Nevsun Resources Ltd. Monday announced the release of an independent follow-up audit on the company’s human rights performance at the Bisha Mine in Eritrea (2015 Audit). The study was based on stakeholder input following last year’s independent human rights impact assessment study.

The audit report presents the latest findings and recommendations of an ongoing human rights impact assessment (HRIA) process for the Bisha Mine that began in 2013.

The HRIA was commissioned by Nevsun and the Eritrean National Mining Corporation (ENAMCO). The HRIA process has been conducted by LKL International Consulting Inc.

HRIAs are tools that can help organizations (companies, communities, and governments) identify and address the potential and actual impacts of an investment, development project, or business operation on the human rights of affected stakeholders—particularly on the rights of workers and communities.

An initial HRIA Report was published in April 2014, and included a series of recommendations for strengthening ongoing human rights due diligence at the Bisha Mine.

Nevsun and ENAMCO accepted all of the recommendations of the initial HRIA Report, and they are both supporting the implementation of these recommendations in various corporate policies, management systems, and initiatives at the mine site.

It was agreed, in the course of dialogue between Nevsun and international stakeholders about the initial HRIA Report, that the HRIA assessment team should play a role in monitoring the follow-up on the HRIA. Therefore, ongoing research, interviews, and other impact assessment activities have continued—including two further visits to Eritrea and the Bisha Mine in January and May 2015.

It is anticipated that further assessment activities will be undertaken after the publication of the 2015 Audit. Eritrean and international stakeholders will be consulted regarding the report’s findings and recommendations, as well as the ongoing HRIA process, with a view towards continuous improvement of the human rights due diligence efforts at the Bisha Mine.

With the adoption of the United Nations Guiding Principles on Business and Human Rights (UN Guiding Principles) in 2011, a global consensus has emerged that business enterprises should respect human rights.

This means that they should avoid infringing on the human rights of others and should address adverse human rights impacts with which they are involved.

Business enterprises will meet their responsibility to respect human rights through the adoption of human rights policies, the implementation of ongoing processes for human rights due diligence, and remediation of adverse human rights impacts when they occur.

Since November 2014, the UN Guiding Principles have been included as one of the international standards to which the Government of Canada expects Canadian mining companies to adhere in their operations abroad.

The UN Guiding Principles do not specifically call for business enterprises to undertake HRIAs, and currently there are no legal requirements for companies to undertake HRIAs.

The HRIA of the Bisha Mine has been a voluntary undertaking by Nevsun and ENAMCO, and it is reported to be the first HRIA conducted in Eritrea. The initial HRIA Report stated that “the overall intention is for this HRIA to be a constructive tool to strengthen dialogue and due diligence about the Bisha Mine and thus contribute to further respect and support for human rights.” In particular, the initial HRIA Report provided information and analysis about:

• the ownership and operations of the Bisha Mine and the national context in Eritrea
• the human rights issues that are relevant to the Bisha Mine
• the responsibilities for ongoing human rights due diligence with respect to the Bisha Mine
• conclusions and recommendations to help ensure that human rights are respected and that the Bisha Mine sets a good precedent for the mining sector in Eritrea

Most HRIAs conducted to date have been one-time exercises that present a snapshot of the human rights situation at a particular point in time.

The initial HRIA Report provided a portrait of the Bisha Mine’s operations and business relationships in 2013–2014. Since the publication of the initial HRIA Report, the assessment team’s mandate has been extended to the monitoring and auditing of the Bisha Mine. In this way, the HRIA has become an ongoing process. This represents a potential innovation in HRIA practice where an ongoing process extends beyond simply assessing impacts and supports further elements of human rights due diligence (i.e., integration and acting, tracking, and communication).

Therefore, this 2015 Audit provides current information regarding:

• the evolution of the context for mining and human rights in Eritrea
• the progress made on implementation of the recommendations in the initial HRIA Report
• the identification of emerging human rights issues since the initial assessment
• an update on the human rights issues covered in the initial assessment
• the evolution of human rights due diligence at the Bisha Mine
• conclusions and recommended next steps for human rights at the Bisha Mine

National Service

Conclusions of initial HRIA Report

• Since 2009, BMSC has implemented screening procedures and dialogue with the management of its main suppliers, contractors and subcontractors to implement the prohibition against national service workers at the Bisha Mine. The dialogue and screening procedures were first developed with respect to Segen Construction and have also been implemented with respect to other important contractors such as Transhorn Transportation and Binae Security

• BMSC’s efforts are contributing to an expanding awareness amongst internal and external stakeholders that national service workers are not permitted at the Bisha Mine, and these efforts should be continued. Based on a review of the various suppliers, contractors and subcontractors at the Bisha Mine, ongoing engagement should be maintained with Segen Construction, Transhorn Transportation and Binae Security, and BMSC’s procurement policy and procedures should serve to identify opportunities to engage with new suppliers

