Decision

Follow up statement: RAID complaint to UK NCP about ENRC

Published 23 April 2018

This statement was published on 23 April 2018 by UK National Contact Point (UK NCP) for the OECD Guidelines for Multinational Enterprises.

Background

OECD Guidelines for Multinational Enterprises

1. The Organisation for Economic Co-operation and Development (OECD) guidelines are voluntary principles for responsible business conduct in areas including employment, human rights and the environment. Each country adhering to the guidelines is required to maintain a National Contact Point (NCP) to consider complaints under the guidelines. The UK government maintains the UK NCP to meet this requirement. The UK NCP is not part of the OECD and has no wider responsibilities for OECD functions. The UK NCP is staffed by officials of the Department for International Trade (DIT). The UK NCP is funded by DIT and the Department for International Development (DfID). It operates independently of ministers, who have no role in the UK NCP’s decision making on complaints.

Follow up to final statements by the UK NCP

2. Where a final statement includes a set of recommendations, the UK NCP approaches parties at a specified date after its publication to request an update. A follow up statement is then produced based upon the responses provided. The parties have an opportunity to comment on the statement in draft before its publication. Conclusions made by the NCP in the follow up statement are based only on what is apparent from the parties’ responses. They do not represent any further examination of or finding on the issues by the UK NCP.

Find more details of the NCP’s process and statements

UK NCP recommendations to ENRC

3. The UK NCP’s Final Statement on the complaint from RAID against ENRC can be viewed on gov.uk

4. At paragraph 82 of the final statement, 4 recommendations were made by the UK NCP to ENRC. These were to:

• ensure that effective communications channels are in place between ENRC, the concession holding companies, and the stakeholder communities of Kisankala and Lenge, including accessible and effective procedures for the communities to raise grievances
• inform the communities about standards of conduct expected of staff and security contractors on the site, and ensure that the communities receive timely advice about anticipated changes to the schedule for mining
• use its influence with Africo/Swanmines to ensure that site security management includes measures that assure continuing and unrestricted community access to the water supply provided in 2007 to 2008
• in consultation with the communities, consider whether plans to provide or enhance community facilities as part of mining plans can be progressed at an early stage

Response from the parties

5. The NCP contacted both parties by email on 7 February 2017 and invited them to provide updates on the recommendations by 20 March 2017, which could be used in the follow up statement.

6. Following the correspondence of 7 February 2017, RAID contacted the NCP requesting an extension to the 20 March 2017 deadline. The reason given was that the delay would allow them to provide the additional information which had been gathered by their local partner working in the Democratic Republic of Congo. The NCP agreed to this extension and it duly received an update from RAID on the 6 April 2017.

7. Subsequent requests from both sides to review information submitted by the opposite party, along with some additional delay in response by the NCP, resulted in the timetable for the publication of findings being set back.

At the beginning of September 2017, the NCP contacted both sides with a draft of the follow up statement and requested that both parties review the document in order to provide any factual corrections and final contributions. This was done on the understanding that all materials submitted would be reviewed and, if deemed relevant by the NCP, be included in the final draft. All contributions were to be submitted by 15 September 2017.

This statement takes into account the relevant information provided to the NCP at the later date.

Complainant

8. The complainant’s responses of 6 April 2017 were based upon investigations carried out by their Congolese partner who had made site visits to both communities.

9. RAID also provided additional material for consideration in response to the 15 September 2017 deadline set by the UK NCP.

10. With regards to the UK NCP’s first recommendation, the complainant stated that the situation had not improved. It stated that the community at Lenge continued to have almost no contact with the company. It was also alleged that community members had at times been subjected to threats of forced relocation from representatives of the ENRC. At the second community in Kisankala, the complainant stated that interaction with the company had been restricted to brief monthly visits from a community relations agent working on ENRC’s behalf. RAID stated that on these occasions, all discussions were strictly limited to issues regarding the water supply.

11. On the matter of the UK NCP’s second recommendation, the complainant stated that of the residents who had been interviewed by their partner at Lenge, none were aware of any policy or guidance being provided in relation to the conduct of ENRC staff and contractors.

12. In relation to the third UK NCP recommendation, the complainant recognised that clean water was now available at the Kisankala site and that it was provided free of charge. It also noted that the cost of this service was borne by the company. However, the complainant stated that as a discretionary service, there was no long term or formal understanding in place for the ongoing maintenance of the facility. The complainant also drew attention to the lack of development in establishing access to clean water at the Lenge site.

13. With regard to the fourth recommendation, the complainant recognised that some efforts had been made by ENRC to improve community conditions at the Kisankala site. This included the introduction of basic sanitation and the provision of a staffed health facility. However, the complainant stated that this facility, along with services related to the ongoing improvement of the community, had now been suspended. As a result of this, the Kisankala community had experienced a reversal of the initial improvements. The complainant also pointed to the lack of progress regarding the company’s initiatives to promote agriculture in the area. With regards to the second site at the Lenge community, the complainant noted that no activity had been undertaken for community development projects.

