WITHOUT PREJUDICE PLEASE NOTE: the responses to these questions do not imply endorsement of the claims and allegations made nor consent to the publication of claims that directly or indirectly damage the reputation of Gemfields plc, Montepuez Ruby Mining Limitada (“MRM”), its officers, staff or contractors. Gemfields plc categorically denies the inference that it condones or sanctions acts of violence. Neither Montepuez Ruby Mining Limitada nor its officers, staff or contractors are engaged in violence toward or intimidation of the local community. We also wish to note that Gesbeen Mohammad has not visited MRM. Gemfields has a widely respected record of improving transparency within the coloured gemstone sector and MRM is doing the same in Mozambique. MRM therefore cordially invites Ms Mohammad to visit MRM and to establish the veracity of the allegations made, and responses given, in this document. Naturally we would consider such a visit to be imperative in producing a balanced and objective body of journalistic work. CONTEXT a. Montepuez Ruby Mining Limitada (“MRM”) holds one concession (of around 340 sq. km) in the wider Montepuez ruby-mineralised area (and which exceeds 1,000 sq. km). Small-scale and unlicensed ruby mining, along with its associated risk and incidents, is known to occur across a significant portion of this far larger area, with few of these being accurately recorded or accorded to the relevant locations. b. Rubies were first discovered in the Montepuez region in 2009 and gave rise to upheaval and unrest in the wider area due to the influx of unlicensed miners and unlawful dealing in rubies. c. Gemfields began operating its concession in mid-2012 and has worked ever since to improve transparency, law and order and decrease lawlessness in the area. d. Artisanal miners risk their lives to dig for gemstones at the behest of unscrupulous (and mostly foreign) middlemen who operate a system of smuggling, pay little or no tax to the Mozambican government, and profiteer at the expense of local people. This mining is unregulated, unsafe, exploitative and opaque. History shows that such activities tend to dissipate over time, and as the benefits of formalised methods of extraction and their associated benefits begin to take shape. However, these positive transformations are often actively opposed - frequently by incitement and rumour mongering - by the perpetrators of illegality (who prefer the murky operating environment that is key to their way of business). e. Gemfields and MRM are working to transform the sector into one that is transparent, responsible and provides sustainable long-term social, economic and environmental benefit. f. Gemfields’ Human Rights and Security Policy is attached. 1. QUESTION 1 Our sources and newspaper reports suggest Mozambican forces, such as the FIR, the police and the Environment Conservation Unit have shot, injured and killed artisanal (illegal) miners in MRM’s concession area. There are similar accusations against the private security company, Omega Risk Solutions, MRM has hired. What is MRM and Gemfields doing to address these concerns? What is your response to these allegations? Page 1 of 11 Gemfields is premised upon a zero tolerance policy toward violence or human rights abuses. It has never requested, instructed, sanctioned or condoned any such abuse and would not tolerate any act of that kind. While allegations are periodically made (at times instigated by unscrupulous dealers and middlemen whose access to ill-gotten rubies is impeded by MRM’s presence), no employee or security contractor connected to Gemfields has been found to have committed an act constituting an abuse of human rights, whether at MRM or elsewhere. As far as MRM is aware, there have been two allegations of shooting of illegal miners by security personnel contracted to MRM (including Arkhe). These were thoroughly investigated by MRM as well as by Arkhe. The Mozambican authorities, who conducted their own investigations and with whom MRM cooperated fully, subsequently cleared the accused individuals. As such, further action was not taken against the individuals. As a matter of principle, MRM investigates allegations of human rights abuses made against it (or persons connected with it) in conjunction with the appropriate parties such as its security contractors and the Mozambican authorities. Independent investigators are engaged to provide impartial conclusions. MRM routinely carries out human rights training for employees and contracted security personnel. In addition, both Gemfields and MRM consistently communicate to all stakeholders and partners (including government authorities and security contractors) the importance of upholding human rights, and that doing so is fundamental to Gemfields’ approach, and to building a sustainable gemstone industry. The Mozambican government security services present on or in the area of the MRM concession (namely the NRPF, which replaced FIR on 22 April 2015, and the local police) are not under the direction of MRM, nor do they have any accountability or reporting obligations to MRM. They are directed by the Government of Mozambique and are present on the MRM licence to uphold the law of the land and to protect the national interests of the country (clearly the presence of rubies – one of the planet’s most