A company operating a gold mine in Ethiopia, Midroc Investment Group, and the Swiss refinery Argor-Heraeus that sourced its gold took no action over media reports about pollution from the mine for years, Human Rights Watch said today. An assessment carried out at the Ethiopian government’s request found that local residents had experienced serious health effects. Midroc resumed operations, apparently with a license from the government, but without any apparent steps to reduce pollution even though the government had said it was suspending its license until pollution issues were resolved.

The Ethiopian government suspended the Lega Dembi industrial gold mine’s license in May 2018 following protests over pollution and its health impacts. Scientific studies initiated in 2018 found that residents were exposed to toxic metals, violating their rights to health and to a clean, healthy, and safe environment. The government said it would not permit the company to resume the mine’s operations until the issues were “resolved” and the toxic waste “no longer poses a threat.” However, Human Rights Watch research found that the mine recommenced operations around March 2021 without any apparent steps taken to reduce pollution.

“The Ethiopian government, by allowing the Lega Dembi mine to reopen without pollution reduction steps in place, is violating the right to health of children and adults living nearby,” said Juliane Kippenberg, associate child rights director at Human Rights Watch. “The government should suspend operations until measures have been taken to ensure that harmful chemicals in the water and soil do not exceed international standards, and that people harmed by the pollution obtain compensation and care.”

Residents living near the mine, located close to the town of Shakiso in Guji Zone, in the Oromia region, have for years complained of ill-health and disabilities, particularly in newborn children.

The Ethiopian government should immediately halt operations at the Lega Dembi mine until effective pollution reduction measures have been put in place. Midroc Investment Group and Argor-Heraeus, the Swiss gold refinery it supplied until 2018, should provide compensation and health care to affected residents and clean up the devastating pollution in the area.

Human Rights Watch interviewed 26 people living in the vicinity of the mine site, former Midroc employees, and former local and regional government officials and environmental and health experts. Human Rights Watch also reviewed numerous environmental and health studies and other documents relating to the mine.

Environmental testing by Addis Ababa University in 2018 found high levels of arsenic in water samples taken downstream from the mine area, and high levels of nickel, chromium, and arsenic in soil samples outside the mine.

An assessment initiated in 2018 by the Ethiopian Public Health Institute, done at the Ethiopian government’s request and shared with Human Rights Watch, found that local residents had experienced serious health effects. The study concluded that “communities living around Lega Dembi mining area were at risk of exposure to pollutants like toxic metals released from the mining plant and other mining activities.” The results of the assessment process have never been made public.

Midroc Investment Group, one of Ethiopia’s largest private business entities, took over the mine from the Ethiopian government in 1997. Based on information provided by Argor-Heraeus, Midroc appears to have taken little action to address complaints over environmental harm and ill-health, Human Rights Watch said. Midroc did not respond to a Human Rights Watch request for information.

Argor-Heraeus, one of the largest gold refineries globally, says it sourced gold from Lega Dembi from 2013 until March 2018. However, in Midroc’s 2007 annual report, Argor-Heraeus was the only company named as Midroc’s business partner. According to information shared by Argor-Heraeus with Human Rights Watch, the refinery did not identify the harm to the environment and to human rights at Lega Dembi until 2018, despite media reports and public protests about environmental pollution and ill-health at the mine in 2009-10, 2015-2016, and 2017. As a result, Argor-Heraeus did not use its leverage with Midroc to address that harm.

Argor-Heraeus responded to Human Rights Watch’s findings: “We were very shocked by the reports Human Rights Watch quoted from. We stopped the business relation with Midroc five years ago, immediately after we became aware of the significant local issues. Unfortunately, there are only very few isolated internationally accessible media reports from the region. The studies from which Human Rights Watch quotes were only produced after the situation became known.” Argor-Heraeus also responded to questions from Human Rights Watch with two letters.

Companies have a responsibility to ensure that they do not cause or contribute to rights abuses, in line with standards established by the United Nations and the Organisation for Economic Development and Co-operation (OECD). More specifically, companies should take steps to identify, prevent, and mitigate their human rights and environmental impacts: a process called “due diligence.” Where companies have caused or contributed to human rights impacts – including by failing to use leverage over a supplier to mitigate its impact to the greatest extent possible – they should help remedy abuses.

“The mine owner Midroc does not appear to have seriously addressed the human rights and environmental harms at Lega Dembi, despite years of public protests by residents,” said Felix Horne, senior environment researcher at Human Rights Watch. “It is a source of great concern that the gold refinery Argor-Heraeus sourced gold from the mine for years without publicly identifying the human rights risks.”

When Argor-Heraeus used the Lega Dembi mine as a source of gold, two industry bodies certified it as sourcing “responsibly” on the basis of audits confirming compliance with the two industry bodies’ codes of conduct. The Responsible Jewellery Council (RJC), which has over 1,600 company members in the jewelry supply chain, certified Argor-Heraeus in 2011, 2014, 2017, and 2020. The RJC standard in place at this time requires members to conduct human rights due diligence in their supply chain and “provide for or cooperate in legitimate processes to enable the remediation” of adverse human rights impacts where members have contributed to such impacts.

The London Bullion Market Association (LBMA), the trade association of major gold refineries, bullion dealers, and banks, certified Argor-Heraeus annually since at least 2013 under its “Responsible Gold Guidance.” The guidance requires members to conduct human rights due diligence to identify, prevent, and mitigate human rights abuses in their supply chain and stop sourcing from a supplier implicated in serious human rights abuses.

Argor-Heraeus said in response: “Our due diligence processes are among the most rigorous in the world today. Nevertheless, we have taken this case as an opportunity to review our internal processes again.”

Midroc, with support from Argor-Heraeus, should provide comprehensive, inclusive, and transparent environmental remediation, Human Rights Watch said.

“Two industry certification schemes endorsed Argor-Heraeus’ sourcing practices despite its failure to identify and address a supplier’s environmental and human rights harms,” Kippenberg said. “The Lega Dembi gold mine exemplifies that certification by voluntary programs are no guarantee of sourcing from rights-respecting suppliers and may actually risk ‘greenwashing’ a catastrophic situation.”