Karadere area is located between the town of Byala and the village of Goritsa in proximity to the north slopes of Stara Planina (Balkan Mountain). The area is wild, there is no infrastructure, and is valued and visited by a growing number of tourists, including families with children, foreign citizens and tourists lodging in neighbouring resorts.
A résumé of the facts of the case:
Karadere falls under Natura 2000 eco network as part of the protected area “Kamchiya Mountain” for conservation of bird species and protected area “Shkorpilovtsi Beach” for conservation of natural habitats and wild flora and fauna. A part of Karadere, Belite Skali (white cliffs), is a natural monument.
This is one of the longest beachlines along Black Sea coast with natural dunes – incipient, white or grey. The site is significant for the existence of invertebrate fauna and is valuable for the big number of plants with protection status. Under protection are 15 types of natural habitats, 6 of which are rated with priority as per the Biodiversity Act; six species of mammals; five species amphibians and reptiles; three species of fish and seven species of invertebrates. Under protection are 189 bird species, 47 of which are included in Bulgaria’s Red Book, 81 are of European nature protection significance, and 72 – endangered in Europe. The region is located along the migration way Via Pontica, and has international significance.
In 2007, the first attempts for building in Karadere start with a massive high-end holiday complex of more than 4,000 apartments. The complex “Black Sea Gardens” is advertised as an eco-village, designed by British architect Norman Foster with the participation of the architect Georgy Stanishev, brother of the then Bulgarian Prime Minister Sergey Stanishe. Protests and the Global Financial Crisis then put the construction on hold. The plans for construction are renewed officially in the spring of 2014 by a new investor (Madara Europe AD), which receives a “Class A” investor certificate. A few months later in June 2014, a second investor appears, Maxi I AD, which files documentation of a project for “a luxury campsite” to Regional Inspectorate of Environment and Water-Burgas.
Building up the area becomes possible after a succession of irregular procedures for amending the town of Byala’s Master Plan in 2004, the Detailed Development Plan, forest swaps, and the change of agricultural and forest lands purpose.
Karadere’s popularity grows among tourists, and it attracts more and more camping people. The last years the beach and the enjoining woods are well inhabited and the natural capacity of the place is nearing fulfillment.
At what stage is the case
As of October 2015, construction at Karadere is temporarily halted. A part of the investment projects are put on hold by lawsuits and withdrawn construction permissions. The permanent solution of the case depends on bringing it into compliance with the ecological legislation of the Master Plan of the Municipality of Byla, so that the protection of the area is guaranteed. The area can be preserved, if Karadere is pronounced protected area.
Two investment projects are envisaged for the territory of Karadere – “Black Sea Gardens Eco Resort” by the offshore company Madara Europe, and the so-called “luxury campsite” by Maxi I AD.
The investment project “Chernomorski gradini” (Black Sea Gardens), whose creators claim they will not allow high construction, envisages the construction of three hotels and a holiday village. The 2014 submitted project to the Ministry of Economy in 2014 envisages two five-star hotels, one four-star hotel, four and five storey respectively, and a five-star holiday village with 200 houses. The investment project contains also public places – restaurants, stores, amusement places, as well as underground parkings on one and two levels. The investor adds that in addition appartments for seasonal usage will be constructed, and the hotels will be at the disposal of tour operators.
The investor in Karadere is the offshore company Madara Europe AD. Registered on August 31, 2008, the company has not had any registered activity according to data from the investor to the Ministry of Economy. A check in the Commercial Register shows that Madara ends six consecutive years in the red – the loss in 2014 was 128,000.
The ownership of Madara Europe is intertwined among a number of offshore companies and funds, some of them represented by physical persons. The main shareholder in Madara Europe is the offshore Rainbow Malta (Holdings) Limited (94.966%), registered in British Virginia Islands, managed by an offshore company, owned by another offshore company registered on another island (Man). Five percent of the shares are owned by Rainnow Group Services. Two shares (0.004%) are owned by Radoslav Dimitrov Dimitrov from Varna.
A research by Bivol uncovers Madara Europe ownership scheme. A check in the Commercial register gives the name of the so-called physical persons, ultimate owners of the two offshore companies. A BTV research from April 11, 2014 “250 pounds for getting around Peevski law” shows through the example of Karadere schemes for concealing the ultimate physical persons, owners of the offshore company.
