A Study in Gold: Gabriel Resources vRomania. Qui Prodest? The Neo LiberalRhetoric and the Multi-Facet Impact of theInvestment Agreement in Ros‚ ia Montană

Cătălin-Gabriel Stănescu

The free trade regime of the past several decades is clearly ata tipping point and countries like Romania must weigh theirsovereignty against their appetites for foreign investors, someof whom have little sympathy for domestic measuresadvancing environmental protection, sustainabledevelopment and public health, let alone the will of thepeople.Adam Cernea Clark (▶ http://www.huffingtonpost.com/adam-cernea-clark/whose-sovereignty-gabriel_b_7939596.html)

ContentsIntroduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2Neoliberal Legality: What Kind of “Rule of Law” Does FDI Foster? . . . . . . . . . . . . . . . . . . . . . . . . . . 5The Institutionalization of FDI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8Neoliberal Discourse in Gabriel Resources v Romania . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11The Neoliberal Discourse in Romania-UK and Romania-Canada BITs . . . . . . . . . . . . . . . . . . . . . . . . 11The Neoliberal Discourse in Gabriel’s Request for Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13The Fostering of Economic Development Rhetoric . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13The Sustainability Rhetoric . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14The Rule of Law Rhetoric . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15Rhetoric vs Facts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17Valid Investment or Unlawful Appropriation? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18Economic Development or Speculation? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20Conflict of Interests and Corruption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22Sustainability and the Environmental Dimension . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23The Dedicated Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

C.-G. Stănescu (*)Centre for Market and Economic Law, University of Copenhagen, Copenhagen, Denmarke-mail: Catalin-Gabriel.Stanescu@jur.ku.dk

© Springer Nature Singapore Pte Ltd. 2020J. Chaisse et al. (eds.), Handbook of International Investment Law and Policy,https://doi.org/10.1007/978-981-13-5744-2_110-1

1

Abstract

There is a general wisdom that investment law and investor-state arbitrationcontribute to the development of rule of law by enhancing features such asaccountability, clarity, transparency, and predictability, despite evidence to thecontrary. Such wisdom stems from the neoliberal political, economic, and legaldiscourse surrounding free trade and free markets, which were supported andimposed by international institutions on developing countries. In many cases theneoliberal discourse is employed solely to justify economic plunder and theestablishment of a predatory type of capitalism (The most accurate descriptionof predatory capitalism has been provided by Noam Chomsky: “Predatory cap-italism [. . .] is incapable of meeting human needs that can be expressed only incollective terms, and its concept of competitive man who seeks only to maximizewealth and power, who subjects himself to market relationships, to exploitationand external authority, is antihuman and intolerable in the deepest sense.” See:Chomsky N (2005) Chomsky on anarchism. AK Press, Oakland, p 114.). GabrielResources v Romania is one of the best examples.

Starting from the ICSID claim of Gabriel Resources, this chapter adds to theongoing debate, addressing how the neoliberal rhetoric is employed before arbitraltribunals in regard to specific FDI projects. Based on the facts of the case arisingfrom publicly available documents, it debunks the myth of the positive impact ofinvestment agreements on societal developments and proves how the system set upby BITs and trade conventions is being abused by unscrupulous “investors” to thedetriment of host states and local population.

Keywords

Investment law · Investor-state arbitration · Rule of law · Neoliberalism ·Rhetoric · Environmental protection · Sustainable development · Corruption

Introduction

It must be stressed from the outset that although everyone has an idea about what“rule of law” encompasses, there is no common accepted understanding. For neo-liberals, rule of law mainly implies taming the national states’ interventionismagainst the markets, by elaborating international norms and providing internationaltribunals with means to implement them. This perception is usually referred to as a“thin,” “formal” type of rule of law. Human rights activists understand rule of law asprotection of human rights by domestic and international institutions, constitutionalguarantees, judicial review, independent courts, and “access to justice.”1 This under-standing is labeled as a “thick,” more substantive concept of rule of law. The vague

1Damşa L (2017) The transformation of property regimes and transitional justice in Central EasternEurope: in search of a theory. Springer International Publishing, p 84

2 C.-G. Stănescu

and incoherent concept of “rule of law” became a “big business in the 1990s”2 wheneconomic development agencies driven by neoliberal ideas started to invest in legalreform, which turned rule of law into a leitmotiv of transitional justice programs.

Despite such differences, by the time former communist states, including Roma-nia, started their transition toward capitalism in 1989, “rule of law was described insufficiently vague terms to enroll the support of both neoliberals and human rightsactivists.”3 In fact, neoliberals have managed not only to adopt parts of the rule oflaw rhetoric employed by human rights activists but also to appropriate some of theirconcepts, by reconfiguring property and contractual rights as parallel to minority oridentity rights4 and bringing them under constitutional protection.

The neoliberal project deems export-led growth, free markets, privatization, andforeign direct investment (FDI) as the keys to economic development.5 Thus, thefinancial institutions that promoted it and the system it generated went to greatlengths to convince the newcomers on the path to capitalism to embrace the newlegal order and adopt the necessary reforms for transit to a market economy.6

However, the self-perpetrating neoliberal legality has attracted significant criticismand not without good reason. It was emphasized that the advance of the globalmarket “in fact created ‘a new political class’ that reproduces itself through ‘neo-liberal clientism’ and that this class in fact expropriates the state itself,”7 unrestrainedby any state apparatus. Therefore, the neoliberal legal order imposed by bilateralinvestment treaties (BITs) and multilateral investment treaties (MITs) has beenaccused of benefiting only the economic elite8 and has been labeled as a slogan,neocolonialism,9 or plunder.10

2Trubek DM, Santos A (2006) The new law and economic development: a critical appraisal.Cambridge University Press, p 853Damşa L (2017) The transformation of property regimes and transitional justice in Central EasternEurope: in search of a theory. Springer International Publishing, p 844Trubek DM, Santos A (2006) The new law and economic development: a critical appraisal.Cambridge University Press, pp 19–73, 66–675De Schutter et al. (2013) Foreign direct investment and human development: the law andeconomics of international investment agreements. Routledge, p 16Trubek DM, Santos A (2006) The new law and economic development: a critical appraisal.Cambridge University Press, pp 85–86. As the author pointed out, this was the case in formercommunist countries, such as Romania, with former command economies, where the wholeinstitutional structure of market economy had to be built from scratch.7Robison R (2006) The neoliberal revolution: forging the market state. Palgrave Macmillan, p 88Trubek DM, Santos A (2006) The new law and economic development: a critical appraisal.Cambridge University Press, p 949The claim of neocolonialism is addressed at length in an empirical study conducted in 2014. Theauthors found that up to mid-90s the claim appears to be supported by evidence. Schultz T, DupontC (2014) Investment arbitration: promoting the rule of law or over-empowering investors? Aquantitative empirical study. Eur J Int Law 25:6–1810Mattei U (2008) Plunder, when the rule of law is illegal. Blackwell, Malden, pp 10–35

A Study in Gold: Gabriel Resources v Romania. Qui Prodest? The Neo Liberal. . . 3

Seen from the latter perspective, sites rich in mineral resources are of greatinterest to multinational companies11 that prospered in the international neoliberallegal order.12 Constantly presented as risky projects that require special treatmentand enhanced protection,13 they generate high and relatively fast returns for theinvestors but foster no development in the host state.14 As “one of the largest golddeposits in Europe, including proven and probable mineral reserves of 10.1 millionounces of gold and 47.6 million ounces of silver,”15 Ros‚ia Montană is no exception.

The mining project that was supposed to exploit the gold and silver reserves isnow the subject of one of the most interesting pending cases at ICSID, given theamount of damages requested: 4.4 billion dollars,16 the equivalent of 2.35% ofRomania’s GDP.17 It was stopped due to public protests and local opposition, forwhich reason the Claimant now seeks compensation for losses based on the pro-visions of two BITs: Romania-Canada and Romania-UK. As this chapter reveals, theavailable information and background paint a significantly different picture than theone presented to the arbitration panel.

Of central interest to this chapter and the general debate concerning neoliberalideas is the manner in which the Claimant employs the neoliberal discourse regard-ing the alleged linkage between FDI, rule of law, and economic development in itsclaim against Romania. After taking advantage of the lack of an adequate regulation,lack of transparency, unsanctioned conflict of interests, regulatory capture, andattempted legislative changes or expedited procedures that were rampant in theRomanian “wild years of capitalism,” the Claimant is trying to use all the aboveagainst Romania, by invoking breach of rule of law or absence of (some of) itsfeatures to extort significant amounts from the state budget.

Thus, Gabriel Resources v Romania is a perfect case study to reflect both theweaknesses and the paradoxes of neoliberalist legality, as the general rhetoricconcerning economic development, sustainability, transparency, and rule of lawinvoked by the investors is contradicted by the facts. Moreover, the neoliberaldiscourse is extensively used by the investor to cover for the lack of substance ofits claim, which is also affected by suspicions of fraud and corruption.

