Southeast Europe: Plundering the Western Balkans

Milorad Dodik is nothing short of an expert when it comes to attacks on the Bosnian state. Republika Srpska’s (RS) president has been hurtling the Serbian-dominated entity of Bosnia and Herzegovina ever closer toward secession over the past months. State institutions should be stripped of their power; decisions of the state’s highest court should cease to apply in RS. On 9 January, Dodik opened the celebrations to mark a holiday previously deemed unconstitutional by Bosnia’s Constitutional Court, with paramilitary formations and Putin’s Night Wolves taking part in the festivities. Secession is the main subject of Dodik’s propaganda, which even conjures up the spectre of a new war.

For Dodik and his SNSD party, nationalist aspirations are by no means the only interests at stake here. The Bosnian-Serbian leadership uses its position of power primarily as a lucrative source of income: family members and party colleagues have been siphoning funds from state budgets for years – with no consequences from the domestic legal system.

Bosnia and Herzegovina: Despoiling of public resources by ethnonationalist clans

The success story of Dodik’s son Igor and daughter Gorica is the prime example: the two have been linked to the company Prointer, which landed public contracts valued at around 196 million convertible marks in recent years, according to an investigation by the business-oriented media outlet Capital. While Dodik repeatedly calls the existence of the Bosnian state into question through his (well-publicised) statements and actions, he and his family are making a fortune off public contracts with that very same state.

In an effort to shut down the “patronage network” that makes this possible, US authorities placed Dodik’s children and their companies on a sanctions list in late October of 2023. The companies enjoy the patronage of public institutions, primarily in Republika Srpska, and have a virtual monopoly in several areas according to Ivana Korajlic, who heads up Transparency International’s Bosnian office.

Since Dayton, Bosnia-Herzegovina has been dominated politically and economically by three ethnically centred power blocs, all of which were involved in wartime dealings and crimes prior to the signing of the peace agreement. Like Dodik’s SNSD, the ethnonationalist Croatian HDZ and the Bosniak SDA have been helping themselves to lucrative state contracts. Hardly any jobs are awarded without one of these blocs having a say in who gets them: the ethnic clans behave as though they owned the state.

Politics and business interests

Thus, systematic exploitation has become a leitmotif of the Bosnian political system. It is always the same pattern: alleged “national” interests of the three ethnic blocks are bound up with private and party-linked business deals. The result is a thriving business model for a small power clique in one of Europe’s poorest countries – to the detriment of the state and the general public.

The clans have proven quite inventive when it comes to plundering the country’s resources, with the theft of entire forests being a particularly provocative example, especially in the age of climate change. It has been calculated that two million cubic metres of wood are stolen from Bosnia’s forests each year, according to Anes Podic of the environmental organisation Eko Akcija in Sarajevo. Near the town of Pale, for instance, the theft of wood on Jahorina Mountain, known as a site of the Sarajevo Winter Olympics, can be seen from far and wide. Environmentalists say that the involvement of high-ranking politicians is what makes it possible for the perpetrators to get away with criminal activity on this scale.

Bosnia-Herzegovina’s political leaders are not the only ones involved in the predatory over-exploitation of the country’s resources though: increasingly, international corporations are also taking part. For example, Adriatic Metals Plc is gearing up for large-scale mining activities in Vares, a small town in the mountains not far from Sarajevo, the capital. The investments of the London-based corporation have been the target of criticism for months. Its Vares project was the subject of an open letter sent by five environmental groups to the US, UK and Norwegian ambassadors, who had expressed support for the planned mining project, even praising its “sustainability”. Observers on the ground take a different view: the environmentalists who have joined forces to fight the large-scale project say that, far from being sustainable, the mining project endangers landscapes that should be receiving protection.

Gold rush atmosphere – without concern for flora or fauna

The forest in and around Vares is considered an important habitat for wild animals, including bears and wolves. Activists complain that trees have been felled along stretches of the forest and point out that the authorities have altered existing land use plans in preparation for the mining activities. In this sense, the area of woodland endangered by the project is greater than was calculated for the project documentation, reports Prof. Samir Lemes from the NGO Eko Forum Zenica. The primary subject of Semes’ criticism is the lack of transparency regarding the planned mining activities. Officially, the plan is to extract zinc, lead, barite, and silver.

Environmental organisations lament that the community will be paying a high price: biodiversity and nature, including a protected virgin forest will be sacrificed in order to extract the mineral resources. Professor Dalibor Ballian of the University of Sarajevo’s forestry faculty has determined that the preparatory work on the project has already resulted in animals leaving the region. The vegetation has changed and drinking water has been polluted, including that of a spring in the immediate vicinity of the mine. “The area is being transformed into an industrial desert,” warns the forestry expert.

