Select Committee on International Development Written Evidence


Letter to the Chairman of the Committee from Mr Ketan Kotecha, Afrimex (UK) Limited

  I write in relation to our meeting on 4 July 2006 when I answered questions for the International Development Committee's inquiry into "Conflict and Development: Peace-building and Post-conflict Reconstruction" at the House of Commons.

  This letter is intended to accompany the answers that I gave to your questions, in that it clarifies some of my answers in order to ensure that they are correct as a matter of fact. In this respect, I have had to seek assistance both in reviewing the uncorrected transcript of my evidence and in drafting this letter, for English is neither my first nor primary language and I now believe that, without the clarification that I have provided below, my answers could be misinterpreted. In addition, I must apologise for having misunderstood from your letter dated 8 June 2006 the kind of questions that I would be asked by the Committee. As a result of having insufficiently prepared myself beforehand for such questions and not having had certain information to hand on the day, I was unable to provide more helpful answers in some instances. Bearing in mind the need to keep the length of this letter to a minimum, I have now attempted to remedy this in relation to a few such instances below.

  In the circumstances, I request the Committee to formally accept the contents of this letter as forming part of my evidence, and ask that my answers be read and presented in conjunction with what is stated herein. On this basis, I have not proposed individual corrections at the relevant parts of the transcript.

AFRIMEX UK LIMITED AND SOCIÉTÉ KOTECHA S.P.R.L.

  There appears some confusion on the part of Mr Patrick Alley of the NGO Global Witness, and perhaps also on the part of the Committee as a result, in relation to the relationship between Afrimex and Société Kotecha. Unless specifically directed by the Committee to Afrimex, I sought in good faith to answer its questions without seeking to draw legal distinctions between Afrimex and Société Kotecha. I did not wish the Committee to think that I was avoiding its questions, and this was in fact the same approach that I adopted in my dealings with the UN Panel.

  Afrimex is a UK registered company that I founded in 1984. It has a staff of four individuals (including myself) from offices in Wembley, Middlesex. It acts solely as a commission agent for several companies, one of which is Société Kotecha. Société Kotecha is my father's Congolese company, established in Bukavu as Kotecha's in the early 1960s. Société Kotecha directly employs approximately 160 people in the Congo. All of its investment and business activities are conducted in the Congo, and it deals with a number of other companies and engages in a variety of businesses unrelated to its dealings with Afrimex.

AFRIMEX'S MINERAL TRADING ACTIVITIES

  Afrimex's role in trading in minerals in the Congo is marginal, as is its income from such work.

  The mining sector in the Congo is such that permitted artisans are free to source minerals from anywhere in the country provided that they on-sell them to authorised "comptoirs". Afrimex has always bought its minerals from such "comptoirs", on a "delivered at frontier" basis. It has not conducted business directly with the mines or with the artisans. To my knowledge, the "comptoirs" that Afrimex has bought minerals from are respected members of the local business community, and I consider it reasonable in all the circumstances for a company such as Afrimex to have placed reliance on the assurances that they have given me. I do not accept the accuracy of the allegations made against Afrimex before the Committee, notably in relation to the identity of the parties that Afrimex is alleged to have dealt with or in relation to who in the Congo was controlling whom or what during the conflict period.[2]

  The Committee had asked about Afrimex's profits from mineral trading. I now have profit calculations available to me from Afrimex's auditor, and can represent to you that Afrimex's profits from its mineral trading activities have amounted to an average of 6.05% of its total profits over the last decade. During the 1998-2003 period, this percentage in fact dropped to 5.09%. The bulk of Afrimex's profit is generated from the supply of food items such as sugar, rice, salt, wheat flour, cooking oil and milk powder.

THE OECD GUIDELINES

  I am not an expert on the OECD Guidelines, which is why I stated to you that I had not personally read them. I do recall that one of Afrimex's employees had acquired some knowledge about them at around the time of our meeting with the UN Panel, but he has since left the company. My understanding from the time of Afrimex's meeting with the UN is that Afrimex's conduct had not contravened the Guidelines. Having looked briefly at the OECD website since our meeting, I note that the Guidelines appear to govern "multinational enterprises". Afrimex has only its four employees in Wembley, and no offices or staff in any other jurisdiction. Moreover, I have personally never regarded Afrimex as a multinational enterprise, and certainly not in the mould of the large corporates that are commonly referred to as such.

