Barrick Gold suspected to contract fakes

 

 North Mara Gold Mine is an open pit gold mine inTarime. It is one of four gold mines African Barrick Gold, a company listed on the London Stock Exchange, operates in Tanzania, the other two being Bulyanhulu and the Buzwagi Gold Mine. 

African Barrick Gold Plc, the Tanzanian subsidiary of Canadian gold company Barrick Gold Corp, has been accused of illegal payments to government officials in the North Mara mine. In the process of buying land near the mine starting last year, African Barrick paid more than $400,000 (Sh670 million) in cash, mostly to Tanzanian government officials and consultants responsible for valuing the land, according to company invoices and copies of cheques reviewed by The Wall Street Journal.

The American-based newspaper said the payments were bribes for officials in positions to influence African Barrick’s business interests, according to an email sent to the company last year and reviewed by the Journal. The person did not describe any quid pro quo behind the payments.

In an email sent to The Citizen on Saturday however, African Barrick and Toronto-based Barrick Gold said the payments they made were not bribes but legitimate payments for expenses and allowances tied to an agreement with the Tanzanian government.

“Both African Barrick Gold (ABG) and Barrick Gold Corporation are committed to ethical and transparent business practices in compliance with the law,” said the email. “ABG engages regularly with local and national government officials in Tanzania to determine the fair value of land the company wishes to purchase from local land owners.”

According to the company, the Lands Task Force was created to facilitate a transparent, fair and inclusive process to value land-- which ABG strongly supports. The company said: “Cash is often the only viable method of payment because, in many regions of the country, banking infrastructure and services are extremely limited or sometimes not available at all. All such payments are carefully documented, monitored and controlled.” The nearest bank was hours from the mine, people close to the company said. An investigation of the companies by law firm Steptoe & Johnson LLP found that African Barrick “acted appropriately in all instances, in accordance with Tanzanian, US, and UK law”.

The Tanzanian government did not respond to requests for comment, according to the American newspaper.

US authorities have said that cash payments to government officials, while not necessarily illegal, are a red flag. “The most obvious form of corrupt payment is large amounts of cash,” says a guide from the Justice Department and the Securities and Exchange Commission.

Under a memorandum of understanding between African Barrick and the Tanzanian government that was reviewed by the Journal, local and national officials would oversee the valuation of land parcels that African Barrick wanted to buy and determine their owner. The company would compensate the officials with allowances and pay cash for travel and other expenses, the memorandum and the people close to the company said.

Some of the money was paid in cash to Mr Adam Yusuf, the head of a Tanzanian government task force overseeing the land valuation for African Barrick, with the intention that he would deliver cash to other officials, according to the documents reviewed by the Journal. Mr Yusuf was responsible for asking for money, picking up the cash at a bank and turning in documentation such as sign-in sheets showing that the cash was used as intended. Two people inside the company raised concerns over the cash payments to Mr Yusuf and other officials, according to company emails.