MIGA Statement on Bulyanhulu Mine in Tanzania

MIGA Statement on Bulyanhulu Mine in Tanzania

Washington, DC, September 26, 2001— The Multilateral Investment Guarantee Agency said today that the so-called "new" evidence it has received relating to deaths that allegedly took place in 1996 at the Bulyanhulu mine in Tanzania during a government operation to fill illegal mining shafts provides no evidence of wrongdoing on the part of either the Tanzanian government or Barrick Gold Corporation of Canada. MIGA, which became involved in the project in 2000, four years after the alleged events, stressed its commitment to ensuring that the projects it supports are environmentally and socially sustainable and do not harm the people they are meant to help. It noted that although it was not and cannot be associated with the alleged events of 1996, it takes any allegations of misconduct seriously.

Following its own due diligence, including an assessment of the allegations, MIGA was satisfied that it was in full compliance with all its environmental and social policies, including involuntary resettlement. Last year, MIGA issued a $115 million guarantee against political risks to a syndicate of banks for their loan to Kahama Mining, a wholly owned subsidiary of Barrick Gold Corporation. A guarantee for $56 million was also issued to Barrick, which first acquired a financial interest in the project in March 1999.

The allegations of human rights abuses, forced evictions, and widespread killings of artisanal (informal) miners in August 1996 were investigated by many independent parties prior to MIGA's decision to proceed with its guarantee of the project. Amnesty International, the Tanzanian government, the Canadian High Commissioner, and many others investigated the allegations and consistently found that they could not be substantiated. In view of the recently resurfaced allegations, the Tanzanian Ministry of Home Affairs issued a press release on September 17, 2001, which states it found no new evidence of negligence or injustice surrounding the alleged killings, and appealed to the public to avoid "being taken astray by false allegations."

The so-called new evidence brought forward by the Lawyers' Environmental Action Team (LEAT) to MIGA, in the form of a videotape in Swahili with an interpretative statement, is at best misleading. It seems to be a partial copy of a tape that has been in the possession of the Tanzanian police since 1996. MIGA is not convinced that the human remains depicted in the tape are demonstrably located at the site where the pits were filled and are demonstrably of exhumed miners. Further, a more extensive and detailed video taken concurrently shows that the process of evacuating the miners, who were on the site illegally, was done in a safe, systematic, and non-violent manner in full view of observers from the local and regional law enforcement, the Tanzanian Ministry of Mines, representatives of the project enterprise, Kahama Mining, and pit inspectors from the artisanal mining community.

Prior to Kahama's and MIGA's involvement in the project, artisanal miners on the site commonly worked in violation of safe mining standards, digging shafts too close together and constructing unsafe scaffolding that regularly led to the mines' collapse and the death of miners. Asphyxiation due to lack of ventilation underground also led to deaths. In addition, the project site faced many social and environmental problems, including, for example, child labor, deforestation, mercury contamination and poisoning, and lawlessness.

Today, the turnaround is significant:

•  All mining is now conducted in accordance with international environmental and social standards.
• Nine hundred permanent jobs have been created, and another 600 contractors are employed. Indirect employment is conservatively estimated at more than 7,500.
• Extensive staff training has been provided (costing $6.3 million), even though the mine has been in operation for only a few months.
• A new $1 million medical center serves not just employees and their families but the local community as well. The company is also refurbishing a nearby dispensary and is partnering with the African Medical and Research Foundation to develop, fund, and staff public health educational programs regionally.
• The project is making reliable, clean water available to the area's 30,000 residents, many for the first time.
• A scholarship program maintained by Barrick-which to date has invested $6.4 million globally—will also provide financial support to the children of Bulyanhulu employees for post-secondary education. The project has recently entered a million-dollar partnership with CARE International to develop education facilities in the communities around the project site.
• The project is sponsoring the country's first private sector housing program, providing interest-free loans to employees for the construction of up to 600 new houses.
• More than $15 million has gone into the construction of a power line, in cooperation with the Tanzania Electric Supply Company, to bring power to the region. Roads are being upgraded, and financial support is going to rail facilities and ports.

While MIGA recognizes the need to address legitimate concerns regarding its projects, it is troubled that unsubstantiated allegations and misleading statements undermine the pressing needs of today and set back the chances of Tanzania's development and a better quality of life for its citizens.

For information:
Moina Varkie, mvarkie@worldbank.org, t. (202) 473-6170
Angela Gentile, agentile@worldbank.org, t. 202.473.3509