A Golden Example of Globalization


In the Shinyanga region of west central Tanzania, one of the poorest in the country, small-scale mining at Bulyanhulu once offered rural people an income about 6 times what they could make from farming.  The nation’s richest gold deposit, Bulyanhulu is located in the Kahama district, about 30 miles south of Lake Victoria, an area that had been officially designated as restricted to small-scale concessions, under the Mining Act of 1979, and by explicit order of former President Ali Hassan Mwinyi (1986-1995), who in 1993 told Kahama District Commissioner Halinga to ensure that artisanal miners be “free to operate in any area of Bulyanhulu.”


But in August of 1996, less than a year after President Benjamin W. Mkapa took office, that changed.


According to eyewitness reports, affidavits, photographs, and even video by Tanzanian police, and in violation of an injunction from the High Court of Tanzania, eight entire settlements around the town of Kakola were razed, an estimated 200,000 miners or more were evicted from the mines, and in the process some 54 miners at Bulyanhulu were buried alive in mineshafts sealed by bulldozers.  The alleged agents of these crimes were the Government of Tanzania and the Kahama Mining Corporation, Ltd. (KMCL), which at the time was owned by Sutton Resources of Vancouver, BC.  Sutton, and thus KMCL, was acquired in March, 1999 by Canada’s Barrick Gold Corporation, which was granted a political risk guarantee of $172 million by the World Bank’s MIGA (Multilateral Investment Guarantee Agency), just over a year later. 


By July of 2001, the mine, now revamped as a huge high-tech operation, was officially opened with great fanfare by President Mkapa.  With its new mining facility at Bulyanhulu, Barrick expected to extract 400,000 ounces a year, and according to its own estimates, anticipates $3 billion over the 15-year life of the mine, for which it paid Sutton $280 million.   By contrast, MIGA estimated that Tanzania may reap the more modest sum of $75 million in taxes and revenues.


Although Mkapa has steadfastly refused to investigate the allegations, the World Bank currently states that his government “has made efforts to fulfill its election pledge to fight corruption,” and notes glowingly that “Tanzania continues to enjoy political stability…”   How could it be otherwise?  Mkapa’s ruling Chama cha Mapinduzi Party (CCM) has worked very closely and consistently with the IMF in pursuing aggressive liberalization policies of investment deregulation and privatization.  Next to that achievement, what does contempt for its own High Court matter? 


On the contrary, it is two Tanzanian lawyers and a leading MP who face charges of sedition, as a result of their tireless investigation of the case, their support for the local miners, and the crime of releasing evidence of rampant corporate hegemony.  The documents they have compiled reveal a trail of deceit, corruption and high crime that involves not only their own government, but that of Canada and one of its most powerful corporations, whose advisory board included former president George H.W. Bush, and Clinton confidant Vernon Jordan.


The tangle begins with the Kahama Mining Company, Ltd. which was issued a prospecting license (PL # 216) by Tanzania’s Minister of Minerals Jakaya Kikwete in 1994.  That license specifically cites Butobela Area, Geita District, and nowhere mentions Bulyanhulu; and the two renewals issued in 1997 and 1998 are identical: thus, KMCL never possessed a shred of any legal claim to the mine.  Further, under Article 24 of the Constitution of Tanzania, the artisanal miners were assured customary rights of occupancy, recognized under the country’s land law as property.  Yet it is the small-scale miners who have been referred to by Barrick, MIGA and the Tanzanian government as “illegal,” and as squatters and trespassers-terms that in fact apply to KMCL and its parent company Sutton.


In June 1995, KMCL initiated legal proceedings in the High Court of Tanzania to evict the artisanal miners, who had been in lawful occupation of Bulyanhulu claims since 1975.  The miners’ claims also rested on ancestral rights in the area, on the basis of pre-colonial farms and ancestral graves.  The High Court ruled in favor of the miners on 29 September, 1995; within a fortnight, the company turned to the Court of Appeal, in hopes of overturning this ruling.  Yet some seven months later, KMCL lawyers unexpectedly withdrew the appeal, apparently realizing the legal system in Tanzania would not be as sympathetic as the Ministry of Minerals had been.  It would soon become all too clear why KMCL had withdrawn their appeal: they no longer had any intention of using legal means to secure Bulyanhulu.  And indeed, the current Minister of Minerals, Dr. Shija, decreed on July 30, 1996, that the Bulyanhulu miners had one month to vacate the area.  That same evening, however, the Regional Commissioner, Major General Kiwelu, stationing paramilitary troops at a Bulyanhulu village, ordered all mining operations to cease within twelve hours.  Eviction began the next morning.  The High Court responded with urgency, issuing an injunction on August 2 against KMCL and the government of Tanzania.  Though the court ruling was broadcast over the radio, Major General Kiwelu boasted over a loudspeaker that he was not an employee of the court and did not take orders from them.  According to an internal memo from Sutton/KMCL Exploration Manager Jim Hylands, Shinyanga Regional Police Commander David Mnubi received orders from both the Attorney General and the Inspector General of Police to continue to “remove the miners by whatever means required… and ignore… the High Court.”  The evictions continued, and it was during this time that the alleged atrocities took place.  Thus government officials themselves stand in contempt of the High Court for having violated the injunction.


