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Petra Diamonds : Settlement of human rights claims at Williamson

05/12/2021 | 07:31am EDT
12 May 2021 LSE: PDL

Petra Diamonds Limited

("Petra" or the "Company" or the “Group”)

Settlement of human rights claims at Williamson Diamond Mine, Tanzania

Petra Diamonds Limited today confirms that a settlement has been reached, on a no admission of liability basis, in relation to claims brought in London (“the Claims”) by Leigh Day, a UK based law firm, on behalf of 71 anonymous claimants, in relation to alleged breaches of human rights, associated with third-party security operations, at the Williamson Mine (“the Mine”) in Tanzania. The Mine is operated by Williamson Diamonds Limited (“WDL”), which is 25% owned by the Government of Tanzania and 75% owned by Petra.

The agreed total settlement figure is £4.3 million, which includes the sum to be distributed to the claimants by Leigh Day, a contribution to the claimants’ legal expenses, and significant funds that Petra has committed to invest in programmes dedicated to providing long-term sustainable support to the communities living around the Mine.

The agreement also includes a framework pursuant to which an additional payment will be made by Petra in respect of up to 25 additional potential claimants who have come forward during the final stages of the settlement negotiations.

Following its investigation, Petra acknowledges that past incidents have taken place that regrettably resulted in the loss of life, injury and the mistreatment of illegal diggers, within the WDL Special Mining Licence area (“SML”). The incidents in question involved WDL’s third- party security provider Zenith Security as well as the Tanzanian Police Force (“TPF”). During the investigation, no evidence emerged that WDL personnel were directly involved in these actions.

While PDL is not directly involved in operations at the Mine and had no direct involvement in the events, it believes that the agreed settlement balances the interests of its stakeholders with those of the local community and avoids contesting protracted and expensive litigation where, even if Petra prevailed, it is unlikely that its own legal costs would have been recoverable.

Petra is also establishing a new and independent (“Tier 2”) Operational Grievance Mechanism (“OGM”). It will be managed by an independent panel and operate according to the highest international standards, as set out in the United Nations Guiding Principles on Business and Human Rights. It will consider any incidents of potential human rights violations and provide remedy as necessary. PDL and WDL encourage any community members subject to any human rights violations to utilise the OGM. The establishment of an OGM is in keeping with the Company’s support for the local community and the provision of fair remedy. Individuals who allege that they were harmed at the Mine and treated at Mwadui hospital will be allowed to access their medical records.

The commitment to invest significant funds in community projects is intended to provide long

term sustainable benefits to local communities through income generating projects, including; a feasibility study into a formalised artisanal mining project at the Mine, an agri-business project, a programme which provides medical support to the community, and arrangements pursuant to which local residents will be permitted to access certain parts of the mine to collect firewood and/or graze animals. In doing so, Petra will work with specialist external consultants and local NGOs to ensure that these programmes are designed and implemented in a collaborative and beneficial way.

As has been announced previously, upon being notified in 2020 of the allegations, the Company immediately formed a sub-committee of the Board, comprised entirely of Independent Non-executive Directors, to look into the security operations at the Mine and has undertaken an investigation carried out by a specialist external advisor, in conjunction with the Company’s lawyers. The Board’s conclusions in relation to the investigation and details of the actions taken, have been published separately.

Based on the Board’s conclusions, appropriate disciplinary processes have been instigated. In addition, certain individuals have left or will be leaving the Company. Operational reporting lines in relation to incidents have been restructured and a revised incident escalation procedure has been put in place. These initiatives are expected to greatly enhance the oversight and accountability of security operations at the Mine going forward.

Commenting, Peter Hill, Non-Executive Chairman of Petra Diamonds Limited, said:

“The Company, Board and Management are deeply concerned and saddened by the allegations, which relate to the treatment of illegal diggers and others on or around the Williamson mine site in Tanzania, by third-party security providers. The Board regrets the loss of life, injury and mistreatment that appears to have taken place around the mine. The agreement reached with the claimants, combined with the other actions put in place, are aimed at providing redress and preventing the possibility of future incidents. These actions are in keeping with our approach throughout, which is to provide fair remedy, in the interest of all parties, based on a full, balanced and impartial understanding of the allegations made. An external investigation has taken place and we have today published the Board’s conclusions and details of the actions that have been taken.”

~ Ends ~

For further information, please contact:

Petra Diamonds, London                                                                                                                             Telephone: +44 20 7494 8203 Marianna Bowes                                         investorrelations@petradiamonds.com

Celicourt (PR Advisor)                                                                                            Telephone: +44 20 8158 5829

Philip Dennis                                                                               Petra@celicourt.uk

Jimmy Lea

About Petra Diamonds Limited

Petra Diamonds is a leading independent diamond mining group and a consistent supplier of gem quality rough diamonds to the international market. The Company has a diversified portfolio incorporating interests in three underground producing mines in South Africa (Finsch, Cullinan and Koffiefontein) and one open pit mine in Tanzania (Williamson).

Petra's strategy is to focus on value rather than volume production by optimising recoveries

from its high-quality asset base in order to maximise their efficiency and profitability. The Group has a significant resource base of ca. 243 million carats, which supports the potential for long-life operations.

Petra strives to operate according to the highest ethical standards and will only operate in countries which are members of the Kimberley Process. The Company aims to generate tangible value for each of its stakeholders, thereby contributing to the socio-economic development of its host countries and supporting long-term sustainable operations to the benefit of its employees, partners and communities.

Petra is quoted with a premium listing on the Main Market of the London Stock Exchange under the ticker 'PDL'. The Company’s US$337 million loan notes due in 2026 will be listed on the Global Exchange market of the Irish Stock Exchange. For more information, visit www.petradiamonds.com.

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