Gemfields announced on Tuesday that it has agreed, on a no-admission-of-liability basis, the settlement of all claims brought by law firm Leigh Day on behalf of individuals living in the vicinity of Montepuez Ruby Mining’s (MRM’s) mining concession in northern Mozambique.
Gemfields holds a 75% stake in MRM, with Mwiriti Limitada holding the balance.
The JSE-listed gemstone miner has agreed to pay £5.8-million, which will cover Leigh Day’s legal expenses and be distributed to the claimants represented by the law firm.
Leigh Day represents 273 Mozambicans who allege that they, or their relatives, were the victims of serious human rights abuses at or around the mine.
Gemfields denies liability for these allegations. However, in a voluntary statement on February 12, 2018, Gemfields recognised that, in the past, instances of violence have occurred on and around the MRM licence area, both before and after the company’s arrival in Montepuez.
In a statement on Tuesday, Leigh Day acknowledged that Gemfields had taken the claimants’ allegations seriously and had been proactive and constructive in addressing the wider issues raised by local communities through this case.
“Gemfields has maintained throughout that it is not liable for the alleged incidents set out in the claims. However, the company noted that it took the view that the agreed settlement best balances the interests of the assorted stakeholders and avoids tainting MRM’s relationship with sections of the local community by contesting protracted and expensive litigation against the claimants,” the law firm stated.
As part of the settlement agreement, Gemfields will also establish a new and independent operational grievance mechanism (OGM).
An independent panel will consider evidence accompanying grievances submitted to the OGM and, where applicable, determine compensation payable.
Under the terms of the settlement, and provided Gemfields fulfils its commitment to establish the OGM, Leigh Day will not bring or support any further claims in relation to MRM where they arise prior to the date of the settlement agreement.
Gemfields will also create a new agricultural development and training fund and commit at least £500 000 to provide long-term sustainable benefits including skills training to foster economic activity and employment for the Ntoro/Namucho community.
That fund will be additional to the settlement amount and sit alongside Gemfields’ existing direct investment in, and establishment of, collaborative community projects in the area.
“Given a complex array of considerations and the likely protracted nature of the mooted litigation, we believe today’s settlement best balances the interests and futures of the assorted stakeholders,” commented Gemfields CEO Sean Gilbertson.
“Vitally, we wish to ensure that we are regarded as trusted and transparent partners to members of our local communities, rather than legal adversaries.”
“The settlement announced today provides significant redress to our clients and, importantly, puts in place a credible and independent mechanism for providing remedy to those we have been unable to represent,” Leigh Day partner Daniel Leader commented.
“These incidents should never have happened. However, we commend Gemfields for engaging constructively to resolve this case promptly and for putting in place an independent grievance mechanism.”