- Date filed
- 26 February 2016
- Keywords
- Countries of harm
- Current status
-
No resolution
- Sector
- NCP
Allegations
On 26 February 2016, the Canadian NCP received a complaint from five former employees of the Société Minière et Industrielle du Kivu (SOMINKI) located in Kalima (South Kivu) in the Democratic Republic of Congo (DRC). The complaint alleges that Sominki went into liquidation in the late 1990s and that, in 1997, its mining assets (specifically, its mining titles) were transferred to another company called SAKIMA SARL. The complaint alleges that Sominki and SAKIMA SARL had a responsibility to pay severance and other benefits to 4,987 former employees, but did not. The complaint further alleges that Canadian multinational enterprise Banro Corporation, which owned 93% of SAKIMA SARL until 2002, breached the OECD Guidelines by failing to ensure the completion of the liquidation process, including the final settlement of the accounts for the 4,987 former workers of SOMINKI. As a result of the failure, the complaint alleges that the workers did not receive their severance pay, pension benefits, or other related benefits.
Following the failure of their first attempt at remedy via the good offices of the Canadian NCP, on 11 January 2021 the workers filed a second complaint to the U.S. NCP against a financier of Banro, Gramercy Funds Management LLP, based in the United States. The complaint alleges that Gramercy has also not met its due diligence responsibilities under the OECD Guidelines by failing to ensure that its client Banro resolves the outstanding lack of payment of severance and other benefits to the former workers of Sominki. The complaint asserts that Gramercy has particular leverage over Banro, since two members of Banro’s Board of Directors are appointed by and from Gramercy. The complaint observes that its own failure to pressure Banro to take action represents a failure of due diligence, particularly as Gramercy should have known of the recommendation by the Canadian NCP for Banro to attempt to resolve the workers’ concerns.
Relevant OECD Guidelines
Outcome
On 25 May 2017 the Canadian NCP issued an intial assessment rejecting the complaint. Although the NCP found that the questions of the liquidation of SOMINKI and payment of the final accounts of ex-employees merited further examination, the NCP also concluded that offering facilitated dialogue only between Banro and the submitters without the presence of other key actors in the liquidation process (especially the Government of the DRC and the Liquidation Committee) would not facilitate the completion of the liquidation of SOMINKI. The NCP did not offer mediation, as it felt that in the absence of key parties, the dialogue would not provide the necessary accountabilities to facilitate the process needed to resolve the issues at hand.
However, based on conservations it had with both parties, the NCP made the following recommendations to Banro, that the company:
1. Make all efforts possible to engage with DRC government officials, in good faith, to promote a timely reactivation of the SOMINKI liquidation process with a view to working with all implicated parties to complete a reconciliation and closure process as soon as possible. It is recommended that this process focus on facilitating an expedited cash payment of the long outstanding ex-employees’ final accounts.
2. Provide a written update to the NCP by 8 September, 2017 addressing what steps the Company has taken to address the NCP request 1) above regarding the re-activation of the SOMINKI liquidation process; and
3.Provide a 2nd written update to the NCP by 8 December, 2017 regarding any outcomes achieved as a result of the implementation of the request regarding the SOMINKI liquidation process.
The Canadian NCP also recommended that Banro endorse and implement both the OECD Guidelines and the OECD’s Due Diligence Guidance for Meaningful Stakeholder Engagement in the Extractive Sector.
The Canadian NCP committed to issue a follow up statement to the Final Statement in approximately May 2018 and stated that the NCP can also make recommendations pertaining to the provision of trade advocacy support services by the Government of Canada, should constructive engagement with the NCP by Banro falter.
More details
- Defendant
- Complainants
- Affected people
- Date rejected / concluded
- 25 May 2017