14. As well as addressing the UK NCP’s recommendations, the complainant also introduced further information for consideration. This information was based upon evidence that had been submitted against ENRC in a separate action. However, this information could not be accepted as part of the original complaint.

15. Within the final section of their response, the complainant also presented a number of recommendations that it asked the UK NCP to enforce.

Company

16. The UK NCP received an update from ENRC on 7 March 2017 that provided examples of the actions taken by them to address the 4 recommendations proposed by the UK NCP.

17. ENRC also provided additional material for consideration in response to the 15 September 2017 deadline set by the UK NCP.

18. With regards to the first recommendation, ENRC stated in its response of March 2017 that regular meetings now took place with the representatives of both stakeholder communities. The ENRC also stated that a registry had been set up to prevent future damage to historical and cultural sites in the two communities. Additionally, the ENRC stated that it had put in place a Participatory Rural Appraisal (PRA) process to identify and address the needs of the Kisankala community. At the time, the intention had been for one of the concession partners to work with a yet to be established committee, to address the wider developmental needs of the community under the PRA.

In its submissions to the UK NCP in September 2017, the company also offered photographic evidence to substantiate the assertion that it had held PRA sessions with the Kisankala community. It also provided the minutes of meetings held with the Lenge community as evidence of its engagement with them.

19. In relation to the second recommendation, ENRC stated that it had used regular meetings with representatives of the stakeholder communities to raise awareness on scheduled mining activity and the security issues associated with the mine. It noted that on 5 April 2016 and on 18 July 2016, representatives from one of ENRC’s concession companies met with both stakeholder communities to update them on these matters.

In its submission of September 2017, the company included a draft list of rules for its employees and concession holding partners to abide by. ENRC also provided photographic evidence which they indicated to be the process of consulting a community about mining activity.

20. On the third recommendation, ENRC stated that the problem of maintaining an ongoing supply of clean water at the Kisankala site had been resolved. ENRC also provide a translated note indicating that water from the well at Kisankala continued to be provided free of charge and without any cost of maintenance to the community. The document also indicated that it was signed by a representative of the Kisankala community. ENRC stated that a further visit by representatives of the company on 17 March 2017 confirmed this situation to still be the case. ENRC also re-confirmed its commitment to maintaining the well facility at no cost to the community.

The company minutes from meetings held with the Lenge community and submitted in September 2017 also indicated that the provision of a water facility had been discussed. Documentation was also provided to indicate that progress had started on the drilling for a permanent water source for the community.

21. With regards to the fourth recommendation, ENRC re-iterated the formation of the PRA. It drew attention to the issues identified by the PRA and, the efforts of the concession holding parties to work with the community committee at Kisankala in the attempt to resolve them. The company notes that it is keen for the process to be led by the Kisankala community itself.

The submission of September 2017 also included a Community Action Plan for the Kisankala site that had been prepared by the company, as well as documentation relating to the potential development of a permanent school for the community.

UK NCP conclusions

22. Following further discussions with both parties and conscious of delays on the part of both sides in responding to queries, the UK NCP informed both the complainant and the company on 29 August 2017 that it would shortly provide them with a draft of the follow up statement. Factual corrections and comments would be invited and all comments would need to be submitted for consideration and potential inclusion by the 15 September 2017.

The UK NCP’s assessment of ENRC’s performance was further complicated by the fact that the company undertook remedial activity after the initial date that responses were originally invited, namely the deadline date of 20 March 2017.

23. The UK NCP notes there are significant differences in the responses it received from the 2 parties. However, the main conclusion the UK NCP draws from the responses is that not all of the suggestions in the original recommendations - set out in the final statement of February 2016 - have been implemented effectively and that there are still a number of outstanding issues which will need to be addressed by the company in relation to both communities.

Implementation of recommendations

24. The UK NCP’s original recommendations made under paragraph 82 of the final statement apply equally to both stakeholder communities.

25. The first recommendation made by the UK NCP stated that ENRC should ensure effective channels of communication were established between itself, the concession holding companies and the stakeholder communities. Engagement by businesses with relevant stakeholders is covered under Chapter II, Paragraph 14 of the guidelines.

The UK NCP’s original findings of February 2016 established the lack of an effective grievance mechanism for stakeholders in both communities to exercise in the event of a complaint. Documents which have since been submitted to the UK NCP do indicate that there has been some form of engagement between the company and representatives from the two communities and, that a basic grievance process is being operated at the 2 community sites. This interaction appears to have mainly been with the village chiefs of Kisankala and Lenge. However, there is no indication of a systematic methodology being implemented to engage with the wider community or how it is being managed on an ongoing basis. There is no evidence of a documented strategy or process which all stakeholders can refer to in the event of a grievance being raised.