valuable gemstones – attracts unscrupulous dealers, middlemen and smugglers who engage in and nurture illegal activity). MRM does of course maintain an active dialogue with the authorities in the interests of upholding the law, reducing illegality, operating in a transparent manner and optimising – for all stakeholders envisaged in the laws of Mozambique – the benefits of the MRM licence area. In addition, Gemfields and MRM work with well-respected and professional international risk and security companies to audit and monitor its security policies and practices regularly, providing third party oversight. In addition, these groups provide vetting and training in (non-violent) professional practices and procedures. We work with the national and local authorities as we review the qualifications of all local contractors, including when we hire new contractors. All our internal security employees have undergone human rights training. The specialist-training course on human rights provides MRM Security staff with information on how human rights issues can arise, and be relevant to them, the company and the community. The training enables the team to understand how to uphold and protect human rights. Page 2 of 11 2. QUESTION 2: MRM spokespeople have said that all deaths we refer to have occurred outside their territory. Our eye witnesses claim they occurred in the areas inside MRM territory. Specifically we have been told about two murders (Antonio Manuel, Manuel Bacar) and one shooting (Issufo). Are you aware of these cases? If not, will you investigate? If your investigation confirms our information, will you take any action? What kind of action would you take? We are not aware of a Mr Antonio Manuel or Mr Manuel Bacar having been killed within the MRM licence. Is it possible that these occurred prior to 2012, or occurred outside of the MRM licence area? We believe that we would have been made aware of these had they been killed within the MRM licence area after 2012, but we will of course do our best to investigate these thoroughly and promptly if you are able to provide further information. We are also not aware of the name “Issufo”. However, the description (a shooting in the leg by FIR) and timing (July 2014) of the incident (as provided elsewhere in your questions) do correspond with our records, save that we understand FIR were dispersing a hostile group of illegal miners when one of the miners was shot in the leg by a member of FIR. As a matter of policy and protocol, we thoroughly investigate reports of violence and security violations on our concession. However, MRM has neither the remit nor the authority to investigate alleged incidents that may have occurred outside of its concession area (save of course where the allegations involve MRM employees or security personnel). If an investigation suggests that a breach of human rights has occurred, the matter is duly reported to the Mozambican authorities for investigation so that the law may run its course. Naturally any third party or aggrieved individual has the right (and we believe, the obligation) to formally report the matter to the Mozambican authorities, either locally, or further afield, or both. 3. QUESTION 3: Five villages (Mpene, Namanhumbir, Nanune, Nseue and Ntoro) are located within the concession area. Locals claim unlawful force and burning of homes has been used to force those who don’t resettle, to leave. What is your response to this and how are you addressing these issues? No resettlement of any village has taken place as yet. This fact can be seen on site. All of the five villages mentioned are still in their original locations. Any future resettlement will likely only involve the single village of Ntoro. Aside from the established villages, informal and unauthorised settlements within the MRM concession have arisen (and continue to arise from time to time) when non-authorised persons enter the MRM licence area seeking to recover for their handlers (or sometimes themselves) rubies which are the subject of MRM’s licence. Such settlements are reported to the police, who may seek to remove the relevant persons from the MRM licence after giving due notice that the settlement is to be cleared. MRM seeks to ensure that it is kept informed by the police given the associated movements on the MRM licence, but it does not manage or determine the process of removing such settlements. Your question regarding the burning of homes may arise from the following: in a 2014 incident reported upon in the Mozambican media, illegal miners had built or rented informal structures on the periphery Page 3 of 11 of Ntoro village. Frictions between the villagers and the illegal miners soon arose. An investigation, conducted after a fire broke out at the village, reported that immediately prior to the planned removal of the informal structures by police, a fight reportedly broke out between foreign illegal miners and the locals, during which one side set fire to a number of structures. Allegations soon circulated that MRM personnel had been involved in setting the fire and a villager filed a police complaint against MRM. At the ensuing identification parade at the local police station, the villagers failed to identify or implicate any MRM personnel in the incident and case went no further. 