"Vardani Zartonq" LLC got into a lawsuit with RA Ministry of Territorial Administration and Infrastructure (TAI) when the ministry terminated the company's soil management right to Sofi-Bina gold-polymetallic mine in Vayots Dzor Region in 2020. The company demanded in court to annul TAI Minister’s decree No. 1075-A dated on 07.08.2020. The Administrative Court rejected the company's claim, RA Administrative Court of Appeal upheld it. The case has been in the Court of Cassation since June 10, based on TAI's appeal.
In the RA Administrative Court of Appeal, "Vardani Zartonq" LLC submitted a motion that: "As a result/for the reason of not suspending the validity of the administrative act, the Company will not regularly fulfill its obligations under the Contract until the expiry of the validity of the soil management contract.
The company will incur large material losses due to not making profits, which will be reflected in non-payment of taxes to the state budget, our employees: as a result of not making a profit, the plaintiff will have to fire the employees, as a result of not making a profit and not operating, the plaintiff will have to stop the social assistance and support provided to the community.
"Vardani Zartonq" LLC, having a permit to operate Sofi-Bina gold-polymetallic mine since 2012, did not operate the mine and did not fulfill its obligations. The company did not pay state taxes.
In their conversation with EcoLur, the residents of Zaritap community affected by the mine also mentioned that the company did not provide socio-economic support to the community.
Shmavon Azatyan, Secretary of Staff of Zaritap Municipality, noted that "Vardani Zartonq" LLC does not have land, property or land lease agreements with Zaritap community, and has never provided any charitable assistance to the community. As for jobs, according to the reports filed by "Vardani Zartonq" LLC, published on the website of the Extractive Industries Transparency Initiative, the company had only 1 employee in 2016-2018.
According to the interviewed residents in Zaritap, when signing a soil management contract, the community was not involved in those works, nor was it aware of whether or not the company had undertaken any obligations to the community. Most of them are against the development of the mining industry. They see the future of the community in the development of agriculture, the cultivation of ecologically clean crops, the processing of small raw materials such as canned food, dried fruits, edible greens, the expansion of animal husbandry, as well as the development of ecotourism. But here, too, there are many problems. "There are very few pastures in the region, and the lands are not fertile and deprived of water. The pipeline comes from Kechut, passes through the village, about 20% is enough," the representative of Zaritap community municipality said.
Azatyan responded to the observation as to what requirements should be presented to the soil managers in case of carrying out mining activities in general. "Certain levers must be provided to the community to control the work of companies. At the same time, when concluding a soil management agreement, the community should be involved as a third party and have the opportunity to exercise control.”
This material has been prepared within “Liability of Non-operating Mining Companies in EITI Process” project impletmened by EcoLur with the USAID support within the frames of “Engaged Citizenry for Responsible Governance” project implemented by Transparency International Anticorruption Center.
This article is made possible by the generous support of the American People through the United States Agency for International Development (USAID). The contents of this article are the sole responsibility of the authors and do not necessarily reflect the views of USAID or the United States Government.
June 23, 2021 at 15:54