Written evidence from Global Witness |
Please find below our briefing on concerns over the
Democratic Republic of Congo's natural resources sector. Our key
concerns are highlighted in bold. Global Witness believes the
International Development Select Committee could help push for
improvement in the management of the country's natural resources
by pushing these points with government officials and others (including
donors and private sector representatives) with whom they speak.
This would help ensure that DRC's natural resources are used for
the benefit of the population as a whole.
Following a series of highly controversial moves
in the mining and oil sectors, including the confiscation of key
assets held by international companies, the World Bank suspended
new aid disbursements to the DRC in the autumn of 2010 (excluding
humanitarian aid). For the suspension to be lifted, the DRC agreed
to fulfil a number of conditions, notably saying it would publish
all agreements in the mining, oil and forestry sectors. The document
in which this is all laid out is called the "economic governance
In May the DRC passed a decree in response to
this pressure, stating that all natural resource contracts would
be published within 60 days of their coming into effect. This
is a welcome move that could help prevent corruption.
However, while several contracts have already been published online,
these do not include opaque oil deals signed last year or revisions
to a huge resources-for-infrastructure deal with China (see below).
It is crucial that these and all other active contracts are published.
Global Witness has been pushing particularly for
the official publication of some of the most recent revisions
to a $6 billion deal with China, under
which the DRC is to provide millions of tonnes of copper and cobalt
in return for an array of infrastructure projects. The deal could
transform the country by providing new roads, hospitals and other
infrastructure. But anti-corruption safeguardsparticularly
transparency measuresshould be taken to ensure it really
delivers. As a first step the latest version of the contract (from
late 2009) should be made public to allow proper scrutiny. In
addition, the DRC and China should systematically declare what
infrastructure is being provided under the deal and how the minerals
being exported from the DRC are to be valued: in other words,
they should say what the DRC is getting and what it is giving.
The government and companies concerned should also properly account
for all financial and in-kind payments made in relation to the
agreement (according to the principles of EITI). These payments
include signature bonuses and taxes. In the absence of such
basic information, it is much easier for corrupt individuals to
profit from the deal.
Global Witness is also concerned about the DRC's
confiscation of mines belonging to First Quantum and oil licences
belonging to Tullow, and their subsequent
reallocation to companies based in offshore tax havens in 2010.
It is unclear, for example, why the companies Caprikat and Foxwhelpbased
in the British Virgin Islandswere given control of oil
Blocks 1 and 2 of the Albertine Graben, in the northeastern area
of Ituri. As well as having potential tax implications for the
DRC, the fact that the companies are registered in the BVI means
it is virtually impossible to trace their chain of ownership through
company documents. The blocks could prove of major importance
to the country's economy. It is crucial that such contracts
are officially published and that the true or "beneficial"
owners of the companies are made known.
Witness report, China and Congo: Friends in Need:
Witness press release on transparency in the DRC:
For 15 years now, armed groups have been preying
on the mineral trade in eastern Congo. Within the last year serious
moves have been taken at the international level to stem the trade
in conflict minerals. In July 2010, the US Congress passed the
Dodd-Frank Wall Street Reform and Consumer Protection Act, requiring
companies buying minerals from the Great Lakes Region to conduct
due diligence on their supply chains to ensure they are not buying
conflict minerals. The UN Security Council has also endorsed rigorous
due diligence standards (ie measures companies must take to make
sure they are not buying conflict minerals), as has the OECD.
Global Witness is backing these due diligence standards,
which focus not just on rebel groups and militias, but also on
official army units that have been profiting from the minerals
trade. The International Development Select Committee will probably
have been informed about traceability schemes in DRC and Rwanda,
aimed at tracking minerals from the mine to the point of export.
