I met Mrs. R. in front of her house in Roșia Montana at the end of May, tending to the flowers that kept being disturbed by the dogs that roam free in the streets of the village. She was pleased that “the Gold” had lost the Washington lawsuit and that the Romanian state didn’t have to pay them a penny in compensation. The 84-year-old woman told us how, in the glory years of Roșia Montană Gold Corporation (RMGC), referred to by locals as “the Gold”, when the corporation was buying property after property in Roșia, she refused to sell her house because it was a house bought 60 years before, by her late husband and in which they had raised their children. A widow for almost four decades, she has worked almost alone all her life for that land and house. About two months back, Mrs. R. was approached by a journalist: the whole country was waiting with bated breath for the verdict of the International Court and Roșia was a hive of journalists from Bucharest. Mrs. R’s short interview opened almost every news segment on Antena 3 CNN on March 8. Those of us at home could see a frail woman, with a trembling voice, frightened that she would be homeless if the Romanian state loses the lawsuit with RMGC.  

Mrs. R.: Let them do what they want. I have no money. [I] just [want to] stay in the house. Don’t take the house off me.

Reporter Antena 3 CNN: Are you afraid they might take your house? Like the proposals were when the Canadian company came in?

Mrs. R: That’s what I heard, that they’re going to take the house away from us. Now, I don’t know. But I don’t agree. Let me stay in the house, I’m old. Where will I go, old, with nothing? Am I on the road? My biggest fear is that they will take me out of the house. Leave my house. And then they can do as they like.^[1]

In retrospect, it’s hard to know where Mrs. R. had heard the terrible rumor that she might end up homeless if Romania lost case ARB/15/31, as it had been on the docket of the World Bank’s International Center for Settlement of Investment Disputes (ICSID) Court of Arbitration since 2015. But to the public, the case was called Gabriel Resources Ltd. v. Romania. For the few remaining Romanians left in the community, the case was, for nearly three decades, Gold vs. Everyone.

A brief history of extractive violence at Roșia Montana

In the almost 30 years since Roșia Montană has been struggling to survive, extractive violence has manifested itself on several levels, and the role of aggressor has been played, successively or in tandem, by both the mining company and the various post-1989 governments. This violence has affected the structure of property ownership, through land-grabbing (acquisition), but also the community, through depopulation. Today, 80% of the houses and land in Roșia Montana are owned by the Canadian company. At the beginning of the 2000s, there were almost 4000 people living in Roșia Montană, today there are just over 2400. Almost 1000 of them live in Dăroaia, a precarious area of Roșia, inhabited mainly by Roma, whose extreme poverty has deepened with the decline of the commune. 

The human potential and the future of the community have been almost annihilated by the systematic deterioration of living and working conditions due to the declaration of the area as mono-industrial. The long-running campaign of denial of alternatives for the community, maintained and financed by the mining company, authorities and the media, has also been perfidious. Throughout this time, the voice of the Romanians opposed to the mining project has been denigrated, ridiculed, distorted or ignored; they were characterized as traitors and disqualified as political subjects who can decide how to live their lives. All these strategies have left visible traces and emotional damage that is still felt today. 

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The corporation, under different titles and associations, became interested in the gold from the oldest mining operation in Romania, since the late 90s. It was the period when the Romanian state was massively deindustrializing under the umbrella of transition, privatization and cost efficiency. In those times full of uncertainty and alarmist rumors, the investor seemed to be the only salvation for mining in the area and for the continuity of the small community in the Apuseni Mountains. A few years later, at the beginning of the 2000s, the first tensions and ruptures in the community began to emerge, revolving around one main actor: the Roșia Montană Gold Corporation (RMGC), which began a massive campaign to buy up properties in the area. The project would have entailed the destruction of the Cârnic Massif and the creation, in the picturesque Cornei Valley, of the largest cyanide water reservoir in Europe.

Locals who refused to negotiate with “Gold’s people” still remember to this day the strategies by which the mining company tried to convince them to sell, a process that lasted until 2008, and ranged from seductive promises of financial comfort for those who agreed to sell, to more or less veiled intimidation and threats against those who refused. Local resistance began to take shape as early as 2002, when the first protests against the mining project took place, a resistance that was to reach national and international proportions over the next ten years.

More familiar to the collective memory are the massive protests in Romania’s major cities that took place in the fall of 2013, when tens of thousands of people protested against the Ponta government, which proposed a special law to give a green light to the mining project as being of ´national´ interest. It was only in the summer of 2014 that Parliament rejected the Roșia Montană law, which would have allowed mining under the terms proposed by RMGC and set a dangerous precedent. As the protesters were shouting, ´The Corporation should not make the Legislation. ´

A year later, in 2015, the Canadian mining company, Gabriel Resources Ltd. complained to the ICSID because, in their opinion, the Romanian authorities had violated international trade agreements: in other words, they had obstructed the investor in starting the mining project in Roșia Montana. It was the beginning of a nine-year legal epic that unfolded behind closed doors in Washington, of which only a few law firms and a handful of people subpoenaed as witnesses knew about. The local association of Roșia, Alburnus Maior, engaged in the arbitration by initiating the Amicus Curiae procedure (in 2018, 2022, and in 2023), the only formal/legal channel to bring the perspective of the community and the topic of human rights into the debate.