• Contractual provisions prohibiting the use of national service employees appear in the main contracts with BMSC’s contractors and subcontractors. These provisions reinforce the dialogue and screening
  procedures for suppliers, contractors and subcontractors. Ongoing attention should be paid to opportunities to add similar provisions as new contracts are negotiated and signed—particularly when supplier, contractor or subcontractor will involve the provision of national and local workers

• The engagement with suppliers, contractors and subcontractors about national service workers represents a constructive entry-point for a more comprehensive strategy for human rights due diligence in the Bisha mine’s supply chain

• BMSC’s intention to create a Contract Manager position is a positive step and can serve as a focal point with clear responsibility for engagement with suppliers, contractors and subcontractors, including for coordination with BMSC’s engineering, procurement and construction management (ECPM) contractor, SENET. This focal point should take a role in ongoing inspection and maintenance of records related to discharge from national service

2015 Audit Findings

• National service remains a focus issue in external reports regarding the human rights situation in Eritrea. National service is considered in detail in the UN Commission of Inquiry’s report of June 2015, including specific allegations with respect to the use of national service workers by Segen Construction at the Bisha Mine during the construction phase of the mine’s development.

• Some of these allegations do not align with the observations and findings of the HRIA, and appear to be related to the construction period rather than current operations at the Bisha Mine. Nonetheless, given the overall concerns raised about the national service program, including possible falsification of discharge documents and intimidation of workers, it is important for continued auditing activities related to Segen be undertaken in order to address the specific concerns raised in the COI report

• National service also remains an important issue for Nevsun because of the lawsuit in British Columbia which includes allegations of forced labour and slavery

• There has been international media attention focused on national service, particularly in reports about migration of Eritreans to Europe across the Mediterranean, including stories about human rights impacts related to human trafficking, detention, and drowning

• The HRIA auditing activities at Segen Construction and Transhorn Trucking have uncovered no evidence of national service workers at the Bisha Mine. Auditing activities included file inspections, worker interviews, and discussions with managers at Segen Construction, Transhorn Trucking, as well as the BMSC managers in the Human Resources and Procurement Departments. From all indications, the screening procedures which are in place to ensure that contractor and subcontractor workers at the Bisha Mine have been discharged from national service are being enforced. The attention that this issue has received—and continues to receive—provides a strong incentive for Segen Construction, Transhorn Trucking and other Eritrean suppliers and contractors to comply with the prohibition against national service workers at the Bisha Mine

• The Chair of the Parliament of Canada’s Subcommittee on International Human Rights participated in certain audit activities at the Segen camp at the Bisha Mine in January 2015. In subsequent testimony to the Subcommittee on March 12, 2015, he opined that, for a variety of reasons, “that it is highly unlikely that forced labour is being used at present, or will be used in the future, by state-owned subcontractors at the Bisha mine”

• From interviews with BMSC procurement and human resource managers, it was confirmed that progress has been made with respect to developing a Standard Operating Procedure for including provisions in all relevant contracts that reinforce the prohibition against national service workers at the Bisha Mine. However, the plan to hire a local contract manager to coordinate screening and audit activities related to national service workers has not yet been implemented

• In the audit assessment period, there have not been any major contracts awarded to new Eritrean suppliers; however, the standard screening procedures requiring documentation of discharge of national service has been applied to all new contractors or subcontractors before they are allowed on site

• Over time, the role of SENET (as the ECPM contractor) in screening Eritrean subcontractors has diminished and has been assumed by the BMSC Human Resources and Procurement Departments. At the time of writing, there are no SENET presence at the mine site—although SENET will likely have a role in future engineering and construction projects. From the perspective of ongoing human rights due diligence, it is likely best if BMSC retains responsibility for the screening and audit activities related to contractors and suppliers. In this regard, some next steps have been suggested to build a more comprehensive approach to human rights due diligence in the Bisha Mine’s supply chain has been suggested in the assessment of the follow-up on the initial HRIA’s Recommendation #4 Updated conclusions and next steps

• The national service issue remained an important subject of ongoing attention with activities concentrated in particular on Segen Construction and Transhorn Trucking during the audit period. From all indications, the screening procedures in place to ensure that contractor and supplier workers at the Bisha Mine have been discharged from national service are being diligently enforced

• While the audit activities at Segen Construction and Transhorn Trucking have disclosed no evidence of national service workers being used at the Bisha Mine, this issue remains an priority for ongoing human rights due diligence. Nonetheless, given the importance of the issue, ongoing attention is required by BMSC management and any contractors or suppliers who wish to work at the Bisha Mine

• As suggested in the initial HRIA Report, ongoing dialogue with Eritrean contractors and suppliers will be most constructive and effective if it builds upon ongoing audits of the national service screening procedures and includes broader discussions of working conditions and labour rights

• Next steps for ongoing human rights due diligence on the national service have been previously discussed in the section about the implementation of Recommendation #4 from the initial HRIA Report. They include: creation of a Contract Manager position development of a code of conduct for contractors and suppliers and ongoing audits and engagement with contractors and suppliers about national service and other human rights issues

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