The company applies twice for priority investor class A certificate for its investment project “Black Sea Gardens”. In 2013, the Ministry of Economy rejects the priority investor status, on the grounds that the project does not have an approved environmental impact assessment, and does not meet the main requirements of the Investments Encouragement Act – to create direct jobs. The Ministry points out that the jobs will be opened by tour operators and renters of restaurants and public places, which are not engaged in the agreement between the company and the State. Another grounds for the rejection is the lack of ensured investment and the intention of the offshore company to use the certificate for luring investment. At the same time, before the project has passed environmental impact assessment, it is impossible to define its parameters and accordingly guarantee the size of the investment – which is another requirement of the Investment Encouragement Act.
A few months later, Madara Europe again submits its application for class A priority investment project at the time of the mandate of the Government of Oresharski. The project is approved with Council of Ministers’ Decision 183/28.03.2014 for signing a Memorandum for priority investment project, although the company is in the red, and the investment proposal is almost the same. However, the Government is formed with the backing of BSP, whose leader Sergey Stanishev is the brother of architect Georgy Stanishev, who participated in the preparation of the investment project.
The decision triggers protests right away. So far, the decision by the Government of Oresharski has not been revoked, but the certificate for priority investment project of Madara Europe is still not signed.
The investor claims that the projects will be financed by an internal credit of Euro 100 million released by Rainbow Malta. In the second submitted investment project a letter from the Swiss crediting fund UBS AG is applied. In practice, here we see confirmation of the scheme of how the seeked priority investment project status is a means for bypassing the legal requirements to the investment project. The Investment Encouragement Act envisages a variety of encouragement measures for investors. The support requested by Madara Europe is a priority administrative service at curtailed terms of the procedures. One of them is an environmental impact assessment. The status Investor Class A gives a green light to the project, guarantees support from the Government, and is a powerful tool for the investor for influencing the administration, including through its officials, who will represent it at coordination of the construction between the various institutions.
A few months later in June 2014, the second investor makes its appearance, Maxi I AD, which submits documents for coordination of a project for a luxury campsite to RIEW-Burgas. Although the project is for the construction of a campsite, its presentation includes, in addition to sites for tents, caravans and campers, also bungalos with bathrooms on two and three levels, luxury villas, restaurants, shops, bars, cafes, spa center, fitnesses, swimming pools, sports and amusment facilities, and others. 670 parking sports are planned (one for each one-family bungalos and three for the three-family ones). The complex is planned for a capacity of 1860 people.
According to the Environment Protection Act, campsites, unlike holiday complexes, are not subject to mandatory environmental impact assessment. The decision whether such an assessment will be required, or the campsite can be built, is taken by Regional Inspectorates on the Environment and Water. Initially, RIEW-Burgas gives green light to the construction of the so-called campsite. After signals about these violations from the civil initiative Let’s Save Karadere, public protests, an opinion by the Ministry of the Environment and Water (MEW) and complaints by non-governmental organisations (Biodiversity Foundation, Bulgarian Society for the Protection of Birds and Parks Association), RIEW-Burgas reviews and revokes its decision, and decrees the investment project to be returned to the stage “notifying the competent body on the environment and the affected population”.
MEW conducts an internal inspection on how RIEW-Burgas has taken its decision the construction of the campsite to start without an environmental impact assessment (EIA). The report of the inspection reveals that the decision was taken in violation of the opinion of the experts of RIEW, and that information was concealed from them and from the director of the regional inspectorate. The institutions with which the decision had to be coordinated – the Basin Directorate and the Regional Health Inspectorate (RHI), had twice rejected the project. The report shows how two officials from RIEW-Burgas hid from the other experts the negative opinions of RHI and of the Basin Directorate. Despite the objections of the other institutions and their opinions about considerable negative impact and lack of clarity on where waste water would be conducted, two experts of the management of RIEW-Burgas returned the project twice for new opinion till a positive assessment was received. Such an assessment was given after the project was sent for a third time for coordination.
MEW’s report does not mention whether pressure was used by the investor on the officials of RIEW in order green light to be given to the project, and environmental impact assessment avoided.