The failure of Mkapa’s government to launch a full investigation violates UN Economic and Social Council Resolution No. 1989/65, which requires a government to form an independent and impartial commission of inquiry to investigate accusations of unnatural deaths.  Despite repeated calls to do so over the years from responsible organizations, including Amnesty International and the Council of Canadians, the Tanzanian government has refused.   When asked to exhume the mineshafts, the Tanzanian police chief justified his refusal by citing the “enormous costs.”  Human or social costs were clearly not at issue.  Supposedly the Canadian High Commissioner, Verona Edelstein, “investigated” the killings, but this detective work consisted merely of interviewing KMCL officials and regional police authorities-the very people accused of having been implicated in the miners’ deaths and evictions.  Barrick has also claimed that the World Bank “investigated” the killings in 1998, but the Vice Chairman of the Bulyanhulu Regional Miners Association affirmed that “the bank never asked us anything about the killings.”  A member of the Miners’ Committee at Kakola village, the main Bulyanhulu settlement, has said that when the World Bank team visited, the Committee told them about the killings, but the team was only interested in how much gold was coming from the mine.  Thus far, no official investigation has been undertaken, and no report has ever been issued.  Local organizations working on the case have been intimidated and harassed, and a joint fact-finding mission undertaken last March by MiningWatch Canada-which included a representative of  Friends of the Earth and a Canadian law professor with the Rights & Democracy organization-was prevented from interviewing Bulyanhulu miners by a police roadblock.


Moreover, miners and subsistence farmers forced off their land have never been properly compensated, in accordance with Section 81 (1) of Tanzania’s Mining Act, and further evictions of the area have occurred since Barrick’s acquisition.  When the Chairman of Sutton Resources, James Sinclair, suggested a $3 million compensation for the evicted miners and farmers, his board of directors rejected the proposal.  In August of 1998, two suits were filed in Tanzania’s High Court, one of them on behalf of villagers, including 41 families who were removed, claiming that they were paid less than $100 per family for loss of grazing lands, crops and buildings.  Although the High Court dismissed both cases on grounds that it lacked jurisdiction in matters of constitutional rights, the Court of Appeals soon accepted the cases and set a series of hearings to begin in May of 2000, by which time Barrick had acquired Sutton.  But ten days before the hearings were to begin, the current Kahama District Commissioner, Ms. Hawa K. Mchopa, yielded to pressure from Barrick and ordered the villagers to vacate within 12 hours.  Police arrived the following morning, and began razing houses and destroying crops.


That August, the loan guarantee was approved by both Canada’s Export Development Corporation (EDC), which provided insurance worth $117 million in 2000, and the World Bank’s MIGA.  When MIGA was founded fifteen years ago as a member of the World Bank Group, its lofty aim was “to promote foreign direct investment into emerging economies to improve people’s lives and reduce poverty.”  Their support of private enterprise was to be “consistent with the goals of host countries and sound business, environmental, and social principles…” MIGA is prohibited from issuing political risk guarantees to any project that violates the laws of recipient countries, or that entail the forced relocation of indigenous communities.  But all the evidence suggests that this is exactly what KMCL did.  Nonetheless, Barrick’s project to develop the mine received from MIGA “the largest guarantee” ever issued for an African mining project.


Barrick itself told MIGA that it had no property rights in Bulyanhulu.  But in applying for their loan guarantee, KMCL/Barrick, claimed in their Social Development Plan for the mine that there was “currently no apparent conflict between KMCL and customary land holders in the area.” Yet only the previous month before the plan was published in 1999, the High Court had dismissed a suit brought by peasants against KMCL.  Project documents by Barrick, Sutton, and KMCL failed to acknowledge that allegations had even been made, although in correspondence they claim to have investigated the allegations themselves. 


MIGA later claimed that Amnesty International investigated the allegations and had been unable to substantiate them, but this distorted AI’s findings by omitting the assertion “that there was compelling evidence to suggest that several miners may have been killed in the incident.”  Based on these findings, AI urged the Tanzanian government to establish an independent commission of inquiry that would “thoroughly and impartially investigate all claims of deaths of miners,” and bring any official found guilty of violating human rights to justice.  The government of Tanzania rejected these pleas, which AI continued to make for three years.  But about the time Barrick prosecuted the Guardian/Observer for publishing an article by investigative reporter Greg Palast in November 2000,  Amnesty remained silent until new evidence was presented by two lawyers for the Lawyers’ Environmental Action Team (LEAT), Rugemeleza Nshala and Tundu Lissu.  LEAT and local MPs had charged that Barrick’s mine does not benefit local people, but only transfers wealth out of the country. 