11De Schutter et al (2013) Foreign direct investment and human development: the law andeconomics of international investment agreements. Routledge, pp 1–212Robison R (2006) The neoliberal revolution: forging the market state. Palgrave Macmillan, p 1813De Schutter et al (2013) Foreign direct investment and human development: the law andeconomics of international investment agreements. Routledge, p 11 and fn 3014Id. at pp. 8, 84–8515Gabriel Resources v Romania, ICSID Case No ARB/15/_, Request for Arbitration, Para 23,available online at: http://icsidfiles.worldbank.org/icsid/ICSIDBLOBS/OnlineAwards/C4706/DC10119_En.pdf16http://www.mining.com/canadas-gabriel-resources-sues-romania-4-4bn-halted-mine/17According to data collected in 2017, Romania’s GDP was 187 billion dollars. http://business-review.eu/news/romanias-gdp-rose-7-pct-in-2017-to-eur-187-billion-outpacing-greece-for-the-first-time-in-decades-official-data-confirm-160405

4 C.-G. Stănescu

The chapter continues with a section that is centered on the neoliberal discourseregarding promotion of “rule of law.” The next one addresses how the FDI institu-tional framework was created. After the chapter covers the legal basis of Gabriel’sclaim arising from the two applicable BITs, it analyzes the neoliberal rhetoric and thetriadic argumentation – sustainability, economic development, and rule of law – asthey stem from Gabriel’s Request for Arbitration. The final section uses leakeddocuments regarding the claim to debunk the three neoliberal arguments raised byGabriel. The last part draws the conclusions.

Neoliberal Legality: What Kind of “Rule of Law” Does FDI Foster?

Although generally neoliberalism is considered a political ideology and an economicphenomenon centered on market supremacy, the role of law and what came to beknown as neoliberal legality is gaining momentum. The focus is on the “changes inspecific areas of law in relation to neo-liberalism, such as rule of law in internationaldevelopment context, international trade law, property rights, and law in the post-communist transition.”18

With the fall of communism in Central and Eastern Europe (CEE), combined with thetransition of these states to market economy19 and their accession to regional economicorganizations, such as the European Union (EU), it is no surprise that the development ofneoliberal legality’s concepts in CEE region is of utmost importance to legal scholarsinterested in the phenomenon. The CEE region provides a plethora of case studies that canenable researchers to consider and evaluate the role played byneoliberalist ideas in politics,economics, and law and in shaping and transforming the former communist states.

One of the main ideas is that “the value of law in neoliberal development policylies in its utility for facilitating market transactions”20 for which reason the coreconcerns of law become protection of private property, enforcement of contracts,21

18Brabazon H (2016) Neoliberal legality: understanding the role of law in the neoliberal project.Taylor & Francis, p 119On the rhetoric of transition of the CEE countries, from the former transition from socialism tocommunism to the current transition from communism to capitalism Mattei U (2008) Plunder, whenthe rule of law is illegal. Blackwell, Malden, p 47. On the types of capitalism that developed in CEEregion Bohle D, Greskovits B (2012) Capitalist diversity on Europe’s periphery. Cornell UniversityPress, pp 22–24. The authors identify three categories: neoliberal regime (Estonia, Latvia, Lithu-ania, and later on Romania and Bulgaria), the embedded neoliberalism (Visegrad states – CzechRepublic, Slovakia, Poland, and Hungary), and marketization (Slovenia).20Brabazon H (2016) Neoliberal legality: understanding the role of law in the neoliberal project.Taylor & Francis, p 1621Id. at p. 31, Weiler T, Baetens F (2011) New directions in international economic law: inmemoriam Thomas Wälde. BRILL, Dordrecht, pp 310–311 and Olaya J (2010) Good governanceand international investment law: the challenges of lack of transparency and corruption. In: Societyof International Economic Law (SIEL), second biennial global conference, University of Barcelona,July 8–10, 2010, 30.07.2018, p 2. The latter author includes the rule of law among the fourattributes of “good governance,” together with transparency, accountability, and legitimacy.

A Study in Gold: Gabriel Resources v Romania. Qui Prodest? The Neo Liberal. . . 5

and protection of foreign investment22 via transparent and impartial procedures.23

These are the embodiment of a “thin,” formal conception of rule of law seen as a“law of rules,”while for the advocates of neoliberalism, they are the preconditions ofeconomic growth. At the same time, the formal elements of the “thin version” of“rule of law” – independent judicial system and effective law enforcement agencies– are deemed the crucial elements and the necessary guarantees to providing a stableinvestment environment and the predictability necessary for markets to operate.24

Seen from the neoliberal perspective, FDI depends on the establishment of aspecific type of “rule of law” and can be said to foster it, by institutionalizing it.However, “rule of law” in this sense has a very narrow meaning, reduced to the threecore concerns mentioned above. As such, the legal dimension of neoliberalism isreduced to legal techniques that “block, minimize or make state intervention exces-sively expensive,”25 usually by resorting to investor-state arbitration (ISA).26

While legitimate in appearance, the “thin rule of law” as advertised by promotersof FDI generates perverse effects27 and does not guarantee that it will change the lifeof society members for the better. For example, contracts entered between foreigninvestors and host states under the protective umbrellas of BITs and ISA are nolonger typical inter partes agreements but political deals with significant impact on acommunity that are disputed in transnational forums. Such contracts28 serve thepurpose of enabling investors to circumvent the difficulty of modifying legislation.On the one hand, investors pushing for changes in legislation faced the risk ofmeeting social resistance, a risk thus removed. On the other hand, where social

22Mattei U (2008) Plunder, when the rule of law is illegal. Blackwell, Malden, p 4423Trubek DM, Santos A (2006) The new law and economic development: a critical appraisal.Cambridge University Press, p 8624Brabazon H (2016) Neoliberal legality: understanding the role of law in the neoliberal project.Taylor & Francis, pp 36–37, 43. Perrone nominates “bilateralization of relations and microeco-nomic rationality” as the two core disciplines of neoliberal governmentality. Also: Mattei U (2008)Plunder, when the rule of law is illegal. Blackwell, Malden, pp 14–15, 19 and De Schutter et al(2013) Foreign direct investment and human development: the law and economics of internationalinvestment agreements. Routledge, p 3.25Brabazon H (2016) Neoliberal legality: understanding the role of law in the neoliberal project.Taylor & Francis, p 4726Weiler T, Baetens F (2011) New directions in international economic law: in memoriam ThomasWälde. BRILL, Dordrecht, p 312; Mattei U (2008) Plunder, when the rule of law is illegal.Blackwell, Malden, p 1827David Abraham’s comment in Garro AM (2011) Trade and investment treaties, the rule of law andstandards of the administration of justice. (The human element: the impact of regional tradeagreements on the human rights and the rule of law). Univ Miami Inter-Am Law Rev 42:294–29528De Schutter et al (2013) Foreign direct investment and human development: the law andeconomics of international investment agreements. Routledge, p 12. “Such agreements [concludedbetween the individual investor and the host government] are often called host governmentagreements (HGAs): they are internationalized contracts, rather than international treaties.”

6 C.-G. Stănescu

groups are asking for legislative changes, the investors can insulate themselves fromthe effects29 by resorting to the universally recognized contractual principle of pactasunt servanda.30 In other words, the neoliberal legal system hijacked legal principlesthat used to be applied to agreements of limited, personal impact to curve the state’sregulatory powers and bend them to their will and benefit.31

It was also emphasized that by contractualization of foreign investor relations, thedoctrine of “acquired rights” was replaced with that of legitimate expectations.Hence:

“host states are [. . .] now bound by obligations and duties they may not haveexplicitly accepted. Legitimate expectations are based on the reliance theory ofcontracts that focuses not on the promise of the counterparty, but on the expectationsof the party pursuing the claim, i.e. foreign investors. These expectations can emergefrom explicit as well as from implicit representations.”32

This has the effect of maximizing wealth of foreign investors on the expense ofthe state’s sovereignty and local communities, but under the cover of legitimacy.

Empirical studies also refuted the hypothesis according to which investment lawfosters “rule of law” in host states that do not operate in accordance with theprinciple of legality (i.e., the principle of pacta sunt servanda) or that display anunstable legal and political infrastructure (i.e., do not have competent and impartialcourts or independent and transparent procedures). Thus, while up to the mid-1990sthe data seemed to “support the idea that investment arbitration served to replace thedomestic courts of non-democratic countries with unpredictable governments [. . .]in the mid-to-late nineties, when investment arbitration claims became more fre-quent, the situation somewhat shifted,”33 as ISA were filed against governmentsexhibiting relatively high levels of democracy of rule of law. Therefore, the plausi-bility of the hypothesis is largely dismissed. Empirical information infirming theneoliberal discourse means that the rhetoric is nothing more than rhetoric. Hence,one may wonder, if the neoliberal theories do not find support in reality, what is therole that they actually play? The chapter will return to this question in a later sectionwhere it analyzes in detail the neoliberal rhetoric in Gabriel’s claim.