The luxury campsite investor Maxi I AD is a family company, with major shareholder Nikolay Iliev. The firm is known for its Maxi complexes in Sofia and Velingrad. It is represented by advocate Tashkena Kolcheva, who is sister of the investor. Her husband Rumen Kolchev is prosecutor at Supreme Prosecutor's Office of Cassation. In 2009, lawyer Kolcheva is charged with bribing a judge at Pazardzhik Court for changing the verdict of her client, an antiques trader. The investigation against her is subsequently suspended. She and her husband are meanwhile investigated by the Kushlev Committee for dispossesing of illegally acquired property at the value of one million lev. The decision of the committee is confirmed by the Court of Kardzhali in 2010. After the suspension of the lawsuit against advocate Kolcheva, the charges against them fall as well.
Maxi buys 165 decares for 1.66 million or 10 lev per sq. m. in Karadere according to an article in Capital newspaper and to information from the property register. The lands are property of the offshore firm BSPF Projects of the Madara Europe group. The explanation for the low price is that the fund suspends its activity in Bulgaria, and the lands are agricultural.
Information from the commercial register however shows, that in 2014 BSPF not only does not leave the country, but increases its capital to 19 million lev. Before the deal for the agricultural lands is made, BSPF submits documents to RIEW-Burgas, in order to coordinate licenses for construction of fences of terrains, which a few weeks later it sells to Maxi I. The documents submitted to RIEW-Burgas are signed by Maxi’s executive director, Nikolay Ranchev, and by the BSPF executive director, Irena Komitova. The lands with the issued licenses for construction are included in the future project for construction of a campsite. Maxi submits an entirely completed project for construction of a campsite to RIEW-Burgas a month after buying the lands.
Officially, the two investors in Karadere do not act jointly.
Chronology of the case and actions undertaken by various stakeholders
• 26.10.2015 case in Burgas Administrative Court for withdrawal of coordinated licenses for construction of fences by Maxi I. The stakeholders are Dobromir Dobrinov, Let’s Save Karadere, and Bluelink Foundation against Regional Inspectorate of Environment and Water-Burgas. The case disputes the issued construction licenses, which are the only ones at the moment issued for the area of Karadere. The licenses are issued to BSPF projects at a time when the land was already not owned by the firm. The new owner Maxi I did not inform RIEW-Burgas for the change of circumstances.
• 07.10.2015 case 4406/2015 in Supreme Administrative Court by the investor Maxi I AD against the decision of RIEW-Burgas for mandatory environmental impact assessment on the project for a luxury campsite. The investor claims that the non-governmental organisations, which have appealed against the initial decision of the inspectorate to give green light to the construction project, have been represented illegitimately. Therefore, RIEW-Burgas has no grounds to revoke the project, since it contains no violations. The case is conducted by Judge Donka Chakarova. The non-governmental organisations Bulgarian Biodiversity Foundation and Bulgarian Society for the Protection of Birds are constituted as stakeholders on the case. On 19.10.2015 SAC issues a decision, which rejects Maxi’s appeal, that is, it upholds the decision by RIEW-Burgas to return the project to stage one – informing the competent body about the investment intention, with which revokes their former decision the construction to take place without an environmental assessment. The decision of the Court is final!
• 17.09.2015 – a case in the administrative court of Byala for declaring void DDP – Vacation zone Byala North. The sides on the case are Regional Prosecutor’s Office Varna and the firms owners of property in the region of Karadere – Madara Byala, Bulgarian Property Investment Trust and CSKA Professional Football Club and Byala Municipality. The Prosecutor’s Office is notified by the Ministry of the Environment and Water about the declared-void DDP-Byala North, since the plan does not have an environment assessment (EA), and the need for environmental impact assessment is not appraised. According to the investors, after the Territorial Development Plan (TDP) of Byala Municipality from 1997 has environmental assessment, then Detailed Development Plan – Byala North does not need such, since it does not include new property. However, Byala Municipality’s Territorial Development Plan from 1997 does not envisage construction on those lands. At that time, their status is still agricultural and of forest lands. EA is not mandatory as per the Spatial Planning Act and the Environment Protection Act. The ecological assessment of the documentation of DDP-Byala North is expected to be completed.
