June 4 AN meeting involving KRY
posted on
Nov 12, 2008 05:20PM
Crystallex International Corporation is a Canadian-based gold company with a successful record of developing and operating gold mines in Venezuela and elsewhere in South America
Very long but worth the read. Some details in here may pertain to KRY's situation now.
"The National Assembly (formerly known as Venezuela's Congress) is the head of the legislative branch of the Republic of Venezuela. The following translation of the National Assembly's Permanent Committee for Economic Development minutes of a meeting convened on June 4th, 2008 was translated by the Travieso Evans law firm in Caracas, Venezuela. The minutes have been made available to the public by the National Assembly. Please be advised that Crystallex is not responsible for the content of this document and does not warrant the truth or accuracy of the document, nor does it provide any assurances with respect to any direct or implied consequences thereof. Accordingly, Crystallex cautions that undue reliance should not be placed on such information due to the uncertainty thereof. The minutes are made available for informational purposes only."
República Bolivariana de Venezuela National Assembly Economic Development Permanent Commission CERTIFICATE NO. 014-2008 ORDINARY MEETING WEDNESDAY, JUNE 4, 2008 At 10 AM, the President of the Permanent Commission, Congressman MARIO ISEA BOHORQUEZ, requested from the Director of the Secretariat Luís Pargas Mujica, to attest to the existence of the statutory quorum in order to initiate the session, who immediately proceeded to verify the existence of such quorum. Following, the President manifested "the session is initiated", corresponding to Wednesday, June 4, 2008, in the Meetings Room, located at the 6
th
Floor of the
José María Vargas building, with the attendance of Congressmen: Henry Tachinamo, Braulio Alvarez, Oscar Ramírez, Jhonny Milano, Iván Lugo, Omar Osorio, Asdrúbal Salazar, Osmar Gómez, surrogates Carmen Sáez and Argentina Menesis. Following, the days´ agenda was discussed, as follows: First Issue: Consideration of the Certificate corresponding to the Ordinary Meeting No. 013.2008 of the Economic Development Permanent Commission dated May 7, 2008. Upon consideration and since the Congressmen did not present any observation to the former, it is considered APPROVED. Following, the Presidency requested the Director of the Secretariat to read out the Report. Second Issue: Reading of the Days´ Report 1. Services received 1.1 Citizen Carlina Pacheco, Vice minister of Economic Development and Planning, invites the Economic Development Permanent Commission to participate in the Dialogue Tables articulated within the Special Supply Plan, in order to exchange points of view that guarantee a safe and sovereign national nourishment. R: Congressmen Henry Tachimano and Jhonny Milano are appointed. 1.2 Citizen Julio García Jarpa, Vice president of the Territorial Order, National Resources and Environment Permanent Commission submits a File presented by María Zabaleta, related to the final sentence of the claim against Empresa Protinal, C.A., for damages, which was declared as PARTIALLY WITHOUT CAUSE. R. Remit to the Agriculture and Agrarian Sub Commission. R. Remit to the Industry and Commerce Sub Commission. 1.3 Congressman Oscar Figuera, President of the Permanent Commission of Social Integral Development, submits a report about Sacosal company, located in the Sucre State. It is regarding the re launching of the Las Salinas de Araya. R. Remit to the Industry and Commerce Sub Commission. 1.4 Dr. Tamara Duque Orea, Vice minister of Interior Relations, informs that surrogate Congressman of the National Assembly, Rafael Figarella, will work as a link between this Permanent Commission and this Ministry. R. On the report. 1.5 Citizen Congressman Oscar Figuera, President of the Permanent Commission of Social Integral Development, submits a claim lodged by citizens Francisco Salas and Rocio Loaiza, who claim that FONCREI offered financing to the Communitary Cooperatives of the UBES-Zulia structures and currently the commitment has been ignored alleging the lack of resources to honor such promise. R. Remit to the Endogenous Development and Popular Economy Sub Commissions. 1.6 Congressman Erasmo Marcano, member of the Comptrollers´ Office Commission, submits a claim lodged by workers from Central Azucarero Cariaco, located in the Ribero Municipality of the Sucre State, wherein they request support in the initiation of the nationalization process of this company. R. Remit to the Industry and Commerce and Agriculture and Agrarian Policies Sub Commissions. 1.7 Citizen Congressman Oscar Figuera, President of the Permanent Commission of Social Integral Development, submits a file sent by the Producers of the Arbol Las Tres Raíces Lot, located in the Urdaneta gully, Zulia State, making reference to the losses of the onion harvests in the 2004- 2005 period, due to the floods and high temperatures of such time. R. Remit to the Agriculture and Agrarian Policies Sub Commission. 1.8 Pedro Sassone García, General Director of Legislative Development and Research, informs that the General Direction of Legislative Development and Research, has scheduled a Forum titled "The Challenges in the Construction of the New Productive Model", to be effected on June 10, 2008, at 9:30 AM, in the Simón Rodríguez Room, located at the José María Vargas building. R. The Congressmen comprising the Commission are duly invited to participate in this event. Congressmen Braulio Alvarez, Jhonny Milano and Mario Isea will act in their capacity of speakers. 1.9 Congressmen Jhonny Milano, President of the Sub Commission of Industry and Commerce, requests that the Agrarian Alimentary Project be analyzed within this Permanent Commission, presented by the Civil Association "Productores Agropecuarios Unidos Socialistas del Sur de Anzoátegui" (PAUSSA), located at the Anzoátegui State. R. Remit to the Agriculture and Agrarian Policies Sub Commission.
