Turkey: Legal Solutions For The Obstruction Of The Public Investments On Mining Activities

Turkey has been known with its potential of mine variety which also attracts the attention of the foreign investors. However, despite several amendments made to the Mining Law numbered 3213 (the "Law") which came into force in 1985 over years, the mining sector has not developed as expected. Therefore, it was a necessity to remove the loopholes in the Law and find solutions for the problems in the mining sector. In that respect, the Law numbered 5995 which makes significant amendments to the Law was published in the Official Gazette and came into force on June 24, 2010.

One of the most important innovations brought with the Law numbered 5995 is the establishment of a council competent to resolve disputes between the mine investors and others in cases when mining activities and other public interest investments obstruct each other. Although the respective council was firstly envisaged in the Law numbered 5177 enacted in October 07, 2004 which amends the Law, it was stated in the same that the establishment, operation principals, decision mechanism and other procedures of the council would have been regulated by a regulation. Since such paragraph of the respective article was annulled by the Constitutional Court, the council was not effective and actively working until 2010. The Law numbered 5995 removed such loophole in the Law and the council became active with the amendments made by the respective Law since the organization and the functions of the council have now been regulated in the Law and the Mining Activities Application Regulation (the "Regulation").

I. LEGAL REGULATION

1. Establishment and Competence of the Council

In accordance with Article 7 of the Law and Article 127 of the Regulation, in the event that mining activities and the investments of public interest; such as state and city roads, highways, railways, airports, harbors, dams, power plants, petroleum, natural gas and geothermic pipelines and water conveyance lines obstruct each other, in addition, mining activities cannot be performed and the alternative areas cannot be found for the investment, the conditions of the license holders and the investors shall be determined and the decision regarding how to proceed shall be made by the Council formed under the presidency of the Minister to whom the State Planning Organization is liaised and the participation of at least three members consisting of the Minister of Energy and Natural Resources, the minister or the ministers to whom the other investor institution is liaised and the minister which is related to the institution that approves the decision of investment (the "Council"). In case the number of the participants is under three, the Minister of Customs and Trade participates to the Council as a member. The secretariat services regarding the operations of the Council are performed by the General Directorate of Mining Affairs ("GDMA").

The decision maker for the disputes arisen between mine investors and the other investors of public interest is envisaged as the Council in the Law and the Regulation. On the other hand, as is explained in Section III below, for some special occasions, the competence to decide regarding the subject matter is assigned to the GDMA.

2. Application to the Council

In accordance with Article 7 of the Law and Article 127 of the Regulation, in the event that mining activities and the investments of public interest, the examples of which were given above, obstruct each other at the areas where apparent reserves are determined or the areas which are subject to operating permits, in addition, mining activities cannot be performed and the alternative areas cannot be found for the investment, the Council is competent to grant a decision regarding the current situation by determining the conditions of the license holders and the investors.

Therefore, in case the mining activities and such investments of public interest intersect at the same area, it is possible for the investor or the license holder to apply to the GDMA. When the application is made by the investor, all the scientific and technical documents and the information which prove that there is no alternative place suitable for such investment should be submitted to the same. Upon the respective application, if it is determined by the GDMA after the investigation made by the same that;

  • the mining activities and the investments of public interest obstruct each other,
  • the mining activities shall not be able to be performed in case of realization of such investment,
  • the investment which is planned to be realized intersects the operating permit of the license or the area of apparent reserves or the facility areas where production is made with respect to the license,

the investor and the license holder shall be notified of the situation and shall be requested to submit all the related information, documents and opinions to the GDMA within one month.

Unless the investor and the mining license holder comes to an agreement or notifies the GDMA that they came to an agreement within the respective one month, the GDMA shall follow the process ex officio and an expert report shall be prepared and submitted to the Council. Following the submission of the report to the member Ministers, the Council shall meet upon the invitation of the Minister of Energy and Natural Resources or any of the concerned ministers. The Council grants decisions with the simple majority of the total member number and the respective decision constitutes a decision of public interest.

The Council makes an evaluation regarding the conditions of the license holder and the investor of public interest when such activities intersect in the areas where the apparent reserves are determined or which are within the borders of operating permits in consideration of the following:

  • whether it is possible to produce the mine within a reasonable period of time
  • whether there are alternative areas to be used for the need of raw material of the facilities settled at the licensed fields which provides raw material for the industrial facilities involved with intermediate and end product mining

In addition, if it deems necessary, the Council may also have a report prepared against remuneration regarding the subject matter. As a result of the evaluations, a decision shall be granted by the Council and the respective decision shall constitute a decision of public interest. All the expenses; such as the fee of the report, consultancy fees, travelling allowances and daily costs shall be covered by the investor. Also, the procedures and principles of the mining operator, whose activities are restricted due to the investments via the Council decision, and the investment costs determined by the GDMA shall be covered by the party, which has been ruled in favor of the same. 

3. The Competence of GDMA

In accordance with paragraph Article 7 of the Law, the GDMA is authorized ;

  • to permit other investments which intersect with the 1st Group Licenses that are not subject to any investment,
  • to permit other investments which intersect with the licenses issued for any kind of construction raw materials used for constructions such as gravel, rough construction, dams, ponds, harbors and roads,
  • to permit other investments which intersect with the other group licenses the apparent reserves of which are not determined,
  • to decide as to the other investments for the areas, which are not apparent reserve areas that have been determined pursuant to the provision of the evidence regarding the investments carried out for the works such as drilling, well, gallery and inclined shaft in order to determine the apparent reserve at the licensed sites and regarding the existence of the mine, that they will not prevent the mining activities.

II. CONCLUSION

The Mining Law numbered 3213 which was amended by the Law numbered 5995 activates the Council and provides solutions for the cases when mining activities and investments of public interest obstruct each other. According to the peculiarities of the mining activity such as the license group and the conditions of the reserves, the Council or the GDMA shall decide which investment shall prioritize or be allowed in consideration with certain criteria regarding the significance and alternatives of the same.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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