A report by the internationally active NGO Bankwatch arrived at the same conclusion: 3,000 square metres of forest were “mistakenly” cleared in the “wrong place”, protests the NGO’s Pippa Gallopp. Bankwatch is also critical of the role of the European Bank for Reconstruction and Development in the project: the EBRD purchased shares in Adriatic Metals, the mining company, ignoring the documented environmental problems. Bankwatch sees this as a clear violation of the principles set down in the EBRD’s own environmental and social policy.

Prospects for exorbitant profits

The glow of the prospects for exorbitant profits is putting the questionable practices into the shade, though: Adriatic Metals has seen its stock prices shoot up 750% since 2018, according to Miningscout.de, an information portal for mining industry investors. The hype around mineral resources is in full swing – and international corporations are scenting lucrative opportunities in other parts of Bosnia as well. “An unbelievable amount of gold was found along the river Pliva”, carolled Miningscout in early 2023, noting: “There is a gold-rush mood in the Balkans.” The Balkan states are becoming the new raw materials “hotspot”, the news portal reported.
Meanwhile, few are listening to environmentalists’ calls for compliance with international conventions on the protection of nature and the environment. Activists in Bosnia tell of visits by foreign diplomats who send out an unmistakable message that criticism of the large projects being planned, like that in Vares, is unwelcome. In the autumn of 2023, the Bern Convention’s Bureau requested the Bosnian authorities to enforce a halt to the activities in Vares until the complaint filed by environmental activists had received judicial consideration, something Adriatic Metals has simply ignored.

Certainly, representatives of Western states, who, in other contexts, not infrequently criticise the corrupt structures in the country and regularly call for measures to fight corruption, are now – with sought-after resources at stake – making common cause with the local and not infrequently corrupt politicians. Bosnia ranked 100th on Transparency International’s Corruption Perceptions Index for 2022 – on a par with Malawi and Sierra Leone.

The sleepy little Bosnian town of Vares is only one of many places to have caught the eye of companies, primarily European companies. There are reasons for this: in March 2023, the European Commission issued its proposal for a Critical Raw Materials Act, which is intended to help ensure the supply of raw materials important for supply chains and production processes. Brussels is seeking greater autonomy in raw materials extraction and above all to reduce the EU’s dependence on China in this sector.

Is the EU sacrificing the Balkans on the altar of decarbonisation?

The European Union’s strategic realignment is already having far-reaching negative effects on countries in Southeast Europe: in addition to the damage it does to the environment, metal extraction poses serious risks for local communities. The fact that the raw materials extracted are intended for use in the transition to more climate-friendly mobility does not make that any less objectionable. The portal Balkan Green Energy News pointed up this contradiction back in the summer of 2022, asking: “Is the EU to sacrifice [the] Balkans to secure resources for its energy transition?”

The environmentalist Lemes suspects that lithium also plays a role in the Vares project, although this has never been officially confirmed. Lithium is used in automotive battery production, so demand for the valuable material has skyrocketed with the e-mobility boom. Up to now, lithium extraction has been concentrated in Australia, Chile, China and Argentina, which have the largest known lithium reserves. Now the spotlight is on the hitherto untapped reserves in the Balkans.

In Bosnia, criticism of a double standard on the part of the West is growing steadily louder: while environmental protection and biodiversity are writ large in the EU, many in the Balkans have the impression that EU investors are happy to turn not just one, but two blind eyes to these issues there. Certainly, poorly developed democratic structures in the Balkan states and the countries’ key political players, whose interest in environmental protection issues is infinitesimally small, are making it easy for Western actors to pursue their economic interests.

Serbia: An autocrat and lithium reserves

Western actors’ thirst for raw materials also sheds some light on recent diplomatic volt-faces in the wake of Russia’s war of aggression against Ukraine: representatives of both the USA and the EU have taken a remarkably lenient line on President Aleksandar Vucic’s behaviour in Belgrade, despite the continuing policy of destabilisation pursued by Serbia, a loyal partner of Moscow. OSCE observers reported that the Serbian parliamentary elections in December 2023 were marred by intimidation on a massive scale and biased media coverage, but there has been strikingly little criticism from the EU on this issue.

This is even more surprising given that President Vucic is putting Serbia’s multiethnic neighbouring states, Bosnia-Herzegovina and Kosovo, at risk with his “Serbian world” doctrine, which envisages the unification of all Serbians in one country – and thus threatens to upset the existing peace order.

