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Valcambi "purchases gold extracted by children" in Burkina Faso, smuggled via Togo, says Berne Declaration - company responds

In September 2015, Berne Declaration reported that artisanal gold mined in Burkina Faso "under abysmal conditions, by adults and children alike" is being smuggled out of the country via neighbouring Togo, and sold on to Switzerland by several affiliates of Ammar Group (headquartered in Togo).  Ammar Group's subsidiary in Switzerland, MM Multitrade, responded to Berne Declaration (its response is included in the report).  Valcambi responded shortly after the report was published and Berne Declaration commented on Valcambi's response soon afterward.  Business & Human Rights Resource Centre invited Valcambi to respond further to the comments by Berne Declaration. 

In its further response (see below) Valcambi stated that it "is taking the contents of the Berne Declaration’s report extremely seriously and has subsequently and temporarily stopped imports from Burkina Faso pending further research and analysis. Valcambi has engaged a highly experienced and renowned responsible sourcing specialist firm to assist us with these relationships and to review our minerals procurement strategy..."  (Berne Declaration indicated in the original report that it "is not calling for a boycott of artisanal gold from Burkina Faso".)  

We have also invited Ammar Group to respond; we will indicate here whether it does.

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Company non-response
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11 November 2015

Ammar Group n'a pas répondu

Company response
12 October 2015

Valcambi’s Due Diligence process enhancement

Author: Valcambi (Switzerland)

Valcambi’s aim is to have a robust, effective and transparent Due Diligence process (KYC and KYP). Our supply chain Due Diligence process must deliver both the information and assurances our customers and regulators require, as well as offer responsible and pragmatic business opportunities to our suppliers, including smaller and marginal entities in our supply chains. Valcambi endeavors to continuously improve our supply chain sourcing practices in line with the diverse and dynamic set of expectations and requirements that our global stakeholders put to us. Several months prior to the release of the Berne Declaration’s recent report, Valcambi had begun a scoping exercise on how artisanal sources of gold might be better included in its supply chains in line with the company’s compliance commitments. Valcambi is taking the contents of the Berne Declaration’s report extremely seriously and has subsequently and temporarily stopped imports from Burkina Faso pending further research and analysis. Valcambi has engaged a highly experienced and renowned responsible sourcing specialist firm to assist us with these relationships and to review our minerals procurement strategy, including advising on our client onboarding and KYC and KYP criteria and systems. It is Valcambi’s intention to engage all parties, i.e. customers, civil society and government with this work over the coming months.”

 

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2 October 2015

Valcambi is engaging external advisors and involving NGOs to enhance its own Due Diligence process

Author: Valcambi (Switzerland)

Valcambi has established a plan to enhance the Due Diligence process, with special regard to the smaller mines. To achieve this target, Valcambi is engaging experienced and reputed advisors and involving NGOs, with the purpose of improving the client onboarding steps and further develop its responsible sourcing strategy. With respect to the incorrect accusations of failing to investigate the origin of gold and infringing international standards and its own policy, Valcambi confirms to have performed all the activities required by the law, the international standards and to have all the evidences to prove its correct behavior. The internal review confirmed that accuses are false and unsubstantiated, and an external review will be performed for a further validation and enhancement of the existing process. In accordance to its continuous improvement mission, Valcambi will invest on internal and external resources to achieve this ambitious target, to further increase its leadership in gold refining. 

Valcambi sa

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Item
16 September 2015

BD comments on Valcambi statement

Author: Berne Declaration (Switzerland)

On 10th September 2015, the Berne Declaration (BD) published a report titled “A Golden Racket – The True Source of Switzerland’s “Togolese” Gold”, implicating the Swiss refinery, Valcambi. Valcambi reacted two days later with an unsigned press release. Valcambi denies buying gold originating from “any of the 5 mines mentioned” in the BD’s report and provides a long explanation of its due diligence and compliance procedures. The refinery also rejects allegations that it would have “infringed both international standards as well as its own supply chain policies,” describing them as “unsubstantiated and false.” The Berne Declaration’sresponse:  Valcambi provides no evidence to support its denial of the Berne Declaration’s findings, which are the result of a rigorous research process undertaken over the course of 9 months. The BD’s report underwent a thorough fact-checking and external peer review process before publication.  Valcambi states that through its due diligence procedures, it knows the source of “every single lot of precious metals bearing material”. Yet, this is somewhat paradoxical given it had to “thoroughly” audit its records before making this claim. Valcambi’s denial is based on the existence of mining and export licenses. The BD wishes to reiterate that it has never stated that the mines themselves are illegal nor has it claimed that the Burkinabé traders in question do not hold export licenses. Rather, the BD focusses on evidence that Burkinabé traders illegally smuggle a substantial portion of their production to Togo, where the gold is exported to Switzerland. Valcambi has failed to comment on this in its press release.

