MAC: Mines and Communities

Argentina: Court says Yamana Gold cannot open an office in Esquel

Published by MAC on 2016-05-12
Source: Diario Jornada,

Esquel's umpteenth triumph over a Canadian miner

Chubut Superior Court confirms that Yamana Gold cannot open an office in Esquel

Diario Jornada and

2 May 2016

In 2012 a municipal ordinance prevented Minas Argentinas SA (MASA), a subsidiary of Yamana Gold of Canada, obtaining a business license to open an office in the city of Esquel. The mining company appealed, arguing that "an office does not harm the environment."

But this week the High Court (Superior Tribunal de Justiça or STJ) upheld the decision of the Municipality of Esquel not to allow Minas Argentinas to even open an office in the city. The STJ also warned that an office can be understood as "the brain of a company whose activity is prohibited".

The ruling is another chapter of the long running debate around opencast mining in Chubut province.

The tribunal justices considered that even if MASA is not extracting minerals, it is clear that the commercial authorization would be used for an activity that is prohibited under the municipal communal ordinances.

MASA had requested the annulment of two municipal resolutions issued in 2013 that prevented the company from opening an office in the city. According to their version, the office was not complementary of prohibited activities, but independent from them.

In its judgment, the Civil Chamber of the STJ affirmed the independence of municipalities to regulate commercial activity. "Esquel has full authority to establish an adequate and appropriate mining regime and can determine which activity is lawful and which must be banned within its area of authority".

MASA had obtained a first provisional license on May 2012. A year later, the company requested the final approval. But in November 2012, the Council amended the Municipal Tax Code which included the disputed Article 166: "No commercial authorization be granted for the exercise of accessory, complementary or related activities that are prohibited by local law."

The ministers explained that when the first commercial authorization was extinguished, the legal context had changed "for valid reasons of public interest, expressed in the Community decision to consider mining very rigorously" (referring to the March 2003 referendum).

MASA could not prove that its office is independent from the mining activity. "It is clear that an office is like the brain of every enterprise; and in this case it is a company whose activity is prohibited".

MASA's press representative explained that the company´s Department of Legal Affairs "is analysing the decision in detail" and will consider an appeal to the National Supreme Court of Justice.

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