This is the sinister mechanism known as ISDS in action—holding a sovereign government to ransom until it betrays the desires and rights of its own people
Despite popular resistance and grave environmental concerns—the Armenian government green-lit a gold mine on Amulsar Mountain in Southern Armenia.
The new Prime Minister Nikol Pashinyan, who steered the movement that brought about Armenia’s ‘Velvet Revolution,’ appears to have bowed to pressure from mining firm Lydian International, including the threat of a $2 billion lawsuit in a ‘corporate court.’ But the grassroots resistance is determined to hold strong and continue blocking construction. Will the government remove protestors and clear the path for Lydian? The answer will show the strength of Armenia’s new democracy.
Two months ago I travelled to Amulsar to meet with and interview the communities at the center of resistance against the gold mine, which was set to open on their doorstep. The community fear that the mine will destroy their environment, landscape and their jobs. They’re right to be worried; the area around Amulsar is one of astounding beauty, the economy of the nearby spa town of Jermuk relies on the purity of the mountain’s mineral water, and even the start of construction activities decimated local livestock. Amulsar is at the heart of Armenia’s water supply, so any potential mining disaster would have grave repercussions far beyond the immediate area.
UK-registered mining company Lydian was given the go-ahead for the gold mine by the previous Armenian government, even though the communities most likely to be affected had expressed longstanding concerns. That government was an authoritarian administration with a track record of police violence and repression of public protest. Then in 2018, Armenia had a ‘Velvet Revolution’ and a new democratic government was formed. The communities around Amulsar felt they had a chance to make their voices heard. Protests began, ultimately leading to the blockade.
For an entire year, people from the town and villages next to Amulsar have blockaded the entry roads to the mine and have succeeded in completely shutting down construction. This was made possible thanks to the efforts of the entire community—from those living for months at a time at the blockade sites, to the shopkeepers sending food and supplies. Environmental activists along with the local community had been campaigning around Amulsar before this and faced police repression, but since the revolution, this peaceful protest has been allowed to continue without any violence or repression from the authorities.
However, this amazing act of resistance came under threat earlier this year when Lydian threatened to sue the government in corporate courts, also known as Investor State Dispute Settlements (ISDS)—a lesser known feature of modern trade deals that place an unbelievable amount of power and control into the hands of corporations. These corporate courts allow companies to sue states for decisions that reduce projected profits, so Lydian based the challenge on the government’s ‘failure’ to remove the protest blockades, using both a UK–Armenia and Canada–Armenia investment deal, asking for a pay-out equivalent to two thirds of Armenia’s annual budget.
Essentially Lydian is using corporate courts to bully the Armenian government into taking a more repressive approach to public protest.
Now that the Armenian government has caved to corporate pressure and given the go-ahead to the mine, there’s a real risk that it will move to remove the local protestors.
This is corporate courts in action—holding the government to ransom until it backs down. What is on the table is billions in compensation. It sounds like a kind of Kafkaesque situation, and it is. The Armenian government is right to be worried—these corporate courts have been successfully used to strip billions from the public purse of governments that could really do with that money to spend on much needed public services. This is why campaigning against corporate courts is so important.
We need to tell Lydian to drop the corporate court case and respect the wishes of the local communities.