29Moran TH, Institute for International Economics (1998) Foreign direct investment and develop-ment: the new policy agenda for developing countries and economies in transition. Institute forInternational Economics, p 20.30Brabazon H (2016) Neoliberal legality: understanding the role of law in the neoliberal project.Taylor & Francis, pp 48, 5231As one of the advocates of neoliberalist ideas put it, ISA puts a “straitjacket on [. . .] the potentialfor regulatory excess triggered by domestic agitation.” In other words, ISA’s role is to curve theregulatory action of the state, taken due to public request. Weiler T, Baetens F (2011) Newdirections in international economic law: in memoriam Thomas Wälde. BRILL, Dordrecht, pp312–313 and fn. 20 citing Thomas Walde.32Brabazon H (2016) Neoliberal legality: understanding the role of law in the neoliberal project.Taylor & Francis, p 55. See Chaisse J, Ruby N (2018) The doctrine of legitimate expectations–comparing international law and common law in Hong Kong. Hong Kong Law J 48(1):79–10433Schultz T, Dupont C (2014) Investment arbitration: promoting the rule of law or over-empoweringinvestors? A quantitative empirical study. Eur J Int Law:18–20

A Study in Gold: Gabriel Resources v Romania. Qui Prodest? The Neo Liberal. . . 7

To sum up, the “thin, formal” neoliberal concept of “rule of law” is advocated andimposed via international agreements on countries where the preconditions ofpredatory capitalist ideas do not yet exist, for the purpose of capital accumulationand to foster a particular type of investment,34 which might not necessarily lead toequitable social development,35 given the absence of any evidence regarding theconnection between internationalization of trade and democratization of a country.36

The Institutionalization of FDI

As part of the process of shifting from state-controlled economy to a liberalized typeof economy, FDI had to be institutionalized and legitimized, by creating the neces-sary norms, sanctions, organizations, and policies,37 with the large support ofinternational organizations. In opening the former closed socialist system, FDI wasobviously dependent on state actions, which had to decide both on the availability ofdomestic assets to foreign investors and on the encouragement of domestic actors tofind foreign partners. As such, institutionalization of FDI appears mainly38 as both apolitical and legal project. The state must adopt and implement the institutions,policies, and laws to encourage and attract FDI.39 As previously stated, several keyinstitutions were (re)established: private property rights (which facilitated large-scale privatization), governance structures, and rules concerning competition, coop-eration, and organization (including here FDI laws and BITs).40

Legitimization is not only inner oriented but also external. Former communiststates, Romania included, tried to enhance via policies and legal measures theirmembership in the community of democratic and developed states. Therefore, theyadopted certain strategies needed to meet the requirements for membership ininternational institutions, such as IMF demanding liberalization of financial capital

34Mattei U (2008) Plunder, when the rule of law is illegal. Blackwell, Malden, p 1635It has been argued that “when the conditions are right, [. . .] FDI can be an important engine forgrowth and human development.” De Schutter et al (2013) Foreign direct investment and humandevelopment: the law and economics of international investment agreements. Routledge, p 8. Whilethis statement is correct in trying to avoid generalization of negative aspects reflected by actions ofrapacious investors in countries with lax regulations, the issue of “how” to establish the rightconditions is difficult to set in practice.36David Abraham’s Comment in Garro AM (2011) Trade and investment treaties, the rule of lawand standards of the administration of justice. (The human element: the impact of regional tradeagreements on the human rights and the rule of law). Univ Miami Inter-Am Law Rev:294–295.“The ‘rule of law’ is surely a good thing but combine free-market free trade with legal enforcement,and the results may be very mixed as far as democracy and justice are concerned.”37Bandelj N, Bandelj APSN (2008) From communists to foreign capitalists: the social foundationsof foreign direct investment in postsocialist Europe. Princeton University Press, p 6638There is also a cultural aspect to institutionalization of FDI. Id. at 70 and 76–7739Id. at 68. see also Chaisse J, Bellak C (2015) Navigating the expanding universe of investmenttreaties– creation and use of critical index. J Int Econ Law 18(1):79–11540Id. at 68–70

8 C.-G. Stănescu

flows or commissioning the World Bank’s Foreign Investment Advisory Service towrite reports and make recommendations on incentives and administrative barriersto be removed in order to attract FDI. All these institutions, as well as the EU,promoted neoliberal development policies and legitimized the attraction of FDI as adesirable strategy.41 These measures were more coerced than voluntarily adopted,42

and due to state weakness,43 they were significantly abused.44 Formal aspects of ruleof law were implemented, while substantial ones remained absent. Romania, thus,experienced what is called a “malign model of FDI and development,”45 in the sensethat “far from generating a favorable impact on income distribution and social devel-opment,”46 foreign investors registered in tax heavens proved to be unreliable47 but havesupported the newly formed oligarchy of indigenous partners and suppliers.48 Thesepowerful domestic groups failed to act in the interest of national economic developmentand displayed an inability to filter or mediate the impact of external influences ondomestic political economy,49 while speculative investments prospered.

However, having a legal or institutional framework in place does not ensureflow of capital, economic development,50 or democratization,51 as evidenced by

41Id. at 8042Authors have identified also a form of mimetic behavior of Central and Eastern Europeancountries, which appeared to replicate the behavior of their peer states in the region. Id. at pp.80–81. Advocates of neoliberalism also admit the fact that ISAwas an external imposition on states:“It was a ‘discipline’ because it forced governments to change their conduct, particularly towardforeign investors in a way which was more in line with the modern and perhaps Western capitalist,notions of good governance.”Weiler T, Baetens F (2011) New directions in international economiclaw: in memoriam Thomas Wälde. BRILL, Dordrecht, p 320 and fn 5.43Bohle D, Greskovits B (2012) Capitalist diversity on Europe’s periphery. Cornell UniversityPress, p 2244Id. at 201, 206–20745Moran TH, Institute for International Economics (1998) Foreign direct investment and develop-ment: the new policy agenda for developing countries and economies in transition. Institute forInternational Economics, p 2146Id. at p. 2147Bohle D, Greskovits B (2012) Capitalist diversity on Europe’s periphery. Cornell UniversityPress, pp 209–210. One should notice here that one of the companies belonging to GabrielResources is registered in Jersey, one of the British tax heavens.48Robison R (2006) The neoliberal revolution: forging the market state. Palgrave Macmillan, pp 7–8. While the author specifically refers to Russia, the phenomenon occurred in other CEE countries,Romania being one of them.49Bohle D, Greskovits B (2012) Capitalist diversity on Europe’s periphery. Cornell UniversityPress, p 18350De Schutter et al (2013) Foreign direct investment and human development: the law andeconomics of international investment agreements. Routledge, p 23. “The FDI inflows are generallydependent on other variables, especially the size of the market in the host country and tradeopenness.”51For some of the neoliberals, the ideal market state guarantees individual property rights andcontracts but does not need to be democratic. Robison R (2006) The neoliberal revolution: forgingthe market state. Palgrave Macmillan, p 3 (fn 2)

A Study in Gold: Gabriel Resources v Romania. Qui Prodest? The Neo Liberal. . . 9

CEE52 or Latin American53 countries. Neither does the absence of such frame-work, the most obvious example in this category being China.54 On the one hand,focusing on the situation in question, one may notice that although Romania waspart to ICSID,55 the New York Convention,56 and had signed several BITs, therewas virtually no foreign investment to the country at the end of the communistperiod.57 That, however, can be explained by the closed nature and state-con-trolled type of economy.58

Further laws to facilitate and attract FDI were implemented after the 1989 Revolution,yet FDI inflows did not appear until 1996–1998.59 An explanation for this phenomenonlies with the fact that until 1996, the reformed section of the former communist party wasin power and resisted neoliberal ideas,60 by trying to implement a “socialism with humanface.”61 The replacement of the socialist party with a center-right alliance in 1996 allowedfor a change in discourse, increased pro-FDI and neoliberal rhetoric, and changed thepopulation’s stance on privatization and role of the state in economy. It took more than aformal institutionalization to get the FDI flows started, as the neoliberal project can onlywork at all three levels: political, economic, and legal. On the other hand, a communist,nondemocratic country such as China managed to attract significant capital inflows62 even

52One of the best analyses thereof is available at Bohle D, Greskovits B (2007) Neoliberalism,embedded neoliberalism and neocorporatism: towards transnational capitalism in Central-EasternEurope. West Eur Polit: Routledge 3053Robison R (2006) The neoliberal revolution: forging the market state. Palgrave Macmillan, p 954China is the largest destination of FDI and the third largest trading nation, despite the fact that itstill maintains significant FDI restrictions. See: Sweeney M (2010) Foreign direct investment inIndia and China: the creation of a balanced regime in a globalized economy. Cornell Int Law J43:209–210 (and fn 11).55The ICSID Convention was ratified by Decree no 62/1975, published in the Official Bulletin ofRomania no 56/07.06.1975.56The New York Convention was ratified by Decree no 186/1961 published in the Official Bulletinno 19/24.07.1961.57Romania has been one of the first communist countries to resort to joint ventures with Westerncompanies, such as the partnership with Renault or Citroen in the late 1960s and 1970s. See:Richman BM (1976) Multinational corporations and the communist nations. Manag Int Rev 16:9,15–16 and Gatejel L (2017) A socialist–capitalist joint venture: Citroën in Romania during the1980s. J Transp Hist 38:71, 75–80. However, by the end of the 1980s, their impact and contributionto Romanian economy was almost nonexistent.58Bandelj N, Bandelj APSN (2008) From communists to foreign capitalists: the social foundationsof foreign direct investment in postsocialist Europe. Princeton University Press, p 8859Figure 3.1. Trends in FDI Inflows in Individual Postsocialist Countries 1990–2000, Romania, atid. at p 9060Bohle D, Greskovits B (2012) Capitalist diversity on Europe’s periphery. Cornell UniversityPress, p 19861The expression belongs to Ion Iliescu, president of Romania between 1990–1996 and 2000–2004.On the 1992–1996 period of quietness and stagnation see https://adevarul.ro/news/eveniment/1992-1996-epoca-linistii-stagnarii-iliescu-vacaroiu-1_50bd3eb47c42d5a663c8fa2b/index.html, avail-able in Romanian only.62Supra fn 57

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in the absence or upright rejection of the neoliberal framework,63 simply because investorswere interested in getting a hold of the market.64

Since one could not establish a direct link between BITs and economic develop-ment, democratization, or the emergence of rule of law, the neoliberal rhetoric wasrecycled by the investors, who started using it in their claims against states. While attimes they do amalgamate philosophical concepts such as absence of fairness orjustice, which stem from the thick concept of rule of law, investors mostly complainabout the malfunctioning or inexistence of formal aspects of rule of law, such asabsence of independent judicial and administrative bodies or lack of due process.The following section analyzes the neoliberal discourse as it transpires from theapplicable BITs and Gabriel Resources Request for Arbitration.

