Yukon company sparks Romanian protests

A Yukon mining company is at the centre of nation-wide protests in Romania over a proposed gold mining project in that company.

A Yukon mining company is at the centre of nation-wide protests in Romania over a proposed gold mining project in that company.

The Rosia Montana project, Europe’s largest gold mine, has been on hold for the past 14 years, snarled in legal wrangling over environmental legislation.

Gabriel Resources wants to begin mining the giant open pit again, with a processing system that includes the use of cyanide.

Environmental activists and local farmers living in the area oppose the project, and they took to the streets in the tens of thousands after Romania’s government gave the project the green light last week. The only roadblock now is Parliament approval, which is expected this week.

“The project is stupid from all points of view,” said Alexandru Ghitaa, a 33-year-old Romanian economist who is part of the protests. “It’s a disaster for the country and it shouldn’t happen. It’s unsustainable, environmentally and economically. It’s a scam that won’t bring real benefits to Romania.”

“I’ve been to Rosia Montana,” said Ciprian Morega, 26. “I talked with the locals. What I learned is totally different from what I see on the TV. Gabriel Resources pays lots of money for an advertising campaign promoting cyanide mining.”

The deal between the Yukon company and the Romanian state has been widely criticized in Romania, even by members of the government. After the first day of protests, the president and the prime minister of Romania accused each other of taking bribes from the mining company and promised a referendum on the issue.

As the protests have spread, Gabriel’s stock has tumbled. On Tuesday, its share price dropped 18 per cent to $1.39, the lowest it has hit since April.

But Gabriel is a Yukon company in name only. It’s traded on the Toronto Stock Exchange, its directors include billionaires from around the world, and its head offices are located in the United Kingdom.

The only thing making it a Yukon company is that it’s incorporated here. Law firm Macdonald and Company administers the company’s file from their offices on Whitehorse’s Lambert Street.

Grant Macdonald said that he couldn’t speak to Gabriel’s situation specifically for reasons of confidentiality, but that it is common for foreign-owned companies to incorporate in the Yukon for the sake of convenience, as the territory’s Business Corporations Act doesn’t require corporate directors to reside in the territory.

Paul Lackowicz, another Yukon lawyer who handles incorporation for a number of large foreign companies, said that attracting companies like Gabriel to the territory is a good thing, and it poses virtually zero risk to Yukoners.

“Corporations have to incorporate somewhere,” he said, “so why not here?”

Resource companies that register in the territory but work overseas are bound by the environmental legislation of the countries they work in, and any dispute would be fought out in that country, Lackowicz explained.

With Gabriel, for example, if Romania decided that the company had breached environmental protections, it would be settled in Romanian court.

“You get these big companies coming here (to the Yukon) but you don’t have to worry about them leaving behind giant contaminated sites like Faro or Yellowknife’s Giant mine,” Lackowicz said.

The companies that Lackowicz works with have revenues in the high hundreds of millions of dollars. Ultra Petroleum Corp, a hydraulic fracturing company from Texas, had $809 million in revenue last year alone.

Foreign incorporation isn’t the only thing that Lackowicz does, but it does create another revenue stream that brings money into the territory.

“I have 20 people working in my office, and this is one of the revenue streams that allows me to keep them employed,” he said.

He compared the Yukon’s suite of legislation to that of Delaware, another place that doesn’t require corporate directors to reside where they incorporate. Delaware has a reputation for being a good place to incorporate, and attracts many of America’s largest corporations, even though they operate entirely outside the state.

Lackowicz explained that, along with generating legal fees, allowing foreign companies to easily incorporate in the Yukon means they are governed by Yukon’s shareholder legislation.

Any time there is a shareholder dispute, they have to come here to fight it out. That sometimes means small armies of lawyers and directors descending on Whitehorse, staying in Yukon hotels and eating at Yukon restaurants, not to mention the money generated for the Yukon legal system itself.

“Yukon is a small jurisdiction, which means we can be very flexible and be able to react quickly to problems,” said Lackowicz. “We’re like the small PT boat, when the provinces or the federal government is like a giant oil tanker. It takes forever to turn those things around, but we can be more agile.”

That agility is another level of protection for the Yukon. It means the territory can afford to loosen its restrictions on corporations, said Lackowicz, and also react more quickly if problems arise.

Three years ago, Lackowicz and other lawyers began lobbying the government for changes that clarify and loosen restrictions around foreign incorporation. Those changes are nearing their final step.

On Thursday, the government announced it is seeking feedback on a number of changes to the Business Corporations Act, Business Name Act, Securities Act and a business law amendment bill. The changes to the Corporations Act have a number of tweaks that Lackowicz said will make the Yukon more enticing to foreign companies.

