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Ani Hovhannisyan

Government of Former Prime Minister Karen Karapetyan Leased 25 Acres of Arzni Forest to Relatives of His Son-In-Law

Shrubs and trees have been eradicated and burned in the Arzni Forestry Area in Armenia’s Kotayk Province. A group of 15 people working at the site told Hetq several days ago that their actions were not "tree felling" but "cleaning."

This "cleansed" area, about 25 hectares, was leased for 60 years to EcoAgro LLC, to create a fruit garden. The company will pay 536,000 drams (about $1,100) annually to HayAntar (ArmForest) SNCO in rent. The deforested area is now fenced off.

Hetq sent a request to HayAntar asking for a copy of the contract with EcoAgro. HayAntar refused, noting that the contract contains state, commercial or personal secrets. Later, when Hetq suggested that the “secrets” be blacked out, HayAntar provided a copy.

Who is behind EcoAgro?

67 %

The 67% stakeholder of EcoAgro LLC is Gor Khachatryan (He’s the brother of the wife of Arzuman Harutyunyan, an in-law of former Prime Minister Karen Karapetyan.

33 %

Just three days before the Minister of Agriculture signed the contract with EcoAgro, Tigran Harutyunyan became a 33% shareholder of the company. (Tigran Harutyunyan is married to the sister of Hayk Harutyunyan, the son-in-law of Karen Karapetyan). Hayk Harutyunyan was Deputy Minister of Energy and Natural Resources from 2014-2018.

Hayk Harutyunyan is the son of Arzuman Harutyunyan, a deputy director of the National Security Service. Arzuman is the brother of Gagik Harutyunyan, chairman of the Supreme Court Council.

Tigran Harutyunyan also owns shares in the following companies - Global Realty, Global Consult and General Standard Consulting.

"EcoAgro" LLC does not pay employee tax

EcoAgro LLC is only paying tax for two employees. But when Hetq visited a forest area leased by the company there were 10 to 15 people working. We took footage showing at least seven at the site.

Even if these employees worked for EcoAgro on a service contract basis, the company would have to pay the mandatory 1,000 AMD for their "Soldiers Insurance Fund". In 2017 and 2018, EcoAgro only paid this for two people. 

HayAntar did not announce tender bid for the land

EcoAgro was allocated the forest area directly, without facing any competition. Karineh Grigoryan, Head of the Law and Methodology Division of HayAntar, told Hetq that they did not announce a tender bid based on Government Decree No. 806-N of May 24, 2007, the second provision of which allows the forests to be used for forestry projects, with or without a tender bid.

"Since they had to plant the forest-garden themselves, we, and others, the Ministry of Agriculture and anyone in the country, would be interested in planting trees. Moreover, I can say that if he wanted to plant a forest, the Forest Code gives the land for free. Since it’s not a pure forest, but a forest-garden that includes fruit trees where a good amount of investment will be made, the authorized body deemed it prudent to allocate the land with no competition,” says Karineh Grigoryan.

During the 60 lease of the forested area, EcoAgro, according to the contract, has to invest 100 million drams.

In reply to Hetq’s query that since there is no category of forest-garden in the zoning laws, will the forest be used for agricultural purposes, Grigoryan replied: "It's a fairly old category that is in the literature, but it's not included in our legislation as such. The land category has not changed, it’s remained as forest. There will only be changes in the land, but since the Hrazdan Forestry has not drafted a forest management plan there is no approved technical document for the land, "explained HayAntar's lawyer.

According to the agreement signed between EcoAgro and HayAntar, the lessee is obliged to use the specified forest land in accordance to its zoning, otherwise the lessor may demand the anullment of the contract and compensation for damages.

 Video by Saro Baghdasaryan

How was the cadastral value of land leased to EcoAgro calculated?

As mentioned, 25 hectares of forest land was provided to lessee for AMD 536,000 annually. HayAntar calculated the fee for one square meter of the given forest plot at 21 drams. This price, according to HayAntar, was based on a letter received from the Ministry of Agriculture.

When Hetq asked the ministry to specify the legal act on which it based its calculation of the lease rent, it replied that it was based on Government Decree No 237 of July 3, 1997, according to which the forest area was considered non-arable land of agricultural significance, of which 1 hectare is estimated at AMD 22,500.

In the manner prescribed by the contract, HayAntar has the right to review the amount of rent not more than once a year, but it must only be made in accordance with the proportion of land tax change.

"The rent amount includes the land tax and VAT. There is a price set for arable land. In the case of a ready-made garden, the price is higher, but in this case,  we did not give a garden and we did not have any form of calculation of forest land lease cadastral value, so we took the average price for the arable land in that region,” said Karineh Grigoryan.

 EcoAgro changes the land without any environmental evaluation

HayAntar lawyer Karineh Grigoryan told Hetq that the EcoAgro project has not yet been submitted for an environmental evaluation. "In case of a positive conclusion, the work will start," Grigoryan said. When we asked how is it that the company has destroyed and burnt trees and shrubs in the forest territory without any environmental impact assessment, Grigoryan replied:

"The company is still cleaning the area. To be honest, I still do not know at what stage the project is in now.  They inspected the site and took delivery. It clearly shows what area was allocated. Right now, I can’t give a specific answer. It’s a bit of a long process. We’ll inform you as things progress,” Grigoryan said.

The forest as it appeared in May 2016


Plans for the leased site, according to HayAntar

HayAntar press spokesperson Lusineh Hakobyan told Hetq that EcoAgro plans to plant walnuts, plums, apples and other fruit trees in the leased area.

EcoAgro to keep all fruit tree profits

According to the State Cadastre Committee, in 2017, 104.9 hectares of forest and 49.5 hectares of shrub area were given for free use in state-owned lands of Kotayk Province. In addition, 30.4 hectares of forest area of ​​the province was leased.

The forested lands of Kotayk Province are actively exploited, but the province does not have a forest management plan. HayAntar claims it’s due to a lack of funds.

Top photo by Saro Baghdasaryan

Comments (1)

There is something wrong with your calculations. 1 hectare = 2.5 acres. 25 hectare = 63 acres. 1 hectare = 10,000 sq. m. 25 hectare = 250,000 sq. m Therefore, 536,000 dram/250,000 sq. m = 2.1 dram/sq. m of annual rent.

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