'Green bank' linked to eco-unfriendly project

File picture: Tracey Adams/ANA Pictures

File picture: Tracey Adams/ANA Pictures

Published May 13, 2017


Johannesburg – Balla Camara signed over his land with a soldier pointing a gun at him. “I had no choice,” says the Guinea small-scale gold buyer who lost his home and his business. “If you had a man standing over you with a gun, what would you do?”

Camara is featured in a new hard-hitting report that has implicated South Africa’s “green bank”, Nedbank, in financing a “socially and environmentally destructive” mining project in Guinea, run by SAG, a subsidiary of AngloGold Ashanti.

The report, “Unjust Enrichment: How the IFC (International Finance Corporation) Profits from Land Grabbing in Africa”, compiled by Inclusive Development International (IDI), alleges Nedbank has turned a “blind eye” to the “suffering and destruction” reportedly caused by the Siguiri mine.

“AngloGold Ashanti has made a number of promises to the people whose lives it has upended. It has pledged to provide jobs, irrigation, drinking water, and electricity to those it evicted. yet community members say the company has kept few of these promises.”

In 2015, the IFC provided Nedbank with $140 million (R1.87 billion) for “cross-border lending across Africa, including capital-intensive projects.

“An IFC press release announcing the deal noted that the funding was designed to increase lending for ‘resource extraction projects’ in Africa, among other goals,” says the report.

Support for AngloGold Ashanti’s gold mine in Guinea “falls squarely within the purpose of the IFC’s loan to Nedbank ... When the Nedbank loan was announced, IFC official James Scriben praised the deal, (stating) ‘IFC, the African Development Bank and Nedbank share the objective of increasing social and environmental awareness in the financial sector, hoping to contribute to more sustainable development across Africa’.”

Through this financial relationship, IFC money could be used by AngloGold Ashanti to operate and expand the mine in Guinea, says the report.

“Moreover, profits from AngloGold Ashanti and the mine have moved up through Nedbank and onto the IFC, in the form of interest from the loans.”

But IFC, whose mission is to fight poverty and support sustainable private sector-led development, says the IDI is both indirectly financing and profiting from a project that is "harming and further impoverishing the poor".

It cites community members, who accuse the company of “moving in with government security and defence forces” and compelling families to sign inventories of their possessions “often at gunpoint.

“In Guinea, the IFC’s support for Nedbank has created anything but sustainable development. Deprived of their land and livelihoods, and given paltry compensation by AngloGold Ashanti, the relocated families have spiralled into destitution.”

The report says the IFC's social and environmental performance standards are designed to prevent harmful impacts. "As a client of the IFC, Nedbank is required to ensure the high risk activities it finances, like those of AngloGold Ashanti, comply with performance standards. However, the loan agreement does not even mention performance standards.

“Given this complete lack of accountability, which appears to be a flagrant violation of IFC requirements, it’s no wonder the mine has caused such suffering and


The mine, alleges the report, has caused serious environmental damage because “residual cyanide (has) flowed into the area’s water sources, killing fish, livestock and poisoning drinking water, according to community members”.

Paul Miller, a mining investment banker at Nedbank, refutes the claims. “Nedbank has a long-standing corporate banking relationship with AngloGold Ashanti and Nedbank has received funding from a number of the IFC’s funding programmes over the years.

“We cannot comment on the specific issues raised in the report, however, social and environmental regulatory compliance forms a core part of our lending risk management practices.”

The WWF Nedbank Green Trust is a funding organisation that supports programmes with a strong community-based conservation focus. Theressa(crt) Frantz, the head of WWF South Africa’s environmental programmes, says it’s seeking clarity from Nedbank on the report.

“As with all our direct relationships, the areas of work WWF is involved in with Nedbank are clearly defined, but this doesn’t prevent us from holding differing positions or raising specific issues of concern, such as the one you have brought to our attention.”

