Tanzania deaths spark questions over $18 billion mega gold deal

07Nov 2018
By Financial Times Reporter
Financial Times
Tanzania deaths spark questions over $18 billion mega gold deal

ACTIVISTS in the United Kingdom have warned top executives at Barrick Gold Corporation and Randgold Resources about human rights abuses at Acacia Mining’s North Mara Gold mine in Tanzania-

ahead of a planned merger between the two firms that would create the world’s largest gold mining company valued at $18 billion.

Barrick Gold Corp shareholders on Monday overwhelmingly approved the merger, which is expected to be completed by the new year and is still subject to approval by Randgold’s shareholders.

The all-stock merger, valued at more than $18 billion was first announced in late September.

However, Barrick and Africa-focused Randgold Resources Ltd., are now facing fresh questions about unresolved grievance claims for dozens of deaths and injuries among villagers around the North Mara gold mine in Tanzania.

Barrick subsidiary Acacia Mining says it has sharply reduced the number of violent clashes between Tanzanian police and local villagers (invaders) who enter its North Mara site in search of waste rock, from which they can extract small bits of gold.

But while the deaths and injuries may have declined, Acacia is still grappling with complaints that its grievance procedure is unfair and has failed to provide proper compensation for the injured and the families of people who were killed.

The clashes at North Mara have contributed to a public backlash against Acacia in Tanzania, where the government has demanded $190 billion in allegedly unpaid taxes and penalties from the company. The authorities have banned its export of gold concentrate and have filed criminal charges against several executives.

Barrick is hoping its new partnership with Randgold, including the appointment of Randgold founder Mark Bristow as chief executive of Barrick, will help the company improve its relations with Tanzania and other African governments.

Barrick shareholders voted 99.8 per cent in favour of the takeover deal Monday, with Randgold shareholders expected to vote yesterday.

In 2016, a government inquiry reported that the police had killed 65 people and injured 270 during a decade of clashes at the North Mara gold mine. The mine has agreements with local police to provide security at the site, but villagers complain of excessive violence by the officers.

 

In its annual report this year, Acacia said 34 “intruders” have died at North Mara over the past four years, although there were 88 per cent fewer fatalities last year than in 2014. It said there were seven alleged incidents of excessive police violence against intruders in 2016 and 2017.

But human-rights activists have questioned Acacia’s numbers, saying the true number of deaths and injuries could be much higher. Few cases of abuses at North Mara have led to fair compensation for the victims, they say, and not a single police officer has been held accountable for abuse.

A UK-based activist group, Rights and Accountability in Development (RAID), says Acacia’s grievance procedure “lacks independence and transparency and presses the few victims whose claims are accepted to agree to minimal compensation.”

It cites Acacia’s annual report of last year, which stated that only eight of 117 compensation claims were “substantiated” by the grievance process. This means 93 per cent of claims were rejected, the group said in a statement Monday.

RAID has written letters to Bristow and to Barrick executive chairman John Thornton, both of whom replied that the compensation issues would be taken seriously.

The UK rights group cited the case of 32-year-old Zakaria Nyamakomo, who was left paralysed and confined to a wheelchair in October, 2013, allegedly after a brutal beating by Tanzanian police working alongside the mine’s security guards.

Two of his vertebrae were shattered, and he is now dependent on his elderly mother. He filed a claim for compensation in February, 2015, but received nothing. When RAID raised the case this year, the company cited police reports saying the man had been injured in a drunken fight, but RAID says the reports are contradicted by evidence from witnesses.

Another villager, a farmer who was partially paralyzed after he was shot in the back, was given about $10,000 in compensation (23 million shillings) after officials decided he was only 45 per cent disabled, the group said. But he walks with difficulty, cannot stand without a cane and will no longer be able to do the physical work that farming requires, it said.

“It is incredibly difficult for victims to even have their grievance accepted, which means that many get no compensation at all,” said Anneke Van Woudenberg, executive director of RAID.

“The sums provided are low, it is not clear how they have been determined, and there is pressure for victims to accept them.”

Sally Marshak, general manager of investor relations and communications at Acacia Mining, said the allegations by RAID are inaccurate and exaggerated.

“Over the last five years, North Mara has devoted significant time, effort and investment into local community relations, which has resulted in a dramatic improvement in its relationship with the community.”

“It also has focused on promoting human-rights compliance by the Tanzanian Police Force, which has dramatically improved the force’s operational capabilities and adherence to Tanzanian, regional and international standards for policing."

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