Lack of transparency in Denmark after environmental damage in Armenia

Lack of transparency in Denmark after environmental damage in Armenia

PanARMENIAN.Net - After a Danish-funded mine caused serious environmental damage in Armenia, the Danish state has been less than forthcoming on failed due diligence, transparency and compensation, openDemocracy says in a fresh article published Monday, July 27.

Seven years after Denmark's export credit agency guaranteed financing for a copper mining project in Armenia that caused human rights violations and environmental destruction, the country's business ministry has quietly introduced an extensive duty of confidentiality for EKF employees as part of amending the law governing the export agency.

In 2013, the Danish state pension fund agreed to finance an Armenian copper mining project, Teghut, in the north of the country. The investment, a DKK 350 million ($62m) loan for equipment and services to the mine, was guaranteed by Denmark’s Export Credit Agency (EKF).

As a result of the Danish-funded mine construction, the Teghut mine caused the pollution of local rivers, with damage so severe that local farmers and fruit growers lost their livelihoods. A dam containing liquid waste from the mine still threatens to collapse and bury a nearby village, and a large area of pristine forest in the scenic and mountainous region – home to a range of endangered species – was cut down. In 2019, the European Court of Human Rights ruled that land owned by local villagers had been expropriated in violation of their human rights, and ordered the Armenian state to pay compensation.

With the backing of an EKF guarantee, PensionDanmark had agreed to finance the Teghut project on the condition that the Armenian mining company, Vallex group, used the loan to purchase equipment from Danish engineering conglomerate FLSmidth. Under the loan agree­ment, Vallex’s bank, VTB, was to repay PensionDanmark after 10 years.

Now, some seven years after the original loan was approved, Denmark’s business ministry has quietly introduced an extensive duty of confidentiality for EKF employees as part of amending the law governing the export agency. Workers at EKF, which helps Danish businesses secure financing for projects around the world, can now be severely punished - including up to two years in prison - if they break this confidentiality.

In 2017, EKF withdrew its export guarantee for the project, citing environmental standards, but a 2016 freedom of information request to the Danish Ministry of Foreign Affairs showed that EKF was aware in August 2013 of the risks the Teghut copper mine expansion would pose to the environment, as well as “democratic deficiencies in the Armenian decision-making and approval process” of the mine.

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