How could claim against the LBMA impact certification schemes and businesses?

The High Court has confirmed that a claim against the London Bullion Market Association (LBMA) relating to its alleged incorrect certification of gold from a mine in Tanzania as being free from serious human rights abuses, will go to trial in 2026. as companies become more aware of environmental, social and governance (ESG) credentials, the outcome of the case could potentially have a widespread impact on the growing numbers of both certification schemes and those relying on certifications.

The claim 

The families of two miners who were killed by security forces in 2019 while prospecting for gold at the North Mara Gold Mine in Tanzania have brought a claim against the LBMA alleging that MMTC-PAMP gold was wrongly given the LBMA “good delivery list” certification. The families allege that the gold was wrongly certified as being free from serious human rights abuses, despite the mine being associated with a reported pattern of human rights abuses over a number of years. The claimants allege that if the LBMA had enforced its certification properly, the mine would have ended the human rights abuses and their relatives’ deaths would have been prevented.  

MMTC-PAMP source their gold from the North Mara Gold Mine. In order for gold to obtain the LBMA good delivery list certification, technical standards must be met, and LBMA’s “responsible sourcing guidance” implemented. Third party assurances must also be obtained annually relating to compliance with the guidance. 

One aspect of the guidance is that refiners should suspend or stop refining gold where it concludes there are suspected or known instances of serious human rights abuses.

At the time when the two miners died at the North Mara Gold Mine, MMTC-PAMP had good delivery list certification.  

The claimants argue that LBMA was a causative actor in the death of the two miners. They argue that if the certification hadn't been given, the mine would have stopped operating or steps would have been taken to rectify the serious human rights abuses.

What could this mean for certification schemes?

Certification schemes are generally designed to set standards, compliance with which will help avoid issues such as those related to ESG matters. The certifiers typically base their assessment on audits which they carry out and which are sometimes, as in this case, based on publicly available information only. So, a certification isn't normally a guarantee that there will never be adverse actions along the supply chain of the certified product. Yet quite often the certification is either misrepresented or misinterpreted by the certification scheme as a guarantee that a certification ensures absolute compliance with the standards, eradicating any possibility of an action in the supply chain which isn't in accordance with the certification criteria. 

The LBMA has addressed this, stating that it's “not in a position to undertake its own audit of refiners and so it necessarily relies on these third party assurances”. It also stated that it “does not play any role in overseeing, assessing or accrediting mines”.  

However, this is obviously at odds with the claimants' understanding of the scheme. The trial of the LBMA case will likely provide some clarity on what exactly the obligations of a certification scheme are. If the claim against the LBMA is successful, a precedent could be set that certification schemes can be held legally responsible for adverse actions at a certified site.

Pending the decision, certification schemes should ensure they implement a rigorous approach in relation to either their own audits or third party assurances, so that in the event of a challenge they can show they did proper due diligence. If an issue does come to light, it should be dealt with promptly in line with the rules of the certification scheme.

Finally, when communicating externally about the certification, or allowing certification schemes to do so, they need to be really clear about the nature of the certification and not misrepresent this as a guarantee that no adverse incidents will happen, as this could form the basis of a claim.   

With the new corporate offence of failing to prevent fraud set to come into force from 1 September 2025, many organisations will be preparing by strengthening their anti-fraud measures and controls. From September, large organisations may be guilty of an offence if an employee, agent, or other associated person commits fraud intending to benefit the organisation, and the organisation does not have reasonable fraud prevention measures in place. As a result, the need to provide full and accurate information to certification bodies, shareholders and other third parties, and communicate accurately externally about their relationship with certification bodies, will become all the more critical: significant (and potentially criminal) consequences could flow from failing to do so.

What could this mean for those relying on certifications? 

This claim highlights the fact that a certification is not a guarantee that there will be no adverse actions.

Regardless of the outcome of this claim, businesses relying on certifications shouldn't necessarily take them at face value. Instead, it would be best practice to go a few steps further, to look behind the certification to satisfy themselves through their own due diligence that the certification scheme is reputable, and that audits are being carried out to at least spot check compliance. Businesses may want to reassure themselves as to how the audits are undertaken, the level of checks carried out and how often these are reviewed.

Another consideration may be to review the licence between the company and the certification body, to consider whether there is a provision in the licence that provides the company with the right to claim against the accreditor should there be any issues with the certification.  

Given the plethora of certification bodies in existence and the absence of an external governing body to review whether the certifications are legitimate, businesses necessarily need to undertake this responsibility themselves if they're to associate their business with the certification, and stress test the system before relying upon it.

Looking forward

The outcome of this case could go either way. Whatever the result, certification schemes and those relying on certifications should act now to ensure that their processes are robust and communications about the nature of the certification are accurate and not misleading.

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