"If company stops operating, situation will become hard"
'The biggest social achievement of Deno Gold Mining Company is that the company continues its activity. If the company stops operating, the social situation in Kapan will become harder," said Adrian Goldstone, Vice President of Environment and Sustainable Development of Dundee Precious Metals Company at the EBRD workshop held in London.
Adrian Goldstone made this announcement in reply to EcoLur's question, what kind of responsibility Deno Gold Mining Company bears in Kapan for three communities, Syunik, Shahumyan and Geghanush that have found themselves on the verge of environmental and social disaster.
Under Adrian Goldstone, the situation in Kapan is a difficult inheritance received from the Soviet Union. "It's very hard to work in Armenia. Deno Gold Mining puts much effort to change the situation," Goldstone noted. He said that the company intends to start open-cast development (Shahumyan Mine) where newest technologies will be applied.
Profile: Dundee Precious Metals Company is nearly related with Deno Gold Mining Company through Vatrin Company registered in the offshore zone of the British Virgin Islands. This financial chain is tracked by EBRD loan the bank allotted for the construction of Geghanush tailing developed by Deno Gold Mining Company.
The workshop in London was devoted to the issue of environmental and social responsibility in mining sphere. Besides EBRD, it was participated by the representatives of mining and consulting companies, as well as CEE Bankwatch Net Work (Bankwatch network is an international non-governmental organization that has members in the countries of Western Europe and CIS, and deals with monitoring of international financial institutions, including EBRD).
In the course of this event CEE Bankwatch Net Work which EcoLur Informational NGO has joined to, held a separate meeting with Dariusz Prasek, Head of Operational Support at EBRD's Environment Department, Michael Green, Senior Banker at Department of Natural Resources, and Biljana Radonjic Ker-Lindsay, NGO Relations Advisor at EBRD Communications Department. The discussions were held in the frames of the round table.
In the course of the discussions the outcomes of the public monitoring over Deno Gold Mining Company's activity in Kapan were presented, the issue on compliance of the company's activity with EBRD's social and environmental policy in regard to the allotted loan of 4 million USD, аs well as issues on the company's negotiations with the bank in regard to future probable loans were raised.
An opinion was expressed that Deno Gold Mining Company's activity doesn't comply with international standards, the national environmental legislation and violates right to health and healthy environment.
In particular, the following facts were submitted as evidence: 1. Right to public participation in decision-making is violated in Geghanush Village where the residents collected 134 signatures against the construction of 2 tailings. 2. The right of residents in Syunik Community is violated, as their land areas are contaminated by the dumps from Kapan Combine emissions. 3. There are risks for life in Shahumyan Region located above the galleries where underground ore development is carried out. The residents have sued to get protection. 4. The Company's Environmental Actions Plan doesn't comply with any standard, either international or national.
Dr. Dariusz Prasek noted:
- Dundee Precious Metals has a good image and works at high standards,
- the bank directs its funds to, first of all, solve the problem of working places in the countries in transition period even though with use of old technology,
- in the frames of small loans it's impossible to solve global environmental issues,
- on EBRD's loan, a certain issue such as prevention of river pollution and the company's drainage outlet in the new tailing in Geghanush was solved.
He also assured that in the frames of the bank loan the bank was submitted both the social program and environmental actions plan different from the one presented.
In his turn Michael Green announced that the negotiations with the company on allotting a new medium-term loan of 25 million USD were broken off and won't be resumed at official level.
The participants of the public monitoring expressed an opinion that social responsibility means not just employing. Just the opposite, such notion for responsibility puts the people employed by such a town-forming enterprise as Deno Gold Mining Company in dependable situation and these employees have to agree with any conditions set by the company, only let the company not close down. A wish is also expressed that the bank would pursue the social and environmental policy it declared and didn't allot any loans in case of any incompliance to this policy.
Coordinator of CEE Bankwatch Net Work in Balkans Fidanka McGrath commented the London Wotkshop and outlined, that EBRD's portfolio of mining projects gives the bank little to be proud of. "EBRD chose Dundee Precious Metals as the only mining company from its countries of operation that could show good practice from Chelopech. But in fact Dundee's projects in Bulgaria have been delayed for years, and even now when they obtained the permits, Bulgarian environmental organisations are appealing in Bulgarian court and at the European Commission. The Bulgarian court canceled the EIA, and we hope that the EC will start an infringement procedure on the IPPC permit (Intergated Pollution and Prevention Control), because these proposals were not consulted properly with communities living downstream from the mine," said Fidanka McGrath.
Inga Zarafyan, EcoLur
