FRIDAY September 20, 2024
By The Tranquility News Team
While legal norms governing legal firms’ operations on compensation costs for cases settled out of court may seem clear on paper, firms defending human rights have almost proven to be incoherent in practice.
Focusing solely on what is officially defined as illegal overlooks a more serious threat, as such practices though are within the bounds of the law, have multiple adverse social consequences.
The recent emergence of international legal firms, which claim to champion rights of oppressed citizens in Tanzania, warrants scrutiny.
These legal firms and international business rights advocacy organisations have been targeting multinational mining companies and profiting from Tanzanians they claim to represent against gold mines in the country.
In 2020, a law firm 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 Limited.
In May 2021, Petra agreed to a settlement with 96 Tanzanian claimants, committing to a comprehensive settlement package approximately valued at £4.3 million.
On May 12, 2021, Petra reached a settlement without admitting liability with the 71 claimants represented in the Leigh Day petition.
The 14 billion Tanzanian Shillings equivalent settlement included compensation for victims, claimants’ legal expenses, funds for community support programmes, and creation of an independent grievance mechanism.
The settlement also covered compensation for 25 additional claimants identified during the final stages of negotiations.
In this case, Leigh Day received Sh4.5 billion as legal costs and a success fee. In a letter to one of the clients they represented, the law firm stated challenges in providing accurate estimates of the total cost of the case.
Sterling Pound 250,000 for our cost plus a success fee of 25 per cent and VAT (if applicable), and 50,000 pounds for disbursements such as experts fee and VAT,” Leigh Day’s letter to clients it represents.
“Our current estimates for the total cost this case proceedings via the compensation framework are as follows:
“Sterling Pound 250,000 for our cost plus a success fee of 25 per cent and VAT (if applicable), and 50,000 pounds for disbursements such as experts fee and VAT.”
In the letter dated June 30, 2021, and signed by Daniel Leader who did not divulge his position at the firm further said:
“The total would thus be approximately pound 300,000 plus an uplift 25 per cent on profit on costs and counsel’s fee and VAT where applicable.”
In the litigation against Acacia Mining Plc, the then owner and operator of North Mara Gold Mine, which was settled out of court in undisclosed amount in 2015, the Leigh’s letter dated January 14, 2014, to one of the clients stated:
“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 and VAT, your share to this would amount to pound 294,118 (782,294922 TZS) plus success fee and VAT.”
The letter signed by Shanta Martin 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.”
There is a strong working relationship between Leigh Day and Rights and Accountability in Development (RAID).
RAID, along with similar local organisations, target companies like Barrick Gold Ltd and Petra Diamonds by investigating them through phone interviews.
They then present their evidence to Leigh Day for it to take the matter to court in search of compensation. Although this is a profitable business to activists, it frustrates mining companies and growth of host communities they claim to protect.
Concerned about potential declines in their stock value, mining companies often opt for settling compensation agreements out of court without admitting fault and compensate the affected parties.
The self-proclaimed human rights defenders engage in this business primarily for personal gains rather than defending rights with integrity and ethical conduct.
The business has become so lucrative that, at times, the activists fabricate or falsely events within mining activities.
Once the events are widely reported and publicized, they take legal action on behalf of the allegedly oppressed or mistreated citizens.
While this business appears legally valid, has had negative socio-economic impacts on the nation.
The companies and human rights advocacy organisations do not want to let go of the profit-making machine; they resort to fabricating information and publishing reports of events that do not actually exist.
Mining Watch Canada, for instance, released a report recently claiming that North Mara Gold Mine had forcibly relocated, abused, and tortured people at Komarera and Kewanja villages in Tarime District, Tanzania
However, an investigation by the Commission for Human Rights and Good Governance revealed that no human rights were violated, and that the people were compensated according to agreements.
As we pen down this article, the High Court in London is handling a lawsuit against the London Bullion Market Association (LBMA) Leigh Day filed in December 2022.
The lawsuit alleges that LBMA wrongfully certified gold from a Tanzanian mine as being free from serious human rights abuses.
LBMA oversees the world’s largest gold market and upholds responsible sourcing standards. Swiss refineries rely on its stamp to approve international trading of gold and silver bars.
The LBMA Goods Delivery system includes measures for ensuring precious metal bars of highest quality of enter the market, as well as measures for combating money laundering, climate change, and human rights abuses.
Consequences of blocking sale of gold from North Mara would be significant, not only to the mine, but also to the country’s economy, including Corporate Social Responsibility (CSR) projects the mine has been providing hosting communities.
The decision will further create a negative perception among members of the hosting community, as some of them would regard the mine as an enemy rather than an opportunity.
This has been more evident in Tarime, where some citizens, even without a reason, see the presence of the mine as an obstacle to development rather than an opportunity for them to advance economically.
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 and VAT, your share to this would amount to pound 294,118 (782,294922 TZS) plus success fee and VAT.” Leigh Day’s letter to clients it represents.
Gold, like other minerals mined from the ground, is not inexhaustible, time will come when gold will run out, and mining activities will cease.
Economic experts advise host communities to take advantage of the opportunities available during the lifespan of mines by building other economic systems that are not dependent mines.
In so doing, once mining activities come to an end, the host communities remain with alternative ways derived from the presence of the mine of earning income.
A look at the Tarime community hosting North Mara Gold Mine and Kahama, the home of Bulyankulu Gold Mine, reveals that the later has obtained more socio-economic benefits from the presence of mine than the former.
A prolonged negative perception the Tarime hosting community holds is to blame for the failure to seize opportunities as their counterparts in Khama do.
Even if the mines were to close today, the economy of Kahama could still stand on its feet, and people could continue with their activities.
Building alternative economic systems alongside mining activities is crucial for sustainable development.
In conclusion, it is important for all stakeholders to work together to ensure legal actions are taken with integrity and ethical considerations, keeping in mind the long-term well-being of communities and the economyΩ
