- October 12, 2018

(12 October 2018) - Mining companies talk about a ‘social licence to operate’, but legitimacy in the eyes of local communities is proving hard to find at UK-listed Acacia Mining’s North Mara Gold Mine in Tanzania. On 10th October, in a Tanzanian court, a senior manager at the Mine was charged with corruption, and another former employee named, in connection with a scheme intended to compensate local people for the loss of their land taken over by the Mine. Six government and village officials were also charged with receiving pay-offs from the Mine. It is alleged that one inducement allowed the Mine to avoid the costly rebuilding of a primary school.

The Mine manager has pleaded not guilty and Acacia has responded to the allegations in a press release and in a message from its chief executive.

The troubles at Acacia’s North Mara Mine relate directly to mining’s biggest story of the moment, the merger of Barrick Gold and Randgold to create the world’s largest $18 billion gold company.  Acacia is majority owned by Barrick Gold and its principal shareholder, despite a framework agreement reached a year ago, has unsuccessfully been trying to conclude a settlement with the Tanzania government, which has banned Acacia from exporting gold concentrates because of an outstanding tax bill. The ban is now entering its 18th month.

But Acacia’s management and board must grapple with yet more serious governance issues, not least questions about the North Mara Mine’s human rights record. Since 2014, RAID has documented how police paid for by the company to guard the Mine have been responsible for shooting dead and injuring a number of those venturing onto the site to gather waste rock. In March 2017, after considerable pressure to publish further information, Acacia confirmed there had been 32 “trespasser-related” fatalities over a two-year period between 2014 and 2016. The company failed to publish information about injuries.

The Mine has been running a complaints process to deal with claims from families who have lost loved ones or those injured who are seeking compensation, but civil society groups have serious reservations about its independence.  Just this week RAID wrote to Acacia’s board raising concerns about the independence, transparency and functioning of the complaints process. We also highlighted the plight of one man left paralysed after a police beating at the Mine in 2013, whose case remains unresolved five years later.

The current allegations of corruption, unpaid taxes,  human rights violations, and inequity in the complaints process, all point to the same problem: the failure of Acacia to achieve legitimacy in the country and local communities within which it operates.

Shareholders will now be contemplating how to vote on the proposed merger and the boards of Acacia, Barrick and Randgold will meet in the coming weeks to action the outcome. Ultimately, the largest gold miner in the world will be made up of all the mines it owns, including the highly problematic North Mara Mine.  The social licence to operate is writ large and reflects on the company as a whole. That is why, before and after the merger, directors and senior managers should redress the legitimate interests of those adversely impacted by the way in which Acacia has chosen to conduct its business in Tanzania.