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Expropriation for Čukaru Peki: How Zijin Is Trying to Pay Less for Land

10 Dec 2021
Miodrag Živković, a villager of Slatina; photo: CINS
Up until last year, Miodrag Živković had worked the land in the place which now has a big hole in the ground designated for waste from the Čukaru Peki mine, a so-called tailings pond. He had lived off roughly six hectares of property near Bor – forests and fields from which he obtained cattle feed. The land was forcefully taken from him in expropriation, and he sold the large cattle because he had nothing to feed it with. Today, he says, he lives on a disability pension totaling 14,000 dinars.

“We have turned from homestead owners in the country into welfare cases,” Živković, who is trying to get financial compensation for his father Petar’s property, began his story.

It all started in April 2020, when the authorities declared as public interest expropriation for the area of the Čukaru Peki mine, owned by Chinese Zijin Mining. Miodrag Živković received a decision on expropriation, that is, land was forcefully taken from him, for which the company was supposed to compensate him. He met with Zijin representatives on the premises of the City Administration in Bor, but no agreement was reached. The company offered him a low price – below market value according to the estimation of the Tax Administration. The Tax Administration estimated the value of the property he had been living off at around 22 million dinars, and he agrees with the estimate.

Expecting that offer, Živković has to lead proceedings against the company before the Municipal  Court in Bor. The company is asking for a new forensic evaluation whereby it could lower that price.

“A multinational company that is chock-full of money, while we are without a penny in our pocket and we are supposed to wrestle with them in courts. People from the country, that’s what we chose to be. We are neither literate nor do we have any money to invest in lawyers,” complained Živković, who is also afraid of the pollution threatening this area.

RESIDENTS OF THE VILLAGE OF SLATINA IN AN INTERVIEW WITH CINS; PHOTO: CINS

Other citizens of this area also sat with CINS journalists in the cold community hall of the village of Slatina, near Bor. The same concern brought together people of different profiles and life circumstances around the same table – whether they will be able to win their case against the Chinese investor in court and receive just compensation for the hectares of fields and forests forcefully taken from them in the expropriation for the Čukaru Peki mine. The land that had been passed down from generation to generation, in their words, was taken from them overnight, while years will pass before they can get compensation for it in court.

Problems with compensation have resulted in 12 proceedings against Serbia Zijin Mining before the court in Bor. According to the court’s data, forensic evaluation is still pending in most cases. One completed case is currently in the appeal procedure before the Higher Court in Zaječar, whereas another has been sent back for a retrial.

CINS reveals the problems expropriation has brought, to the detriment of the inhabitants of Slatina. The villagers who were forced to sell their property and want to be fairly compensated for it are condemned to lengthy proceedings in which courts decide their fate – but that does not guarantee them justice.

The current version of the new Law on Amendments to the Law on Expropriation will not change that. It is the last in a line of regulations expanding the possibility of expropriation in favor of a private company and to the detriment of citizens, according to CINS’ interlocutors.

In Goran Dimitrijević’s case, forensic experts reduced in court the price Zijin must pay. The Tax Administration believes that Dimitrijević had fields, a pasture and a forest worth close to 6.6 million dinars, but the court asked the company for a sum 5.5 times lower – just over 1.2 million dinars.

According to the verdict that CINS had access to, the price set by the Tax Administration was rejected and the forensic experts’ evaluation was accepted instead.

A lawyer with many years of experience with expropriation cases, Predrag Savić, explained that the court ruling in Dimitrijević’s case was inadmissible:

“I think that the decision (where they were paid below the price set by the Tax Administration) is discriminatory and very bad for the rule of law.”

He explained that Zijin wanted to get land as cheaply as possible and that this was its legitimate right, but that it was not in line with court practice. A judgement of the Constitutional Court, Savić added, read that an estimate made by the Tax Administration was the lowest price a court could set. 

Goran Dimitrijević appealed the basic court’s decision and is now waiting for a verdict from the Higher Court in Zaječar.

“We don’t want to and cannot prevent mining. But why should we, as individuals, be victims of that mining? We are the victims at the moment,” he concluded.

WORKS IN THE AREA OF THE ČUKARU PEKI MINE NEAR BOR; PHOTO: CINS

Zijin representatives confirmed to CINS that the market value of real estate, determined by a local office of the Tax Administration, was usually paid in the expropriation procedure.

However, after expropriation was declared, the Tax Administration considerably increased the so-called market value of real estate without any justification. That price, according to Zijin, is not realistic because that would mean that fifth-, sixth- and seventh-class land in Slatina near Bor is worth much more than, for example, the most fertile first-class land in Vojvodina.

That is how, as they put it, the disagreement with several landowners from Slatina and the subsequent court proceedings occurred.

Former owners spend years waiting for money from expropriation

Problems arise even when a court rules in favor of the residents, as evidenced by the example of Ivica Todorović from Slatina. The Municipal Court in Bor had ordered Zijin to pay him the full price for the land defined by the Tax Administration, but that decision was annulled by the court in Zaječar. In June 2021, the case was returned to the court in Bor for a retrial.

In his book titled “Iskorak ka Pravdi” (“A Step Toward Justice”), Predrag Savić says that the practice of returning a case for a retrial is an insurmountable obstacle and one of the biggest problems in practice.

“That is a violation of the right to trial within a reasonable time,” says the book. Such proceedings are urgent, Savić states, but previous owners of property end up waiting for years to have compensation determined and the money paid to them.

