TEGHUT

August 2010


ARMENIA: ANTHROPOGENIC ENVIRONMENTAL DISASTER IN THE MAKING

“Given the mountainous terrain around the deposit, and the location in an area prone to severe earthquakes, there is a considerable technical and, therefore, financial challenge to deposit 500 million tones of tailings and 600 million tones of various waste categories in a safe and environmentally acceptable manner.”

“Scoping Review of the Teghut Copper-Molybdenum Project”
by Strathcona Mineral Services Ltd., Canada, 2001

Country background

Armenia is a landlocked country with a territory of 29,000 sq. kilometers, about the size of Belgium and slightly larger than Israel. It is located upstream of the Kura-Araks river basin, on altitudes ranging from 380 to 4090 meters. Because of the country’s unique location and volcanic origins, it contains a vast array of microclimates and exclusive habitats for many endangered plant and animal species.

Armenia has serious environmental problems. It has joined the majority of international environmental conventions. It has continuously received technical and financial support for environmental protection from international organizations—the dollar values of which amount to millions. Despite these, the country’s natural environment continues to deteriorate. The country lacks adequate environmental policies and enforcement of environmental laws. Corruption is rampant and natural resources are being exploited feverishly.

In the early 1980s, 11% of the country’s territory was covered by forests. Today this coverage has decreased to 7%. Armenia’s energy crisis in the early 1990s resulted in the destruction of large areas of the country’s forests. This was done randomly by individuals who used the wood to warm their homes and cook their meals. Today, deforestation continues and is primarily due to organized illegal logging and unlawful allocation of forest lands. As elsewhere in the world, deforestation in Armenia aggravates the impacts of climate change, speeds up desertification, increases the risks of landslides and soil erosion, leads to the loss of biodiversity, and results in the loss of livelihood of communities adjacent to the deforested areas. According to experts, at the current rate of deforestation the country will become a desert within 50 years.

In the past decade, Armenian forests have been aggressively allocated for various economic activities, key among them mining. Today, mining is declared a priority sector by the Armenian government and is being developed intensively. The government has issued several hundred mining licenses without any long-term program for sustainable use of resources, adequate regulatory framework for taxation and environmental protection, and comprehensive assessment of the environmental and social consequences. The impact of mining has been devastating. Thousands of hectares of the country are covered with open pits and dumping tails. Conservation work does not take place. Emissions and disposal of hazardous substances poison the surrounding environment and affect human health. A 2005 report by the World Health Organization placed Armenia second after Kyrgyzstan among CIS countries with birth abnormalities. Many experts attribute this high rate to increased environmental pollution. Health problems are particularly acute around big mining areas in the northern and southern parts of the country.

One of the most controversial of the government-sanctioned mining initiatives has been the licensing of the copper-molybdenum deposit in Teghut. This initiative has faced widespread opposition from the environmental non-governmental organizations (NGOs), experts and local communities. But the prevention of an environmental disaster will additionally depend on the mobilized support of international organizations.


Area description

The Teghut copper-molybdenum deposit is located in the northeastern region of Lori in Armenia - a region prone to earthquakes and landslides. The area of the Teghut deposit is a picturesque and complex landscape covered with forests and engraved by gorges of the Shnogh River and its tributaries - Krunk, Pakasajur (Kharatadzor) and Duqanadzor. These rivers are the main water sources for the Shnogh and Teghut villages. They use the water for drinking as well as irrigation. Shnogh River itself is a tributary to the transboundary Debed River flowing to Georgia. This area is also home to about 20 historical and cultural sites that go back to antiquity and the middle ages.

Teghut forest is one of the best-preserved forest areas in the country with rich biodiversity, including about 200 species of plants, 55 species of mammals, 86 species of birds, 10 species of vermigrades and 4 species of amphibians. Many of these species are rare and endangered, 6 plants and 29 animals are included in the Red Book of Armenia.

The village communities of Shnogh and Teghut, with an aggregate population of 3600, are adjacent to the forest area. Favorable climatic and soil conditions allow for the cultivation of a large number of crops, which the residents of these villages have traditionally engaged in. After the collapse of Soviet Union and dismantling of collective farms, people in this area have survived on subsistence agriculture and forest products.