Chris Nthite, a spokesperson for AngloGold Ashanti, points out SAG and AngloGold Ashanti have been engaging with NGOs cited in the report for several months on the resettlement process and the report. Regrettably, our feedback was not reflected in their final report. Both AngloGold Ashanti and SAG categorically reject the report’s key findings, including the alleged collusion with Guinean security forces.

“The military in no way participated in, or interfered with, the inventory process. We reiterate none of the affected residents signed resettlement agreements in haste or under duress. SAG is also satisfied that adequate and fair compensation was paid on a case-by-case basis.

"SAG has not – and neither will it – engage in or condone any threatening behavior to secure access to land .. We reject in the strongest terms the deduction in the report that this was the case."

"A framework agreement with respect to the resettlement project was entered into between SAG, the local negotiation committee, the Elders of Kintinian and the Mayor, acting collectively under the aegis of the Prefect and Sub Prefect of Kintinian, on 27 August 2015."

All existing infrastructure has not only been restored, but "improved in the new resettlement site”, he says.

Nthite explains that 74 from 155 affected landholders have thus far taken occupation of their new houses. “The feedback we’ve received has been hugely positive.

He points out the link between the bank facility and the funding requirements of the Siguiri gold mine in Guinea" is wholly incorrect, a fact we would have pointed out had the authors of the report put the question to us.

"The facility in question is a rand-denominated facility and is in place to provide liquidity for our South African operations. Crucially, this facility is yet to be accessed at all."

AngloGold Ashanti, he says, is certified to the International Cyanide Management Institute’s cyanide code and was in compliance with environmental laws and regulations. “We’re not aware of any ‘residual cyanide’ that has flowed into the area’s water sources, killing fish and livestock and poisoning drinking water.”

The gold produced from the mine is mined and processed "under strict environmental standards, the operation provides good-quality jobs, with benefits, at the mine and associated support industries for many thousands of people".

SAG pays millions of dollars in taxes and royalties to the government, wages to employees and large procurement budgets for locally sourced goods and services.

"These benefits flow to millions of Guineans and are deployed for infrastructure development, education and healthcare, among other things ... Respect for human rights is an essential part of AngloGold Ashanti and SAG’s vision and values.

"It's fundamental to our value of treating each other with dignity and respect."

The IDI report details how Africa is in the grip of a land grabbing epidemic. "Large multinationals, in search of cheap land to grow crops and extract minerals, rushed to Africa to make deals" a decade ago in the wake of the global financial crisis.

Between 2008 and 2010 alone, investors acquired an area roughly the size of Ukraine, with the World Bank "at the centre of this storm", says the report. "By encouraging foreign investment in land that was deemed 'idle' or 'empty' these policies have enabled the seizure of land that local people have sustainably used and managed for centuries. To those affected, these deals have been nothing more than land grabs, resulting in dispossession and displacement on a massive scale."

Nthite says the firm is committed to doing no harm, to avoiding infringing the human rights of others, and to addressing adverse human rights impacts "where they may be linked to our activities. We'll strive to avoid causing and contributing to adverse impacts through our own activities and address them if they do occur through appropriate remediation".

In June 2016 AnglGold Ashanti announced it would spend $400 million expanding the Guinea mine over the next year years. "The firm is doing so perhaps out of necessity," says the report, pointing out how two of its large mines in nearby Ghana, Obuasi and Iduapriem are "experiencing problems. Meanwhile, a proposed mine in Columbia may not get off the ground after 98% of affected communities rejected it in a referendum" in March this year.

"Given these difficulties, expanding the mine in Guinea has become all the more important to AngloGold Ashanti's future bottom line. As a result, the 150 000 people living in its concession area face an uncertain, imperiled future.

"In this remote corner of northeastern Guinea, far from the world's gaze, an IFC-backed gold mining company is generating extraordinary wealth – while leaving the rightful owners of the land quite literally in the dust"

"The company does not care about us," the report quotes Camara as saying,. "Who is going to defend us?"

Nthite says AngloGold Ashanti has committed to building a new plant at the site that will extend the life of the operation, for "the long-term benefit of the local community and Guinea as a whole."

Saturday Star

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