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Timeline of Akara Gold Mining Case.
THAC offers an overview of one of the major arbitration case concerning Thailand Kingsgate Consolidated Ltd, the parent company of the Akara Resources Plc, has obtained a concession contract for mining gold in Phichit province, for a total area of 3,900 rai covering 3 provinces namely Phichit, Phitsanulok and Phetchabun. In 2001, the concession was divided in different concessions: Chatree Tai concession expiring in 2020 and Chatree Nuea concession expiring in 2028. The concession contract expires in 2020 and the “Chatree Nuea” mining license expires in 2028. On 1st January 2016, the National Council for Peace and Order (NCPO), under Section 44, closed the Akara gold mine. According to the NCPO’s announcement, Akara mine had an impact on the environment causing villagers’ complains. This led to a conflict between the Thai Government and Kingsgate Consolidated Ltd, an arbitration is required. Timeline of Akara Gold Mine Case In 2000, Kingsgate Consolidated Ltd won the bid for the 20 years Chatree Gold Mining concession, for an area of 1,259 rai, expiring on 18th June, 2020. Later, Kingsgate obtained an additional concession for Chatree Nuea for 20 years, from 21st July 2008 to 20th July 2028. The additional concession regards an area of 2,466 rai. (Workpoint News, 2019) From 2007 to 2016, people living in the concession area were affected by the mine, especially due to the pollution that creates health and environmental problems. This situation originated a movement to protest against the mine willing to stop the mining operations. Villagers’ complaints increased every year, due to pollution from the mine that causes health and environmental problems. Especially, contamination of soil, water and air, in addition to the noise pollution caused by the industry’s work process. However, there are supporters for the anti-mining groups. On 19th May 2016, approximately 5000 employees and their families from the area around Chatree Gold Mine gathered at the Pichit City Hall to support Kingsgate. In 2016, villagers submitted a letter to the Thai government. On 13th December 2016, the NCPO, under Section 44, closed the Akara gold mine and suspended operations from 1st January 2017 onwards. This decision was very controversial. After the NCPO’s suspension order no. 72/2016, Kingsgate started a negotiation with the Thai government offering compensation of approximately US$ 750 million (around 30 billion Baht) but the negotiations failed. After the unsuccessful negotiations, Kingsgate decided to enter in an arbitration against the Thai government. In the Statement of Claim, Kingsgate requested the arbitral tribunal compensation for damages from the Thai government according to the Free Trade Agreement Thailand-Australia (TAFTA). The Zurich Australia Insurance Limited concluded a settlement agreement with Kingsgate and will pay compensation to Kingsgate for US$ 82 million. The Thai government hired an American lawyer for 70 million Baht as the first instalment for the year 2018, the total cost will probably be around 600 million Baht. On 3rd-12th February 2020, the Thai government and the Kingsgate enter the arbitration in Singapore. The award is expected by the end of 2020. The arbitral tribunal is still analyzing the facts. What will be its decision? We need to wait a bit more. In the case above, parties could not agree on the appointment of the presiding arbitrator. The Secretary-General of the Permanent Court of Arbitration (PCA) will appoint the presiding arbitrator. If you need any services related to arbitration or alternative dispute resolution (ADR), please contact the Thailand Arbitration Center (THAC) at: www.thac.or.th Tel: 02 018 1615 Address: 26th Floor, Bhiraj Tower (Emquartier) Phrom Phong BTS Station
