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 Congoto 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 sayapplying the NGO argumentthat
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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