1.10
Congressman Jhonny Milano, President of the Sub Commission of Industry
and Commerce, submits the "Project for the Bill of Indication of Origin and Denomination of Origin of original products" for its study and consideration. R. Congressman Jhonny Milano informs that two technical meetings have taken place and invites all the Congressmen to participate in the coming ones. The distribution of a copy of such Project of Law to all the Congressmen is agreed, and it will be considered in the first discussion of the next meeting. 2. Requests of rights of word:
(right to speak)
Congressman Henry Baldayo, President of the Fishing Sub Commission, request a right of word for citizen William Fariñas, President of the Industrial Credit Fund, (FONCREI), in order to grant an exhibition of the "Fishing Socialist District Paraguachoa", of the Tubores Municipality of the Nueva Esparta State. R. Differ this issue, until the proposing Congressman informs the other Congressmen in greater detail. 3. Secretary of the National Assembly: 3.1 Iván Zerpa, submits a telegram signed by citizen Rubén Armas León, wherein he manifests his concern by the National Government's decision to nationalize the cement producing companies. R. Remit to the Industry and Commerce Sub Commission. 3.2 Iván Zerpa, submits a communication signed by citizen William Tadino, Secretary of the Municipal Council Chamber "Juan Antonio Sotillo", of the Anzoátegui State, wherein he notifies that in ordinary session dated May 6, 2008, the appointment of a Mixed Commission was approved between the Legislation and Public Services Commissions of such Council, with representatives of the State Legislative Council and representatives of the National Assembly, in order to draft the Functioning and Informal Economy Market Coexistence Statute Project, José Antonio Anzoátegui. R. Remit to the Sub Commission of Endogenous Development and Popular Economy, who must establish work meetings jointly with Anzoátegui´s State Parliament. 3.3 Iván Zerpa, submits for the acknowledgment and corresponding purposes, a communication signed by citizens Wolfgang Cardozo Espinel and Arnoldo Benítez, Directives of the Federación Venezolana de Asociaciones de Consumidores y Ususarios (FEVACU), wherein they inform that they have filed a legal action against the use of tobacco in the Constitutional Room of the Supreme Court of Justice, in order to demand the guarantee and protection of the right to a good health. R. Remit to the Special Sub Commission presided by Congressman Jesús Domínguez. 3.4 Iván Zerpa, as per what was agreed in session dated May 25, 2008, remit the typed extract of the what was proposed by Congressman Raúl Bracamonte, regarding the labor problems faced by the workers of Central Azucarero de Tacarigua, located in the Carlos-Arvelo Municipality, Carabobo State. It was agreed that Congressmen Raúl Bracamonte and Fernando Vásquez Guzmán, integrate this Permanent Commission in order to help in the investigation of the sugar centrals at a national level. R. Remit to the Industry and Commerce and Agriculture and Agrarian Policies Sub Commissions, in charge of studying such case and inform Congressmen Raúl Bracamonte and Fernando Vásquez. PREVIOUS ISSUES 1. Congressman OSMAR GOMEZ, in attention to the what was formulated by the representatives of the Union for the RUEDAS DE ALUMINIO, C.A., RUALCA company, requests a right of speech for June 11, 2008, upon the facts denounced by the Union of the referenced company. A right of speech is agreed for the proposed day. 2. The Presidency informs regarding the need to give a statutory emergency character to the request made by citizen Vice president of the Republic to Congresswoman Cilia Flores in her condition of President of the National Assembly, wherein it is requested, the Declaration of Public Utility and Social Interest, operation, use and advantage of the property wherein the Hotel Hibiscus now functions (Operadora Margarita 2005), belonging to mercantile society Group 6, C.A., domicilied in the City of Asunción, Nueva Esparta State. Accordingly, a series of documents were read out, submitted by citizen Minister for the Popular Power for Tourism, wherein fundamentally, it is highlighted that such property will be destined for a School Hotel in the eastern part of the country that will report to the National Institute for Promotion and Training of Tourism INATUR, in order to cover the needs of training human resources of the tourism sector of such zone, broadcasting its objectives, studies and investigations, as well as the formation and training of resources for a better development of the hotel and tourism sector, generating jobs and guaranteeing a better quality of life to the population. As considered, it was APPROVED. The Secretary is instructed to remit the corresponding report of the Declaration of Public Utility and Social Interest of the property wherein the Hotel Hibiscus functions, today, to the Secretariat of the National Assembly. Third Issue of the Order of the Day: Rights of Speech. 