Nonetheless, US diplomats continue to praise Vucic as a “good partner”. That Belgrade has been covertly fomenting violence in Northern Kosovo, that Serbian forces abducted three Kosovan police officers on Kosovan territory, and that there was Serbian involvement in a terrorist attack that resulted in the death of another Kosovan officer: all this is being prudently ignored in Washington and Brussels. The political calculation behind the position of the US and the EU: it would be highly desirable to extract Vucic from Moscow’s embrace. At least, that is the unofficial explanation for the continuing appeasement policy. There are indications, though, that some very different considerations are also involved.

Jadar Valley: one of Europe’s largest lithium mines?

Serbia has an aggressive foreign policy vis-à-vis its neighbours, but it has something else as well: lithium. Experts estimate that the country is home to about 1.3 percent of the world’s lithium reserves. The corporation Rio Tinto plans to open up one of Europe’s largest lithium mines in western Serbia’s Jarad Valley. The reputation of this Anglo-Australian mining multinational is more than somewhat tattered: the globally active mining giant has already demonstrated more than once that the environment and cultural heritage mean nothing to it.
In the Jadar valley, too, scientists, environmentalists, and representatives of the Serbian opposition have been warning for years of the likelihood of long-term damage to agricultural lands and toxic pollution of the Drina and Save rivers, which supply water to about 2.5 million people.

As is so often the case, there is a lack of transparency regarding how the deal between the Rio Tinto Group and the Serbian leadership came about. In the winter of 2021/2022, though, huge protests, which saw tens of thousands of people all over Serbia blocking streets and motorways for weeks, forced the regime in Belgrade, which has been growing increasingly autocratic in its domestic policy, to put the project on hold.

Nonetheless, it seems very possible that the lithium mining project will be continued at some point: President Vucic now describes his decision to halt it a big mistake. Meanwhile, Rio Tinto is still buying up land.

New form of colonisation?

Despite the massive resistance to the lithium project, despite the clear and logical arguments of the project’s opponents, the European Commission also continues to emphatically support the Jadar valley mining project. In September 2023, the Commission and the leadership in Belgrade signed a “letter of intent” to initiate a strategic partnership for the exploitation of critical raw materials, including lithium. Germany’s government has also made its interest in the planned mining activities explicit for quite some time. Angela Merkel, who maintained close contacts with Vucic back when she was chancellor, left no doubt about Germany’s interest in Serbia’s rich lithium reserves. Foreign Minister Annalena Baerbock has also recently emphasized the importance of lithium.

In this context, it also seems worth mentioning the establishment of an “institutional partnership aimed at strengthening the industrial strategy in line with the European Green Deal 2020 and at the same time strengthening supply chains”, as revealed by the Austrian daily Der Standard. Berlin’s contribution within this cooperation is said to be the assignment of a German advisor directly to the Office of the President in Belgrade. According to a report in Le Monde, Rio Tinto has also established contacts with Germany’s economics ministry, VW and Daimler. Policymakers in Berlin are keeping their cards rather close to the vests when it comes to lithium deals with Belgrade though.

The opponents of the suspended Jadar Valley project plan to continue their fight: on her Twitter account, Serbian activist Bojana Novakovic calls for people worldwide to challenge narratives justifying the destruction of nature, fertile lands, and indigenous populations in the name of a “green transition”. In early September 2023, Novakovic called on the European Parliament to “stop selling out nature and people”, a direct criticism of the Critical Raw Materials Act. She calls for the protection of human rights and indigenous communities and the prevention of imminent environmental disasters.

The EU is behaving hypocritically in the Balkans – this, is the increasingly vociferous accusation levelled by environmental activists. Highly toxic production capacity has been relocated to poor countries, thus de facto exporting environmental problems to them. Tihomir Dakic, who heads up the Centre for the Environment in the Bosnian town of Banja Luka, describes the situation as follows: “What we have here is a new form of colonisation.”

Dakic’s condemns the lack of transparency associated with the award of concessions for the environmentally harmful exploitation of resources as reprehensible, also reprehensible in his view is the overt cooperation of international enterprises and state actors with non-democratic forces, forces which the international community itself has repeatedly described as corrupt. The environmentalist is certain of one thing: Western investors have their eyes firmly focused on the Balkans, and their as-yet untapped resources, precisely because of the illiberal power structures that hold sway there.

Albania: Airplanes in nature reserve

There are controversial projects in other Balkan countries as well. Although environmental activists in Albania were able to celebrate a significant victory recently, when the Vjosa River, with its unique ecosystem, was declared a national park, their battle is far from won. An airport is being built near the port city of Vlorë not far from the Vjosa delta – even though the area is considered one of the Mediterranean region’s largest ecosystems. It is the habitat of more than 220 bird species, including vultures, flamingos, and pelicans migrating along the Adriatic flyway, and a paradise for reptiles as well. Opponents of the airport are in no doubt: the large-scale project, stretching over 34,000 square meters, would destroy forever a landscape that is clearly worthy of protection. Gabriel Schwaderer, director of Euronatur, an environmental organisation active throughout Europe, points out that planes using the airport would be flying right through the protection zone.