• 16.06.2015 – third successive meeting on the case in Varna Administrative Court on DDP-Byala North being declared void. Ecological assessment of the documentation is not ready because RIEW-Varna have returned the documentation back to court, with the motive that they don’t have time to prepare it. The case is postponed for September.
• 30.06.2015 – Sofia City Administrative Court rejects the appeal against the refusal of the Ministry of Economy to present as per the Access to Public Information Act the complete Madara Europe project, which is approved as a priority investment class A. In his decision, the judge lists all the documents that the investor has submitted as per the requirements of the Investment Encouragement Act, but does not consider if the violations, which the Ministry discovered in the previous version of the project have been removed.
• 05.05.2015 – second meeting on the case of declaring void DDP-Byala North. The Court refuses to further postpone the case and opens it up. All investors have already identified as stakeholders and are behind the thesis that DDP-Byala North does not require ecological assessment. Only ecological inspection is appointed.
• 21.04.2015 – The Supreme Administrative Court takes a decision to pull to an earlier date Maxi’s case about the decision by RIEW-Burgas, which suspends the “campsite” project. The case, like all cases during this period, is scheduled for 2016. The Court committee consisting of the scandalous Judge Andrey Ikonomov, Iliana Slavovska and the reporting Judge Donka Chakarova take a decision to schedule the case for October 7th. At that time, there are not any other decisions taken for the other cases, which argue the legality of the construction project of Maxi.
• 17.04.2015 – SAC schedules Maxi’s case against the decision by RIEW-Burgas as per its system for random scheduling of cases. The first sitting on the case is only four days later.
• 07.04.2015 – the case for suspension of DDP – Byala North is postponed on request of the defense of the investors.
• 18.03.2015 – Civil Initiative Let’s Save Karadere announces the report at a press conference after MEW’s inspection regarding the pressure and violations, under which RIEW-Burgas takes its initial decision of giving green light to the contruction of Maxi’s luxury campsite. One of the conclusions of the report is that the officials who hid the information and pushed through the decision derogate the institution.
• 10.03.2015 – the case of declaring void DDP-Byala North starts at Varna Administrative Court. The case is postponed on the request of Maxi I, which is not a stakeholder, unlike the other firms of the group of Madara, land owners in the region of Karadere, which pushed through DDP-Byala-North back in 2005. Varna Administrative Court declares the case of high public interest and publishes information from every sitting on its site.
• March 2015 – a report by BAS ordered by the Ministry of the Environment and Water confirms the presence of protected species at Karadere. Dunes, protected flora and fauna species have been established. New protected habitats have been found out, which are proposed for Natura 2000. MEW has not made an answer yet. The report has been received as per the Access to Public Information Act by Let’s Save Karadere civil initiative.
• February 2015 – Sofia Administrative Court tries the case for access to information to the full documentation of the investment project of Madara Europe, for which the Ministry of Economy has granted priority investor class A status to the offshore company. The lawyers of the Ministry and of the offshore company appear together in court.
• January – February 2015 – on insistence of Let’s Save Karadere, the Ministry of Regional Development and Public Works (MRDPW) orders the National Construction Control Directorate (NCCD) to inspect the documentation of the Master Plan of Byala Municipality and of DDP-Byala North. No further action takes place.
• October 2014 – May 2015 – civil initiative Let’s Save Karadere notifies several times the MRDPW to order an inspection of the new DDP of Byala Municipality and its compliance with the DDP from 1997, as well as an inspection of the legality of the procedure of development and adopting of the amendments of the updated version of the Master Plan of the Municipality from 2004 and 2007. Despite the ordered inspection, MRDPW ignores the substitued version of the Territorial Development Plan from ’97.
• November 2014 – February 2015 – letters are sent and meetings with the Ministry of Economy are requested for suspension of the decision for priority investment project class A for Madara Europe. Although the Reformers Block is the only political party which appeals against the decision of Council of Ministers, SDS Minister Bozhidar Lukarski does not give any answer to the letters. The decision of Oresharski Government is not revoked.
• December 2014 – Varna Administrative Court launches a case for declaring void DDP-Byala North on request of Regional Prosecutor’s Office. The Prosecutor’s Office is notified in the beginning of November by then Minister of Environment and Water, signalled by Let’s Save Karadere.