Neoliberal Discourse in Gabriel Resources v Romania

In its Request for Arbitration, Gabriel based its claim on two BITs: Romania-UKBIT and Romania-Canada BIT. The parties signed the former on 13th of July 1995and the latter on 8th of May 2009. The neoliberal ideas stemming from theirprovisions are analyzed in the first subsection. In addition, Gabriel’s Request forArbitration employed significant parts of the neoliberal rhetoric as arguments infavor of its claim. These are covered by the second subsection.

The Neoliberal Discourse in Romania-UK and Romania-CanadaBITs

The Romania-UK BIT’s Preamble recognized that “the encouragement and recipro-cal protection [. . .] of [foreign] investments [. . .] will increase prosperity in bothStates,”65 thus, advancing the neoliberal argument of economic development andmutual economic benefit. The Romania-Canada BIT merely stated that “promotionand protection of investments [. . .] will be conductive to [. . .] development ofeconomic cooperation”66 between the two countries, omitting any of the usualneoliberal arguments in favor of FDI. Therefore, the neoliberal discourse regardingsustainable economic development and fostering the rule of law is almost absent

63On China’s investment regime see: Sweeney M (2010) Foreign direct investment in India andChina: the creation of a balanced regime in a globalized economy. Cornell Int Law J:219–22464Franck SD (2006) Foreign direct investment, investment treaty arbitration and the rule of law.McGeorge Glob Bus Dev Law J 19:337, pp 357, 359. Also: David Abraham’s Comment in GarroAM (2011) Trade and investment treaties, the rule of law and standards of the administration ofjustice. (The human element: the impact of regional trade agreements on the human rights and therule of law). Univ Miami Inter-Am Law Rev, p 29365The Romania-UK BIT is available online at: http://investmentpolicyhub.unctad.org/Download/TreatyFile/221866The Romania-Canada BIT is available online at: http://investmentpolicyhub.unctad.org/Download/TreatyFile/3503. The BIT was replaced by CETA.

A Study in Gold: Gabriel Resources v Romania. Qui Prodest? The Neo Liberal. . . 11

from the two BITs. The only hint toward the former is found in the Preamble of theRomania-UK BIT, which does not have a binding effect on the parties.

The two BITs differ in length and approach. While the Romania-UK BIT isminimalistic, the Romania-Canada BIT is rather extensive, including lengthy defini-tions, exemptions, and annexes that make its content more concrete. Both, however,place an emphasis on legality, environmental protection, and human rights, all mattersof relevance in Gabriel’s claim. The Romania-UKBIT, for instance, states that it appliesto “investments in the territory of one Contracting Party made in accordance with itslaws and regulations.”67 However, there is no other provision regarding legality besidethe general reference to the host state’s laws and regulations.

In its turn, the Romania-Canada BIT contains a similar reference to legality in itsdefinition of “investment,” meaning “any kind of asset owned or controlled [. . .] byan investor [. . .] in the territory of the other Contracting Party [. . .] in accordancewith the latter’s laws [. . .].”68 Furthermore, the BIT provides that “Contractingparties recognized that it is inappropriate to encourage investment by relaxing[waiving or otherwise derogating from] domestic health, safety or environmentalmeasures.”69 In addition, it is stated that “[n]othing [. . .] shall be construed toprevent a Contracting Party from adopting, maintaining or enforcing any measure[. . .] that it considers appropriate to ensure that investment activity in its territory isundertaken in a manner sensitive to environmental concerns.”70

Although displaying different levels of concern, the BITs’ references to legality and/or environmental are noteworthy, given that, as shown later, the investor appears taintedby corruptive practices and the implementation of the project would have had disastrouseffects on the environment. On the one hand, it has jurisdictional consequences becauseonly legally obtained assets as defined in BITs qualify as investments protected by thetwo treaties.71 On the other hand, it may bear consequences regarding the evaluation ofthe merits of Gabriel’s claim.72

67Art 11 – Scope of Application of Romania-UK BIT. Also Art 1 – Definitions, letter a) whichdefines “investment” as “every kind of asset admitted in accordance with the laws and regulationsin force in the territory of the Contracting Party [. . .].”68Art 1 – Definitions, letter g) of Romania-Canada BIT69Art 2, Para 5 – Establishment, Acquisition and Protection of Investment of Romania-Canada BIT70Art 17, Para 2 – Application and General Exceptions of Romania-Canada BIT. See Chaisse J(2013) Exploring the confines of international investment and domestic health protections– generalexceptions clause as a forced perspective. Am J Law Med 39(2/3):332–36171For example, in Gabriel’s Request for Arbitration, the Claimant acknowledges that it failed toobtain an Environmental Permit (Para 31), which would have enabled it to perform the activitiesunder the Concession Agreement. In such case, one can legitimately ask if, by failing to secure thepermit the Claimant’s subsequent actions performed in its absence can be deemed “valid” and thusworthy of protection under the treaties. For details infra Neoliberal Discourse in Gabriel’s Requestfor Arbitration and Valid Investment or Unlawful Appropriation?72The population and environmental NGOs in Romania opposed the project for its extremelynegative impact on the environment, the local habitat and the cultural heritage in Ros‚ia Montană.However, in its Request for Arbitration, the Claimant states that the use of “cyanide-based technol-ogy” is commonly used in gold mining industry around the world, which, although could be true, ishardly an evidence of consideration for the environment, to bring it into the ambit of the BITs.

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The Neoliberal Discourse in Gabriel’s Request for Arbitration

Although the neoliberal rhetoric is merely hinted in the BITs, it does constitute asignificant part of the Claimant’s discourse in its Request for Arbitration. This fact israther surprising, and one should question why the Claimant employs the neoliberalrhetoric so extensively, considering that there is no actual linkage to the BITs. Doesthe neoliberal rhetoric fall well with ICSID arbitrators given that ICSID is a WorldBank forum? Does the alleged abhorrence displayed by the host state against thebenefits of neoliberal investment policies bear any negative consequences in itsdefense against the claim? Is it merely a preemptive tactic, meant to defuse thepotential defenses to be advanced by the host state? Or is it, as Mattei put it, anattempt to legitimize “international corporate extraction”73?

Notwithstanding the reason, the Request of Arbitration develops, alongside withthe alleged indirect expropriation, three arguments associated with the neoliberaldiscourse: (a) economic development, (b) sustainability, and (c) (absence of) rule oflaw. Each of them is addressed in the following subsections.

The Fostering of Economic Development Rhetoric

Economic development is one of the main arguments in Gabriel’s claim. As theinvestor puts it: “The project would contribute billions of dollars to the Romanianeconomy, stimulate development of the economically disadvantaged region in whichthe Project is located”74; “potential to contribute billions of dollars to Romanianeconomy. The Project also has the potential to stimulate growth and badly neededdevelopment in the Apuseni region, which has been suffering from poverty, under-development, and structural unemployment [. . .]” (emphasis added).75

With so many conspicuous advantages, one may rightfully question why adeveloping country would obstruct the project, as this is what the Claimant isarguing in its expropriation claim.76 However, as it is shown later,77 with a royaltyof 2% of the natural resources extracted, a cyanide lake and the total destruction ofthe surrounding area, the economic terms of the investment agreement were far fromadvantageous for the host state or the local community.

Nevertheless, Gabriel suggests that the failure of the project was due solely to“vacillating political considerations,”78 arbitrariness and “violation of basic princi-ples of due process”79 in permitting, arbitrariness and discrimination in the use of

73Mattei U (2008) Plunder, when the rule of law is illegal. Blackwell, Malden, p 674Request for Arbitration at Para 575Request for Arbitration at Para 2576Id at Para 27–3677Infra Economic Development or Speculation?78Id at Para 3479Id at Para 35

A Study in Gold: Gabriel Resources v Romania. Qui Prodest? The Neo Liberal. . . 13

cyanide, and political rejection,80 which attempt to provide a fundament for the thirdneoliberal argument employed by Gabriel: the absence of rule of law.

The Sustainability Rhetoric

Sustainability is another strongly emphasized argument. In Claimant’s own words,the mining project was: “developed as a productive, high quality, sustainable andenvironmentally responsible [project] utilizing state-of-the-art81 technologies and inaccordance with European Union guidelines, international mining best practices andsustainable development guidelines.”82 “The project would [. . .] identify and safe-guard the rich cultural heritage of mining in the region and enable and accelerateremediation of the severely polluted environment.”83 “Gabriel worked to developthe Ros‚ia Montană Project as a productive, high-quality, sustainable and environ-mentally responsible mining project in accordance with all [. . .] European Unionguidelines, international mining best practices and international sustainable devel-opment guidelines.”84 “Gabriel engaged leading global mining, engineering andenvironmental consultants and experts to assist [. . .] undertaking and financingextensive corporate social responsibility programs [. . .] and other projects enhanc-ing sustainability and social progress”85 (emphasis added).

