When Koidu Limited took over the Koidu Kimberlite Mine in Sierra Leone, it promised community members in the Gbense and Tankoro Chiefdoms that upcoming expansions to the mine would bring wealth and jobs to the community. It agreed to mitigate the harm from the mine by ensuring that any affected community members would be given new homes at a safe distance from the mine following rigorous environmental standards.
But the community never saw any of the promised profit. Instead, it has been disproportionately affected by the negative effects of diamond mining without enjoying any associated economic or social benefits. Koidu Limited displaced them from their homes, and many families have been awaiting relocation for over a decade. Daily explosions from the mine send rubble flying onto their farmland and crashing through their roofs. Locals are unable to farm their traditional lands. In part, this is because the immense pile of mining rubble which looms over Koidu has engulfed some residents’ farmlands. Their land is no longer productive because mining practices have depleted water supplies and are leaching toxic substances into their soil. Residents report skin rashes, digestive problems, headaches, high blood pressure, respiratory problems, and other health conditions linked to the mine. When community members protested the company’s working conditions and environmental impact, Koidu Limited called in the police, who shot and killed four villagers, including a 12-year-old boy.
In March of 2019, 73 Koidu residents from Gbense and Tankoro Chiefdoms, together with the Marginalised Affected Property Owners (MAPO), an association of community members affected by the mine, filed a class-action lawsuit in the High Court in Kenema, Sierra Leone. The suit claims damages for the degradation or destruction of land, destruction of homes and loss of livelihoods, and dumping of toxic mine waste, among other things. Multiple other actions have since been filed, and are consolidated before the Sierra Leone High Court. The Network Movement for Justice and Development (NMJD), a Sierra Leone non-profit organization that has worked with the Koidu communities for years, and Benedict Jalloh of C&J Partners represent the plaintiffs.
The Defendants in Sierra Leone are Koidu Ltd., its parent Octea Ltd., and ten of Koidu’s subsidiary companies and corporate officers. Koidu Mine is owned and operated through a complex structure of companies, with BSG Resources Limited (BSGR) –- an international company controlled by Israeli diamond tycoon Beny Steinmetz –- at its head. To succeed in their claims and collect any potential judgment, Plaintiffs need to trace this complex web of companies to determine who is responsible for the mine’s operation and who holds the mine’s profit. But obtaining evidence on the mine’s ownership has proved challenging, in part because of BSGR’s complex corporate structure.
BSGR has been forced to turn over at least some of this critical evidence in its ongoing bankruptcy proceedings in the Southern District of New York, where it produced evidence about the Koidu Mine and its other assets. The bankruptcy is part of an ongoing dispute between BSGR and Vale S.A. about their mining interests in Guinea, Sierra Leone’s northern neighbor. In 2019, the London Court of International Arbitration granted Vale a two billion dollar judgment against BSGR, finding that BSGR had corruptly obtained the Guinean mining licenses. BSGR filed for bankruptcy in its home jurisdiction of Guernsey, which Vale alleges is a blatant attempt to evade enforcement of judgments against BSGR. BSGR has also sued George Soros in New York, alleging that he interfered with the Guinean mining license. BSGR filed a request in New York asking for recognition of the Guernsey bankruptcy, in part to protect its suit against Soros from Vale and other creditors.
In August of 2021, MAPO filed a petition pursuant to the Foreign Legal Assistance (FLA) Statute, 28 U.S.C. § 1782, in the Southern District of New York, with EarthRights’ assistance. The petition asks BSGR, Alvarez & Marsal, who acted as BSGR’s bankruptcy administrator, and Cleary Gottleib, who represented BSGR’s creditor Vale, to give MAPO documents that BSGR has produced under seal to the parties in the bankruptcy proceeding.
Cleary Gottlieb Steen & Hamilton is a New York law firm that represented Vale S.A. in BSGR’s New York bankruptcy proceedings.
Alvarez & Marsal is a global management consulting firm based out of New York. Three A&M employees are BSGR’s bankruptcy administrators and represent BSGR in the New York bankruptcy proceedings.
The Sierra Leone government approves plans for the Koidu Kimberlite Project. Many criticized Koidu Limited for taking advantage of the Sierra Leone government as it emerged from a devastating civil war.
BSGR assumes full ultimate ownership of the Koidu mine. Open-pit blasting at the mine begins. Police open fire on community members during a protest, killing two and injuring several others. The Jenkins-Johnston Commission of Inquiry Report finds that the Sierra Leone government and mining company share responsibility for the violence and recommends compensation to victims.
Koidu Ltd. (then Koidu Holdings SA) conducts an environmental impact assessment of its operations in Koidu and formulates a Resettlement Action Plan for affected local residents. Few residents are actually resettled, and those that are receive inadequate housing far from markets and arable land. Environmental devastation from the mine increases. Discontent over working conditions and bonuses leads to another protest. Police again open fire on community members, again killing two and injuring several others.
Koidu Limited signs a Community Development Agreement with Tankoro and Gbense Chiefdoms, promising, among other things, to conduct its mining operations in accordance with international best practices. It again breaks its promises.
Community members form Marginalised Affected Property Owners and sue Koidu Ltd. and other related corporate entities in Sierra Leone.
MAPO asks the Southern District of New York to order BSGR, Cleary, and Alvarez & Marsal to produce discovery for use in the ongoing Sierra Leone proceedings.