30 November 2002, 10:31am EST

Tanzania: World Bank Did Not Exercise "Due Diligence" at Bulyanhulu

Barrick Gold Tanzania

The official World Bank ombudsman has found that the Multilateral Investment Guarantee Agency (MIGA) agreed to provide $72 million US in political risk insurance to Barrick Gold in August 2000 for their Bulyanhulu Gold mine based on "informal conversations" and verbal assurances, which did not constitute the "independent verification" and "due diligence" required by Bank policies.

Export Development Canada matched the MIGA investment and used the MIGA "due diligence" process in lieu of conducting their own. The ombudsman's finding makes the EDC decision very shaky indeed.

The report from Compliance Advisor Ombudsman (CAO) of the World Bank was initiated by a formal complaint filed by the Tanzanian Lawyers Environmental Action Team on behalf of the small Scale Miners Committee, with the last year. The complaint asked the CAO to (in summary):

  • determine full, fair and just compensation to those who were voluntarily resettled, who lost property, or who are currently being disturbed by the project
  • review the process of MIGA's due diligence with regard to the project, and to determine if MIGA took steps to properly ensure that World Bank policies were complied with (disclosure, resettlement, environmental safeguards, etc.)
  • review the information submitted by the mining company for accuracy
  • lend its voice to a call for an independent commission of inquiry into the acquisition and possession of the Bulyanhulu property

The CAO summary report was released on October 31. Instead of dealing in detail with issues raised in the complaint, it spends almost 10 pages attacking the complainant, and discussing the allegations of deaths during the relocations. This, despite the CAO acknowledgement that "the CAO did not undertake a full-scale inquiry, nor did it engage in the techniques of human rights investigation which would be necessary to try to prove or disprove many of the allegations repeated in the complaint, such as the exhumation of closed mines shafts for example". In fact, there were no references to the deaths or exhumations in the complaint whatsoever, since the CAO had told LEAT that she could not address these issues.

A detailed response to this misleading and evasive summary report is being prepared.