Barrick Gold concession violates laws

Barrick Gold concession violates laws

Deputies say Dominicans Barrick concession violates laws
Posted March 6, 2013 Associated Press
SANTO DOMINGO, DOMINICAN REPUBLIC - A special committee of the Chamber of Deputies of the Dominican Republic reported Wednesday that the millionaire contract granting a gold mine to Barrick violates several local laws, and therefore recommends that immediate review or annulment.

"We have the options of submitting an override of the Barrick contract with the state because there is sufficient evidence, legal elements," said Demosthenes Martinez, chairman of the justice committee of the House.

Martinez reported that according to a study by a multiple commission, the contract contravenes 10 articles of the energy bill, as well as at least five of the environmental law and several provisions of the constitution.

The agreement, originally negotiated in 2002, was amended by an amendment passed by Congress (bicameral) in September 2009.

After months of protests against various sectors of the mining concession considering leaving few economic benefits to the country, the president of the Chamber of Deputies, Abel Martinez, requested in February to justice commissions, environment and energy, submit the agreement to a new study.

The tripartite committee concluded its report on Wednesday, which will be discussed in the coming days by the full House of Representatives, said Alejandro Jerez, president of the energy committee.

The Canadian Barrick Gold and Goldcorp acquired in 2006 the concession to operate for 25 years the Pueblo Viejo mine, 100 kilometers north of the capital, with a proven reserve of 20 million ounces of gold. The miner also extract silver and zinc.

Using an adaptation of the contract in question, passed in 2009 by both houses of Congress, Barrick will begin to pay the state profits from the exploitation of the mine only when you have recovered their entire investment and achieved a 10% return.

Until these conditions are met, the state will receive only 3.2% of the profits and income tax.

President Manuel Rocha miner said last week that the mining company has invested nearly 4,000 million, the highest foreign direct investment in the history of the Dominican Republic.

President Danilo Medina warned last February 27, introducing his first government report that Barrick should renegotiate the contract, considering it "unacceptable" because of a presumed allow the company to remain "virtually all" the benefit of the mineral extraction and export, which began in mid-2012.

   
Medina said that gold prices have increased from $ 298 an ounce since negotiating a $ 1,700 grant, without representing more immediate benefits for the country.

Not to accept a renegotiation, Medina warned the mining submit a bill to impose new taxes on the "windfall profits" of the mining industry by the increase in metal prices.

While insisting that the company is open to dialogue, the Pueblo Viejo Barrick spokesman, Jorge Esteva, said this week in an interview with a local television station to "renegotiate the contract, redefine the rules, change the legal framework that protects the investment, that is not on the table ".

Esteva told The Associated Press that negotiations to adapt the contract in 2009 lasted 27 months and also passes through both houses of Congress and was enacted by the executive branch.

Trajano Potentini from the Justice and Transparency Foundation (FJT), reported Sunday that the contract with the company Barrick Gold, as well as being harmful, illegal and unjust, so Olympic violates the Constitution, in relation to the constitutional principles of equality, equity and proportionality, privileges almost absolute tax exemptions, as well as issues of health, environment, international treaties, and the General Mining Law.

Trajano Potentini president of the FJT considered mockery, a challenge and a provocation of the head of the Barrick Gold in the country, when required by the Dominican State to fulfill an agreement that is illegal, unjust and unacceptable.

"It is a contract full of constitutional and legal violations, specifically the Mining Law of the Dominican Republic, it is a nightmare, a dismal and unfortunate experience for the country, which now requires the will and determination of the authorities and the Dominican people in a relentless struggle to reclaim our heritage, "he said.

                                           Cancellation of contract

He stressed that the consensus position of the FJT, is that the contract is totally null reference, both by general principles of law that establish the invalidity of the conventions that repealing public order regulations, as express provision of Article 19 in fine of the Mining Law No.146 "the terms of the contracts may not be less favorable to the national economic interest that under this law."

He said the contract Barrick Gold violates Articles 32, 43, 75, 95, 98 letter g), 129, 133, 134, 137 and 138 including the Mining Law of the Dominican Republic, No. 146, dated 16 June 1971, published in Official Gazette No. 9231, resulting void.

Trajano said that among the many violations attributed to the contract between the Dominican State and Barrick Gold, was identified as Article 98 directs the Dominican Mining Law, which within six following the granting of the concession, the Barrick Gold due constitute a Dominican company to carry out the operation, which has not done yet. For this reason alone, the award is null and void.