The leadership in Tirana does not care: Albania’s Prime Minister Edi Rama makes no bones about his backing for the plans. This is another case in which environmentalists complain of dirty tricks by the authorities in connection with the award of the concession: the borders of the protected reserve were redrawn to exclude the site of the planned airport. The EU Commission has now also recognised that the project violates national and international law, and in September 2023, the Bern Convention Steering Committee called on the Albanian government to stop the construction of the airport.

Unlawful project: Munich Airport involved

One particularly fraught aspect of this controversial project is that one of the companies involved in it is a subsidiary of Flughafen München GmbH, the company that operates Munich Airport. The involvement of a state-owned enterprise is “extremely problematic”, according to Euronatur, which has called for the immediate withdrawal of the subsidiary (Munich Airport International GmbH) from the project.

The airport is not the only troubling project in Albania though. The Albanian government is planning to build an LNG terminal to the north of the port city of Vlore in cooperation with the US corporations ExxonMobil and Excelerate Energy. This would allow large volumes of liquid gas to be distributed across Europe. Excelerate-CEO Steven Kobos explains that a terminal on the Albanian coast could increase the energy security not only of Albania but also of Italy, Bulgaria, and other EU countries.

The planned LNG terminal would devastate the green Bay of Vlore as a recreational area, protests environmental activist Lavdosh Ferruni. The planned gas terminal is just a few metres away from lush woodland with unspoiled beaches, and it is not far from the Vjosa-Narta National Park. The construction craze on the Albanian coast is already getting huge, in Ferruni eyes, and now the LNG terminal that US corporations are planning will destroy the last remaining patch of green. Ferruni and other activists have therefore filed a lawsuit in the hope that the destruction of the coastal environment can still be stopped.

To preclude future litigation, Edi Rama’s government is trying to eliminate the “restrictive” boundaries associated with the protection of nature. In the last days of 2023, parliamentary legislation that would remove decisions on the exploitation of protected reserves from the scope of democratic control was hastily introduced. Approval authority would be assigned to the National Territorial Council, an executive branch body headed up by the prime minister himself. Environmentalists see the maneuver as a clear attempt to open up protected areas for intensive development in the grey infrastructure sector.

Montenegro: Cliques, greed and an ecocide

Two things know almost no limits: the avarice of investors and the willingness of local politicians in the Balkans to ignore the responsibility they ought to feel for the unique nature and rich biodiversity of their regions. In Montenegro, too, an unbridled construction craze has been destroying landscapes and towns for years: Budva’s once-green hills are swamped in concrete, and apartment blocks sprawl out as far as the eye can see.

Undoubtedly, one of the greatest environmental sins is the Montenegrin section of the Bar–Boljare highway, which was built largely by China Road and Bridge Corporation (CRBC). During the highway’s construction, which began in 2015, a kilometer-long stretch of the UNESCO-protected Tara River was devastated. The Tara is considered to be one of Europe’s most beautiful wild rivers. Its riverbed was ruined and the biodiversity in the area suffered permanent damage. Environmentalists had been warning of the dangers posed by the construction for years but were unable to prevent what is now being called an ecocide. The Montenegrin Environmental Agency confirmed in early 2024 that the damage has not yet been repaired.

This is yet another case of a project given a green light by politicians at the highest level: the contract with Chinese Road and Bridge Company emerged out of clandestine dealings between the Chinese company and the long-serving Prime Minister Milo Djukanovic, who, according to information revealed in the context of the “Pandora papers”, holds large amounts of money in a web of letter-box companies. The Chinese Road and Bridge Company is indirectly controlled by the Chinese state. The details of the contract are still largely unknown.

The pattern underlying “partnerships” of this kind with Balkan “strongmen” is always the same, in the judgement of Gudrun Steinacker, a former German ambassador to Montenegro: “There is a classic form of state capture: a man and his family, a clique around this man, a political party, the control of the state apparatus. Add in clientelism, and the state is the largest employer. Then a lack of transparency at all levels, and the façade of a constitutional state.”
There is another element we must not forget: globally active companies and states that seek to profit from structures of these kinds. Through non-transparent, unlawful investments, they contribute to the loss of credibility on the part of, above all, the West.

It is unacceptable that environmental standards held up as indispensable in the EU should no longer apply just a one- to two-hour flight away. Brussels would be well advised to adopt a stronger corrective role in the future and to arrange for professional and continuing support to environmental activists on the ground. The force of international conventions for the protection of flora and fauna should not be up for negotiation in Southeast Europe, or anywhere else.