On Sunday, 31 August 2014, Energy and Mines Minister Pelegrin Castillo warned about the high compensation costs Dominican government would have to pay to landowners in the Loma Miranda mountain area. Last week, Congress passed a bill granting protected National Park category to a 42km2 area of the mountain. The Constitution requires the government to compensate landowners for the expropriation.
Glencore-Xstrata is one of the landowners.
Castillo stated: “It is ironic that Glencore-Xstrata that purchased the Falcondo deposits a few years ago, after their environmental impact study was rejected and with the evidence they do not have the social license to carry out the extraction, in virtue of a law that includes instructions for expropriation, may now end up receiving large-scale compensation, and in certain way be relieved of its environmental and social obligations.”
Castillo said that in the absence of a National Land Use Law and after the 2010 Constitution, that before declaring new protected areas, especially national parks, the decision ought to be based on multi-disciplinary scientific studies of undeniable national and international credibility.
“Unfortunately, those studies have not been carried out in the case of Loma Miranda. That means then that compensation to a group of owners including the large mining company, without true knowledge of the real value of the expropriated area and the possible amounts of the compensations, is a high-risk decision with unknown consequences.” The press release states that until the approval of the law, Loma Miranda had only been included as a reference for its panoramic views in the “La Vega Real Panoramic Corridor” by Decree 233 of 1996.
Castillo said that the sources identified in the law for the compensation payments are not appropriate and will be insufficient to comply with Art 51 of the Constitution.
He said that Swiss-based mining company Glencore-Xstrata has the option of invoking the 2004 Agreement for the Reciprocal Protection of Investments between the Dominican Republic and Switzerland, and therefore it is highly probable that the case will end up in an international court.
Castillo said that the problem could be traced to the absence of state policies to guarantee secure, transparent, responsible and fair use of renewable and non-renewable resources of the metallic and non-metallic mining industry.
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