Material provided by the company for the deadline of 15 September 2017 also indicated that a consultation meeting had occurred with representatives from the village of Lenge. However, this event occurred long after the initial request for follow up information was made in February 2017. The details indicate that the meeting in fact occurred on the 9 June 2017.

A further note of the 25 July 2017 indicated that while a subsequent meeting also occurred between the leaders of Lenge and the company, no concrete decisions had been arrived at to ensure that the village had an operational school or health centre. These difficulties were again revisited in another meeting held between the representatives of Lenge and the representatives of ENRC on 24 August 2017.

26. The second recommendation made by the UK NCP indicated that ENRC should have an appropriate process to inform the stakeholder communities of the standards expected of staff and, to inform them of scheduled mining activity. This recommendation was drawn from Chapter II, Paragraph 12 to 13 of the guidelines.

27. The UK NCP does note the examples provided by ENRC of how village chiefs were kept informed of certain commercial activity, as and when it occurred. While the company did provide environmental and social impact material on the operations, this was drawn from the company’s corporate reporting. Consequently, there is a lack of detail on what information was passed to the communities, informing them of their rights and what they could expect from the staff associated with the mining operations. As with the engagement processes discussed under the first recommendation, there is no evidence of a written strategy or ongoing procedure being in place.

The UK NCP previously noted that ENRC had not met its obligation to address the impacts of its business relationships on the communities or, encouraged its partners to apply standards set out in the guidelines. The UK NCP accepts that efforts have been made by the company to produce a set of rules for its own employees and those of its concession holders and partners to follow. However, the material submitted for consideration for the 15 September 2017 deadline indicates that they are still in draft form and have yet to be enforced.

28. In relation to the third recommendation, there is recognition on both sides to the complaint that clean water is now being supplied to the community at the Kisankala site on a free of charge basis. However, the wording of the original recommendation stated that any access should be on a continued and unrestricted basis. The UK NCP previously concluded that access to safe water was a human rights impact issue under chapter II paragraph 2 and chapter IV paragraph 1 of the guidelines and that the company had not satisfied its obligations in relation to it. Without any clear guidance or agreed process on how it will be managed in the future, the issue of a permanent water supply is only partially resolved and remains an outstanding obligation.

The UK NCP does note that there seems to have been some progress made in establishing access to water at the Lenge site. In a subsequent meeting that was held between representatives of the Lenge community and representatives of the company, the handwritten record for the event indicates that a well has been established, with responsibilities being assigned to relevant parties. However, the UK NCP also notes that this meeting occurred on 4 September 2017, long after the March 2017 deadline for submissions. The meeting also seems to have been arranged to coincide with the actual establishment of the well itself. The UK NCP also notes that amongst the proposals included for the eventual operation of a water facility, is the suggestion that a minimum charge be established for the provision of clean water.

29. The fourth recommendation made by the UK NCP related to the company providing and enhancing community facilities at the 2 sites as part of overall plans to develop the mining facilities. The UK NCP concluded that the obligation to do so arose out of chapter II paragraphs 1 and 3 of the guidelines.

In their response to the UK NCP, ENRC stated its intention to use the PRA process as a conduit for managing the community development process at the Kisankala site, with the community itself leading the identified development opportunities. While this recognises the importance of input from the Kisankala community in the development process, it does not address the lack of experience the Kisankala community may have in fulfilling this role or the support it may require to successfully engage with other parties as part of an overall resolution process. This includes the maintenance of the already established facilities at the Kisankala site.

Under normal circumstances the expectation would be for a PRA committee to be established and convened. The PRA committee would then have the task of monitoring and facilitating any progress to ensure its objectives are met. However, there is no evidence to suggest this has taken place.

30. There is also no indication from either party that any positive efforts have been made by ENRC to establish meaningful community development projects at the Lenge site.

Other issues

31. As stated in paragraph 2, the purpose of the UK NCP Follow up Statement is only to comment on activity that has occurred following the recommendations made in the final statement. In their response to the NCP, the complainant had also included additional material that related to the business conduct of the company. This related to ongoing investigations being conducted by the UK authorities. While the information may be related to the original application, it cannot be considered for inclusion at this stage of the proceedings.

32. The response from the complainant also outlined a number of recommendations it wished the UK NCP to pursue. This included compelling the company to adopt a specific course of action to remedy the outstanding issues. The work of the UK NCP is defined under the guidelines. As mentioned in paragraph one, the guidelines offer voluntary principles for responsible business conduct. This being the case, the UK NCP cannot mandate a course of action for a participating party to follow.

33. It has been also noted by the UK NCP that following its acquisition by the Eurasian Resources Group (ERG) in November 2013, ENRC is technically no longer domiciled in the UK. However, we understand that 2 ERG subsidiaries, which are affiliated to the group’s interests in Africa, continue to be based in the UK.