While legal guidelines regarding compensation costs for out-of-court settlements may appear straightforward, the actions of certain human rights defence firms have raised concerns about their real-world implications.
Focusing solely on activities deemed illegal may overlook the more insidious threat posed by practices that, while lawful, have negative social repercussions.
The rise of international legal firms purporting to advocate for oppressed individuals in Tanzania demands closer examination.
These firms and international business rights organizations have been targeting multinational mining companies and profiting from Tanzanians they claim to represent in disputes against gold mines in the country.
In a recent case, UK law firm Leigh Day secured a settlement with Petra Diamonds for Tanzanian claimants, totalling approximately £4.3 million.
While the settlement included compensation for victims and community support programs, Leigh Day received substantial legal costs and fees.
In 2020, Leigh Day filed a lawsuit in the UK High Court on behalf of victims and their families against Petra Diamonds, the majority owner of Williamson Diamonds Ltd.
In May 2021, Petra agreed to a settlement with 96 Tanzanian claimants, committing to a comprehensive package valued at approximately £4.3 million.
On May 12, 2021, Petra reached a settlement with the 71 claimants represented under the Leigh Day petition without admitting liability.
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The settlement, worth £4.3 million (14 billion Tanzanian shillings), included compensation for victims, claimants’ legal expenses, funds for community support programs, and the creation of an independent grievance mechanism.
The settlement also covered compensation for 25 additional claimants identified during the final stages of negotiations.
Leigh Day received 4.5 billion Tanzanian shillings as legal costs and a success fee in this case. In a letter to one of the clients they represented, the law firm stipulated their charges to their clients.
“Our current estimates for the total cost of this case’s proceedings via the compensation framework are as follows: sterling pound 250,000 for our cost plus a success fee of 25% and VAT (if applicable), 50,000 pounds for disbursements such as experts’ fees and VAT.
The total would thus be approximately pound 300,000 plus an uplift 25% on profit on profit costs and counsel’s fee and VAT where applicable,” said the letter dated 30th, June, 2021 signed by Daniel Leader who did not divulge his position at the firm.
In the litigation against Acacia Mining Plc, the then owner and operator of North Mara Gold Mine, the case was settled out of court in 2015 for an undisclosed amount.
Leigh Day’s letter to one of their clients stated that “The likely costs of pursuing your claim through to trial would be sterling pound 5,000,000 (13, 298,419,561 TZS) plus success fee an VAT, your share to this would amount to pound 294,118 (782,294922 TZS) plus success fee and VAT. ” explained the letter dated 14th, January 2014 signed by Shanta Martin.
The letter further narrates, “The total estimate of your share of individual and common costs for bringing the action through to trials is, therefore, pound 314,118 (835,357,698 TZS) plus success fee and VAT.”
Though the settlement amount in this lawsuit was not disclosed, the above categorization of charges leaves no doubt that the London-based firm received a sizeable sum.
Leigh Day and Rights and Accountability in Development (RAID) have a strong working relationship. This partnership, which involves similar organizations working together in Tanzania, targets companies such as Barrick Gold Ltd and Petra Diamonds.
It involves conducting investigations through interviews and phone calls. Subsequently, they present their evidence to Leigh Day, who takes the matter to court to seek compensation.
The collaboration has led to investigations and legal actions against mining companies like Barrick Gold Ltd. and Petra Diamonds. While this profitable business model is financially rewarding for activists, it has raised questions about their true motivations and ethical conduct.
The practice of fabricating or exaggerating events related to mining activities to pressure companies into settling outside of court has detrimental effects on the affected communities and the nation as a whole.
This approach, driven by personal gain rather than genuine rights advocacy, undermines the integrity of human rights defence efforts.
This appears to be a profitable business for activists aiming to frustrate mining companies. The pay is substantial but has indirect, devastating effects on the communities they claim to protect.
Mining companies, concerned about potential declines in their stock value, often opt to settle compensation agreements outside of court.
These activists, who identify as human rights defenders, engage in this business primarily for personal gain rather than honestly acting as defenders of rights with integrity and ethical conduct.
This business has become so lucrative that the activists sometimes fabricate or falsely link events to mining activities.
They understand that once these reports are publicized and circulated, legal action will likely follow on behalf of the allegedly oppressed or mistreated citizens.
To avoid damaging their reputation and stock value, mining companies typically settle these cases outside of court without admitting fault and provide compensation to the affected parties.
While this business may appear legally valid, it has had negative social and economic impacts on the nation.
These companies and human rights advocacy organizations are unwilling to let go of this profit-making machine, leading them to fabricate information and events that do not exist.
For instance, Mining Watch Canada recently released a report claiming that people were forcibly relocated, abused, and tortured in the villages of Komarera and Kewanja in the Tarime district by the North Mara Gold Mine.
However, an investigation by the Commission for Human Rights and Good Governance revealed no human rights violations, and the people were compensated according to agreements.
Leigh Day’s ongoing lawsuit against the London Bullion Market Association (LBMA) further highlights the complex interplay between legal actions, corporate responsibility, and economic impacts.
The outcome of this case could have far-reaching consequences for the gold market and Tanzania’s economy.
The High Court in London is handling a lawsuit against the London Bullion Market Association (LBMA), filed by Leigh Day in December 2022.
The lawsuit alleges that the LBMA wrongfully certified gold from a Tanzanian mine as free from serious human rights abuses.
The LBMA oversees the world’s largest gold market and upholds responsible sourcing standards. Swiss refineries rely on the LBMA stamp of approval for the international trading of gold and silver bars.
The LBMA Good Delivery system includes measures to ensure the highest-quality precious metal bars enter the market and combat money laundering, climate change, and human rights abuses.
The consequences of blocking the sale of gold from North Mara would be significant not only for the North Mara mine but also would negatively and seriously impact our economy and even the Corporate Social Responsibility (CSR) projects that the mine has been providing to hosting communities.
Another consequence is the creation of a negative perception among community members, causing some to view the mine as an adversary rather than an opportunity.
This is particularly evident in Tarime, where some citizens, without valid reasons, regard the mine’s presence as a hindrance to development rather than a chance for economic advancement.
Like other minerals extracted from the earth, gold is not infinite; there will come a time when gold reserves are depleted, and mining operations will cease.
That is why economic experts advise that during the mine’s operational lifespan, the surrounding community should seize the available opportunities to establish an alternative economic system that is not reliant on the mine.
This approach ensures that when mining activities conclude, citizens have alternative sources of income stemming from the mine’s presence.
As stakeholders navigate these legal and ethical challenges, it is crucial to prioritize the long-term well-being of communities and the sustainable development of the economy.
Balancing legal actions with integrity and ethical considerations is essential to ensure positive outcomes for all involved.
