Rights groups condemn lawsuits brought by ENRC against public watchdogs

ENRC’s cam­paign of legal action across two juris­dic­tions tar­get­ing more than a dozen peo­ple and oth­er enti­ties seems a delib­er­ate attempt to shift the focus away from ENRC’s alleged cor­rup­tion to those con­duct­ing legit­i­mate inves­ti­ga­tions, whether jour­nal­ists or pub­lic authorities.” 

This state­ment was orig­i­nal­ly pub­lished on indexoncensorship.org on 7 June 2021.

Lawsuits rep­re­sent an egre­gious attempt to cur­tail free­dom of expres­sion and jeop­ar­dise anti-cor­rup­tion efforts

legal case cur­rent­ly before the UK courts high­lights the egre­gious tac­tics being used by Eurasian Natural Resources Corporation Limited (ENRC), a pri­vate­ly-owned Kazakh multi­na­tion­al min­ing com­pa­ny, in what appear to be delib­er­ate attempts to escape pub­lic scrutiny.

The civ­il case brought by ENRC is against the UK’s anti-cor­rup­tion author­i­ty, the Serious Fraud Office (SFO), and ENRC’s for­mer lawyers, Dechert LLP. The SFO launched a for­mal cor­rup­tion inves­ti­ga­tion into ENRC in April 2013, but has yet to bring any charges. The inves­ti­ga­tion has become one of the SFO’s longest run­ning and most com­pli­cat­ed cas­es. ENRC denies all allegations.

ENRC is suing the SFO for mis­fea­sance in pub­lic office claim­ing the SFO mis­han­dled the cor­rup­tion inves­ti­ga­tion, induced Dechert lawyers to breach duties owed to ENRC, and leaked infor­ma­tion to the media. ENRC claims Dechert and its part­ner, Neil Gerrard, were neg­li­gent and act­ed in breach of con­tract and fidu­cia­ry duties, includ­ing by leak­ing con­fi­den­tial infor­ma­tion to the press. The SFO, Gerrard and Dechert all deny the allegations.

This is by no means an iso­lat­ed exam­ple of ENRC using the courts in a way that dis­cour­ages scruti­ny and shuts down account­abil­i­ty. Since the SFO announced its inves­ti­ga­tion, ENRC has ini­ti­at­ed a wave of more than 16 legal pro­ceed­ings in the US and the UK against jour­nal­ists, lawyers, inves­ti­ga­tors, con­trac­tors, a for­mer SFO offi­cial and the SFO itself. The SFO has had to divert sig­nif­i­cant staff time and fund­ing away from its cor­rup­tion inves­ti­ga­tion to respond to the claims brought by ENRC.

The 21 under­signed human rights, free­dom of expres­sion and anti-cor­rup­tion organ­i­sa­tions are con­cerned that ENRC’s tac­tics are either a delib­er­ate attempt to under­mine the SFO’s cor­rup­tion inves­ti­ga­tion and to silence those seek­ing to expose the company’s mis­deeds or will serve to do so.

The groups believe that ENRC’s legal tac­tics include Strategic Lawsuits Against Public Participation or SLAPPs, a form of legal harass­ment used by pow­er­ful indi­vid­u­als and com­pa­nies as a means of silenc­ing pub­lic watch­dogs, includ­ing jour­nal­ists, peace­ful pro­test­ers and whistle­blow­ers. SLAPPs typ­i­cal­ly involve long and cost­ly legal pro­ce­dures, or the threat there­of, to intim­i­date and harass crit­ics into silence.

The con­duct of cor­rup­tion inves­ti­ga­tions by state offi­cials and oth­ers must, of course, be law­ful and fol­low appro­pri­ate pro­ce­dures, the under­signed organ­i­sa­tions said, but they nonethe­less raised con­cerns about what appeared to be vex­a­tious lit­i­ga­tion by ENRC.

ENRC’s cam­paign of legal action across two juris­dic­tions tar­get­ing more than a dozen peo­ple and oth­er enti­ties seems a delib­er­ate attempt to shift the focus away from ENRC’s alleged cor­rup­tion to those con­duct­ing legit­i­mate inves­ti­ga­tions, whether jour­nal­ists or pub­lic author­i­ties. If such efforts suc­ceed, not only could it derail prop­er pub­lic scruti­ny of the orig­i­nal alle­ga­tions, but it risks set­ting a dam­ag­ing exam­ple for how oth­ers can thwart cor­rup­tion inves­ti­ga­tions and shut down pub­lic dis­course,” the organ­i­sa­tions said.

