Former employees of Sominki vs. Strategos Group LLC

Date filed

10 April 2023

Keywords

Countries of harm

Congo, The Democratic Republic of the

Current status

Rejected

Sector

Mining

NCP

NCP United States of America

Allegations

On 10 April 2023, the US NCP received a complaint from three former employees of the Société Minière et Industrielle du Kivu (Sominki) located in Kalima (South Kivu) in the Democratic Republic of Congo (DRC). The complaint alleges that Sominki went into liquidation in the late 1990s and that, in 1997, its mining assets (specifically, its mining titles) were transferred to another company called SAKIMA SARL. The complaint alleges that Sominki and SAKIMA SARL had a responsibility to pay severance and other benefits to 4,987 former employees, but did not. SAKIMA SARL was majority owned by Banro Corporation until 2002. In January 2023, Banro’s successor company sold the shares of its subsidiaries that held all the DRC mining assets to an unrelated company. The complainants understood that Strategos, a Delaware-incorporated international holding company, was the principal acquirer of the shares based on documents sent to mine employees dated November 2022 and March 2023, announcing Strategos’ acquisition of majority ownership of Banro’s DRC mining assets.

The complainants allege that Strategos “failed to conduct . . . due diligence to identify and address Banro’s perpetration of serious workers’ rights violations” in connection to non-payment of the former Sominki workers. They claim that, by purchasing the former assets of Sominki, Strategos has responsibilities to the former Sominki employees and should ensure that they receive a remedy for the harm done to them.

The complaint is connected to two previous NCP complaints against Banro Corporation (2016) and Gramercy Funds Management (2021).

Relevant OECD Guidelines

Outcome

On 8 August 2024, the US NCP rejected the complaint in its initial assessment. According to the NCP, Strategos’ only connection to the US was its incorporation in Delaware and maintenance of a mailing address there, but its physical office was located in Bogota, Colombia. The US and Colombian NCPs therefore coordinated with each other in relation to the complaint. Both NCPs attempted to contact Strategos by mailing their physical Delaware address, emailing their general company email, and visiting the company’s Bogata address. However, none of these efforts received a response from Strategos. The NCP concluded, “Offering mediation would not contribute to the purposes and effectiveness of the Guidelines because our inability to establish communications with the company would make an offer of mediation pointless, and in fact we have not heard from any officers or agents to whom we could offer mediation.”

The US NCP made several recommendations to Strategos, including to engage with the complainants on the issues raised in the complaint, review the Canadian NCP’s recommendations to Banro in its 2017 final statement and implement relevant recommendations, and meaningfully engage with stakeholders as part of carrying out due diligence.