It is uncertain whether the repetition of the word sustainable and the use ofpositive adjectives are meant to provide more “substance” to the claim or to concealrelevant details by burying them in wooden language and legalese. Reading betweenthe lines one might discover the fact that the project implicated “relocating andresettling of members of the local community affected by the project,”86 “defending[. . .] against various legal challenges by [. . .] anti-mining non-governmental orga-nizations”87 or that the technology chosen was “cyanide-based.”88 All these creatednumerous concerns in the Romanian society and generated significant interest andresistance from the population and civic organizations.89

80It at Para 3581A reference to “state-of-the-art technologies” and a “state-of-the-art mine” appears also in thePress Release of July 21, 2015 (2015 Press Release), pp 1, 2, available at: https://www.italaw.com/sites/default/files/case-documents/italaw7870.pdf. The overuse of similar expressions in variousdocuments supports the idea that the Claimant is concerned with hitting specific keywords thatwould justify its rhetoric.82Gabriel Resources v Romania, ICSID Case No ARB/15/_, Request for Arbitration, Para 5 and 2483Id at Para 5 and 2584Id at Para 22, Press Release, p. 285Id at Para 2286Id at Para 2287Id at Para 2288Id at Para 2489For details infra Sustainability and the Environmental Dimension

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The Rule of Law Rhetoric

Generally, the thin rule of law rhetoric is used to argue that people and institutionsare subject to and accountable to law that is fairly applied and enforced. In Gabriel’scase, the rhetoric is employed to prepare the reader for the legal claim of “creepingexpropriation,”90 and base it on local malevolence and political interests affected bycorruption. Thus, one may identify two themes: on the one hand, the theme ofarbitrariness and lack of due process (absence of thin, formal type of rule of law) and,on the other hand, the implied corruption and greed of the local government (whichmay fall within the absence of the thick, substantive type of rule of law).

By claiming absence of rule of law, the host state is demonized as an abusiveactor, willing to obstruct FDI projects that would be beneficial for the society, tryingto extort the victimized investor of its legitimate profits and expectations, just for thesake of political interests, for which reason, resort to an international disputeresolution center is needed and justified. In other words, due to high-level corruptionand general arbitrariness, the state denies its citizens all the benefits generated by theneoliberal economic development, and for that the state needs to pay. Gabriel’s claimis merely restating one of the core ideas of neoliberal institutionalism: that repre-sentative politics are tainted and need to be, if not replaced, at least sanctioned fortempering property rights.91

Here are several of the Claimant’s statements in arguing that Romania actedcontrary to the “rule of law”: “[. . .] the TAC review process was suspended in 2007,for an indefinite time period without valid legal basis by the Ministry of Environ-ment during the tenure of an Environment Minister who publicly opposed theProject.”92 “The TAC again failed to [issue a recommendation] and the Governmentalso failed to act in relation to the Project’s permitting”.93 “The Government hasfailed to act on the Environmental Permit, thus making it impossible for the Projectto proceed”.94 “[. . .] the Government has acted to block the Project’s implementationwithout providing any due process or compensation to Gabriel”.95 “Romania frus-trated advancement of the Project [. . .] in an unfair and non-transparent manner inresponse to vacillating political considerations.”96 “Romania failed to address Pro-ject permitting in a reasonable and transparent manner in accordance with stan-dards of due process. [. . .] Romania [. . .] proceeded to politicize the permittingprocess in an arbitrary manner and in violation of basic principles of due process.

90Id at Paras 38–39. See Chaisse J (2012) Promises and pitfalls of the European Union Policy onForeign Investment – how will the new EU competence on FDI affect the emerging global regime. JInt Econ Law 15(1):51–8491Robison R (2006) The neoliberal revolution: forging the market state. Palgrave Macmillan, p 592Request for Arbitration at Para 2993Id at Para 3094Id at Para 3195Id at Para 3396Id at Para 34

A Study in Gold: Gabriel Resources v Romania. Qui Prodest? The Neo Liberal. . . 15

[. . .] the Government imposed arbitrary and discriminatory requirements regardingthe use of cyanide.”97 In addition, “[. . .] the Government demanded increasedroyalties and other economic concessions from Gabriel as a condition for permittingthe Project” and “[b]y way of a unilateral measure the Government also purported tofurther increase the royalties applicable to the Project.”98

The above reflects that the absence of “rule of law” rhetoric is the most significantpart of Gabriel’s Request for Arbitration.99 Absence of rule of law not only negatesthe potential benefits to be achieved through FDI instruments such as BITs, but itemphasizes the important role of ISA in rectifying wrongs.

However, the latter role can hardly be visible in this case, since in the 10 years ofGabriel’s presence in Romania, the investor never resorted to the local courts forredress against the alleged refusal of the state’s authorities to grant an environmentalpermit, although all requirements were, allegedly, met. While it is true that neitherthe Romania-UK BIT nor the Romania-Canada BIT made local proceedings amandatory precondition for arbitration, the former suggested100 and latter evenencouraged investors to “make use of domestic courts and tribunals for the resolu-tion of disputes,”101 a recommendation that was expressly waved by Gabriel.102

Thus, arguing arbitrariness and lack of impartiality of domestic authorities canhardly be substantiated when the dispute was never brought to local courts.

The second theme, that of corruption and occult local interests, is brought up dueto the important role it plays in the neoliberal discourse.103 Since it is believed thatlaw should focus on elimination of corruption, the investor clearly estimates that thearbitral panel will sanction the behavior of the state officials and ignore its own

97Id at Para 3598Id at Para 3599This theme appears also in the Claimant’s Second Request for Provisional Measures and Requestfor Emergency Temporary Provisional Measures, 28 July 2016, Para 6 (2nd Request for ProvisionalMeasures), available at: https://www.italaw.com/sites/default/files/case-documents/italaw8981.pdf.In this case, the Claimant complains that two investigations concerning fraud and tax evasion thatmay have been committed by the Claimant have only a “retaliatory” scope. In other words, thestate’s action have no legitimacy when investigating the actions of investors and thus no documentthat may arise from the investigations and could be detrimental to the investor should be allowed asevidence in the arbitration proceeding (Para 7).100Art 7, Para (3) of Romania-UK BIT reads as follows: “Nothing in this Article (regarding ISA)shall prevent a national or company of one Contracting Party from referring a dispute concerning aninvestment to domestic courts of the other Contracting Party, where it has the right to do so underthe domestic law of that other Contracting Party”. In other words, availability of ISA was neitherconditioned, nor precluded by domestic proceedings.101Art 13, Para 2, final provision of Romania-Canada BIT reads as follows: “It is agreed, subject tothe provisions of this Article, that the Contracting Parties encourage investors to make use ofdomestic courts and tribunals for the resolution of disputes.” While the text seems to suggest thatdomestic litigation should be the rule, or at least exhausted before turning to ISA, the wording ofPara 3, letter b) indicates that it is in fact s a mere right of choice granted to the investor.102Request for Arbitration at Para 46103Trubek DM, Santos A (2006) The new law and economic development: a critical appraisal.Cambridge University Press, p 144

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unlawful activities,104 in order to rule in its favor. The theme is not as developed,probably because the investor did not want to open too widely a door that couldcause harm to its own claim. As shown later, the shadow of corruption looms overthe entire investment, and the investor could not have been unaware. On the contrary,available evidence seems to indicate it benefitted (or at least it tried to) from it.

Using the rule of law rhetoric, the Claimant expects the enormity of state’sactions to overshadow the absence of substantive arguments and the darker facetsof the story. For instance, by his own admission, the investor tried to benefit from thealleged absence of rule of law and due process to “expedite completion of theProject’s permitting.”105 At the same time, the “rule of law” rhetoric employed byGabriel veils its own corruptive practices, the shady origin of the “investors” or ofthe investment, the lack of relevant experience in mining projects, or the Project’sdisregard for the environment,106 failure to observe legal requirements, or to makeuse of local remedies. Hence, some of the questions raised by this chapter arewhether absence of rule of law can serve as a basis of a claim raised by a non-observant actor or whether it may be allowed to replace absence of facts withdiscourse and slogans in supporting its claim.

As shown in the following section, there is more than meets the eye in theClaimant’s narrative. However, for the time being, the following aspects inferredfrom the Claimant’s Request for Arbitration should be underlined: a rhetoric (ofabsence) of formal type of rule of law, arbitrariness, discrimination, lack of dueprocess, and absence of valid reasons; a hyperbolization of potential benefits,sustainable economic development; and a minimization of the project’s pit falls,Claimant’s lack of relevant experience, corruption, pollution, civic opposition, andwide consensus against the project. The final section juxtaposes these elements ofrhetoric with the facts of the case.

