TIDMCAM
RNS Number : 6920O
Camellia PLC
11 February 2021
11 February 2021
Camellia Plc
Trading update, settlement of claims related to African
operations and governance update
Trading update and Covid-19
Camellia confirms that underlying profit* for 2020 is expected
to be significantly above market expectations at around GBP15.0m
due to a combination of better than expected trading results in
Agriculture coupled with lower costs across our operations.
Whilst our UK based operations continue to be impacted by the
lock down, our agricultural operations have been able to produce
largely as normal throughout the pandemic. Demand for tea has
varied regionally, with India prices remaining relatively strong
but Kenya continues to produce record crop volumes which is
affecting prices for both Kenya and Malawi. Group macadamia volumes
have exceeded expectations and our citrus and soya crops made a
stronger contribution than we anticipated.
In addition, BF&M's Q3 results which were announced in
December showed a stronger than expected operating result for the
period, with favourable claims experience being a key driver of
performance. This was partially offset by higher reinsurance rates
associated with the ongoing impact of hurricane losses, and lower
gross premiums written across the Group resulting from
Covid-19.
Cash and cash equivalents net of borrowings at 31 December 2020
amounted to GBP87.8m. In addition, the market value of the
investment portfolio at that date was GBP50.5m.
We anticipate announcing our final results during April at which
we time we will also announce the dividend for 2020.
Settlement of claims related to African operations
In January 2020, Camellia Plc announced that it and certain UK
subsidiary companies faced legal claims in the UK based on
allegations against two businesses in its African operations,
namely Kakuzi in Kenya and EPM in Malawi.
These claims have now been resolved at settlements costing up to
GBP4.6m in relation to the Kenyan claims, and GBP2.3m in relation
to the Malawian claims. Details of the settlements reached can be
found in appendices A and B to this announcement.
These are in addition to the previously announced legal and
other costs associated with these allegations and will also be
reflected in the 2020 results.
Safeguarding and Stewardship Committee
As announced in November 2020, the Board of Camellia has
established a Safeguarding and Stewardship Committee chaired by
William Gibson. This committee is made up of current Non-Executive
Directors and outside experts, the first of whom is Louise
Nicholls, Chair of Suseco and former head of human rights and food
sustainability at a leading UK supermarket.
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.
Notes:
*Underlying profit is profit before tax for the Group before
impairment charges, legal and other costs relating to group claims
and excluding the gain on disposal of the Horizon farm
property.
Enquiries
Camellia Plc 01622 746655
Tom Franks, CEO
Susan Walker, CFO
Panmure Gordon 020 7886 2500
Nominated Adviser and Broker
Emma Earl
Erik Anderson
Maitland/AMO
PR
William Clutterbuck 07785 292617
APPIX A
SETTLEMENT OF CLAIMS IN KENYA
As announced in October 2020, Camellia Plc and two subsidiary
companies in the group have faced claims of alleged personal
injuries suffered by local residents allegedly carried out by
security guards employed by Kakuzi Plc ('Kakuzi') in Kenya. The
claims brought by UK law firm Leigh Day in the High Court in London
were originally also against Kakuzi, but those claims were dropped
and the litigation went ahead against Camellia Plc and its
subsidiaries Linton Park Plc and Robertson Bois Dickson Anderson
Limited ('the companies').
The companies announce that an innovative and mutually
beneficial resolution of all the claims has been reached, without
any admission of liability by the companies or by Kakuzi. The
companies hope that this resolution will clear the path for the
investigations into the allegations and, as required, prosecution
of any offenders.
The settlement is intended not only to resolve the claims
themselves, but also to help Kakuzi to strengthen its relations
with the local communities and to continue to support the thousands
of smallholder farmers who rely on Kakuzi to get their avocados to
market. In particular, Kakuzi's Operational-level Grievance
Mechanism ('OGM') (which was announced in October 2020) will be
developed and implemented, with wide-ranging stakeholder
consultation. The OGM will be compliant with UN Guiding Principles
on Business and Human Rights. It will allow any future complaints
of personal injury or human rights abuses at Kakuzi to be resolved
fairly, locally and quickly. Triple R Alliance, a leading human
rights and OGM consultancy, will review, guide and oversee the OGM.