4. QUESTION 4: What is your resettlement plan for those that leave their homes voluntarily? Those that have been resettled claim they were resettled without any further help despite promises, such as for tractors, a health centre. What is your response to this? MRM remains fully compliant with resettlement laws in Mozambique and works closely with the authorities and the communities that may come to be affected by resettlement. No resettlement of any village has taken place as yet. After discussions with the local village communities, the intention at present is to resettle only one village (Ntoro) and an amicable agreement has been reached covering the 95 families concerned and under which they will all receive compensation in line with government’s prevailing legislation. The resettlement plan is awaiting government approval. 5. QUESTION 5: We understand and know that there is a problem of an influx of foreign illegal miners coming to the ruby deposit, and smuggling rubies back to Thailand. However, evidence seems to suggest that tackling this issue has become MRM’s primary aim, whereas the corporate social responsibility plan has been side-stepped. Locals say MRM has not delivered, what it said it would in the consultation process. What is your comment on this? Corporate social responsibility has always been, and remains, a key priority for MRM. It is wholly inaccurate to suggest that tackling the influx of foreign illegal miners has become MRM’s primary aim. Please also note that Thailand is not the only destination of smuggled Mozambique rubies. MRM began operations in mid-2012 and is still in the exploration and bulk-sampling stage. Notwithstanding this, and while most companies in this stage of resource assessment phase would prefer to await the completion of their full-scale mining plans before initiating any such programmes, MRM has already completed and is undertaking a number of preliminary projects, within the area. MRM fully expects its CSR programme to grow commensurately with its operations. MRM generated its first revenues in June 2014, only 21 months ago. The life of the mine is estimated at over 20 years. Our commitment, over that period, is to invest significant resources into the delivery of a holistic community development plan. This will be done in line with national development plans and in consultation with local communities and national government. A summary of CSR projects to date can be found in Part A of the appendix. MRM’s notable achievements are summarised in Part B of the appendix. 6. QUESTION 6: Page 4 of 11 How are you planning on contributing to community projects to ensure that Mozambican citizens too benefit from the ruby deposit? Corporate social responsibility planning has always been very important for MRM. We have undertaken a number of initial projects even in our early stages of operation (see Part A of the Appendix for a summary). When Gemfields became a shareholder in MRM in 2012 we pledged, in line with our core philosophy as a group, to make the area we operate in a better place to live in for the local community than when we began. We are currently conducting baseline research and developing a long-term sustainable community development strategy. This will be done in line with national development plans and in consultation with local communities. 7. QUESTION 7: It seems that Gemfields’ Mozambican partner and minority shareholder of MRM, Mwiriti, is accused of manipulating local power structures to enhance impunity with regard to forced removal of villagers, beatings, burning of fields, etcetera. Do you feel you have a responsibility in this regard? Gemfields expects all of its partners to uphold the highest industry standards and to refrain from any activity that may promote or assist human rights abuses. Gemfields would not work with any partner that had been found to be in breach of that ethos. Our relationship with our Mozambican partner is one based on trust and mutual assistance. We have worked hard alongside them in order to bring the MRM project to fruition in an open and collaborative manner and are proud of the contributions made to local communities and to Mozambique to date (see Parts A and B of the Appendix). More can always be done, and we will continue to strive to do just that. The fact is that each of MRM, Gemfields and Mwiriti have a responsibility to operate transparently and in compliance with the laws of Mozambique. Doing so builds a long-term, sustainable business. It has been our experience that allegations are easily made in the gemstone industry, and are often driven by vested interests. If a party alleges that laws have been broken, or is otherwise wronged, we would hope they feel an obligation to formally report the issues so that they may be fully and formally investigated. 8. QUESTION 8: One of our sources said that MRM offered the community 76 goats and introduced a project to create chicks to 2,000 people, but that “there’s no record of anything yet”. Another source said that these chicks have been given, by MRM, to the chief of Namanhumbiri, Anastacia Clemente, as a bribe. What is your response to these allegations? 