REG-Petra Diamonds: Update re Allegations of human rights abuses at WDL

Petra DiamondsAnnouncement

09/02/2021 14:50

9 February 2021   LSE: PDL 

Petra Diamonds Limited

(“Petra”, “the Company” or “the Group”)

Update regarding allegations of human rights abuses

at the Williamson Mine in Tanzania

Introduction

Petra Diamonds Limited today provides an update on the status of its work in
relation to allegations of human rights abuses at the Williamson Mine in
Tanzania, including information relating to incidents on the Mine in the three
months since November 2020. This follows previous statements made on 9
September and on 12 November 2020; in the latter Petra advised that it would
provide a further update to the market which this represents.

In May 2020 the UK-based law firm Leigh Day notified Petra and Williamson
Diamonds Limited (“WDL”, owned 75% by Petra and 25% by the Government of
Tanzania), that it had issued claim forms in the High Court of England and
Wales on behalf of 32 anonymous individuals in relation to alleged breaches of
human rights at the Williamson Mine (“the Mine”) over a number of years.
In November 2020, the UK-based Non-Governmental Organisation RAID published a
report also alleging similar human rights abuses relating to the security
operations at the Mine by a third-party security contractor Zenith Security
(“Zenith”) and the local Tanzanian Police Force (“Tanzanian Police”,
or “Police”), during the same period.

Petra has since received reports of continuing incidents involving security
operations at the Mine and as a result of this has carried out an
investigation into recent security incidents at the Mine.

As stated previously, Petra takes all allegations extremely seriously; the
Company has formed a sub-committee of the Board comprised entirely of
independent Non-executive Directors to oversee the matters and has undertaken
an investigation being carried out by a specialist external advisor in
conjunction with the Company’s lawyers. Petra is committed to providing
feedback on its investigation by the end of March 2021; this provides an
interim update on an investigation into incidents reported in the last three
months.

Background and context

Beginning before the acquisition of Petra’s 75% shareholding in WDL in 2009
and continuing throughout the last decade, there have been frequent organised
incursions of groups of illegal diggers, sometimes in large numbers and who
are believed to be sponsored by local dealers in illicit diamonds, onto the
WDL Special Mining Licence area (“SML”), covering an area of 30.6 km2.
Although the vast majority of such incursions are resolved without any
violence, there have also been incidences of confrontation and violence
between illegal diggers who are often armed and the security patrol teams
protecting the WDL property (and themselves).

Regrettably the encounters between the security patrols, performed by guards
from Zenith and the Tanzanian Police, and the illegal diggers have resulted in
injuries being suffered on all sides, and damage to WDL, Zenith and Police
vehicles and equipment. Tragically, some deaths of illegal diggers have also
been reported and are being investigated by the specialist external advisor as
part of the broader investigation.

Zenith has been WDL’s security contractor since 2011 and will be replaced by
a new security contractor following the completion of a tender process with
effect from 1 March 2021. Zenith employees are expressly required to abide by
the Voluntary Principles on Security and Human Rights (“VPSHR”); and
training on the VPSHR is provided to Zenith guards by WDL.

Services provided by the Tanzanian Police are governed by a Memorandum of
Understanding, finalised and updated in 2019, which commits the Tanzanian
Police to act in accordance with the laws, rules and regulations of Tanzania,
company security and safety policies and also the VPSHR. The Tanzanian Police
are an arm of the Tanzanian government and act under its own direction and
chain of command. This happens even when they are conducting operations in
conjunction with Zenith. There are normally between 20 and 25 Tanzanian Police
members deployed at the Mine by the Tanzanian Government.

Police equipment includes tear gas, stun grenades and firearms with live
ammunition, and operates under Police and Government Rules of Engagement.
These are only used by the Tanzanian Police in self-defence and to expel
illegal diggers from the property. Zenith security guards are only authorised
to use baton rounds (rubber bullet cartridges) in their shotguns and are
subject to strict controls around the use of such weapons, which include a
register of any rounds discharged. All firearms and ammunition on WDL premises
are securely stored and are subject to routine checks and verification. No WDL
security employees are permitted to carry or use any firearms.

In the three months from November 2020 through January 2021 there have been 79
recorded incursions onto the SML, involving approximately 1091 illegal
diggers. In the majority of cases (60 of the 79 incidents), no force was used
despite the illegal diggers becoming aggressive in 8 of those 60 incidents.

In 19 of these incidents, reasonable force was required to remove or disperse
the illegal diggers from the SML or for the security patrol teams to defend
themselves.  Live ammunition was only discharged on one occasion during
November 2020, when the Tanzanian Police fired one live warning round in the
air to disperse a group of illegal diggers. The largest group of illegal
diggers recorded in a single incident was approximately 150 and in all of the
incidents where force was required, the diggers were aggressive and armed with
slingshots and rocks. 

