Annex "A"
CASE STUDIES TO GLOBAL WITNESS' SUBMISSION
CASE STUDY
1: THE AFRIMEX
CASE BROUGHT
BEFORE THE
UK NCP FOR THE
OECD GUIDELINES
Afrimex is a UK-registered company which operates
in eastern DRC through the Congolese registered companies Societe Kotecha and SOCOMI,[410]
both based in Bukavu. In February 2007, Global Witness filed a
complaint against Afrimex for breaches of the OECD Guidelines
for Multinational Enterprises, in connection with its trade in
minerals during the war in the Democratic Republic of Congo (DRC)
from 1998.[411]
The UK Government's National Contact Point (NCP) for the OECD
Guidelines investigated the case and, in August 2008, published
its final statement, upholding the majority of Global Witness's
allegations. It concluded that Afrimex had failed to ensure that
its trading activities did not support armed conflict and forced
labour. A significant part of its conclusions rested upon the
fact that Afrimex had not exercised sufficient "due diligence"
to its supply chain, and that some of its suppliers—which
included the comptoirs Muyeye and Olive—made payments
to rebel groups (at that time, the RCD-Goma), thus contributing
to the conflict.[412]
The NCP made a number of recommendations to Afrimex,
relating, among other things, to the formulation, implementation
and periodic review of a corporate responsibility policy which
should take into account the human rights impact of the company's
activities. By February 2009, the NCP had not received any information
from Afrimex about the implementation of its recommendations.
Even after the OECD complaint was submitted
in 2007, Global Witness gathered information that confirmed that
Afrimex continued to trade in minerals from eastern DRC, albeit
on a smaller scale than it had during the earlier years of the
war. Furthermore, one of its suppliers in 2007 and 2008 was
Muyeye, named by the UN Group of Experts as buying minerals produced
by the rebel group FDLR (Forces d
mocratiques pour la lib
ration du Rwanda), responsible
for grave human rights abuses. Congolese government statistics
list Afrimex as having imported 382.5 tonnes of cassiterite
from Goma and 1,102.5 tonnes of cassiterite and 112.5 tonnes
of wolframite from the comptoirs Muyeye and Bakulikira
in South Kivu in 2007.[413]
A sample of monthly reports for 2008 from the Congolese Government's
Centre for Evaluation, Expertise and Certification (CEEC) show
Afrimex as having imported 22.5 tonnes of cassiterite from
Muyeye on 27 May 2008 and 45 tonnes from Bakulikira
and 90 tonnes from Muyeye in June 2008.[414]
Afrimex's mineral supplier and associated company SOCOMI, is listed
as an officially licensed comptoir for cassiterite in South
Kivu, having paid its licence fee of US $9,000 for 2008.[415]
Several other sources interviewed by Global Witness in mid 2008 confirmed
that SOCOMI and Societe Kotecha were still operating and handling minerals.[416]
In January 2009, Global Witness wrote to Afrimex
asking, among other things, for an update on the company's progress
in implementing the NCP's recommendations.[417]
In March 2009, Afrimex replied to the NCP, copying Global Witness,
stating that it had stopped trading in minerals and that its last
shipment left the DRC in or around the first week of September
2008.[418]
This claim remains unsubstantiated by Global Witness and the UK
Government.
Global Witness refers the Committee to paragraphs
21-27 of our submission.
CASE STUDY
2: AMALGAMATED METAL
CORPORATION (AMC) GROUP,
THAISARCO AND UN GROUP
OF EXPERTS
The December 2008 Final Report of the UN
Group of Experts establishes links between THAISARCO and the comptoir
Panju (based in eastern DRC), which has close links with the
rebel group FDLR. Panju is one of the top five exporters of cassiterite,
coltan and wolframite from South Kivu, according to 2007 Congolese
Government statistics. The UN Group of Experts identified Panju
as one of the comptoirs in Bukavu directly complicit in
pre-financing negociants, who in turn work closely with
FDLR. The Group further states that Panju was aware "that
certain mines they buy from are controlled by FDLR" and
that this was common knowledge within the mineral houses in South
Kivu. The Final Report states that "the Group has also
obtained documents showing that all of Panju's minerals purchases
were sold to the Thailand Smelting and Refining Company"
(THAISARCO).