An Independent Monitor will also observe and report on the OGM.
Although not party to the litigation or the settlement, Kakuzi
has confirmed that it will be putting in place certain measures,
for the benefit of the communities on and around its farm. These
include: (1) the funding of charcoal kilns and access to firewood
so local communities can produce and sell sustainable charcoal for
their own income generation; (2) building two social centres for
community meetings; (3) employing predominantly female Safety
Marshalls on Kakuzi's farm to give visible reassurance to those
using access routes and particularly women; and (4) building three
new roads accessible to the community without any requirement to
obtain a licence to give people better access to local amenities
(5) the establishment of a Technical Working Group to survey and
demarcate land which has been previously donated by Kakuzi and (6)
the design and implementation of a human rights defenders
policy.
Kakuzi has also brought in independent experts IBIS to conduct a
human rights impact assessment of Kakuzi's operations, so that
local communities and commercial partners can have confidence in
Kakuzi's commitment to, and attainment of, the highest standards of
business and human rights going forward.
The cost (over three years) of these projects, together with
payments for the individual claimants and a contribution to their
legal fees will be up to a sum of GBP4.6 million.
The companies have reached this resolution because it is the
best way of supporting Kakuzi in continuing its long-standing and
important work with the communities on and around the Kakuzi farm,
which includes comprehensive outreach, CSR and engagement
initiatives such as maintaining and supporting local schools, and
providing medical facilities for employees and their families, and
medical outreach programmes to the local communities. Kakuzi's ESG
report can be accessed here:
https://www.kakuzi.co.ke/pages/626c9d3d-e4ad-4da3-acb8-1ed90c57be23/articles/626c9d3d-e4ad-4da3-acb8-1ed90c57be23.pdf
. This work is fundamental to the ethos of Kakuzi which strives to
uphold the highest standards of ethics in its engagements with all
stakeholders.
Camellia commends Kakuzi, and its leadership team, for their
commitment to promoting the highest standards of ethical business
practice, the protection of human rights and the welfare of all
those who live and work around Kakuzi. As stated by Kakuzi on 16
October 2020, all stakeholders should behave respectfully and
lawfully towards one another, and that any reprisal against
claimants/employees/community members is wholly unacceptable.
The resolution also reflects Leigh Day's confidence in the steps
that Kakuzi has committed to take, supported by Camellia and, in
particular, confidence in Kakuzi's OGM. As an indicator of that
confidence, Leigh Day has agreed not to bring or support any
further claims against any part of the Camellia Group in connection
with their operations in Kenya, for a substantial period.
APPIX B
SETTLEMENT OF CLAIMS IN MALAWI
In January 2020, Camellia Plc announced that it and subsidiary
companies faced legal claims based on allegations against two
businesses in its African operations. The businesses involved are
Kakuzi in Kenya and Eastern Produce Malawi Limited ("EPM") in
Malawi. This announcement provides an update on the Malawi
allegations only.
Camellia Plc has, along with its subsidiaries Linton Park Plc
and Robertson Bois Dickson Anderson Limited (together, the
"Companies") agreed, with no admission of liability, a resolution
of all claims brought against them by law firm Leigh Day on behalf
of 36 women living in the Mulanje and Thyolo districts of Malawi.
The claimants alleged that they had suffered sexual harassment and
gender-based violence while employed by EPM.
Settlement has been reached at a very early stage, before
service of legal proceedings, and so avoids, most importantly for
the women making these claims, drawn out and costly litigation in
England.
Despite the Companies' and EPM's strong belief that, however
abhorrent the allegations were of deliberate acts of sexual
violence committed by individual male workers, EPM and the
Companies would not have been found legally responsible for them,
they saw that there were real benefits to all concerned in
resolving the claims quickly. This is particularly to send a clear
message from EPM and the Companies to all who work in or with them,
that sexual harassment and gender-based violence will not be
tolerated. EPM and the Companies also know that even if they had
successfully defended these claims all the way to trial they would
not have been able to recover their legal expenses from the
claimants.