In the 19 incidents where force was required, 9 members of the security patrol
team were injured. No injuries of illegal diggers were reported, although it
is of course possible that some of these diggers may have been injured in
these engagements.  It has been confirmed that no patients were received at
WDL’s Mwadui hospital with injuries consistent with those which might be
sustained by illegal diggers during this period.

A total of 13 Tanzanian Police or Zenith vehicles were damaged over the three
month period. Seventeen illegal diggers were arrested by the Tanzanian Police
during this period.

Recent reports of ongoing incidents and findings of investigations carried out

PDL has received recent reports that claim that assaults or human rights
violations were carried out between November 2020 and January 2021 by the
security patrol teams comprising Zenith guards and the Tanzania Police, and
that on two occasions a shotgun with live ammunition was discharged. The new
accounts, like those received previously, are anonymised, and claim that the
security patrol teams responded with disproportionate and unacceptable force,
in breach of the VPSHR, to incursions onto the mine.

The reported new incidents have been investigated, by the specialist external
advisor. The investigation included a review of all incident reports and
logbooks (both WDL and Zenith logs), monthly Tanzanian Police reports, Zenith
duty logs, records of illegal entries, arrests and injuries and Zenith firearm
registers. In addition, WDL personnel, and Zenith security guards that were
present on the security patrols involved in the incidents investigated, were
interviewed. Four reported incidents were specifically investigated and are
summarised below:

1. In the first reported incident, early in November 2020, it is alleged that
an illegal digger was hit in the back by a large rock thrown by one of the
Zenith security guards, while running away, that resulted in the dislocation
of his shoulder, requiring hospital treatment.
* The investigation of the incident established that a group of some 150
illegal diggers were chased from the pit by Zenith security guards and the
Tanzanian police. On leaving the pit a group of around 100 illegal diggers
armed with slingshots and rocks attacked the Tanzanian Police and Zenith
security guards, who were significantly outnumbered (the patrol comprised 15
members in three vehicles). Several tear gas canisters and stun grenades were
thrown by the Police to disperse the group. No injuries were reported but two
Zenith patrol vehicles were damaged. There was no admission to the Mwadui
hospital of anyone with injuries of this nature.
2. In the second reported incident, late in November, an illegal digger
asserted that he was part of a group of diggers that was intercepted by Zenith
security guards. He said that there were police and Zenith vehicles present
and while trying to run away got hit on the head by a teargas canister that
knocked him unconscious. He said that he was carried away by his colleagues
and went to hospital for treatment.

(a) On the night in question approximately 70 illegal diggers were involved in
a confrontation with Zenith security guards and police. According to security
reports, the illegal diggers attacked the lease patrol and the Tanzanian
Police responded by throwing tear gas and stun grenades in self defence and to
repel the diggers. Two patrol vehicles were damaged in the incident. Although
one of the Zenith security guards reported seeing one of the diggers being hit
by a canister, he stated that the digger ran away. No injuries were recorded
in the incident reports and there was no admission to the Mwadui hospital of
anyone with injuries of this nature.

3. In the third incident reported, also late in December, an illegal digger
who was part of a larger group states that he was surrounded by 4 vehicles and
was subsequently confronted by a Zenith security guard with a shotgun, while
trying to run away. He says that he was shot at close range and needed to be
hospitalized to receive treatment for reportedly serious facial injuries.

(b) No confrontations with illegal diggers were reported by Zenith or WDL on
the night in question, with no injuries reported and no shots fired. The
firearm and rubber round registers maintained by Zenith also record that no
baton rounds were fired on this night.

4. In the last reported incident that was stated to have occurred sometime in
November 2020, an illegal digger who was part of a larger group stated that he
encountered a group of Zenith security members and Tanzanian Police when
trying to leave the mine. He said that after the group started running away
that tear gas and shotgun pellets were fired at the group. He states that he
was shot in the back of his arm, while running away and that multiple shots
were fired.

(c) According to the data reviewed, there is no record of baton rounds being
fired by Zenith in November. According to the incident report filed,
approximately 20 aggressive illegal diggers armed with slingshots surrounded
the Zenith security team and started throwing stones at them from the
slingshots. In order to rescue the Zenith team, the Tanzanian Police responded
by throwing tear gas canisters, which failed to disperse the group, resulting
in the Tanzanian Police firing one live warning shot into the air, which
resulted in the illegal diggers dispersing. Two Zenith security guards
suffered injuries and the police patrol vehicle was damaged. No injuries to
illegal diggers were recorded.