In 2002, AMC were included in a list of companies
considered by the previous UN Panel of Experts to be in violation
of the OECD Guidelines.
DRC Government export records obtained by Global
Witness confirm that THAISARCO purchased over 2,000 tonnes
of cassiterite, coltan and wolframite from Panju in 2007. In December
2008, Global Witness wrote to THAISARCO and its UK-registered
parent company AMC inquiring about their trade with the DRC and
their "due diligence" policies. In their replies, THAISARCO
and AMC attempted to create a distance between their trade and
the situation in eastern DRC by stating that they do not operate
"directly" in the DRC. THAISARCO also claimed that "most
parties and commentators appear to be in agreement that the continued
trade in minerals from DRC is fundamental to the well being of
the artisanal mining communities " and concluded: "In
summary, we believe we are providing a very valuable service to
the DRC economy although we recognise that improvements in the
visibility of the supply chain are both desirable and necessary."
AMC PLC's Annual Report 2007 and Accounts
state that the company's tin smelter is based in Thailand and
operated by the Thailand Smelting and Refining Company, aka THAISARCO.
It refers to THAISARCO as a "principal subsidiary and
operating unit" of AMC PLC, and states that AMC PLC owns
75.25% of THAISARCO.
Company registration information and details
relating to AMCO Investments Limited, Amalgamated Metal Corporation
PLC, Amalgamated Metal Investment Holdings Limited, and British
Amalgamated Metal Investments Ltd and their directors are publicly
available and provide an explanation of the companies' corporate
structure and shows how several of these entities share the same
directors.
Global Witness refers the Committee to paragraphs
28-32 of our submission.
CASE STUDY
3: UK GOVERNMENT TO
PRIORITISE HUMAN
RIGHTS IN
GAS EXPLORATION
IN TURKMENSTAN
Turkmenistan possesses the fourth largest gas
reserves in the world, and in light of recent concerns over Russia's
control of the European gas supply through Ukraine and Belarus,
western Europe has recently turned to Turkmenistan as a potential
new source of energy. Frameworks for European investment have
been signed and steps toward exploration are moving rapidly: in
November 2007, the UK Government signed a protocol of intention
with the Turkmen Government and in May 2008, the European Union
(EU) signed a memorandum of understanding with the Turkmen government
regarding energy co-operation. In April 2009, the European Parliament
agreed to sign an interim trade agreement with Turkmenistan despite
little progress in terms of human rights which it had previously
requested. Though the parliament called for "strict monitoring
and regular reviews of developments in key areas of human rights,"
and for the agreement to be suspended "if there is evidence
that the conditions are not being met," there is concern
that these calls are being taken seriously. In addition, companies
have not answered calls from NGOs as to how these issues will
be addressed. Any energy deals struck with the Turkmen Government
must address issues relating to human rights and have strict provisions
governing cooperative engagement. Yet the EU looks set to engage
with the Turkmen Government with no preconditions.
Global Witness refers the Committee to paragraphs
33-34 of our submission.
CASE STUDY
4: ANVIL MINING,
THE KILWA
MASSACRE AND
ACCUSATIONS OF
CORPORATE COMPLICITY
Anvil Mining stated that it had no option but
to agree to supply air and ground transport to the Congolese military
(FARDC) in response to rebel activity in Kilwa in October 2004;
the Congolese troops were involved in the deaths of around 100 unarmed
civilians. In investigating events, the UN Mission for the DRC
(MONUC) and human rights NGOs documented incidents of summary
executions, torture, illegal detention and looting by the Congolese
forces. In 2006, the prosecutor at Katanga's Military Court in
the DRC decided to indict three former expatriate employees of
Anvil Mining Congo SARL for complicity in war crimes. Anvil Mining
Congo SARL is a subsidiary of Canadian/Australian Anvil Mining
Limited. The trial in the DRC began in December 2006. In June
2007 the military tribunal acquitted all defendants in the
Kilwa trial. In reference to the trial, the acting UN High Commissioner
for Human Rights, Louise Arbour, stated, "I am concerned
at the court's conclusions that the events in Kilwa were the accidental
results of fighting, despite the presence at the trial of substantial
eye-witness testimony and material evidence pointing to the commission
of serious and deliberate human rights violations." To
date, no prosecution has been commenced in Canada or South Africa,
the home states of the indicted employees, nor Australia. A holding
company for Anvil is located in the UK.