• November – December 2014 – the case for access to information about the investment project of Madara Europe begins. Initially the Ministry of Economy does not send representatives and refuses to comply with the order of the Court to present as evidence on the case the project of the investor. Later, the Ministry presents the requested documents to Court.
• 30.10.2014 SAC’s final decision is that citizens who appeal against the Decision of the Council of Ministers about the priority investment project of Madara Europe do not have a legal interest regardless of the Aarhus convention.
• September – October 2014 – Civil Initiative Let’s Save Karadere signals to the MEW and MRDPW on the irregularity of DDP-Byala North, violations of Maxi’s investment project, and expired construction licenses of the two investors. As a result, MEW notifies Varna Regional Prosecutor’s Office on the nullity of DDP Byala North. The Ministry announces an official statement about committed violations in the decision of RIEW Burgas to be given green light to the construction of Maxi I campsite. . Over 40 licenses for construction in the area are revoked. MEW issues instructions to Byala Municipality and RIEW Burgas on assessing future construction projects in the locality.
• June – July 2014 – a request for access to information to Ministry of Agriculture and Food regarding the decisions for change of the status of agricultural land and forest territories on the territory of Byala Municipality, submitted by citizens. A part of the lands around Karadere have the status of agricultural land, which puts restrictions on construction there. The Ministry rejects the request.
• May 2014 – citizens appeal before the SAC against the refusal by the Ministry of Economy to provide full access to the documentation on the priority investment construction at Karadere.
• April 2014 – appeal against Council of Ministers’ decision on a Memorandum of Understanding with Madara Europe AD by citizens and representatives of Reformers’ Block before the Supreme Administrative Court.
• March 2014 – citizens signal DANS and the Commission for Prevention and Ascertainment of Conflict of Interest about corruption and conflict of interests regarding Sergey Stanishev at taking a decision in the Council of Ministers. DANS does not provide any information from the scheduled inspection.
• March 2014 – requests for access to information on the Memorandum of Understanding, the project of Madara Europe, and the documents presenting the investment and its financial security, submitted by citizens to the Ministrty of the Environment and Water, the Ministry of Economy and Energy, the Agency for Encouragement of Investment.
• 20.03.2014 – protests around the country against the decision by Oresharski Government to grant the status of priority investment project to the proposed by Madara Europe building-up of Karadere.
• 19.03.2014 – the Government of Plamen Oresharski takes a decision for signing a Memorandum of Understanding with Madara Europe for construction at Karadere.
Pre-history of the Master Plan of the town of Byala, which makes possible the construction projects at Karadere:
• 1997 The Master Plan for Byala Municipality (SDP) is adopted, and it does not envisage construction north of the town and at Karadere.
• 2004 In contradiction with DDP and without the required procedure for assessment of the need for ecological assessment, municipal experts on spatial development vote amendments in the Master Plan, which envisage construction at Karadere and the northern territories of Byala Municipality. The new changes to the Master Plan are not published in State Gazette.
• 2005 Byala Municipality approves DDP of Holiday Zone “Byala North”, which envisages construction of the whole coast north of the town of Byala, in violation of two laws – the non-compliance with the procedure for ecological assessment is a violation of the requirements of the Environment Protection Act (EPA), and the violation of the Territorial Management Plan is a violation of the Spatial Planning Act. The project for DDP Byala North is submitted to Byala Municipal Council by a group of investors, among whom are Madara Byala and other firms, some of which ten years later claim that DDP-Byala North does not need ecological assessment.
• 2005 – 2007 – changes of the purpose of the lands around Karadere begin. Some of the swaps done in the region of the village of Samotino are part of the initiated a year later EU Commission’s punitive procedure against Bulgaria and are considered state aid. In this period, based on DDP-Byala North, plans are elaborated for construction on the various properties. Apartments for seasonal usage are planned.
• 2007 Byala Municipality votes new amendments to the adopted in 1997 TDP without Environmental Assessment, without Compatibility Assessment for the purposes of Natura 2000. Following a notification from the Association of Parks, the director of RIEW Burgas orders an inspection, and establishes illegal actions by the Municipal Council and notifies the Prosecutor’s Office in the city of Varna. The notification is not considered.
