13 February 2018

Mozambique: Gemfields Denies Human Rights Abuses in Montepuez

Maputo — The British company Gemfields, which is the majority shareholder in Montepuez Ruby Mining Ltd (MRM), in the northern Mozambican province of Cabo Delgado, has strongly denied claims that it is responsible for human rights violations in its mining concession area.

A British law firm, Leigh Day, has filed a claim against Gemfields on behalf of 29 individuals living near the concession. The claim, Gemfields noted in a statement issued at the weekend, “alleges that Gemfields and MRM are liable for human rights abuses including the deaths and mistreatment of artisanal miners and the seizure of land without due process. Those acts are, in many instances, alleged by the law firm to have involved the Mozambican police and/or other Mozambican government forces, for which the claim seeks to hold Gemfields and MRM liable”.

Gemfields says it takes such allegations “extremely seriously and denounces any form of violence and abuse”, adding that “MRM provides human rights training meeting the Voluntary Principles on Security and Human Rights to both employees and service providers, in addition to offering this training voluntarily to the Mozambican police and government forces”.

Gemfields says it has nothing to hide and “has long pioneered new levels of transparency in the coloured gemstone sector.” The company points out that MRM “frequently hosts and welcomes tours of its operations by international and local press, government officials, non-government bodies, gemstone researchers and customers seeking to assess practices at their source of supply”.

The allegations, Gemfields notes, seems to be recycled from press articles published in 201 and 2016. They include material from the South African “Mail and Guardian” which the South African Press Ombudsman ruled was “inaccurate, false and damaging”, ordering that an apology be issued.

Gemfields admits that violence has indeed occurred in the Montepuez ruby concession area, but denies responsibility. Such incidents, the release points out, happened both before and after Gemfields arrived on the scene.

The violent clashes, Gemfields adds,” have often been between rival groups of artisanal miners and their handlers competing for control of territory, or involving security forces, typically in preserving the safety and wellbeing of employees, service providers and members of the local community”.

The release says that “where such incidents have occurred, including instances involving our own employees, MRM has taken decisive and appropriate steps, working closely with the authorities, including providing humanitarian assistance to artisanal miners and community members”.

No writ has yet been served on Gemfields, and so no court case has begun. Instead Leigh Day seems to be looking for “an alternative resolution of the claim on behalf of its clients”. But should Leigh Day take the case to court, the company warns that “Gemfields and MRM would vigorously defend themselves”.

Gemfields adds that it is “working with our legal advisors in England and Mozambique to ensure that the claim, despite the limited details provided to date, is fully examined and also to defend robustly our hard-earned reputation as a leading supplier of responsibly sourced coloured gemstones”.

The Montepuez concession is the largest known ruby deposit in the world. Before the establishment of MRM the stones were only extracted by artisanal miners, many of them foreigners, using mining methods that pose serious hazards to themselves and to the environment. This type of mining brings no benefit to the Mozambican state.

Rubies mined by MRM are regularly sold at auction in Singapore. The most recent auction, in November 2017, raised a company record of 54.96 million US dollars. This was the ninth auction: in total the auctions have raised over 335 million dollars. Gemfields insists that the proceeds of the auctions are repatriated to MRM in Mozambique, with the production tax due to the government being paid on the full sales price achieved at the auction.

Gemfields holds 75 per cent of the shares in MRM. The remaining 25 per cent are owned by the Mozambican company Mwiriti, one of whose shareholders is Raimundo Pachinuapa, a prominent guerrilla commander in Mozambique's independence war, and a member of the political commission of the ruling Frelimo Party.

Gemfields is now entirely owned by the private equity company Pallinghurst following a successful takeover bid in July 2017.

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