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Mining Legislation Reform Initiative

18 November 2017

Studies confirm, that the existing mining legislation makes it very attractive for mining companies to operate in Armenia.  However, mining done under this legislative framework exposes the country’s environment and public health to significant damage. It also deprives the country of greater economic benefits the sector could provide, and generates negligible benefits to offset these costs.

Addressing the Issue

In November 2014, the American University of Armenia (AUA) Center for Responsible Mining launched the Mining Legislation Reform Initiative (MLRI), made possible through founding support from the Tufenkian Foundation.

The initiative works to identify legislative gaps that expose Armenia’s environment and public health to danger, and, through a multi-year effort, address these gaps. The overall goal is to ensure that mining provides sufficient benefit to the nation and local communities to outweigh its many costs and burdens. MLRI works to achieve this goal by researching, drafting, and ultimately passing legislation that elevates the socio-economic benefits of mining, while reducing the negative environmental and public-health impacts. MLRI also provides an ongoing watchdog function in alerting citizens on mining-related legislative changes that may be to public detriment.

Activities implemented in the framework of this initiative include creating coalitions and consultative groups between the Armenia government, RA National Assembly, international community, NGOs and concerned communities in identifying legislative gaps as well as crafting and implementing change. In fact, collaboration with the civil society, advocacy groups, academic institutions, as well as relevant national and international organizations is a key component of the initiative. At the same time, MLRI works with key governmental and legislative bodies in securing draft legislation’s passage into law.

In a first major step towards achieving this goal, MLRI hired international mining tax expert Matthew Genasci to conduct a thorough analysis of Armenia’s mining fiscal system. Mr. Genasci works with MLRI to provide legal and economic analysis of Armenia’s current mining fiscal structure, compare it to those utilized in other countries, regionally and internationally, and recommend legislative and policy changes to make Armenia’s mining fiscal system more robust, resilient and economically beneficial to the country.

During 2017, the Sustainable Minerals Institute at University of Queensland (Australia) drafted 6 working papers analyzing Armenian mining legal framework based on MLRI gap analysis as well as presenting global best practice overview related to all 6 areas covered by the working papers. These 6 areas include: Mine Waste Classification and Management, Remediation, Rehabilitation and Mine Closure, Compensation for Environmental Damage, Environmental and Social Impact Assessment, Monitoring, Enforcement and Compliance, and Occupational Health and Safety. Following the publication of the working papers, MLRI has been assisting the RA Government in the following areas:

  1. Revision of the waste management provisions of the Mining Code, particularly providing comments and recommendations in the drafting process based on the previously conducted gap analysis of the mining legal framework, as well as working papers prepared by SMI, University of Queensland. The amendments were adopted by the Armenian National Assembly in October 2016 and were provisioned to enter into force in 6 months after being adopted, during which period 20 regulations were planned to be drafted and adopted by the Government of Armenia. MLRI has also provided technical assistance in the process of the development of the 20 plus sub-legislative acts to enact the changes to the Mining Code.
  2. Development of the Mining Sector Policy Framework through provision of recommendations to the draft framework in 2016. Based on this framework, the development of a comprehensive mining policy and strategy is currently in progress.
  3. Engaging in debates on changes to the royalty calculations by communicating conclusions of MLRI international tax expert Matt Genasci to various stakeholders in March 2017.

Starting from April 2017, American University of Armenia's LL.M. program offers a course on Mining Law as a result of joint efforts by MLRI and LL.M. program. The new course introduces students to the basics of the mining law within both international and domestic legal frameworks with emphasis on how to best ensure sound environmental management through legal tools and institutions.

The project’s analyses and results obtained to date will be used to develop a legislative reform roadmap and advocacy/communications strategy to help push through reforms during 2018. To develop roadmap and communications strategy, MLRI plans to establish a panel of experts that will support MLRI in drafting the legislative reforms roadmap, package, and strategy for their advocacy.

 

About the AUA Center for Responsible Mining

Through research, training, and advocacy, the Center for Responsible Mining promotes the creation and adoption of global best practices in socially, environmentally, and economically responsible mining of Armenia and the region.  To archive this, the Center engages with all key stakeholders, including industry, civil society, environmental advocacy groups, financial institutions, and the public sector.

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