• 2009 The Municipality initiates a procedure of coordination of the adopted in 2004 and 2007 amendments to the Master Plan in compliance to environmental legislation. It submits to MEW a request for assessment of the need of Ecological assessment of amendments to Master Plan. Three months later MEW suspends the procedure on account of a number of a contradictions with the Spatial Planning Act, Environmental Protection Act, Black Sea Coast Planning Act, and Biodiversity Act, listed in Decision No - ОВОС – 8723-П/2009.
Despite the suspended procedure, the Municipality transfers the amendments from its Master Plan in 2004 and 2007 to its Territorial Development Plan and endorses them.
Key violations of Bulgarian legislature
• Council of Ministers’ decision for issuing a certificate class A for a priority investment project to Madara Europe’s “Black Sea Gardens Eco Resort” is taken without Environmental Impact Assessment, which is in violation of Art. 16, Par.1, item 4 of the Insvestment Encouragement Act.
• Detailed Development Plan (DDP) of Byala Municipality, on whch both investment projects for construction at Karadere are based is irregular, since it does not have an ecological assessment and compatibility assessment with the goals of Natura 2000. DDP Byala North violates Spatial Development Act, Environment Protection Act, Black Sea Coast Planning Act and Biological Diversity Act. Byala Municipality’s DDP is symptomatic of the practice to conduct illegal construction in protected areas and natural parks and for development of urbanised territories in violation of law
• The amendments to the Master Plan of Byala Municipality, made without ecological assessment and without compatibility assessment with the goals of Natura 2000 are in violation of environmental law. Back in 2009 the Ministry of the Environment and Water and the Ministry of Regional Development and Public Works suspend the procedure of the ecological assessment and with this the procedure of the amendment to the Master Plan of Byala Municipality with a decision by MEW. The motives are that the amendments made by the Municipality do not answer the requirements of the volume and content of the development plans, as well as ecological law, including Environmental Protection Act and Black Sea Spatial Development Act. Thus, the Territorial Development Plan from 1997 remains in force, which does not envisage construction at Karadere.
• Despite MEW’s decision, Byala Municipality incorporates into the old TDP from 1997 the amendments, which envisage construction in the area. These amendments and the DDP from 2005 give justification to the investors to push through separate development plans for their properties, with which actually is envisaged construction in the areas with hotels and apartments for seasonal usage.
• The swaps and the changed purpose of the lands in the region of Karadere are in violation of the Forests Act and the Agricultural Lands Protection Act. In spite of this, there has not been inspection of the legality of the taken decisions as yet.
Civil reaction – non-formal group “Let’s Save Karadere”
After the decision of Oresharski Government granted priority investment project status to the construction at Karadere, large-scale protests were organised at many places around the country. That happened also at RIEW Burgas’s decision to give green light to the construction of Maxi I’s “campsite”.
A civil initiative for the preservation of Karadere was set up, as per the law about direct participation of citizens. A petition for the preservation of the area was initiated, and 5,800 people signed up for less than a month. The petition was submitted to the Council of Ministers in September 2014.
Let’s Save Karadere notified the Ministry of Environment and the Ministry of Regional Development. As a result, the lawsuits against DDP-Byala North were started, the project of Maxi I was suspended, and almost all construction licenses were revoked. A number of documents were collected, which display the violations during the years, which led to building-up of Karadere.
In order to attract more inhabitants of Byala and Goritsa for preservation of Karadere, meetings with local residents have been set up. The preservation of the area is supported by the owners of hotels, small restaurants and other residents of Byala. A considerable part of the inhabitants of Byala are for suspending construction.
Let’s Save Karadere organised clean-ups at the start and at the end of the season at Karadere for preservation of the area. In 2014 and in 2015 together with Ideas for Change were constructed compost toilets on the beach. Information boards about Karadere, rules for responsible camping and a map with the set-up toilets were made.
In May 2015 the initiative won an award in the competition “Participation for Nature”, which has been invested in the construction of toilets, information boards about the dunes and the protected species at Karadere and boards for responsible camping. The remaining part of the funds will be used for legal services.
In October a campaign for raising money for legal services for lawsuits brough up for Karadere starts.
The initiative won the audience award for its campaign for preservation of Karadere.