The high cost of state compensations in the case of the declaration of Loma Miranda as a national park by Congress is a main issue to be considered by President Danilo Medina. The bill has been passed in Congress and now it is the President who needs to decide on declaring the La Vega mountain a protected area. The President can enact or object to the bill. If no action is taken within 10 days the law goes into effect.
On of the larger landowners in the mountain, Falcondo is expected to take the state to an international court to demand payment of around US$4 billion in compensation for not being able to operate their mining concession in the area. The DR has yet to win an international arbitration case.
The Ministry of Environment had already prevented the proposed mining from going ahead, on the grounds that the environmental impact study did not meet requirements. The National Park declaration will make the mining ban permanent.
The Senate sent the bill to the Presidency yesterday, Thursday 28 August 2014. It was fast-tracked in Congress, at a time when public opinion was firmly against the proposed extraction. Falcondo has a poor track record when it comes to recovery of mined areas.
To compensate landowners, the bill established an increase in mining permit costs in order to fund compensating for the ban on land use in the area. But this would not be enough to compensate Falcondo is a case were won in an international court.