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12 September 2015

Valcambi has not received any gold from the mines mentioned by Berne Declaration - brief details of the process followed by Valcambi while dealing with its suppliers and buyers

Author: Valcambi (Switzerland)

What are the commitments of Valcambi regarding the transparency of the precious metal’s provenience? Valcambi attaches great importance to our obligation to responsibly and transparently source precious metals. This includes but is not limited to:  continuous verification and compliance audits of our entire supply chain by independent auditors,  periodical certification through a number of third-party and independent assurance processes,  strict compliance with the guidance and principles developed by the Organization for Economic Co-operation and Development (OECD), the London Bullion Market Association (LBMA) and the World Gold Council (WGC). Valcambi’s significant efforts in this area also include the Know Your Product (KYP) process. Valcambi also engages with NGO’s and actively shares and works on strategies to develop mining projects especially of artisanal mines in order to protect the workers at the mine site, their families and improve working conditions and wages. Which measures are undertaken by Valcambi in case of doubts regarding the performance of precious metals’ suppliers? In case doubts or accusations arise regarding the performance of one of our suppliers, Valcambi asks the supplier to address the accusation and provide an in-depth explanation. If Valcambi is not convinced and any further questions remain and the accusations appear to hold merit or in case they are not adequately addressed, Valcambi conducts an additional investigation to evaluate if the supplier has complied with our standards of safety, environmental and social performance...Based on the facts of the report and accusation made by the Berne Declaration we have thoroughly audited our records and we can confidently state that none of the gold received by Valcambi has originated from any of the 5 mines mentioned by Berne Declaration. The statement of Berne Declaration that Valcambi has failed to investigate the origin of gold and therewith would have infringed both international standards as well as its own supply chain policies are both unsubstantiated and false and Valcambi rejects these allegations.

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Report
10 September 2015

A golden racket - The true source of Switzerland's "Togolese" gold

Author: Berne Declaration (Switzerland)

At least 7 tonnes per year of this artisanal gold never makes it onto the books in Burkina Faso and is instead smuggled overland to Lomé, Togo. Among the primary Burkinabé “comptoirs d’achat” (trading intermediaries) in control of this illicit trade is SOMIKA...[that]...denies any wrongdoing. Once in Lomé, the gold is purchased by Wafex Sàrl, a subsidiary of an agglomeration of inconspicuous companies...called Ammar Group. Wafex in turn exports the gold to Switzerland using Ammar Group’s Geneva-based arm, MM Multitrade SA, where it ends up in one of Switzerland’s “big four” refineries, Valcambi SA. Valcambi then refines and sells on the bars or ingots crediting the equivalent value in troy ounces of gold onto MM Multitrade’s account at Arab Bank in Geneva...Valcambi, who profits from this dirty trade, waxes lyrical about its “ethical, moral and social standards”. In its compliance reports, the refinery claims to be acting “in strict accordance with” the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas and its Supplement on Gold, and the London Bullion Market Association’s (LBMA) Responsible Gold Guidance. It claims to have the “highest traceability standards” over its entire supply chain and every single lot of material processed. And yet, it continues to purchase and refine gold originating from mines run on what the International Labour Organisation terms the “worst forms of child labour”...We contacted all companies for comment: Valcambi and Ammar Group declined our requests for meetings and did not respond to questions sent by email; Arab Bank and KPMG refused to comment...[MM Multitrade responded]...The Berne Declaration is not calling for a boycott of artisanal gold from Burkina Faso...[Refers to Goodyear, Crédit Suisse, Arab Bank, KPMG, Metalor, Argor-Heraeus, Decafin].       

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Article
10 September 2015

Largest Swiss refinery purchases gold extracted by children

Author: Berne Declaration (Switzerland)

How can it be that every year Switzerland imports tonnes of gold from Togo, a non-producer country? The report “A Golden Racket”, published today by the Berne Declaration, reveals that this gold comes from artisanal mines in Burkina Faso, where it is extracted under abysmal conditions, by adults and children alike. It is then smuggled over the border to Togo, imported into Switzerland by a Geneva-based trading company and sold on to the world’s biggest refinery, Valcambi. The report underlines the political necessity to establish binding due diligence measures for Swiss commodity firms...It’s not easy for the Ammar Group or Valcambi to overlook the dubious origin of their gold. In its Code of Conduct, Valcambi even boasts about its “highest traceability standards over the entire supply chain” and its scrupulous application of sector standards, including those aimed at preventing human rights violations along the supply chain. Meanwhile, the Swiss authorities continue to turn a blind eye, relying on the industry’s voluntary initiatives to ensure that Swiss companies are not implicated in human rights violations.

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