“This project has been a major undertaking,” Community Services Minister Brad Cathers said in a release.

“When complete, Yukon will have some of the most robust and modern business legislation in the country, creating an environment that is welcoming to business while providing safeguards to Yukon consumers and investors.”

Lackowicz agrees.

“We’re in a global economy and the directors are from all over the world. Corporations are individuals like you or I, except that there’s a paper trail of their existence. They have to live somewhere,” Lackowicz said.

– With files from Vlad Ursulean.

Contact Jesse Winter at

jessew@yukon-news.com

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Whitehorse and Carcross will be among seven northern communities to have unlimited internet options beginning Dec. 1. (Yukon News file)
Unlimited internet for some available Dec. 1

Whitehorse and Carcross will be among seven northern communities to have unlimited… Continue reading

Willow Brewster, a paramedic helping in the COVID-19 drive-thru testing centre, holds a swab used for the COVID-19 test moments before conducting a test with it on Nov. 24. (Crystal Schick/Yukon News)
An inside look at the COVID-19 drive-thru testing centre

As the active COVID-19 case count grew last week, so too did… Continue reading

Conservation officers search for a black bear in the Riverdale area in Whitehorse on Sept. 17. The Department of Environment intends to purchase 20 semi-automatic AR-10 rifles, despite the inclusion of the weapons in a recently released ban introduced by the federal government, for peace officers, such as conservation officers. (Crystal Schick/Yukon News file)
Environment Minister defends purchase of AR-10 rifles for conservation officers

The federal list of banned firearms includes an exception for peace officers

Yukonomist Keith Halliday
Yukonomist: The K-shaped economic recovery and what Yukoners can do about it

It looks like COVID-19 will play the role of Grinch this holiday… Continue reading

Fossil finds at Mt. Stephen. (Photo: Sarah Fuller/Parks Canada)
Extreme hiking, time travel and science converge in the Burgess Shale

Climb high in the alpine and trace your family tree back millions of years – to our ocean ancestors

Black Press Media and BraveFace have come together to support children facing life-threatening conditions. Net proceeds from these washable, reusable, three-layer masks go to Make-A-Wish Foundation BC & Yukon.
Put on a BraveFace: Mask fundraiser helps make children’s wishes come true

From Black Press Media + BraveFace – adult, youth and kid masks support Make-A-Wish Foundation

Colin McDowell, the director of land management for the Yukon government, pulls lottery tickets at random during a Whistle Bend property lottery in Whitehorse on Sept. 9, 2019. A large amount of lots are becoming available via lottery in Whistle Bend as the neighbourhood enters phase five of development. (Crystal Schick/Yukon News file)
Lottery for more than 250 new Whistle Bend lots planned for January 2021

Eight commercial lots are being tendered in additional to residential plots

The Government of Yukon Main Administration Building in Whitehorse on Aug. 21. The Canada Border Services Agency announced Nov. 26 that they have laid charges against six people, including one Government of Yukon employee, connected to immigration fraud that involved forged Yukon government documents. (Crystal Schick/Yukon News file)
Charges laid in immigration fraud scheme, warrant out for former Yukon government employee

Permanent residency applications were submitted with fake Yukon government documents

Whitehorse City Hall. (Joel Krahn/Yukon News file)
City hall, briefly

A look at decisions made by Whitehorse city council this week

Karen Wenkebach has been appointed as a judge for the Yukon Supreme Court. (Yukon News file)
New justice appointed

Karen Wenckebach has been appointed as a judge for the Supreme Court… Continue reading

Catherine Constable, the city’s manager of legislative services, speaks at a council and senior management (CASM) meeting about CASM policy in Whitehorse on June 13, 2019. Constable highlighted research showing many municipalities require a lengthy notice period before a delegate can be added to the agenda of a council meeting. Under the current Whitehorse procedures bylaw, residents wanting to register as delegates are asked to do so by 11 a.m. on the Friday ahead of the council meeting. (Crystal Schick/Yukon News file)
Changes continue to be contemplated for procedures bylaw

Registration deadline may be altered for delegates

Cody Pederson of the CA Storm walks around LJ’s Sabres player Clay Plume during the ‘A’ division final of the 2019 Yukon Native Hockey Tournament. The 2021 Yukon Native Hockey Tournament, scheduled for March 25 to 28 in Whitehorse next year, was officially cancelled on Nov. 24 in a press release from organizers. (John Hopkins-Hill/Yukon News file)
2021 Yukon Native Hockey Tournament cancelled

The 2021 Yukon Native Hockey Tournament, scheduled for March 25 to 28… Continue reading

Most Read