In September 2023, ICSID announced that it was closing all proceedings and preparing to communicate a verdict in early 2024. In Romania, the information was distorted and cynically instrumentalized by a good part of the media and politicians, who, for almost two months, credited the idea that our country would lose the case and that all Romanians would have to pay compensation to the Canadian company. The compensation estimates ranged from 2 to almost 7 billion dollars. In the dominant discourse, victory for the Romanian state did not seem a possibility.  

The Investor-State Dispute Settlement (ISDS) mechanism, a global controversy

This mechanism dates back to 1965 when the World Bank proposed to arbitrate disputes between international corporations and states. The companies usually come from the extractive sector, be it hydrocarbons or mining, but the list also includes energy producers, the pharmaceuticals industry or agri-businesses. Often, the states called to arbitration proceedings are countries with fragile economies, but not only. In 2019, there were 983 such cases initiated against more than 100 states. Only 36% of these were resolved in favour of the state. There is a widespread perception that more and more often, states are discouraged from legislating in favor of human rights for fear of being sued (´regulatory chills´). Both state sovereignty and inability to pay are increasingly at issue especially in the new context of climate change mitigation policies.

A case becomes relevant as ISDS only if foreign investors can demonstrate that their economic interests have been harmed by abusive expropriations, legislative blockades and impediments by the states where they want to operate, or if the investor considers that the states in question do not meet the “minimum standards” of international trade law for foreign investors.

Over the past 20 years, an increasing number of countries in the Global South have begun to challenge the legitimacy of this mechanism, because its practices and decisions maintain an unequal power relationship in which national law is suppressed by bilateral economic agreements. More recently, the issue has also become thorny for states in the Global North, such as the US and Germany, which have also been the target of disputes.

Many international law scholars have pointed out the problems of transparency and inclusiveness, as proceedings have often been secretive while the system for accepting witnesses or evidence has been unpredictable. Also, various controversies related to the integrity of arbitrators have been recorded over the years. In the academic literature, and even in their own ethical guidelines which they have revised in the meantime, the “double-hat” system is often invoked, which describes a common practice in court; an arbitrator may serve, in the same case, as both arbitrator and counsel for one of the parties. More so, the composition of the arbitral tribunal is made up of the same (more or less eight) rich white male lawyers who are supposed to weigh and divide justice between corporations and states in disputes over natural resources.

Basically, people who have not been democratically elected end up interfering with the right of states to plan their public policies (and protect public interest!) related to the functioning of society and the economy. In addition, as we have already mentioned, the ´regulatory chills´ are the mere prospects of an arbitration case: this alone can have profound effects on the democratic process of a state, as governments tend to censor themselves to become flexible in dealing with investors for fear of being sued and having to pay exorbitant sums as punishment. Who would dare to ´harm´ investors? The global democratic deficit in trade policy is becoming increasingly evident.

The ICSID verdict and the perpetuation of extractive violence

On the evening of January 31, 2024, the news website digi24.ro published an article with a seemingly neutral headline: ‘Sources: Romania loses the trial with Gabriel Sources for Roșia Montană. We should pay at least two billion dollars”. The unverified news would generate thousands of headlines the next day and hours of heated debate on national TV stations. Just the news that Romania was losing and not that it might lose the Washington lawsuit generated public ´shock and awe´, as the exorbitant sum appeared to be an economic disaster.

The element of astonishment was reinforced by the almost ´religious´ response from the media, the experts, the politicians, with no one questioning such a verdict. ICSID seemed the supreme and unchallengeable authority. The government, headed by the Prime Minister of the country, set the discursive construction of the case from the very beginning, adopting the position of losers by default. Only a week later, in the midst of media and political hysteria, Prime Minister Ciolacu tried to temper the discussion and urged patience, pending an official communiqué from the Court. The politician’s gesture was belated and lacked credibility, because the agenda had already been set.

Romanian society had begun the ridiculously stressful exercise of mental calculations to see how and how much they would have to pay for their ´mistake´. In public discourse, terms and phrases such as “compensation” or “financial claims” have been replaced by “payment note”, “invoice” or “bill”, in a lexicon of impending economic disaster.

For almost two months, the subject has been used as a tool for the main ruling party to attack its opponents, as well as to simulate ad hoc investigations on the sets of pro-government television stations, eager to hunt down the traitors who opposed gold mining and because of whom the next two generations will have to pay. Amidst this spectacle of disaster, elementary questions about the legitimacy and the global controversies of the ISDS, as an ´awfully´ legal mechanism, have been avoided.