Working constructively with Leigh Day, the resolution is
innovative and will reinforce steps that EPM has been taking in
Malawi for several years to promote gender equality, female
empowerment, and respectful relationships between men and women
working for and living on or near EPM's estates.
A new EPM Women's Empowerment Initiative will fund projects to
improve the skills, employment opportunities, and educational
attainment of women and girls in and around EPM's operations,
providing benefits both to the claimants and the wider community.
These projects include EPM Gender Equality Scholarships for 10
women, comprising guaranteed tuition and living costs throughout an
undergraduate degree/other higher education course in Malawi; a
specialist female leadership training programme to support the
career progression of women into more senior positions at EPM;
funding community civic education programmes concentrating on
Sexual Harassment and Gender Equality; relocating and upgrading
primary school facilities to include a community meeting hall; and
building and maintaining boreholes in locations designed to benefit
women and children locally to EPM's estates; and establishing three
new Victim Support Units (VSUs) at local police units.
Consultations will be held with stakeholders, including women
working and living in and around EPM, to ensure these projects have
maximum impact. Triple R Alliance (a respected consultancy group in
this area - http://triplealliance.ca/ ) has been engaged by EPM to
monitor, guide and oversee, independently, EPM's Women's
Empowerment Initiative.
In addition, agreement has been reached on changes to EPM's
working practices, including to support the protection of women
workers, notably by the introduction of Women's Safeguarding
Supervisors across EPM's estates.
Prior to this agreement, EPM had already set up an
Operational-level Grievance Mechanism ("OGM"), compliant with UN
Guiding Principles on Business and Human Rights, so that any
complaints of sexual harassment and/or gender-based violence
related to its operations could be resolved fairly, under the
direction of a Malawian female Independent Senior Lawyer and with
independent and paid-for legal advice available to complainants.
The OGM also ensures that counselling support is available for any
vulnerable complainant. The OGM is already having a positive impact
in and around the estates. Triple R Alliance will also review,
guide and oversee the OGM and an Independent Monitor will also
report on it.
An important objective for EPM and the Companies in this
settlement is to make sure that if anyone believes EPM's Sexual
Harassment Policy has been breached their complaint can be raised
and properly resolved through the OGM. This will bolster confidence
that EPM will not tolerate sexual harassment or gender-based
violence in any form and reassure complainants they can come
forward and get prompt resolution and redress for any wrong. This
is a vital ingredient in achieving long-term improvement of gender
relations in Malawi, which are rooted in interrelated economic,
social, educational and cultural dynamics.
The cost (over three years) of projects funded under the EPM
Women's Empowerment Initiative, together with redress for the
Claimants individually and contribution to their legal fees will be
GBP2,313,400.
Under the terms of the settlement and given the constructive
dialogue between the Companies and Leigh Day about EPM's work on
the ground to improve gender equality and in particular the OGM,
Leigh Day will not bring or support any other claims relating to or
in connection with the Camellia Group's operations in Malawi for a
substantial period of time. This reflects Leigh Day's confidence
that the OGM and EPM's Women's Empowerment Initiative, and the
involvement of Triple R Alliance and independent monitoring, have
the potential to bring long-term and positive change for women and
gender relations in southern Malawi.
The Companies are pleased that constructive discussions with
Leigh Day have resulted in a resolution of these claims that not
only benefits the women represented by Leigh Day but also delivers
wider and longer-term benefits to the communities in which they
live. It is better to enhance the working and living conditions of
employees of EPM, rather than fighting expensive, drawn-out
litigation.
We hope that the steps EPM has already taken in Malawi, and the
actions it has committed to in this settlement, will help cement
its reputation as a force for good in the communities in which it
operates.
The Companies and EPM are committed to bringing about continued
positive change and development on and around EPM's estates. This
settlement and the associated community initiatives should lead to
a significantly improved working environment in EPM's operations in
Malawi, most especially for women. They acknowledge the significant
cooperation and contribution of Leigh Day in achieving this
outcome, and thank them for their efforts to bring this about
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