3.A. Right of speech to Citizen Luís Felipe Cottin, Executive President of Crystallex International Corporation, regarding the Las Cristinas Project. Given the importance of the issue, the following were invited: 1. Citizen Yubirí Ortega Lovera, Minister for the Popular Power for the Environment, who excused herself. 2. Citizen Rodolfo Sanz, Minister for the Popular Power for the Basic Industries and Mining and President of the Corporación Venezolana de Guayana, who sent his representative, Attorney Norelys Lucena González, Legal Counselor of that Ministry and Attorney Flavio Véliz, Coordination of Mining Procedures of the General Direction of Concession of that Corporation. Congressman Mario Isea, President of the Permanent Commission: Introduced the issue and declared: The Representatives of Crystallex International, have come to the Commission, alleging that they have an agreement with the C.V.G., who in turn have a concession for the exploitation known as Las Cristinas, that they have complied with all the permits and other proceedings and the project is not being executed because the Ministry of Environment has not granted the C.V.G. the permit of use of resources (affectation). Additionally, he manifested that he had knowledge that this case was treated in previous opportunities by this Commission and even the National Executive had expressed interest in its development within the framework of the current regulations. Because of the importance of the issue, representatives of the Ministry of Environment, from the MIBAM and from the C.V.G. have been invited to listen to their points of view and the objective situation of the project. The course of action is the following: Engineer Luís Cottin, Executive President of Crystallex will make an initial presentation and later on, the representatives of the other present institutions may declare what they deem convenient, to later on give the right of speech to the Congressmen, who will be able to make the observations or questions related to this issue. Engineer Luis Cottín informed that this Permanent Commission has known this case ever since several years ago, that there is a signed contract with the Corporación Venezolana de Guayana (CVG), since May 7, 2002, which purpose is to re activate and execute in its totality, the mining project Las Cristinas, by way of the design, construction and operation of a facility to process auriferous material and its later commercialization and sale, so that once the contract is concluded, the mine and its facilities will be transferred to the Venezuelan State through the CVG. To date, all the necessary permits have been approved to operate the project, except the environmental impact of the use of the resources (affectation of resources), granted by the Ministry of Environment, notwithstanding compliance of all the demanded requirements. He indicated that the communities claim for the initiation of the works since this is the sole source of employment of the Sifontes Municipality. He explained that the contract with the CVG establishes that Crystallex must be the one to certify the gold reserves therein located, to later on draft a feasibility study and consequently, draft a study of the environmental impact to mitigate the damages that a project of this nature could cause the environment. There was a chronogram, "since the Venezuelan State was interested in not letting this project stand by, since it was a commitment that the State had acquired through the Corporation, of making it happen, to carry it out basically with the primary benefit for the surrounding communities and some contractual benefits as per a community point of view regarding supply and maintenance of many services that exist therein". He stated that such chronogram has been met and all the documents requested have been submitted. "The first time that the feasibility study was submitted for consideration, it was discussed by all of the C.V.G.´s technical team, a series of recommendations were elaborated to maximize the social impact on the communities, and this study was technically recommended and later approved by the Board of Directors of the CVG, who, as the administrator of the property of the State and of the rights before the State, submitted same to the approval of the Ministry of Energy and Mines (currently the Ministry of Basic Industries and Mining), and also submitted the study of the Environmental Impact to the Environment Ministry. In the year 2006, the approval was received, the confirmation that it was viable, feasible, in as much as an economic point of view as well as a technical development and we received the approval by the Ministry of Energy and Mines in due time. Once we had that, the only permit lacking is the study of use of natural resources (affectation) of the Las Cristinas area, for which we have been waiting for three years, ever since the documents were submitted for the first time". At the beginning of 2007, we received