Rhetoric vs Facts

The € 4.4 billion claim brought in front of ICSID on the basis of both the Romania-Canada and the Romania-UK BITs alleges an effective expropriation of GabrielResources’ “sizable investment” in Romania, via its Romanian subsidiary – Ros‚ia

104In the 2nd Request for Provisional Measures, Para 7, the Claimant requests the tribunal not only toreject any evidence arising from investigations concerning criminal behavior of the investor, but alsoto treat any such investigations as oppressive and aggressive, all for the sake of safeguarding the ISAprocedure (Paras 42–56). The request is restated in Claimant’s Reply to Respondent’s Observations onClaimant’s 2nd Request for Provisional Measures, August 24, 2016, Paras 3, 5, 13, 20, 27–44,available at: https://www.italaw.com/sites/default/files/case-documents/italaw8980.pdf. The requestwas rejected via the Reasoned Decision on Claimant’s Request for Emergency Temporary ProvisionalMeasures of October 21, 2016, available at: https://www.italaw.com/sites/default/files/case-documents/italaw8989.pdf105Request for Arbitration at Para 35106Infra Sustainability and the Environmental Dimension

A Study in Gold: Gabriel Resources v Romania. Qui Prodest? The Neo Liberal. . . 17

Montană Gold Corporation (RMGC).107 The stake is one of the largest gold andsilver deposits in Europe, estimated at 10.1 million ounces of gold and 47.6 millionounces of silver, in which RMGC holds almost 81% based on a mining licenseobtained in 1999.108

For a very long time, it was impossible for the Romanian society to know whatwas truly going on in the Ros‚ia Montană Project. The documents were, as theClaimant acknowledges, confidential109 and thus, unavailable for public scrutinyfor more than 14 years. From the moment Gabriel emerged as the sole availablepartner for the mining project in Ros‚ia Montană, the entire procedure took placenontransparently and in complete secrecy.110 It took whistleblowers and leakeddocuments to finally reveal the details of the Project which was supposed to bringso many benefits to Romania and its citizens.111

This section addresses several aspects of the alleged investment, regarding themanner in which the investor managed to become part of and, subsequently, obtainthe concession, the major economic aspects of the investment, the conspicuousconflicts of interests and looming corruption stemming from the contract andinvestor’s behavior, its shady origin and lack of experience in mining projectscoupled with the environmental impact of the project, and finally the preferentialtreatment that might have benefited the investor, by means of a tailor-made law.

Valid Investment or Unlawful Appropriation?

The basis of Gabriel’s claim against Romania is the License for Concession of Exploi-tation no 147/1999 (the License). Ab initio, the License was granted by the NationalAgency for Mineral Resources (NAMR), without tender, to the National Copper, Goldand Iron Company (“MINVEST”), as title holder. However, the License also

107Request for Arbitration at Para 2108Idem. at Paras 1–5109Idem. at Para 62. Although the Claimant states that confidentiality was “state imposed,” thedetails of the deal reveal that the investor was also happy to maintain the secrecy110The issue of confidentiality is raised also in the Claimant’s Request for Provisional Measures ofJune 16, 2016 (1st Request for Provisional Measures), Paras 37–43 and 62, available at: https://www.italaw.com/sites/default/files/case-documents/italaw8541.pdf. Here, however, the Claimantcomplains that due to the lack of access to confidential documents, its counsel is unable to prepareand present their case. In other words, confidentiality affects the Claimants right to due process. Atthe same time, the Claimant appears to be unsatisfied with the fact that several confidentialdocuments that were leaked to the public have not been removed by state’s authorities (Para 59)111For a detailed chronological account of the Ros‚ia Montană saga, see: Beyerle S, Olteanu T(2016) How Romanian people power took on mining and corruption, Foreign Policy, November 17,2016, available online at: https://foreignpolicy.com/2016/11/17/how-romanian-people-power-took-on-mining-and-corruption-rosia-montana/. For further recent developments regarding the site see:Douglas Main – In Transylvania, A Fierce Battle Over Gold And Roman History, NationalGeographic, July 12, 2018, available online at: https://www.nationalgeographic.com/environment/2018/07/romania-gold-mining-fight-rosia-montana-unesco/

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acknowledged the right of Eurogold Resources SA (later known as Ros‚ia MontanăGoldCorporation or RMGC) to perform exploitation works as “affiliated company.”112 Theformer was a national company established byGovernmental decision in 1998, while thelatter was a joint venture SPV, belonging to MINVEST (33.8%) and the GabrielResources (65%).113 One year later, the License ended up gratuitously and also withouttender at RMGC. However, it is not only the lack of tender that is problematic. As itappears from the documents available, the entire transfer scheme was based on a fraud.

On the 5th of September 1995, the Romanian state company published in anational newspaper an announcement according to which it was searching for aforeign partner to exploit the deposits located in Ros‚ia Montană. The announcementestablished a 30-day period for tenders from interested companies.114 However, theproject of the joint venture contract between the Romanian company and GabrielResources states that the latter won the tender on the 4th of September 1995, 1 daybefore the public announcement mentioned115 above.

As already said, the entire operation took place in a nontransparent manner,because the terms of the License remained secret116 until they were leaked in2013.117 Based on the above, the “investment” cannot be deemed compatible eitherwith the provisions of the BITs, which made references to legality and observance oflocal laws in the process, or with the requirements of thin type of rule of law.

Another relevant aspect regarding appropriation stems from the nature of theconcession. By law, the concession did not pass any right of ownership, but a rightto administer and conduct mining activities.118 The reason lies with the fact that therights of the state-owned company had their origin in the socialist period, when stateproperty was deemed inalienable and could not be disposed of by contract (as opposed

112Art 17 of the License113NAMR Address no 254/1997 to the Ministry of Industries and Commerce, available in Roma-nian only at: https://www.documentcloud.org/documents/782246-rosia-montana-acte-premergatoare.html#document/p1114Idem115Idem116http://www.hotnews.ro/stiri-esential-15496670-rise-project-documentele-confidentiale-ale-afacerii-rosia-montana.htm117https://www.riseproject.ro/articol/documentele-confidentiale-ale-afacerii-rosia-montana/118Art 3 point 7 corroborated with Art 16 of Mining Law 61/1998. Art 16 clearly states that “Theright obtained by giving into administration or by concession is different from the ownership rightover lands and cannot be encumbered by the title holder in any way.” The sole exception was thetransfer of the license, which could take place solely with the prior approval of the supervisingauthority (NAMR), according to Art 14 of the Mining Law. For details regarding the RomanianMining Law, infra, fn. 131.

A Study in Gold: Gabriel Resources v Romania. Qui Prodest? The Neo Liberal. . . 19

to private property forming the patrimony of a private enterprise).119 Nevertheless,during the transition period, the previously socialist estates were transferred to state-owned companies and further to private enterprises.120 The same scheme wasemployed in this case when the License granted to the state-owned company wastransferred gratuitously to the foreign investor. Thus, the concession merelyestablished an interest in the natural resources until they have been extracted, providedall the necessary approvals and permits were obtained.

By law, the rightful owner (the state) retains a right of supervision over the actionsof the concession holders via its appointed agencies (NAMR).121 However, as thecase at hand shows, the state failed to exercise its supervision powers as many ofNAMR’s employees were tainted by conflicts of interests and acting in collusionwith the foreign investors.122

Economic Development or Speculation?

The initial License was granted for 20 years, with a right to expand it for additional5-year periods, in accordance to Romanian Mining Law.123 The terms of the originallicense changed rapidly in favor of the investor. RMGC took over the License andbecame title holder in 2000.124 By the same year, the state’s company participationdecreased to 19.3%, while Gabriel reached 80%.125 At the same time, the areacovered by the concession quadrupled via subsequent addendums.126 One mustremember that the License granted only a right to exploit, not to own, as NAMR

119For details Damşa L (2017) The transformation of property regimes and transitional justice inCentral Eastern Europe: in search of a theory. Springer International Publishing, pp 124, (fn 126),127120This process occurred in Russia as well according to Robison R (2006) The neoliberal revolu-tion: forging the market state. Palgrave Macmillan, p 59. “Public property, ‘socialist property,’ wastaken under control and seized by individuals and groups of individuals who treated these assets insome respects as private property, without having a legal title to it.”121Art 40, Para 1, letters e), f), or g) of Mining Law no 61/1998 (abrogated) and Art 55, Para 1,letters e), f), and g) of Mining law 85/2003 (in force).122Infra Conflict of Interests and Corruption123Art 4.1.1 of the License available online, in Romanian only, at: https://www.documentcloud.org/documents/782220-licenta-rosia-montana.html#document/p1124The transfer of the License was approved by NAMR Order 310/09.10.2000.125Idem126https://www.documentcloud.org/documents/782216-anexe-perimetru-rosia.html#document/p6,available in Romanian only

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was entitled to terminate the License127 in accordance to Mining Law in force at thattime.128

The most relevant economic provision concerns the level of royalty for miningproduction, which was set at . . . 2%129 of the annual production value.130 In otherwords, the government passed gratuitously, a percentage of 98 of the total mineralresources in Ros‚ia Montană to the foreign investor. It is very hard to imagine whatkind of economic development was fostered by setting such a ridiculous royalty, andone may legitimately question not only the competence and the good faith of theAgency (NAMR) representing the state’s interests but also their integrity.131 Theattempted renegotiation from 2013 that raised the royalty to 6% in exchange for apreferential treatment of the investment did not alleviate any of the aforementionedpitfalls regarding the economic benefits for Romania or the ancillary concernsregarding a collusion of interests between the investors and people in power.132

Moreover, the speculative purpose of the mining project was also noticed bydomestic contributors, who pointed out that the project was never brought to a“ready to build” status by obtaining the required permits or by reaching an agreementwith the local settlers, to be able to conduct the operations.133 On the contrary, theinvestor has constantly required the government to amend its legislation for a morefavorable (and preferential) legal regime,134 which contradicts not only the veryessence of BITs and the ICSID Convention135 but also the substantive conception ofrule of law.