135 goats have been distributed to the community (90 females and 45 males). This project was managed and paid for by our business partners rather than by MRM. On 20 November 2015, MRM distributed approximately 1,900 chicken chicks to local communities (represented by 7 associations, one for each village around the mine). Press and media (TVM, STV, RM and Radio Girinba) were in attendance, as were Montepuez Administrator Arcanjo Cassia, Ms Clemente, assorted community leaders and the Director of Agriculture. Page 5 of 11 The allegation that this was a bribe to Ms Clemente is unfounded and is a classic example of how those threatened by MRM’s presence in the Mozambique ruby business will sow misinformation in an attempt to destabilise MRM and cast it in a bad light in the eyes of the community and the media. 9. QUESTION 9: There have been various reports about shootings occurring within the MRM ruby concession. Many local artisanal miners we have spoken to say that the men of Rapid Intervention Force (FIR/ Força de Intervenção Rapida) are shooting illegal artisanal miners to protect the interests of MRM. We have case studies alleging their sons have died1 because they have been shot by FIR whilst mining in Namanhumbir. Gemfields is aware of some of the shootings, what is your response to these allegations that artisanal miners are being killed because they are mining on MRM territory? What is your response to allegations that security forces are killing miners in MRM’s name? And what are you doing to prevent further deaths like this from occurring? We state categorically that artisanal miners are not being shot “because they are mining in MRM territory” and security forces are not killing them “in MRM’s name”. You state that Gemfields is aware of some of the shootings. Since it started operating on site in mid2012, we are aware of two illegal miners (one Mozambican and one Tanzanian) having been shot and killed by FIR within the MRM licence area. Their names do not however correspond with those you refer to as “case studies”. MRM is also aware of a considerable number of false claims. Please also see the responses to Questions 1 and 2 (and which further address the “case studies”). 10. QUESTION 10: Will you be investigating these cases? If your investigation confirms our information, will you take any action? What kind of action would you take? Please see the response to Question 2. 11. QUESTION 11: According to our sources, artisanal miners who continue to work in areas claimed by MRM – now face mortal danger on a daily basis, and not only from shootings. MRM digging machines, too, allegedly simply move in, whether there are human beings around or not. A local miner called Abdul, lost his cousin that way. He said: “He was working with two others in a three meter deep hole. They had already collected a sack of rough camada –the sand that contains rubies. They were about 100 meters away from us, still working when I and others went back home. We hid when we heard the machines coming. After a while we went back to look for them. Then we saw the machines. They were closing the hole on top of them.” First what is your response to this allegation 1 One father, Jeronimo Manuel, told us his son Antonio Manuel was shot by FIR while Antonio was mining for rubies in Namanhumbir. Similarly Manuel Artur, mined in the area. But he was shot on the same day that Antonio died. Fellow miners came to tell his father Bacar Artur that security men of the FIR patrol shot him in the abdomen. A worker called Issufo who used to mine in Namanhumbir told us he was digging rubies inside a hole when the FIR arrived. They told him to step out and when he got out of the hole, one of them shot him in the leg. This allegedly took place in July 2014. The bullet wound has healed since this happened, but the hole is still visible in his right leg: both where the bullet came in and where it went out again. Page 6 of 11 that MRM digging machines killed his cousin? Will you be investigating this specific case and how would you do so? We categorically state that artisanal miners do not face “mortal danger on a daily basis” on account of any of MRM’s direct actions, including by way of its “digging machines”. Artisanal miners do face daily mortal danger posed by the risk of their excavations collapsing on top of them as a result of gravity and their improper mining methods. Tragically, this is a severe and inherent risk in the artisanal and illegal methods deployed, frequently at night due to the illicit nature of the practice, and thereby further increasing the risk. MRM is habitually called upon to assist in a humanitarian capacity to rescue or recover illegal miners who have been buried by the collapse of their own excavations. MRM does fill in illegal artisanal excavations because of the risks they pose to persons trespassing through this area, but a stringent process has been put in place and has been strictly applied to ensure that no MRM “digging machine” has ever killed an illegal miner, whether by accident or intentionally. The inference that MRM buries illegal miners alive by driving its “digging machines” over their excavations while they are in them is both libellous and unfounded. Because illegal miners do not wish to see their excavations filled in, any burying of an illegal miner by his own excavation is quickly blamed on MRM in the hope that MRM will stop the process of filling in empty illegal excavations. If Abdul is able to provide the full name of his cousin, or the date of the alleged intentional burial, we can cross check our records to establish whether his cousin might be one of the illegal miners buried by the collapse of his diggings. 