Actions taken to date

A number of steps have been taken since Petra and WDL became aware of the
initial allegations, including:

a) Appointment of a Petra Board sub-committee to oversee the investigation
being carried out by a specialist external advisor in conjunction with the
Company’s lawyers. The Committee will consider the outcome of the
investigation and the recommendations to address any findings. This may
include any required remedy or corrective action to be taken as a result of
the investigation’s conclusions. Petra will provide further feedback on this
investigation by the end of March 2021.

b) Detailed training and refresher training in the VPSHR has been provided to
all WDL line and senior management, WDL security team, Zenith security guards,
night-watchmen, WDL employees working in the health, safety and environmental
area and WDL employees working at the Mwadui medical facility. Refresher
training was provided to Zenith guards most recently in December 2020. Members
of the Tanzanian Police Force assisted as facilitators in some of the
sessions.

c) Implementation of a revised Tier 1 Operational-Level Grievance Mechanism
(“OGM”) and completion of the design of a Tier 2 OGM, specifically aimed
at considering any incidents involving potential human rights violations and
providing redress, where indicated. This Tier 2 OGM will be managed by and
independent panel and is expected to be implemented during the third quarter
of this year, following extensive and ongoing stakeholder engagement to ensure
its support by the local communities. The Tier 2 OGM will operate according to
the highest international standards and will comply with the requirements set
out in the United Nations Guiding Principles on Business and Human Rights. It
aims to resolve complaints following the full application of local legal
requirements, including the provision of free and independent advice from
local lawyers. PDL and WDL encourage any community members who have been
subject to any human rights violations to utilse this OGM.

d) Establishment of a new, more easily accessible community office and
dedicated grievance desk at the main entrance to the Mine, as part of a wider
community out-reach and stakeholder engagement plan.

e) Deployment of a stakeholder engagement expert at WDL to provide support to
the General Manager and other mine leadership in their engagement with the
communities and other stakeholders.

f) Suspension of the WDL Head of Security and Head of General Services pending
the outcomes of the investigations.

g) Launch of a new radio programme to facilitate open engagement with
surrounding communities.

h) Completion of the prescribed tender process for the provision of security
services to WDL, resulting in the appointment of a new security contractor,
effective 1 March 2021.

i) Closure on 29 September 2020 of the on-site police facility where arrested
illegal diggers were temporarily detained and which was never operated by WDL
or Zenith.

j) Upgrade of the WDL Mwadui medical facility and protocols to ensure the
security of any illegal digger patients in police custody awaiting court
appearance, of which there are none at present, nor have been in the last
three months.

Conclusions and way forward

The incidents and information described here remain of great concern to the
Board and management of PDL.  As part of its operational responsibilities,
WDL nevertheless has an obligation and right to protect its property from the
illegal exploitation of its diamond resource, in the interests of all
stakeholders. Individuals providing this protection (being the Tanzanian
Police and third party security guards) are familiar with the VPSHR and what
is required in discharging their duties. The investigation of the four new
incidents described above do not indicate a breach of the VPSHR. 

WDL has significantly stepped up its engagement with its local communities,
specifically focused on securing support for the independent, Tier 2 OGM
referred to above. The engagement also extends to looking at local economic
development opportunities with a view to reducing illegal digger activity on
the SML. One such initiative is an artisanal tailings project, where local
community members will be able to exploit old tailings material at the
Williamson Mine, in a formalized and controlled manner. A memorandum of
understanding between WDL, the local artisanal mining group and local and
regional government authorities has been drafted and is with government
authorities.

The broader and comprehensive investigation into the previous allegations of
human rights violations at the Williamson Mine, is nearing completion and PDL
will provide feedback on this by the end of the quarter as previously advised.

For further information, please contact:

Petra Diamonds,
London                                        
Telephone: +44 20 7494 8203

Marianna
Bowes                                            
            investorrelations@petradiamonds.com

About Petra Diamonds Limited

Petra Diamonds is a leading independent diamond mining group and a consistent
supplier of gem quality rough diamonds to the international market. The
Company has a diversified portfolio incorporating interests in three
underground producing mines in South Africa (Finsch, Cullinan and
Koffiefontein) and one open pit mine in Tanzania (Williamson).

Petra's strategy is to focus on value rather than volume production by
optimising recoveries from its high-quality asset base in order to maximise
their efficiency and profitability. The Group has a significant resource base
of ca. 243 million carats, which supports the potential for long-life
operations.

Petra conducts all operations according to the highest ethical standards and
will only operate in countries which are members of the Kimberley Process. The
Company aims to generate tangible value for each of its stakeholders, thereby
contributing to the socio-economic development of its host countries and
supporting long-term sustainable operations to the benefit of its employees,
partners and communities.

Petra is quoted with a premium listing on the Main Market of the London Stock
Exchange under the ticker 'PDL'. The Company’s US$650 million loan notes due
in 2022, currently subject to restructuring, are listed on the Global Exchange
market of the Irish Stock Exchange. For more information, visit
www.petradiamonds.com.



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