Mining project

The Teghut copper-molybdenum deposit was discovered in 1972. According to experts, the deposit is estimated to contain about 450 million tones of ore at an average grade of 0.36% copper and 0.022% molybdenum, i.e. more than 1.6 million tons of copper and about 100,000 tones of molybdenum. Those are accompanied by some concentrations of sulphur, gold, silver and rhenium.

In 2001, the license for exploitation of the mine was granted to the Armenian Copper Program (ACP) closed joint stock company. About 81 percent of shares of ACP belong to the so-called Vallex F.M., a company registered in Liechtenstein and having no other publicly available information. It is difficult to ascertain the legitimacy of Vallex, its ownership, and legal and accounting propriety of its operation. Since 1997, ACP has operated the copper smelter in Alaverdi, a city 18 km to the north-east of the Teghut forest. As a result of this activity, ACP has gained a reputation as being notoriously careless about the environment and human health. By employing inappropriate environmental practices it caused increase in respiratory problems, pregnancy complications and birth defects in the area.

ACP suggests extraction of copper and molybdenum through open mining over a 50- to 70-year period. The production capacity of Teghut mine is estimated by ACP to be 7 million tons annually, with a projected output of $87,664,000. Project intends to employ about 1400 people, some to be selected from the local residents and the rest recruited from ACP’s other enterprises.

The allocated land for the mining operation is 1,491 hectares (ha)--82% (or 1,232 ha) of which is covered with forests. The project plans clear-cutting 357 ha of the forest. As a result of resource extraction, one of the forested mountains will be replaced by a 600 meter deep pit. Dumping tails will be disposed in the gorge of Duqanadzor River. Exploitation of the mine will produce about 500 million tones of tailings and 600 million tones of various other wastes.

Implementation of the project has begun. It did so after the adoption of enabling decisions by the Republic of Armenia (RA) Government in November 2007. In May 2008, ACP signed an agreement with the VTB Bank (Russia) to receive a loan equivalent to 249.5 million dollars for a 12-year development of the Teghut mine. As of today only a limited amount has been transferred to ACP due to the global financial crisis. The preparatory activities for mining, including the cutting of 55 hectares of the forest, building road infrastructure and construction of the ore-processing plant, are being done with the company’s own resources. According to recent statements by ACP and the bank's leadership, VTB will be ready to provide the loan to ACP in September 2010.




Environmental and health concerns

The expediency of the project has been challenged by international as well as local experts. Strathcona Mineral Services Ltd., commissioned in 2001 by ACP itself to review the mining project, questioned the environmental safety as well as the economic viability of the project. Local experts in their turn conducted an analysis of the potential environmental impacts - deforestation, water pollution, and loss of biodiversity, grounding their judgments on the baseline data collected by ACP.

According to experts, the clear cutting of the planned 357 hectares of mountain forests and development of the mining infrastructure will likely be accompanied by drying of water sources and soil erosion and result in the actual destruction of more than 1000 hectares of forests. Entire ecosystems, including habitats of endangered plants and animals will be jeopardized. Dumping tails containing silver, rhenium, lead, arsenic, copper, molybdenum, zinc, sulfurous compounds, and various chemicals used in extraction and ore processing will contaminate the nearby pristine valleys of Shnogh River and its tributaries, affecting food safety and human health. Likelihood of landslides will increase. There is a risk of failure of the enormous tailing reservoir, in which case the entire region will be affected, including the valley of the Debed River that crosses into the neighboring Republic of Georgia.

The environmental impact assessment (EIA) of the project conducted by ACP and accepted by the government has failed to fully consider the above-cited consequences. The EIA did not do a serious analysis of the loss of biodiversity and completely disregarded risks to human health and emergencies. It made most of its environmental cost estimations based on 15-year old methodologies of the Russian Federation and, conspicuously, disregarded the requirements of the national legislation. Environmental damage was considered only for the first 8 years of the 50-70 year project. As a result, the costs of mining were undervalued against the benefits and the project was presented to the public as having critical importance to the national economy.

To-be-affected communities were not adequately informed about the potential environmental impacts on their livelihoods. To the extent that any public participation did take place, they were perfunctory and unproductive as all the major decisions were already made.

Authorities in charge of the review of EIA ignored the miscalculations and false data provided by ACP. Risks for transboundary impacts and emergency situations as well as adherence to Armenia’s international obligations were disregarded completely. The call of NGOs to arrange for independent and impartial environmental impact assessment by international experts was rejected by the Armenian government.