Roșia Montană, as a human community, was again excluded from this conversation, portrayed as a place cursed to remain poor. The progressives of 2013 were seen as guilty of blocking the RMGC project legislatively; the progressives of 2021 were accused of international conspiracy for proposing the inclusion of Roșia Montană in the list of UNESCO protected areas. No one seemed to care about what might be called the intergenerational trauma of this community, and the numerous material and intangible losses it has endured. These losses have deeply affected dignity and the arbitration context only added to the wound through endless painful debates focused on ´debt´:

When the rumor came out, about three weeks before the verdict was given in Washington, Ciolacu came and said “We have to pay billions of euros (…) Everyone was looking at us, that we, the activists, have to pay (…) They saw us as pariahs (Interview with a resident of Roșia Montană, July 2024) 

Victory a la Pirus

Despite this assembly of disaster, on March 8, 2024, around midnight (in the Romanian time zone), the Court of Arbitration in Washington announced that it had rejected, with a majority vote and a dissenting opinion, the financial claims made by Gold Corporation Ltd. Moreover, not only Romania did not have to pay, but it was ruled that the Canadian company had to pay the state approximately 30 million lei, covering the juridical expenses accumulated in the nine years of trial.

For politicians and opinion-makers in Bucharest, this pivotal moment would have been a good opportunity for reflection and rectification. Maybe even to thank those ´activists´ and NGOs who continuously struggled to prove the many illegalities of Gold and who have backed the state during the trial. There are many invisible heroes to whom the state would have to say thanks. But they also missed this opportunity. In a pre-electoral context, the discussions degenerated into political and ideological attacks. Once again, Roșia Montană was excluded from the mainstream public debate. It was only after the victory was announced that more detailed analyses of the project’s impact on the community began to appear.

To understand the local atmosphere, we visited Roșia Montană, where we spoke with several former and current local activists who opposed the mining project, as well as with local entrepreneurs and members. We naively expected the locals to be happy after the unexpected victory in Washington. But they were reluctant, tired, hesitant and deeply distrustful of the government and local and regional authorities.

It is true that our arrival in the summer coincided with a decision by ICSID to temporarily suspend implementation of the March 8 ruling. It is possible that this development contributed to the prevailing sense of discouraged winners suffering anxieties of unfinished justice. Testimonies reveal distrust and traumas that no public entity talks about:

We won the war, but there is a lot of destruction…. people want something to happen…the authorities don’t lift a finger… no information about what UNESCO means (Interview with a  resident of Roșia Montană, July 2024).

Some people in Roșia described the atmosphere before the verdict as being influenced by the discourse at the central political level, which blamed civic resistance. In fact, some locals were convinced that they would have to pay billions in damages because of the NGOs. The absolutely necessary democratic exercise carried out by them even during the arbitration, as Amicus Curiae, was further ignored. Invoking the Fundamental Right to Participation of Communities in Social and Environmental Decision-Making, Amicus interventions were submitted by NGOs to Washington.^[2] Although we cannot know exactly the significance of these interventions in the very complex formal framework of arbitration, they should be recorded in the collective memory as historical acts of democratisation of global trade policy.

Years of division have left a deep wound. Among those people in the community who want to show that there are alternatives to mining, there is skepticism that the company will leave. Despite the victory, the company is still perceived in military terms, as foreign occupation in a psychological war of attrition. The company still owns 80% of the properties in Roșia Montană. As long as there is a gold deposit beneath Roșia, this place seems likely to be prisoner to battles between players in the extractive industry.

(…) Roșia Montană is not in their daily life, to stress. They are in no hurry.

They have enough time. Five years, ten years, twenty years. (…) They are, in a way, the masters here, because they own property. (Interview with a resident of Roșia Montană, July 2024)

The signs of ongoing injustice are visible. One local man described them as ´ wounds to the soul´. Now the discussion is no longer about cyanide, but about universal heritage. What will be the symbol of this recognized ´treasure´ in the context of the new (green) transition? What are the possibilities for development while the Urban Plan is blocked? Who does UNESCO include as long as the neighboring Roma community of Dăroaia is not even on the map of the victory? The future is just as uncertain for the people of Roșia, who are waiting for the Romanian state to take responsibility for the public planning and alternatives of development.

If the talk of the last nine years has been about caring for the alleged wounds of the investor, perhaps it is now time to see the scars in the fiber of community. A starting point could even be to take seriously the contribution of civil society to winning the lawsuit and the envisioning of a more just and democratic future. As appears in the Amicus of 2018, any investment must receive a ´social license´ in order to operate and must respect the global framework regarding the protection of affected parties and the redress of damages. RMGC has never acknowledged the damages caused in recent decades, on the contrary, it has violated many fundamental rights. For decades, Alburnus Maior had no choice but to address the competent domestic courts to obtain information that should have been made public anyway. We are talking about two generations of people who have lived in a perpetual struggle.

The Roșia case sheds light on one of the main limitations of the ISDS arbitration: it only accepts as legally valid two types of actors, the State and the Companies. But the interests of states do not always coincide with those of the local communities, just as they may not coincide sometimes with the interests of investors. While the rights of public participation are still to be fought for, it becomes clear that a real renegotiation of democratic decision-making is imminent at the global level.

Acknowledgement

Special thanks to the locals of Roșia Montană and other representatives of civil society in Romania for giving their time and energy to discuss these issues with us. The authors acknowledge support from the following funding schemes: PNNR- ULBS, 760077/23.05.2023 and FCT-PTDC/GES-AMB/29355/2017.