12. QUESTION 12: Our investigation reveals eighteen illegal artisanal miners have been shot either within the MRM territory or surrounding it since MRM began its operations. News reports by journalists in the area suggest that three people die in Namanhumbir every week: either buried or torn apart by machines, killed by security guards, landslides and mining accidents, or in fights with criminals. While all the accusations are not directed at MRM/Gemfields – there is a worry that a majority of these deaths occur due to shootings by the five forces (FIR, ARKHE, Environmental Conservation Force, Protection Police and National Resources Protection Force) protecting the ruby deposit. First, why are so many deaths occurring in the MRM ruby concession area? You ask why so many deaths are occurring in the MRM ruby concession area. MRM believes that the occurrence of a single death within its licence area is one too many. On the one hand you state that your investigation has revealed that 18 illegal miners have been shot either within or surrounding the MRM licence since MRM began its operations (we are aware that this figure recently featured in an Al Jazeera documentary about Gemfields and MRM and have to date not seen a listing of the incidents). On the other hand, if “three people die in Namanhumbir every week” (which equates to 156 annually) and “a majority of these deaths occur due to shootings by the five forces”, you seem to be inferring that the “five forces” are shooting at least 79 people annually, or 3 persons every two weeks? Page 7 of 11 We are obviously unable to track shooting activity outside of our licence area, but if you are able to provide the breakdown of how many of the 18 have allegedly been shot within the MRM licence area, we would be able to cross-check that with our records and to comment. We also note that we are not aware of “5 forces” (the NRPF replaced FIR and we are not aware of the “Environmental Conservation Force”). 13. QUESTION 13: What is your comment on allegations that FIR and other forces are shooting illegal artisanal miners, because they are mining on the MRM concession? What is your response to allegations that these forces have killed illegal artisanal miners, because of mining on the MRM deposit? What are you doing to prevent deaths? Are you collaborating with the Government and prosecutors? Please see the responses to Questions 1 and 9. 14. QUESTION 14: ARKHE, the security company MRM has hired, has come under criticism for shooting illegal artisanal miners too. What is your response to this? Do you take action against ARKHE employees for shooting artisanal miners for illegally mining on MRM territory? Please see the responses in Question 1 relating to Arkhe. 15. QUESTION 15: Locally amongst the illegal artisanal miners, ARKHE is known as the Nakatanas, "men of machete". How do you feel about that? We understand that the term Nacatana is used widely throughout Mozambique to describe bandits and gangs. We understand that this term is also used to describe some of the more aggressive illegal miners in the Montepuez area. Our security employees and the Arkhe contractors patrol the MRM concession area to protect it against illegal mining, and to monitor for and report any other illegal activity. They are required to do so in a trained and professional manner. 16. QUESTION 16: Why are there so many forces protecting the ruby concession? Some locals say the Montepuez region has become a militarized zone. Some of the forces, such as FIR, carry AK-47s – why is part of the army protecting the ruby deposit? Is this necessary? You suggest in Question 12 that there are 5 forces (being FIR, ARKHE, Environmental Conservation Force, Protection Police and National Resources Protection Force), which presumably leads to this question 16. However, note that the NRPF took over from and replaced FIR and that we are not aware of the “Environmental Conservation Force”. This confusion over a fundamental point calls into question the reliability of other assertions being made in this document. Page 8 of 11 In case useful, Part C of the appendix summarises the key security services present on the MRM licence area, their remit and the extent to which they carry firearms. We disagree with the suggestion that the Montepuez region has become a “militarised zone” and we would urge anyone of that view to visit the area for themselves, and also to visit MRM itself and take a tour of the MRM licence area. We cordially invite you to do the same. 17. QUESTION 17: Several villagers narrate the burning of houses and fields and the beating of locals in Namucho, in the Namanhumbir area, in October 2014. A local man, who says he lost about two hectares of land, calculates that about two hundred farms were destroyed. “They start digging, they discover ruby, and then the company comes and says the area belongs to them.” Another villager in nearby Ntoro confirms that this is an ongoing practice: “The company burns our houses and takes our fields. We are beaten and shot. Every time they discover a new zone with rubies, they chase us out of it.” What is your response to this allegation? What are you doing to ensure this doesn’t happen again? Please see the response to Question 3. 