UK Prime Minister Cameron told: stop Jersey-registered shell company suing Romania in ‘corporate court’

   1   0 AllEurope, Blog, Tax and corporate responsibility
Rosia Montana gold mine uses the gold cyanidation technique

Rosia Montana gold mine uses the gold cyanidation technique

A letter (see below) to the UK prime minister signed by TJN and other global justice campaign organisations, calls on David Cameron to stop a Canadian mining company using a Jersey ‘subsidiary’ to sue Romania for halting toxic gold mine, and warns that such cases will balloon under the proposed TransAtlantic Trade and Investment Partnership.

A coalition of environmental and human rights organisations from the UK, Romania and Canada have called on prime minister David Cameron to intervene in an international case which is pitting a Canadian mining company against the government of Romania. The group argues that under new trade agreements like TTIP (the Transatlantic Trade and Investment Partnership) such cases will radically expand, targeting the British and other European governments.

Mining company Gabriel Resources has filed a request for arbitration at the World Bank after a Romanian court annulled a critical environmental document that was required for the Rosia Montana mine to go-ahead in the Transylvania region of Romania. Part of the request uses a Jersey-listed subsidiary company which campaigners believe is a shell company. Campaigners believe the company is doing this to give it access to a bilateral trade deal between the UK and Romania, under which such corporate cases can be brought.

In a previous interview, the CEO of Gabriel Resources has suggested that they would seek compensation of up to $4 billion if the mine were not to go ahead, despite having spent only a fraction of this amount developing its plans for the mine. According to WHO statistics, Romania’s entire spending on public health for a year is under $8 billion.

The case is an example of the Investor-State Dispute Settlement (ISDS) or ‘corporate courts’ system that has received recent notoriety as a result of their controversial inclusion in the free-trade deal being pushed between the EU and USA, the Transatlantic Trade and Investment Partnership (TTIP). The letter to Cameron highlights the European Commission’s desire to stop:

“so– called “shell” or “mailbox” companies, owned or controlled by nationals or companies not intended to be protected by the agreement and having no real business activities in the country concerned, to make use of an investment agreement to launch claims before an ISDS tribunal.”

Signatories of the letter, who oppose the use of ISDS in trade agreements, call on Cameron to investigate and call on the court to throw out the case based on the fact that Gabriel doesn’t represent a real British company.

Nick Dearden, the director of Global Justice Now said:

“It’s bad enough that Gabriel Resource’s ‘right to profit’ is being put forward as more important than the government of Romania’s right to act for the benefit of its citizens. It’s even worse that a Canadian mining company is able to do this by exploiting a trade agreement between the UK and Romania based on a shell company it owns in Jersey.

Cheerleaders of TTIP, the toxic trade deal being pushed by the EU and the USA, have accused its many critics of exaggerating the threat that it poses to democracy. But this is a clear example of how we are leaving ourselves vulnerable to an enormous corporate power grab. Why should UK taxpayers foot the massive bills for compensating greedy corporations when the government rules that their operations are harmful to communities or the environment?”

Gabriel Resources filing request for International Arbitration July 2015
Save Rosia Montana press release on the court case July 2015
According to the World Bank Databank for 2013, Romania’s GDP was $189,639,111,752 while 0.04 of GDP was spent on public healthcare, which comes to $7,585,564,470.08

Full text of the letter to David Cameron and signatories

To: Prime Minister David Cameron MP

Dear Prime Minister

Request for intervention to prevent a Canadian company using British investment treaty to sue Romania

We are deeply concerned that a Canadian mining company called Gabriel Resources has filed a claim against the government of Romania at the International Centre for the Settlement of Investment Disputes (ICSID). We believe the company has accused Romania of unfair treatment with regard to its inability to approve Europe’s largest open pit cyanide mine. The project has been faced since its beginning in early 2000 with massive opposition on social, environmental, economic and cultural grounds. These include cyanide tailing waste, the blasting away of four mountains, and relocation of thousands of people.

The locals of Rosia Montana, along with numerous organisations united in the Save Rosia Montana campaign, challenged the legality of key permits, having them permanently annulled by national courts. In 2013 Gabriel Resources attempted to pressure Romania’s government to approve the mine by passing a law through parliament to declare their mine of overriding national interest. This triggered national and international protests which remain to date the biggest social mobilisation in Romania since the fall of communism in 1989.