Global Witness refers the Committee to paragraphs
35-36 of our submission.
CASE STUDY
5: OIL, DEUTSCHE
BANK AND
NATURAL RESOURCE
REVENUES FUNDING
HUMAN RIGHTS
VIOLATIONS
Since the mid 1990s, Deutsche Bank has been
the main banker for the Turkmen Government, widely regarded as
one of the most corrupt and worst human rights abusing regimes
in the world. Yet the bank has never properly answered questions
regarding its commitments to upholding human rights in relation
to these accounts. Though the accounts are nominally held by the
Turkmen Central Bank, in actuality the autocratic president controls
all money flows. This was most apparent under the now deceased
former president, Saparmurat Niyazov, who maintained a US$3 billion
fund (The Foreign Exchange Reserve Fund or FERF) at Deutsche Bank
which he used to build his ubiquitous personality cult, replete
with golden palaces and statues of himself. A former Turkmen Central
Bank Chairman has gone on record to say that only Niyazov could
access money from this fund. Meanwhile 75% of government spending
was done off-budget from other funds at Deutsche Bank, making
it one of the most fiscally opaque countries in the world. There
were calls by civil society for all accounts at Deutsche Bank
to be frozen after Niyazov's death in December 2006, when the
rightful constitutional acting president arrested. A new president,
Gurbanguly Berdymukhamedov, was elected in February 2007, yet
questions remain concerning what happened to the money in the
FERF and to the control of Turkmenistan's revenues in general.
These concerns are such that the European Bank for Reconstruction
and Development EBRD currently refuses to lend to the Turkmen
government. Though Deutsche Bank has confirmed that it holds Turkmen
government accounts it has refused to comment on how it ensures
that these revenues are not used for corrupt ends or to curb the
human rights of the Turkmen people. It cites its commitments to
the UN Global Compact, but again, has refused dialogue on how
its commitments are implemented in this case. The UN Global Compact
has no mechanism to ensure whether companies are truly living
up to its ideals.
Deutsche Bank AG's UK Head Office is located
at 1 Great Winchester Street, in London.
Global Witness refers the Committee to paragraph
37-40 of our submission.
Gavin Hayman
Campaigns Director
May 2009
410 Afrimex's mineral comptoir. Back
411
See Global Witness, "Afrimex (UK)-DRC: Complaint to the
UK National Contact Point under the Specific Instance Procedure
of the OECD Guidelines for Multinational Enterprises",
20 February 2007. Back
412
Final statement by the UK National Contact Point for the OECD
Guidelines for Multinational Enterprises: Afrimex (UK) Ltd, 28 August
2008; Department for Business Enterprise and Regulatory Reform
(BERR) press release "Mineral trade helped fund rebels",
28 August 2008. Back
413
Rapport Annuel 2007, Division des Mines, North Kivu and South
Kivu. Back
414
CEEC, Rapport mensuel d'activit
s, mois de mai 2008 et mois de juin 2008, Antenne de Bukavu,
Sud-Kivu. Back
415
Performances des comptoirs du Sud-Kivu en 2008, Division
des Mines, South Kivu, 19 July 2008. Back
416
Global Witness interviews in Bukavu, 28 July and 3 August,
and in Goma, 7 and 8 August 2008; report by a Uvira-based
human rights organisation on illicit exploitation of minerals
in the territoires of Uvira and Fizi, January-July 2008. For an
explanation of the relationship between Afrimex, Soci
t
Kotecha and SOCOMI, see Final statement by the UK National
Contact Point for the OECD Guidelines for Multinational Enterprises:
Afrimex (UK) Ltd, 28 August 2008. Back
417
Global Witness letter to Afrimex, 6 February 2009. Back
418
E-mail from Ketan Kotecha, director of Afrimex, to Margaret Sutherland,
NCP, copied to Global Witness, 2 March 2009. Back
| 