127Art 4.3.1. c) and Art 4.3.4 of the License128The Mining law no 61/1998, published in the Official Gazette of Romania, Part I, no 113/1998,was abrogated and replaced by Mining law no 85/2003, published in the Official Gazette ofRomania, Part I, no 197/2003. Mining law no 61/1998, Arts 23–25 enabled NAMR to terminatethe license for specific reasons regarding the title holder’s activity, non-compliance or legal status129The percentage increased to 4% once the new Mining Law 85/2003 was adopted130Art 10.1.2 of the License. Additional income was to be generated by taxation, which does not,however, justify the level of the royalty, especially since the investor was granted significant taxdeductions. Art 12 and 13 of the License131Infra Conflict of Interests and Corruption. Also NAMR’s Note no 2060/1997 to the Minister ofIndustries and Commerce, endorsing the partnership with Gabriel Resources as being “a foreigninvestor that, by capital injection and transfer of know-how and equipment, can contribute deci-sively and substantially, in transforming the activities in Ros‚ia Montană . . . in profitable actions”.With 2% royalty, the activities would have been very profitable for the investors, but not for thestate. Available in Romanian only at: https://www.documentcloud.org/documents/782246-rosia-montana-acte-premergatoare.html#document/p1132For details infra, Conflict of Interests and Corruption133http://www.contributors.ro/administratie/un-cancer-al-coruptiei-afacerea-rosia-montana-e-doar-un-tun-speculativ-de-exportat-bani/134For details infra, The Dedicated Law135http://www.contributors.ro/administratie/un-cancer-al-coruptiei-afacerea-rosia-montana-e-doar-un-tun-speculativ-de-exportat-bani/

A Study in Gold: Gabriel Resources v Romania. Qui Prodest? The Neo Liberal. . . 21

Conflict of Interests and Corruption

In its claim Gabriel pointed its finger at political interests and high-level corruptionas the main culprits for the failure of its investment. However, it omitted to mentionits own political ties or nontransparent acquired advantages. As most foreign“investments” with detrimental terms for the state (the License was granted forfree and the state revenue was only 2%, the License area was doubled via adden-dums136), the shadow of corruption looms over it.137 The matter is relevant, as onemay raise the questions, whether such an investment agreement or the proposedtailor-made law from 2013138 would have been possible without support from thestate’s officials, or whether it could be upheld in ISA by the arbitral tribunal.

For instance, in 2000, RMGC sponsored trips to Las Vegas and Rio de Janeiro forthe directors of the NAMR, the state institution that approved the gold miningproject139 and was supposed to supervise its implementation. An Addendum to theLicense reveals a scheme by which the SPV undertook to sponsor “all expensesregarding the participation of Government’s and Agency’s qualified personnel atinternational and national technical conferences or forums, labor visits of theRomanian personnel to the mines belonging to the investor, international andnational training courses.”140 The document is the solid evidence of a conspicuousconflict of interests, considering that throughout the sponsorship both the Govern-ment and the Agency have issued a number of favorable documents to the SPV.141

The leaked documents reveal also the scheme by which the “initial investment” –estimated on paper at 100 million USD – reached 538 million USD: alleged loansmade by the foreign investor to the SPV company and to its Romanian partner.142

These loans would have been retained from the joint venture’s dividends due to

136http://economie.hotnews.ro/stiri-companii-15557580-guvernul-nu-desecretizat-licenta-exploatare-rosia-montana-asa-cum-promis-premierul.htm137https://www.riseproject.ro/articol/de-unde-vin-banii-rmgc/. Also: http://www.mining.com/gabriels-subsidiary-probed-for-money-laundering-and-tax-evasion-in-romania-71474/ and http://www.hotnews.ro/stiri-15523085-proiectul-lege-pentru-rosia-montana-marile-semne-intrebare.htm138For details infra The Dedicated Law139https://www.riseproject.ro/articol/afacerea-rosia-montana-excursii-in-las-vegas-si-la-rio-pentru-functionarii-statului/140Idem. The minimum annual amount for such “trainings” was 5000 US Dollars, and the companyretained a last word on the beneficiaries of sponsorship.141Idem142For instance, the 2009 Loan agreement between Gabriel Resources (Jersey) LTD and MINVEST(the Loan Agreement), available online, in Romanian only, at https://www.documentcloud.org/documents/782217-contract-imprumut-gabrielresources-minvest.html#document/p1

22 C.-G. Stănescu

MINVEST,143 thus enabling the foreign investor to cash in all the proceeds of theventure until the “loans” were fully covered. Moreover, since 2013 the RMGC hasbeen involved in a criminal investigation for complicity to money laundering,144 andas of 2015 it is investigated for fraud and nonpayment of VAT. As such RMGCis hardly the poster image for promoters of “rule of law.”

Sustainability and the Environmental Dimension

As apparent from section “Neoliberal Discourse in Gabriel Resources v Romania,”Gabriel’s claim placed significant emphasis on its know-how and went to greatlengths to accredit the environmental viability of the project while arguing thesustainability rhetoric. Since the Romanian media took a strong interest in thecase due to the dubious nature of the foreign investor and the “investment” itself,the information revealed a very troublesome reality.

It was discovered, for instance, that Gabriel Resources is a small mining com-pany, which in 17 years has not successfully developed or operated any mines andhad no financial resources thereof. In fact, the company was created solely forexploiting the Romanian mine and, after failing to do so, it sold its stake in thearbitral award that is to be rendered.145

The environmental dimension is just as worrying. Beside the neoliberal rhetoricof sustainability, Gabriel resorted to this dimension to show, on the one hand, itscompliance with the Romania-Canada BIT and national laws and, on the other hand,to argue that its failure to obtain an environmental permit was not due to objectivefactors.

However, the text of the License reveals that the value of the envisioned works forenvironmental protection for the period 1999–2003 was 330.000 USD,146 while thebank guarantee for environmental restauration amounted to only 1.5% of the valueof works established in the development exploitation plan.147 The amount wassignificantly low, if one considers the actual impact foreseen by the implementation

143Art 1.2 of the Loan Agreement. According to Art 1.5, of the Draft Loan Agreement thealternative to returning the loan was to pass the valid title over land detained by MINVEST inconnection with the mining Project to Gabriel Resources. At the same time, the loan bore accruinginterest that was to be capitalized yearly (the draft agreement, in Romanian only, at: https://www.documentcloud.org/documents/782219-draft-acord-confidential-imprumut-minvest.html#document/p1). Although the Loan Agreement cited here did not maintain these provisions,there is no way of knowing if previous loans did not actually contain such provisions144Concerning the money laundering investigation regarding RMGC https://www.riseproject.ro/articol/corporatia-rmgc-cercetata-penal-intr-un-dosar-amplu-de-spalare-de-bani/, last visited11.07.2017, https://www.riseproject.ro/articol/4242-2/, http://www.hotnews.ro/stiri-17004712-culisele-tranzactiei-penale-cazul-rosia-montana.htm, and http://www.hotnews.ro/stiri-16970482-sechestru-conturile-rmgc-afacerea-firmelor-fantoma.htm145http://www.huffingtonpost.com/adam-cernea-clark/whose-sovereignty-gabriel_b_7939596.html146Art 5.2.1 of the License147Art 5.3.1 of the License

A Study in Gold: Gabriel Resources v Romania. Qui Prodest? The Neo Liberal. . . 23

of the project. The mining operations would have completely erased four mountainsand two villages and would have left behind a pool of cyanide148 over archeologicalsites149 dating back to the Roman Empire.150

Additional obligations for the holder were to prepare, both prior and aftercompletion of the mining activities the environmental documentation required bynational laws, for approval by the competent authorities,151 and to ensure theecological rehabilitation of the perimeter affected by mining operations, in accor-dance to the law.152 At the same time, the title holder was to comply with allmeasures set by the environmental impact study and the place for environmentalrehabilitation, to conduct mining obligations in accordance with accepted miningpractices and applicable Romanian legislation, to take measures for protecting theenvironment and all its components – surface, undergrounds, air, water, flora, andwildlife – and to minimize their degradation or destruction, or to comply withwhatever measures set by NAMR or other empowered institutions.153

Despite significant amounts spent in PR campaigns, the project has been blockedand subsequently rejected, mainly due to a very strong civic154 and environmentalistopposition.155 In fact, contrary to allegations made by Gabriel, the government’sreluctance to continue the project after renegotiating the agreement might havestemmed solely from public pressure. Subsequently, several NGOs have file aPetition for Non-Disputing Parties and an amicus submission with the ICSID