Many Romanian institutions including the Romanian Geological Institute and Romanian Academy have spoken against the project and its methods.

Furthermore, Investigative journalism indicates a number of alleged illegalities associated with this corporation’s actions in winning the contract for this project. The company has been under investigation in Romania in connection with tax evasion and money laundering.

Two parts of the same corporation have brought this arbitration case, one called Gabriel Resources (Jersey), whose involvement enables the company to utilise the UK-Romania Bilateral Investment Treaty.

In recent campaigns focussing on the Transatlantic Trade & Investment Partnership, we have been given regular assurances by your government that you only support the utilisation of investor State Disputes Settlement (ISDS) mechanisms in ‘legitimate’ cases. it is our understanding that your government agrees with the European Commission’s desire to stop:

“so– called “shell” or “mailbox” companies, owned or controlled by nationals or companies not intended to be protected by the agreement and having no real business activities in the country concerned, to make use of an investment agreement to launch claims before an ISDS tribunal.”

We are concerned that Gabriel Resources (Jersey) does not represent a significant or genuine business interest in the UK, and therefore that any claim launched by that entity should be discounted.

We therefore call on you to
(a) investigate this situation, and if you find evidence that Gabriel Resources (Jersey ) has no real business activities,
(b) present evidence to ICSID that, in your opinion, they should not be covered by the provisions of the UK-Romania agreement.

We look forward to hearing from you further about this matter.

Yours sincerely,
Nick Dearden, Global Justice Now
John Christensen, Tax Justice Network
Tim Jones, Jubilee Debt Campaign
Craig Bennett, Friends of the Earth (England, Wales and Northern Ireland)
Bert Schouwenburg, GMB
Ruth Bergan, Trade Justice Movement
Liz May, Traidcraft Exchange
John Hilary, War on Want
Blanche Jones, 38 Degrees
Emma Hughes, Platform
Richard Solly, London Mining Network


Related Posts

UN must defend target to curtail multinational companies’ tax abuse

Photo by Luca Santori, Creative Commons LicenseThe Tax Justice Network, The Independent Commission for the Reform of International Corporate Taxation, and the Global Alliance for Tax Justice call on the UN Secretary General to make sure the commitment to action on tax abuses by multinational companies remains part of the new UN Sustainable Development Goals.


The BVI: Responsible for worldwide tax losses of $37.5 billion a year

BVI report blogAn extraordinary report by consultants Capital Economics, for BVI Finance, claims that the British Virgin Islands are responsible for $1.5 trillion of assets invested around the world, and that these result in 2.2 million jobs and $15 billion in tax revenue. A better approximation would be that the BVI imposes global tax losses of $37.5 […]


Event: Making Tax Work for Women in the UK and Globally

Invitation_ Tax and Gender eventOn Wednesday 28th June 2017 at 16.30 our very own Liz Nelson will be speaking at an event in London that aims to bring together gender and tax justice advocates to highlight the need for coherent and gender-responsive fiscal policies to safeguard the rights of women and girls both in the UK and globally. The […]


Historic event on women, human rights and tax justice in Bogota

BogotaLast week civil society organisations, researchers, labour union activists and policy makers met in Bogota, Colombia to explore how tax justice issues can ensure governments, multinational corporations and others meet their obligations to women in order to secure their full range of human rights. The Women’s Rights and Tax Justice conference opened with a conversation […]


The Offshore Wrapper: the Panama Papers, one year on

Photos from the Protest outside PwC 1 Embankment Place, part of the Global week of action for tax justiceWelcome to the Offshore Wrapper – your weekly update from TJN.  Happy Paniversary! This week it’s been one year since the Panama Papers were leaked, and a number of organisations around the world have been marking the occasion though the global week of action for tax justice. In London, activists from the TJN and the […]


One thought on “UK Prime Minister Cameron told: stop Jersey-registered shell company suing Romania in ‘corporate court’

  1. Bogdan says:

    Great initiative! One mention: Benjamin Steinmetz it’s the owner of Gabriel Resources.

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to Top