a letter that stated that "all the technical part of the project had been accepted and we were requested to submit an environmental bond for the planning of the environmental measures, as well as payment of the customs tariffs or the corresponding taxes. Seven days later all the documents were submitted, all the taxes were duly paid, with which we thought that the environmental impact of the use of resources permit would be granted". After a year of absolute silence on the part of the Ministry of Environment, we received a communication of this Ministry that denied such permit and alleged a series of reasons. He pointed out that this causes a terrible harm to the company, since they have investments to the order of approximately 30 Million US$ in social investment agreed with the CVG and the purchase of special equipment that must be built with specific dimensions for the project and that have been contracted in different places in the world. He highlighted that in the Sifones Municipality of the Bolívar State, there in no other substantial economic activity that generates jobs, and as such they receive a great social pressure. He indicated that the Las Cristinas Project would be one of the largest projects in Latin America and could amount to the fifth or sixth worldwide. He requested permission to the President in order to let Engineer Sergio Alcalá speak, in his capacity of Environment Superintendent of Crystallex, and was duly granted. Engineer Sergio Alcalá spoke up, who presented the Order and Regulations of Use of the Imataca Forest Reserve Plan, and of the administrative providence of the affectation of resources and highlighted the environmental damage caused by handmade (local) mining. Engineer Luís Cottín, submitted for the knowledge of the Congressmen, a detailed report of the project in print and magnetic means, as well as a series of pictures and a video, where one can see: the social work undergone by the company and the environmental damages generated by handmade mining, not permitted in the area of the project, insisting that the future exploitation by Crystallex would use technology of minor environmental impact and restoration techniques as well as reforestation. Following, Attorney Norelys Lucena González had the right to speak, who identified herself as "the Legal Counselor for the Ministry of Basic Industries and Mining, the Ministry that exerts tutelage over the CVG", and declared the following: "What has been declared by the representatives of Crystallex is true…lets be reminded that the concession was granted by the Venezuelan State to the CVG and in turn, the CVG signed an operation agreement with Crystallex for the exploitation of this project. They have complied with a series of steps, of proceedings set forth in the Law to obtain different permits, until the certificate of natural resources issued by the Ministry of Environment was denied, this is a situation that escapes the MIBAM, an it is a competence, in this case, exclusive of the Ministry of Environment. I imagine that they will exercise their rights, their actions. On our part, we must await the exhaustion of the deadlines and of the administrative and judicial processes on the part of the company to take any decision". Crystallex representatives and the Legal Counsel for MIBAM intervene in order to make observations and ask questions, as well as Congressmen Osmar Gómez, Jhonny Milano, Carlos Olivo, Iván Lugo, Oscar Ramírez and Mario Isea, with regards to the following: 1. Why has Crystallex invested such big amounts without having the final operations´ permit? 2. Is there a contract between the CVG and Crystallex? Is the contract available? Answers: Engineer Luís Cottín: As we have stated, such investments are contractual, they were agreed with the CVG and the communities. On the other part, for projects of this nature, the contribution of the equipment must be contracted with ample anticipation so they are available and operational on a timely basis. Being the CVG the only contracting party on the part of the Venezuelan State, having public manifestations from the National Executive in favor of the legal exploitation, paying taxes and with programs of environmental impact reduction, having paid the corresponding taxes and delivering the bonds and having obtained the preliminary permits by the Ministry of Energy and Mines, all made us suppose that the project would take place, and as such, we are surprised upon the last denial by the Ministry of Environment. Attorney Norelys Lucena González responded that the concession granted to the CVG, were the areas: Cristinas IV, V, VI, and VII, reserved to the State by way of Decree of the year 2002 to be explored and exploited by the extinct Ministry of Energy and Mines. There is a contract between the CVG and Crystallex. The authorization contract was signed in June 2002 for the execution of the exploration works, exploitation and sale of the gold mineral that exist in that area, with a duration of 20 years, extensive