The London Bullion Market Association has been accused of causing the deaths of two miners in Tanzania, as it fights for its future as the setter of standards in the world’s largest gold market at the start of a High Court case.
The trial began on Wednesday over claims brought against the non-profit members’ association by the families of the two miners, who were allegedly killed by security forces in two separate incidents at the mine in 2019.
The case centres on the LBMA’s so-called “good delivery list” accreditation, which refiners must have to deliver gold into London vaults. This requires them to comply with the industry body’s responsible sourcing rules, which are designed to prevent gold linked to human rights violations, conflicts or crimes from entering the market.
The case could have far-reaching ramifications for centuries-old standards for metals traded in London — and through it around the world — and for more recent attempts to promote responsible mining and prevent “dirty” gold entering the market. Protesters gathered outside the court on Wednesday.
In their opening arguments, the claimants alleged that the LBMA “devised, trumpeted and implemented a responsible sourcing and certification programme which served as a thick smokescreen”.
They said the LBMA caused the miners’ deaths by “enabling the commercial viability of operations accompanied by serious abuses . . . cloaking a problematic supply chain from scrutiny [and] maintaining certifications when suspension or withdrawal would have altered conditions”.
They argued that the LBMA was the certifying body that accredited gold from the mine as being responsibly sourced, and said it should have followed its procedures and decertified the metal because of alleged human rights abuses.
The LBMA denies liability in full. In its opening arguments on Wednesday, it denied it owed any alleged duty of care.
Lawyers for the group said it was “not responsible in law for either of these deaths and is firmly of the view that these claims should not have been brought against the LBMA”. It said it does not certify any gold as responsibly sourced, but that its certification scheme requires refiners to demonstrate they have due-diligence processes and procedures in place.
“LBMA is not an auditor, carries out no audits, and did not have access to the relevant confidential due-diligence files of the refiners,” its opening argument said.
The case threatens to open the door to claims against other industry bodies that set standards. The LBMA said it could mean industry certification programmes would be liable for the conduct of organisations they do not control and that this could weaken responsible sourcing programmes across metals, minerals, garments and agriculture.
Analysts at Peel Hunt said this week that the impact of a win for the claimants “across the whole of mining would be seismic”.
Emily Iona Stewart, head of policy and advocacy at campaign group Global Witness, said the case could be a “watershed moment for voluntary certification schemes”, which “may no longer be able to distance themselves from harm while continuing to provide assurances to companies and customers”.
“Any credible scheme should properly scrutinise the companies and supply chains they certify,” she added.
The case arises from incidents in July and December 2019 at the North Mara gold mine, about 20km south of the Kenyan border in Tanzania. The men were among artisanal miners prospecting for gold in waste rock and slurry storage. They were allegedly killed by police and private security forces called to disperse artisanal miners using tear gas and live ammunition.
The mine is owned and operated by Barrick, one of the world’s largest mining companies, while the gold in the case went through an Indian refinery certified by the LBMA.
The LBMA’s small size — it had 45 staff as of last year and made a pre-tax loss of £1.6mn in accounts filed last month, leaving reserves at just £1.4mn — belies its importance to the gold trade, with many refiners needing accreditation in order to trade on markets.
The case threatens to wipe out its financial reserves: in its accounts last month, the LBMA said potential costs of £3mn relating to the claimants’ legal expenses could be incurred, were it to lose the case. However, it added in the accounts that it did not believe its liability to be provable, and would fight in court to clear its name.
The court case comes days after the LBMA’s annual gathering in Sorrento, Italy, where chief executive Ruth Crowell said that fees would need to increase “to continue and grow our mandate”.