  No guidance has ever been provided to me personally or to Afrimex on whether the OECD Guidelines apply to it, or on their implications on a business such as ours. In addition, my understanding is that the OECD Guidelines have no legal effect, which I feel makes proper guidance even more necessary. I also see from the OECD website that, in June 2006, the OECD issued Guidelines for Multinational Enterprises in Weak Governance Zones. This was not mentioned by anyone before the Committee on the day that I attended for questioning, and I therefore have no idea about whether or not they too apply to us.

  Nevertheless, Afrimex takes its legal and other obligations seriously. Pending necessary guidance and bearing in mind the size and resources of our company, I confirm that we are committed to ensuring that our activities conform to good business practice.

THE UN PROCESS

  I wish to clarify an inaccuracy in one of my answers on the matter of the UN Panel's investigation. I had thought that Afrimex was informed that its case was "resolved" by the UN by way of a letter. In fact, we were informed by way of the UN Report itself, a hard copy which I attach for the Committee[3]*. I understood from my meeting with the UN Panel in Paris, and from a subsequent telephone conversation with the UN, that Afrimex's name was placed on the "resolved" list because it was not a business that had simply appeared at the time of the conflict but, rather, had done business in the Congo for many years and had made a positive contribution to local communities. Ours is not a company that has gone to the Congo—to use Mr Alley's phrase—"for the short to medium term, and usually for short-term profit".

  My family, through my father, has conducted what I can only describe as a substantial amount of charitable activity in the Congo over the years. We continue to do so to this day. As practising Hindus, my family consider it our religious duty to make a positive contribution to the societies in which we work and live. We do not do so because the government or anyone tells us to, or because of the current fashion of "corporate social responsibility programmes" used by the likes of FT-100 companies. In fact, owing to our personal religious beliefs, we consider it an anathema to engage in such activity for recognition. It is unfortunate that, for this reason, I do not have to hand a list of such activities. However, given that the Committee showed an interest in this subject during my questioning, and for this limited purpose, I ought to state here that the aspects of our social work that immediately come to mind include, since the 1970s, the following:

    (a)  the provision of free vaccinations to more than 10,000 residents of the town of Bukavu;

    (b)  the provision of free emergency relief to the residents of Goma following the earthquake there in 2002;

    (c)  the continuing provision of assistance to Bukavu's General Hospital. Such assistance has included items such as free medication, blankets, bed sheets and food; and

    (d)  the continuing provision of free higher education scholarships to some 120 students every year.

  It would seem from having heard some of the evidence of the NGOs to the Committee that they want Afrimex to stop dealing in minerals every time that a conflict erupts in the Congo. The Committee was informed in this context that there is a 50% chance of a conflict erupting every five years in countries such as the Congo. However, absent necessary guidelines, even if companies such as ours had knowledge of all relevant facts in order to be able to exercise some form of judgment (which ours did not), there is nothing to say—applying the NGO argument—that our far more significant non-mineral trading activities of supplying food do not ultimately fund conflicts in a conflict situation, for example through local taxes paid in relation to such activities by everyone including the ultimate buyer. The logical conclusion of that argument is that we must close our business entirely as soon as any conflict erupts in the Congo.

  I end with the following promise. If the government requires Afrimex to withdraw from trading in minerals, then we shall comply. However, as noted by Ms Patricia Feeney in her evidence to the Committee, if we withdraw then we will almost certainly be replaced by Chinese or Israeli companies that are queuing up to do business in the Congo. Through our charitable contributions, I feel that my family has succeeded in doing some social good in the Congo. There is nothing to suggest that those that would replace us will engage in any such activity or co-operate with Committees such as yours.

25 July 2006



2   The Channel 4 report that you mentioned during my questioning also wildly speculates that I was somehow involved in the arrest of the reporter who I willingly spoke to in my father's office in Bukavu for over an hour and a half. This is all the more incredible because we had bid each other farewell after our long meeting, and he had thereafter completely left the company premises. I had no idea that the authorities had accosted him on the streets. Back

3   Copy placed in the Library. Back


 
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