for two periods of ten years. She continued, the CVG contracts an operator, which in this case is Crystallex, to operate the concession, the CVG requested permission to operate such exploitation. On the other part, Attorney Lucena committed to submit to the Economic Development Permanent Commission, an Executive Summary of the Legal Antecedents of the project and a copy of the corresponding contract between the CVG and Crystallex, as soon as possible. Congressman Mario Isea, President of the Permanent Commission, asked the following: Was the letter regarding the affectation of resources permit submitted by the Ministry of Environment to the CVG? Does this make reference to the zone being catalogued as a reserve zone or a zone of a special forest regime? Attorney Norelys Lucena González answered: it is my understanding that this was the answer from the Ministry of Environment. Engineer Luís Cottín: the applicable regulation to the Imataca reserve has not changed since the beginning of the project until now, and that is why it is surprising that after having approved the occupation of the territory, drilling permits, constructions of diverse infrastructure works and even the study of environmental impact submitted for consideration, it is when the Ministry of Environment presents this issue as an insurmountable obstacle for the development of the project. I insist that the area of influence where the Las Cristinas project is located, within the Imataca forest reserve, is totally affected by the effects of illegal local mining. One of the main objectives of the project is the recuperation of such areas for an industrial development with service for the community. With the decision from the Ministry of Environment, in an indirect manner, the current situation of environmental destruction due to illegal mining is preserved. The President of the Commission drafted the following summary: 1. It is clear that the Las Cristinas project dates a long way back and deals with a concession of an organ of the State to another: Ministry of Energy & Mines to the CVG, that it was being developed in accordance with a chronogram with the approval of the entities involved, as evidenced from the fact that they were requested to pay due taxes, fix bonds, as well as the affirmation made by the MIBAM´s Legal Counsel. 2. The project had been backed with government support until the moment of the denial on the part of the Ministry of Environment to grant the CVG with the affectation of resources permit. 3. The delay in this project and the existence of permanent illegal exploitation may have contributed to the increase in the environmental deterioration of the zone. 4. The population in the zone lack alternative options of massive generation of jobs. For such considerations, it is necessary to clarify the interest of the Venezuelan State and the National Executive's policy regarding this project. Proposals: 1. That the Commission facilitate an encounter space to resolve the apparent contradiction existing between two organs of the State: CVG (which reports to MIBAM) and the Ministry of Environment. With interest on searching for alternatives, taking into account the legal aspects and proceedings to also allow the development of projects with decisive participation from the State, the organized communities and suitable private actors to guarantee generation of jobs, improvement in the quality of life of the Sifones Municipality population. 2. To invite the Minister of Environment for the next meeting, the Ministry of Basic Industries and Mining, the President of the CVG and his technical team in the mining area, as well as the representatives of Crystallex. It is hereby attested in the Certificate, of the commitment from the Legal Counselor of the MIBAM to submit the contract between the CVG and Crystallex as well as an Executive Resume with the legal antecedents. Upon consideration: APPROVED. 3.B. Guest: Citizen Rubén González, Vice minister for Tourism Development Performance of the Ministry for the Popular Power for Tourism. 3.B.1. Guest: Citizen Jorge González, President of INATUR. Issue: Programs, projects and investment plans per State, currently executed by the Ministry of the Popular Power for Tourism. Previously, the Presidency indicated that the invitation for the Minister is based on the need to know the policies, plans and programs maintained by such Ministry, we must promote a strategic alliance and establish coordinated visits to the States to discuss such policies with the Community Councils, and pleaded the Vice minister to work jointly in order to articulate efforts in benefit of national tourism. Accordingly, Vice minister Rubén González, made a general presentation of the works being anticipated by the Ministry in the Bolívar, Delta Amacuro, Falcón, Mérida, Miranda, Monagas, Nueva Esparta, Sucre, Trujillo, Vargas and Dependencias Federales States, in addition to a series of project of national coverage. He indicated that the Ministry of Tourism,