On August 23, 2001, Nshala presented MIGA with police videotape that had never been made public.  Shortly thereafter, he came into possession of two further videotapes that KMCL employees had filmed in 1996.   According to Nshala, the video and other photographs “provide incontrovertible evidence that dozens of deaths and widespread damage to property occurred during the evictions…”  Indeed, senior police officers who denied the killings can be seen in the video viewing exhumed bodies. 


In July, 2001, the same month that the mine opened as Barrick’s project, Mr. Nshala wrote to President Mkapa, informing him that KMCL had entered Bulyanhulu illegally, and charged that a senior official in the Ministry of Energy and Minerals (MEM) had connived with KMCL.  Nshala never received a reply.


If the videos did not constitute new evidence, and Nshala’s case could be cavalierly dismissed, why, on November 24, 2001, did police in Dar es Salaam raid his offices at LEAT, which had been investigating the allegations of killings, and search his home, as well as that of fellow attorney Tundu Lissu, and confiscate the videotapes that constituted precisely the evidence that MIGA had claimed was “not new”?   Why did the police then question Mr. Nshala about “documents linked to alleged killings of artisanal miners”?  Both Mr. Nshala and Tanzanian Labour Party president Augustine Mrema, who possessed copies of the incriminating tapes, were threatened with charges of sedition, and Mr. Lissu was arrested without a warrant, spending the night of last December 23rd in jail.   The tapes warranting such treatment are the very ones that supposedly “disproved the killings” at Bulyanhulu. 


Writing to MIGA that December, Mr. Nshala reiterated several concerns, noting that in applying to MIGA for political risk guarantee, Barrick and KMCL made statements that were “misleading, erroneous and false,” and calling once more for independent inquiry “into the Bluyanhulu events.”  MIGA had dismissed his earlier concerns by saying they had been “thoroughly investigated before.” 


Having received nothing but evasions from MIGA, Mr. Nshala lodged a complaint with MIGA’s Compliance Advisor/Ombudsman (CAO), in January of 2002.  Here Nshala carefully avoided accusations of the miners’ deaths, knowing such matters were outside the CAO mandate.  Limiting himself to breaches of MIGA policy, he pointed out that, under due diligence, MIGA should have investigated these well-known charges of fraud when they approved the political guarantee loan. 


The CAO itself admitted that MIGA “failed to carry out a thorough and competent due diligence investigation” of the project, and that “no environment or social specialist” from MIGA ever visited Bulyanhulu.  But in conclusion, it warned the lawyers against repeating “an allegation that one knows not to be true…” lest the reputation of private enterprise and NGO’s role in civil society suffer consequences.  This is a threat to others, not a reply: for anyone reviewing the documents can see that Nshala never once mentioned the allegations in the course of his complaint.  The CAO assessment also omitted the fact that the High Court injunction in favor of the miners was simply overruled by arbitrary decree from the Minister of Water, Energy and Minerals. 


        And it is such abuse of power that is at the heart of this case.  In November 2000, when investigative reporter Greg Palast broke the story, in Britain’s Sunday Observer, he detailed Barrick’s involvement, and the fact that its illustrious board of directors included former president George H.W. Bush.  Barrick waged a libel suit against the Sunday Observer, which agreed to settle the case.  Though the English High Court of Justice specifically warned Barrick not to claim that the libel suit had resolved the question of whether the alleged deaths had taken place, Barrick later claimed they had been exonerated.


But no one had asserted that Barrick was involved in the alleged deaths, since Barrick did not acquire Sutton/KMCL until March 1999.  But Canada had punished former President Mwinyi’s opposition of the Canadian acquisition of Bulyanhulu and the expulsion of the miners by suspending economic assistance.  Mr. Nshala has told me that it was made clear to President Mkapa “in no uncertain terms that the resumption of aid was dependent on his acting to remove the artisanals from Bulyanhulu.”  Moreover, in May 2001, Barrick President and CEO Randall Oliphant, who was fired in February, 2003, told shareholders that the Tanzanian government had been sanguine about Barrick’s takeover because of the company’s stellar advisory board, chaired by former Canadian premier Brian Mulroney, and including not only George Bush, Sr., but also former US ambassador to the UN Andrew Young, and Clinton golf partner Vernon Jordan, the corporate lawyer and power broker who, since the beginning of 2000 has been a senior managing director of the investment firm Lazard Freres & Co., helming its advisory role in mergers and acquisitions. 