A recent legal suit by ENRC was ini­ti­at­ed in September 2020 in US courts against pub­lish­er HarperCollins seek­ing dis­clo­sure of wide-rang­ing infor­ma­tion relat­ing to the pub­li­ca­tion of a book, Kleptopia, and news­pa­per arti­cles pub­lished in the Financial Times by inves­tiga­tive jour­nal­ist Tom Burgis. The book and arti­cles inves­ti­gate pos­si­ble cor­rup­tion and oth­er alleged offences by ENRC and its own­ers, notably Alexander Machkevitch, one of the three oli­garchs (known as the Trio), who – along­side the Kazakh state – own the con­trol­ling stake in ENRC.

Shortly after ini­ti­at­ing the US action, ENRC’s lawyers also ini­ti­at­ed legal action in the UK, send­ing a Letter Before Claim noti­fy­ing HarperCollins UK, the Financial Times and Burgis of intend­ed court pro­ceed­ings for defama­tion. The case has yet to be issued. In January 2021, ENRC fol­lowed with anoth­er legal claim, this time against the SFO and John Gibson, a for­mer SFO case con­troller, who led the inves­ti­ga­tion into ENRC, accus­ing him of leak­ing to the press, includ­ing to Burgis.

In a sub­mis­sion to the court, coun­sel for HarperCollins in the US described ENRC’s tac­tics as a “relent­less cam­paign to squelch any cov­er­age of its cor­rup­tion.” She added, “ENRC has under­tak­en a cam­paign to silence all who dare expose its mis­deeds, through ini­ti­at­ing or threat­en­ing legal action…. It has pur­sued its crit­ics (even law enforce­ment) with numer­ous law­suits…. HarperCollinsUS is now the lat­est target.”

Court doc­u­ments filed in the numer­ous legal pro­ceed­ings reveal not only the aggres­sive legal tac­tics, but also allege unlaw­ful sur­veil­lance and spy­ing by agents linked to ENRC, includ­ing of Burgis and cur­rent or for­mer SFO officials.

The UK and US courts will need to decide the mer­its of these cas­es, but we are deeply trou­bled by the chill­ing effect this wave of legal action has on legit­i­mate inves­tiga­tive and anti-cor­rup­tion work by jour­nal­ists, law enforce­ment offi­cials, and oth­ers,” the civ­il soci­ety groups said. “We can­not per­mit pow­er­ful actors with deep pock­ets to silence their crit­ics, thwart legit­i­mate inves­ti­ga­tions and tar­get those whose efforts are cru­cial to end­ing corruption.”

The groups called on the UK gov­ern­ment to urgent­ly con­sid­er mea­sures, includ­ing legal mea­sures, that could be put in place to pro­tect pub­lic watch­dogs and jour­nal­ists from abu­sive legal actions that are intent on silenc­ing them. The rule of law, pro­tec­tion of human rights, and democ­ra­cy rely on their abil­i­ty to hold pow­er to account, said the organisations.

They fur­ther urged the SFO to swift­ly move for­ward its inves­ti­ga­tion into ENRC. “If the SFO has evi­dence of cor­rup­tion to charge ENRC then it should do so. Lengthy cor­rup­tion inves­ti­ga­tions with no end in sight pro­vide fer­tile ground for dirty tac­tics against jour­nal­ists, whis­tle-blow­ers, and oth­er crit­ics to flour­ish,” the groups said.

Notes to editors:

ENRC was list­ed on the London Stock Exchange until 2013, when it became embroiled in con­tro­ver­sy over gov­er­nance issues and its pur­chase of dis­put­ed min­ing con­ces­sions in the Democratic Republic of Congo. It went pri­vate and today its ulti­mate par­ent com­pa­ny is Eurasian Resources Group S.à.r.l., reg­is­tered in Luxembourg. The ‘Trio’ who own the major­i­ty shares in ENRC (now ERG) are Alexander Machkevitch, Patokh Chodiev and Alijan Ibragimov. Mr Ibragimov died in February 2021.

Dechert took over an inter­nal inves­ti­ga­tion ini­ti­at­ed by ENRC in 2010 into alleged cor­rup­tion by com­pa­ny offi­cials in Kazakhstan and lat­er in Africa. ENRC abrupt­ly fired Dechert on 27 March 2013, just before it was due to report to the SFO about its activ­i­ties in Africa. In April 2013, the SFO launched a for­mal cor­rup­tion inves­ti­ga­tion into ENRC.

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