148Although extremely harmful to humans and the environment, “cyanide is used in the majority ofgold processing operations simply because it is cheap and effective.” See: https://www.mining-technology.com/features/featureshould-cyanide-still-be-used-in-modern-day-mining-4809245/149Ros‚ia Montană was subsequently declared a historical site, which translated into RMGC’s needto obtain an additional permit from the Ministry of Culture. http://www.mining.com/fresh-setback-for-gabriel-resources-in-romania-rosia-montana-named-historic-site/150http://www.huffingtonpost.com/adam-cernea-clark/whose-sovereignty-gabriel_b_7939596.html.Also: http://www2.ziarul21.ro/index.php/actualitate/actualitate/12804-noi-cei-de-pe-valea-arieului-nu-vrem-s-murim-otrvii-cu-aur151Art 8.2.2 of the License152Art 8.2.9 of the License153Art 16 of the License154http://revistapresei.hotnews.ro/stiri-subiectele_zilei-15546501-presa-internationala-despre-proiectul-rosia-montana-dupa-mii-oameni-protestat-parlamentul-respinge-proiectul.htm. Also: http://english.hotnews.ro/stiri-top_news-15550238-digging-for-gold-rosia-montana-romania-announced-closure-mining-project-corners-government-with-continuing-protests-and-threats-legal-action.htm155http://www.mining.com/romania-says-no-to-europes-largest-gold-project/

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tribunal,156 and the Romanian government has been constantly petitioned to includethe Rosia Montana site on the UNESCO Heritage List.157

The Dedicated Law

The government office in 2013 attempted to renegotiate the terms and to have themapproved by law in the Parliament. This way, the effects of the new agreement wouldhave been permanent, while the potential responsibility stemming from unfavorableterms would have been diverted to the legislative power. The Draft Law158 was sentto the Parliament in 2013, but it was rejected in 2014 by both Chambers,159 after itreceived negative reports from several institutions.160

Of relevance is what the law tried to achieve to the benefit of the investor.According to the Statement of Reasons, the License of exploitation, which grantedsolely an administration right and provided the state with the right to terminate theagreement, would have been transformed into a binding organic law, which couldhave been modified only by another organic law. Moreover, the mining projectwould have been declared a “public utility and national interest project,” thusestablishing restrictions of property rights and enabling the investor to expropriateany private property needed for the project’s implementation, without possibility tooppose it. Last but not least, the law would have simplified administrative pro-cedures and remove assets from public property,161 solely for the benefit of Gabriel,to ease and speed up162 the implementation of the project.163

156The document was submitted on the 2 November 2018, but it is not publicly available. Itscontents are summarized in Procedural Order 19 of 7 December 2018 (PO 19), Paras 17–23,available at: https://www.italaw.com/sites/default/files/case-documents/italaw10152.pdf. By PO19 only limited participation from non-disputing parties was allowed157https://www.romania-insider.com/romania-resumes-rosia-montana-unesco.158The Draft Law is available online, in Romanian only at: http://www.cdep.ro/proiecte/2013/500/20/0/pl863.pdf, while the Draft New Agreement between the Government and Gabriel Resources isavailable online, in Romania only, at: http://media.hotnews.ro/media_server1/document-2013-09-3-15504178-0-proiect-acord-rosia-montana.pdf159The decisional forum in this case was the Chamber of Deputies, which decided to reject thetailor-made law. The result of the voting is available online at: http://www.cdep.ro/pls/steno/eVot.Nominal?idv¼11828160See the report of the Special Commission of the Chamber of Deputies and the Senate concerning theapproval of the Draft Law regarding measures related to the gold and silver exploitation in Ros‚ia Montanăand the stimulation and facilitation of development of mining activities in Romania, available in Romanianonly at: http://www.cdep.ro/comisii/rosia_montana/pdf/2014/rp520_13.pdf161For instance, Art 4, point 8 of the Draft Law, approving the definitive removal of 255 ha of forestfrom the national forest fond in Ros‚ia Montană162For instance, Art 4, point 9 of the Draft Law, establishing on the one hand that all permits neededshould be issued in maximum 30 days from submission of required documents and, on the otherhand, prolonging the validity of permits already issued over their due date163Statement of Reasons, point 2: Foreseen Changes, available online, in Romanian only, at: http://www.cdep.ro/proiecte/2013/500/20/0/em863.pdf

A Study in Gold: Gabriel Resources v Romania. Qui Prodest? The Neo Liberal. . . 25

The proponents justified the need to create a “specific legal framework” (meaninga tailor-made law) for Gabriel by employing the same neoliberal arguments one willfind later in Gabriel’s claim. Thus, the proponents underline the “peculiar features”of the project: (a) a mining project of great magnitude, funded exclusively fromprivate funds; (b) the substantial benefits generated for the Romanian economy164

and labor market;165 (c) the mining perimeter covers an area which includes con-structions and properties governed by various legal regimes, thus overburdening theimplementation of the project under efficient economic conditions. Among them, thegovernment mentioned the difficult and long procedures of approving and issuingthe needed construction or environmental permits under the existent laws.166 Nev-ertheless, despite the criticism of its own bureaucracy, the government did not find itproper to amend the existent laws and ease up the process for everyone but tried tocreate a preferential treatment for Gabriel, by way of exemption from the generallegal framework in place.167 Moreover, it emphasized that what the dedicated lawwas trying to achieve was to remove all the legal requirements the investor had notbeen able to comply with on its own throughout the existence of the License.

The law was advertised as an improved deal for Romania, when the economicgains were minimum. The sole beneficiary would have been the investor, whosecontract would have been transformed into a binding law, with additional gains: afreeze in the regulatory framework applicable to the investment, a fixed calendar forobtaining all permits,168 expropriation rights, usage rights over restricted areas,169

prolongation of the license to 49 years (again without tender), more deduction forexpenses, and the reduction of net assets for the mining project. In other words, inexchange for an increase of 2% in royalties and 5% of the shares of the jointventure,170 the investor would have seen all legal obstacles removed, the period ofthe license tripled, increased profits, and less financial encumbrances.

164Art 2 of the Draft New Agreement envisioned an income of 2.3 billion USD from taxes. Inaddition, there were references to economic benefits estimated at 2.9 billion USD165The economic benefits were detailed in Section 3 of the Statement of Reasons and Art 2 of theDraft New Agreement166Idem167Idem, point 4: Amendment of Laws. According to the Statement of Reasons, the proposed lawwould have modified: the Tax Code, the Mining Law, the Land Law, the Forest Code, and theCompany Law. According to point 5, Other Provisions Applicable to the Mining Project (v.), byderogation from legislation governing the protection of natural areas and conservation of naturalhabitats, the investor was allowed to relocate a local natural monument in order to be able to conductoperations (also Art 8 of the Draft Law)168Annex 2 to the Draft New Agreement, “Main deadlines of the authorization calendar” and“Permits and Actions Required from Authorities”169Art 8 of the New Draft Agreement170Art 1 of the Draft New Agreement. One of the conditions for increasing the state participation inthe joint venture was the issuance of the environmental period without “significant” modificationsof the initial project. Another condition was to obtain all other permits required by the exploitationphase, also without any negative substantial changes of the mining project

26 C.-G. Stănescu

Conclusions

Should a state be bound by the questionable and, conspicuously, bad deals enteredby people temporarily in office, i.e., former government officials?171 Should aquestionable “investment,” affected by suspicions of fraud and corruption beenforced, blindly, in the name of protecting the principle of pacta sunt servanda?Should the neoliberal rhetoric of sustainability, economic development, and rule oflaw suffice in replacing hard evidence regarding these three themes? Shall the systemgrant damages to the investor, in the absence of any benefits for the host state or thelocal population, on grounds of mere “expectations”? Qui prodest? Who benefitsfrom the type of investments as the one concerning the Ros‚ia Montană gold deposit?These are just some of the important questions that the upcoming award in GabrielResources v Romania will have to answer.

This chapter showed that the neoliberal discourse of “rule of law” used byadvocates of free market fundamentalism, global trade, and legal reforms in devel-oping countries is now employed against the same countries in international disputeresolution forums. Foreign investors that were supposed to foster sustainable eco-nomic development and aid in the creation of the rule of law are now resorting to theneoliberal rhetoric in order to justify their demonstrably unscrupulous claims.

Although one cannot generalize, cases like Gabriel v Romania clearly underlineeverything wrong with FDI and its institutional foundation: a self-perpetratingplundering mechanism preying on the weak – a money-making machine thatmanipulates facts, distorts reality, and turns mere expectations into protected rights.While pretending to uphold legality and encourage rule of law, such cases avoidlocal or regional courts and use the corruption they have encouraged or benefittedfrom in establishing a foothold in the host state, as arguments for cashing in on aninvestment that did not take place. It is a “veni, vidi, vici” scheme maximizing thegains of investors, financiers, multinational law firms, and arbitration forums at theexpense of those that were supposed to mutually benefit and prosper.

An arbitral award granting damages in the value of 2.35% of the country’s GDPfor an investment that would have created an incommensurable environmentaldisaster and would have generated only 4% of the gold and silver deposit in Ros‚iaMontană in royalties would not support the idea of economic development throughFDI and would not uphold the “rule of law” in any of its two understandings – thin orthick. It would make a travesty out of them. It is the task of the arbitral tribunal eitherto provide substance to neoliberal rhetoric by sanctioning the profiteers of predatorycapitalism, or to endorse another of their scoops.

171On the inability of governments to act in the public interest of their populations De Schutter et al(2013) Foreign direct investment and human development: the law and economics of internationalinvestment agreements. Routledge, p. 24

A Study in Gold: Gabriel Resources v Romania. Qui Prodest? The Neo Liberal. . . 27