As for Bush, he had served since 1995 as senior council on Barrick’s advisory board.  A little over a year before Barrick acquired the mine, in November of 1997, Bush received an honorary degree from the University of Toronto, ostensibly for his “lifelong commitment to public service” and his role in “ending the Cold War.”  But the honor just happened to coincide with a substantial donation to the University from Barrick CEO Peter Munk, on whom the University had conferred an honorary degree two years earlier.  Many at UT, including economics professor Mel Watkins, saw the matter as one of increasing corporate incursion into university decisions.  Munk himself is well-known in environmental circles for extraction practices that contribute to pollution, and was initially funded by Saudi arms dealer Adnan Khasshogi, one of the key Iran-Contra figures, whom Munk bailed out of jail in 1986 when Khasshogi faced charges of fraud. 


As Palast detailed, for a mere $10,000, Barrick in 1992 was able to grab a Nevada mine on Federal property worth $10 billion, by using an 1872 law designed to benefit small prospectors.  Bush’s Interior Department was able to push the deal through before the incoming Clinton administration could act on its intention to thwart Barrick.    Bush Sr. intervened on behalf of many other powerful companies including Chevron in Kuwait, and had also directly requested a gold concession for Barrick from the murderous dictator Suharto of Indonesia.  The CIA President’s philanthropy in these diverse deals enriched Republican Campaign funds, to which Barrick donated nearly $150,000.  One might venture to conclude that Barrick was a past master at manipulating laws designed to protect the poor from depredation for its own benefit.


But Barrick proudly claims to have created 1000 jobs at Bulyanhulu; it takes very creative math along the lines of Enron accounting methods to make that compensate for the quarter of a million people forcibly evicted, not to mention the 54 dead, as a result of Sutton’s massive privatization theft from which Barrick now profits.  Barrick’s public statements stress its “community-building responsibilities,” and assert that “corporate responsibility” is their “guiding principle.”  They do not mention that within a week of the mine’s official opening, 26 Tanzanian engineers quit, citing “low wages, discrimination and mistreatment of local professionals.”    Barrick’s website boasts of building a 47 km pipeline from Lake Victoria, claiming to benefit 30,000 villagers.  The environmental impact to the lake, of course, is not mentioned. 


        The Lake Victoria Environmental Management  Project (LVEMP), a five-year project committed both to the Lake’s restoration and biodiversity, and to regional cooperation, has issued a warning that unsustainable practices and exploitation of the magnificent lake “have caused serious socio-economic and environmental problems including deterioration of water quality, loss of biodiversity, water hyacinth infestation, deforestation, severe soil erosion, wetlands destruction and poverty among the Lake basin communities.”  What has Barrick done, beyond drawing even further on the lake’s imperiled water?


        Lake Victoria is shared by Tanzania, Kenya and Uganda, and its use affects them all.  OSIENALA is a Kenyan NGO genuinely dedicated to local community building and promotion of sustainable policies.  The program officer for Fisherfolks Community Development, Carolyne Odhiambo, told me that OSIENALA was in fact “concerned” over the effect on Lake Victoria of Barrick’s activities, “especially with the effect of Mercury” on both fish and human consumption.  Japan has supported a survey on Minemata disease in the lake’s environs.  Barrick, she said, “have not in any way supported OSIENALA activities.”  But why should Barrick worry what happens across the Lake, in Kenya?  You can’t really expect Barrick to come all the way from Canada to Tanzania, only to be concerned with communities in the next country, just because Lake Victoria doesn’t draw boundaries.  After all, internationalism has its limits.


But it is the lawyers who are on trial.  Mr. Nshala, Mr. Lissu and MP Mrema are charged with sedition, with a preliminary trial set for the 24th of this month.  For exposing corruption at the highest level of their government and in the halls of the World Bank, they stand accused of the crime of inciting rebellion, of treachery to their nation.  They will be challenging the constitutionality of the law in the High Court, which found in favor of the artisanal miners but could not prevent those who committed the real treachery from evicting and even murdering their own poor, by manipulating and defying the law of the land in favor of foreign investors.  The accused have become the accusers.


In supporting Barrick’s Bulyanhulu operation, MIGA claimed that “anticipated benefits from the mine have occurred or are in the process of being realized.”


Mr. Nshala, in his response to MIGA noted that he “failed to see the relevance” of this argument.    Of course Mr. Nshala is right about the argument: “benefits” from the mine have no bearing on disproving whether the crime was committed.  But it has everything to do with the crime itself: in the process of globalization as it continues to be practiced in Africa and throughout the Third World, “benefits” are the only thing that is relevant, the obscenely relevant rewards of the rationalized plunder designed by powerful corporations and their government vassals, deftly systematized into the piracy known as globalization.


Michael Bradburn-Ruster teaches at Yavapai College in Arizona

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