Legal infringements

In the opinion of experts, operation of the Teghut mine is in breach of the principles of the UN Framework Convention on Climate Change, UN Convention on Biodiversity, UN Convention on Combating Desertification, UNESCO World Heritage Convention, European Landscape Convention, UNECE Convention on Environmental Impact Assessment in a Transboundary Context (Espoo Convention) and UNECE Convention on Access to Information, Public Participation in Decision-making and Access to Justice in Environmental Matters (Aarhus Convention) - all signed and ratified by the RA.

In addition, the decisions related to Teghut mining violate provisions of the RA Constitution and a number of national laws, including RA Land Code, RA Water Code, RA Mineral Code, RA Law on Environmental Impact Expertise, RA Law on Allocation of Mineral Resources for Exploration and Exploitation (RA Law on Concession), RA Law on Plants, and RA Law on Animals. These infringements, along with those of the Espoo Convention and the Aarhus Convention are challenged by NGOs in Armenian courts.





Social resistance

The environmental NGO community has raised its concerns over the environmental impacts of the Teghut mining project since the first public hearing in March 2006. Despite these, ACP has been granted all the necessary permits and concurrences by the respective governmental agencies. Since the adoption of the ill-grounded and misguided November 2007 decision by the RA Government to launch the project, public opposition has intensified. The Teghut Defence Group, mobilizing NGOs and concerned individuals, has held numerous demonstrations, petition drives, rallies, public hearings and press conferences. Many of these were joined by the members of the to-be-affected communities. Local residents in their turn organized campaigns to complain against the miserable compensation – about 10-20 cents per square meter – paid by ACP for their fertile lands and crops and eventual loss of their homelands.

Public’s voices were unheard. Several meetings arranged by the Prime Minister and other state institutions to demonstrate some dialogue were not productive as the Armenian government acted as the blind advocate of Teghut mining project, ignored the problems highlighted by NGOs and experts. Concerns of NGO representatives from Georgia in respect to the likely transboundary impacts and concrete requests to arrange for a new environmental assessment in accordance with the requirements of the Espoo Convention and international best practices were not duly addressed either.

Activists organizing and participating in protests against the Teghut mining project faced pressure from authorities - including violence to squash rallies, warnings to and attacks on individual activists by law enforcement representatives. A criminal case was opened against one of the Teghut Defense Group activists. Ostensibly, this case was for her whistle-blowing on sexual harassment in one of the schools. It was, however, understood that the case was retaliation against her environmental activism, especially in mobilizing the youth against the mining initiative in Teghut.


Steps to achieve justice

For more than a year a few Armenian NGOs have strived to achieve justice in the Armenian court system. In July 2009, three non-governmental organizations - “Transparency International Anti-corruption Center” NGO, “Helsinki Citizens Assembly Office in Vanadzor” NGO and “Ecoera” environmental NGO - applied to RA Administrative Court challenging various decisions of the RA Government, RA Ministry of Nature Protection and RA Ministry of Energy and Natural Resources. In their legal suits, these NGOs cited breaches of the Armenian Constitution, national laws and international obligations under Espoo Convention and Aarhus Convention.

RA Administrative Court twice rejected the lawsuit citing that the applicants do not have legal standing as their immediate rights have not been violated by the Teghut mining project. The NGOs appealed to the RA Court of Cassation, which in October 2009, recognized the standing of only one of the NGOs - “Ecoera” - as an appropriate claimant on the grounds of the Aarhus Convention and returned the case to the Administrative Court for new review. In March 2010, in contradiction to the decision of the higher court, the Administrative Court again judged that “Ecoera” NGO has no legal standing in respect to the Teghut mining project. This judgment too was appealed in the Court of Cassation in April 2010 and is still pending.

In September 2010, the three NGOs that had brought the above-mentioned lawsuit also addressed a communication to the Compliance Committee of the Aarhus Convention in Geneva. This communication specified the violations of the Aarhus Convention. In March 2010, the case was discussed at the Compliance Committee’s meeting in Geneva with the participation of communicants and the Armenian Government.

In draft conclusions from September 2010, the Compliance Committee recognized the failure of the Republic of Armenia to ensure effective public participation in respect with decisions regarding operation of Teghut mine.

A number of local residents of Teghut and Shnogh communities have applied to the European Court of Human Rights in regard with the loss of their property and inadequate compensation.


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