In a realistic period of time, court proceedings can be wrapped up in two to three years, while in extreme cases they can even last more than 10 years. Savić concludes that the residents of the Bor area could “protect their rights only if they have adequate legal aid.” People are compensated for the passage of time due to the duration of court proceedings through interest.

For the citizens of Slatina, future compensation and interest do not solve their current problems. The Ministry of Finance has allowed Zijin to urgently enter people’s property to build a mine and so, as they put it, they have been left landless overnight. They have not earned any income from their fields and forests for more than a year.

“Winter is coming. We have no firewood and we have no money either,” Ivica Todorović told CINS.

Todorović said that people were forced to make ends meet somehow, some found additional jobs, i.e. worked as “day laborers.” In the meantime, they pointed out, everything has gotten more expensive. Had Zijin paid them for their land the sum set by the authorities, CINS’ interlocutors say they would have used that money to buy other property or would have given it to their children, while some do not even know what they would have done because they never wanted to sell their property in the first place.

Expropriation and foreign investors

The right to peaceful enjoyment of property is a fundamental human right, and can be justified only in the public interest, explained Rodoljub Šabić, a former commissioner for information of public importance and personal data protection, who is now a lawyer.

“If a road, railway, hospital, clinical center is built – the public interest is recognizable there and expropriation is carried out as a rule. Never in favor of some economic interests of some companies. And never in favor of a private company.”

Šabić explained to CINS how the authorities had changed the laws and expanded the possibility of expropriation for the benefit of a private company.

First the Law on Mining and Geological Exploration “created a crack” in 2015 so that expropriation could be done for the purposes of a private company, like Zijin. After that, the Law on Special Procedures for the Implementation of the Project of Construction and Reconstruction of Line Infrastructure Structures of Particular Importance to the Republic of Serbia was passed. That law, as Šabić put it, enables the Government to “declare whatever it wants [a matter of] public interest.”

Miodrag Živković believes the authorities had done a great injustice in favor of foreign investors when they passed the Law on Mining:

“That was done deliberately, on purpose, knowing that the Chinese, Rio Tinto, foreign investors would come here, so let the authorities deal with that and not have any problems.”

CENTER OF THE VILLAGE OF SLATINA; PHOTO: CINS

The amendments to the Law on Expropriation the National Assembly adopted in late November this year also benefit private companies. Because of the problems that citizens and activists had highlighted, Serbian President Aleksandar Vučić on December 8 returned the Law to the Assembly and suggested to the Government, as the one who had proposed the law, to amend the controversial parts and organize a public hearing in order to reach a broad public consensus. The Government then withdrew the Law until such potential changes are made.

New Law on Expropriation

Several protest rallies have been held in Belgrade against the amendments to the Law on Referendum and the Law on Expropriation. The focus was on a future jadarite mine which Rio Tinto plans to open near the town of Loznica. The activists opposed to the construction of the mine believe that the legal amendments are being prepared specifically for this project. The Government of Serbia has not declared this project a matter of public interest yet.

CINS wrote earlier how this company had been giving money to the local community, how it had been a welcome guest at the locals’ festivities, and then began buying up land for the new mine.

CINS’ interlocutors explained some of the key problems with the amendments to the law so far.

Luka Šterić, a researcher of the Belgrade Center for Security Policy (BCSP), said that for years the authorities had been attracting foreign investors by sidestepping regulations or turning a blind eye to violations of workers’ rights. So far, that has been done through non-transparent contracts or special laws that apply only to special cases, such as for example the lex specialis for the Belgrade Waterfront project.

Šterić concluded that the new Law on Expropriation was the next step in attracting investment:

“This is one step further in legalizing the practice according to which investors’ interest can be put above the public interest, i.e. above the rights of citizens, for example primarily to private property, but also to the clean environment in which they live.”

A FACILITY IN THE ZIJIN MINE COMPLEX; PHOTO: CINS

Dragiša Ćalić, a legal advisor at the Lawyers’ Committee for Human Rights (YUCOM), believes that the amendments to the Law on Expropriation severely limit human rights relative to the previous law. In his words, under the new regulation people will not be able to sell unlegalized structures at market prices but rather at less favorable construction ones, as well as that the periods for confiscating property are shorter.

The amendments allow expropriation for foreign companies to be carried out on the grounds of international contracts, adds Ćalić.

“The authorities and wealthy foreign investors are much stronger, while on the other side [there is] a citizen with very tight deadlines – that certainly goes against the possibility of standing up to a very important violation of your right by the authorities, and that is the right to your private property.”

Zijin bought vicinity of Bor like Rio Tinto did in Loznica

Serbia Zijin Mining initiated geological exploration in the area near Bor under the name Rakita Exploration in 2010. Two years later, the company discovered ore deposits and a mine was opened this past October.

The Chinese company started donating money to the local community and buying up property in a way similar to Rio Tinto near Loznica – it donated money to the local outpatient unit, school, soccer club, offered benefits to people for selling their land to the company. Most of the residents reached an agreement with the company and so Zijin paid them in line with the evaluation of the forensic experts it had hired. The residents who could not reach an agreement with the company were met with expropriation.

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This investigative story has been produced with the financial assistance of the European Union, as part of the project ‘PrEUgovor Policy Watch: building alliances for stronger impact in uncertain future’. The contents of this story are the sole responsibility of the authors and can under no circumstances be regarded as reflecting the position of the European Union.

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