18. QUESTION 18: In the consultation process prior to MRM operations beginning in Montepuez, MRM promised local artisanal miners that they would get concessions to continue their own mining activities. They were to form associations which would sell their stones to MRM, thereby deriving good income. This has not happened and artisanal miners continue to mine informally – would you like to comment on why this has not been delivered? Regarding concessions, no such promises were ever made by MRM. However, the Mozambican Government did commit to set aside areas for artisanal mining. Two such areas have since been established and are reported to have produced considerable volumes of rubies. Sadly, however, the very nature of these operations means that no records have been kept with respect to the volume or value of any such production. Regarding buying artisanal ruby production, MRM is prevented from doing so (and hence made no promises to do so) because prevailing Mozambican law prohibits the trading (buying and selling) of rubies by any party other than Mozambican citizens. This law of course does not stop the many foreign citizens dealing illegally in Mozambican rubies in the Montepuez region. The ability for MRM to engage in such trading activities could, however, offer considerable national value (even though they are likely to be vehemently resisted by the perpetrators of illegality) and MRM therefore remains in constant dialogue with the Government to see how best to address these issues. Page 9 of 11 APPENDIX Part A: MRM CSR Projects To date MRM has undertaken the following projects: 1. Rehabilitation of the school and the market in the village of Namanhumbir. 2. Drilled 11 drinking water boreholes in different villages. 3. Installation of public lighting in village of Namanhumbir. 4. Construction of a waiting room in the Namanhumbir hospital. 5. Construction of a school in Mpene. 6. Providing financial support for wildlife conservation and community development in the Niassa Reserve (via the Niassa Lion Project). 7. On 20 November 2015, MRM distributed approximately 1,900 chicken chicks to local communities (represented by 7 associations, one for each village around the mine). Training and support are ongoing to ensure this becomes a self-sustaining project. 8. In February 2016, MRM signed an agreement with the Namanhumbir farmer’s association and the Administrative Chief of Namanhumbir whereby MRM has committed to: a. assisting in preparing and ploughing land for agriculture; b. providing reasonable agricultural input such as seeds and fertilisers; c. assisting in organising government agriculture advisors at reasonable intervals for additional training and advice; and d. purchasing good produce at market price. Part B: Notable Achievements 1. More than 800 jobs have been created in an area that previously had none; 2. In terms of contributions to government coffers, MRM accounts for approximately USD 12.5 million in production taxes and approximately USD 27 million in corporation taxes; 3. 85% of all revenue that has been generated by MRM has been re-invested back into Mozambique and into MRM; 4. MRM is now: a. the second largest taxpayer in the country; b. the largest tax payer in Cabo Delgado province; c. the biggest contributor of foreign exchange reserves to the national treasury; Page 10 of 11 5. To date MRM has spent in excess of USD 100 million on building and operating the project making it by far the largest gemstone project in Mozambique’s history. Part C: Security Services and Firearms Four security components are present on the MRM licence: 1. MRM Internal Security Employees (approximately 109 in number) do not and are not permitted to carry firearms. They are tasked with watch & ward, patrolling, surveillance and reconnaissance duties. 2. Arkhe, a general security firm engaged by MRM, have 12 shotguns (for rubber bullet usage) and 2 pistols. Any Arkhe personnel carrying any of these firearms is duly licensed, authorised and trained. MRM engages approximately 470 Arkhe personnel (meaning less than 3% of Arkhe personnel carry firearms). Arkhe’s contract provides that all of their personnel receive human rights training. In addition, Arkhe adopt the Voluntary Principles on Security and Human Rights and provide conflict resolution training. Arkhe perform industrial security functions including static guard posts to report and guard against illegal intrusion into mining pits, apprehension of illegal miners trespassing on the mining concession, and reporting and escorting them to the local police station as and when required. 3. The Natural Resources Protection Force (NRPF), a body appointed and controlled by the structures of the Mozambican government, carry firearms per government policy wherever they are active in Mozambique. The NRPF took over from and replaced FIR on 22 April 2015 and have approximately 35 personnel on or in the vicinity of the MRM licence. As their name suggests, they are mandated by government to protect natural resources belonging to Mozambique. 4. Local Mozambican police are of course also generally present in the area in the conduct of their duties. They too are appointed and controlled by the structures of the Mozambican government. END. Page 11 of 11