These schemes are a necessary part of due diligence, but they
should be accompanied by on-the-ground checks of the supply chain,
as a bagging-and-tagging system alone cannot guarantee a clean
minerals trade in eastern DRC. The kind of extortion commonly
carried out by armed groups along transportation routes, for example,
need not interfere with tags. Diggers or traders transporting
sacks of minerals sealed and tagged can be illegally taxed by
men with guns just as easily as those carrying unmarked or untagged
bags. Carrying out comprehensive due diligencewhich includes
but is not limited to establishing mineral traceabilityis
currently the only credible way for companies to assess whether
armed groups have interfered with and benefited from the trade
at any point along the supply chain. The field assessment component
of due diligence is particularly critical if companies are to
identify extortion or situations where members of the military
are using civilian proxies to represent their interests in the
In an April field visit to eastern Congo, Global
Witness was encouraged to learn that the biggest tin ore mine
in eastern Congo, Bisie (which accounts for some 70% of North
Kivu's tin ore production) had been mostly or entirely demilitarised.
This is a major development but measures should now be taken
to ensure that armed groups do not return to the mineand
that, if they do, trade with the mine stops. For this purpose,
the UN force MONUSCO should ensure that peacekeepers are present
at or near the mine and along mineral transportation routes to
deter any renewed attempt by armed groups to control or otherwise
profit illicitly from the minerals trade.
On the international level, Global Witness is pushing
for other jurisdictions to follow the US government's lead, and
pass legislation obliging companies to carry out due diligence
on their supply chains.
Key Global Witness documents:
The Hill Belongs to Them
and our last press statement
The DRC currently chairs the Kimberley Process -
the scheme set up to prevent the trade in conflict diamonds. This
should be an opportunity for the DRC to demonstrate its commitment
to promoting good natural resource governance. However, so far
their performance as Kimberley Process chair has not been encouraging.
In April the Chair, Matthieu Yamba, stepped far beyond his remit
to attempt to unilaterally lift restrictions on diamond exports
from Zimbabwe's troubled Marange region, to the dismay of numerous
Kimberley Process members. The Congolese government will be hosting
the Kimberley Process intersessional meeting starting June 20th
in Kinshasa. It is vital that the DRC does not allow
regional political loyalties to take precedence over the urgent
need to introduce reforms and restore some credibility to this
once pioneering scheme.
Given the UK Government's development strategy
focus on the private sector, Global Witness is concerned that
an area of significant private sector activitynamely logging
in the DRCrisks massive environmental, social and economic
damage. Global Witness urges MPs to look closely at this issue
during their forthcoming visit.
The DRC sits in the Congo Basin, the second-largest
rainforest in the world and a vital asset that needs to be preserved
in order to fight global climate change. Logging operations are
a grave threat to the survival of the remaining intact rainforest.
Most of the timber from the DRC is shipped to European markets
and because of a lack of controls, there is a high risk that a
significant amount of this timber is illegal.
There appears to be a rush to expand industrial-scale
logging into DRC's intact forests without: (1) micro-zonagean
inventory of how forests are being used by local populations;
(2) a national forest plan and a national forest (tree) inventory;
and(3) a functioning forest control system to ensure regulations
are adhered to and that there is no illegal logging.
In 2002 the DRC government passed a new Forest Law
which made it obligatory for companies to negotiate and sign Social
Obligation Contracts (cahiers de charges) with local communities
affected by their logging operations. These Social Obligations
involve the logging company paying into a "Community Development
Fund", in proportion to the amount of timber extracted from
ancestral forests. These funds are to be used to refurbish and
build schools, health centres and roads.
In March and April 2011, Global Witness visited 21
communities in the Provinces of Equateur and Bandundu. Among numerous
concerns over the negative impacts of logging, villagers claimed
that "development projects" provided minimal benefitsfor
example, schools with no furniture; health centres with no medical
equipment and hardly any beds; buildings with non-durable material
that fall apart within a few years.
We confirmed this through visits to 54 projects.
We also saw evidence of new social agreements being rushed through
without the "beneficiary communities" being properly
informed or prepared for negotiations.
Global Witness is concerned about the tension we
observed between communities and logging companies as a result
of the failure to implement development projects in compliance
with contracts with communities. Main complaints include:
or only minimal employment of local people by logging companies,
which are removing timber from ancestral forests;
related destruction of forest biodiversity, from which villagers
draw their food and traditional medicines;
to respect traditional and customary rights and benefit-sharing
agreements is often met by force (arrests, beatings, destruction
of homes, with dozens of reported rapes by security forces); and
in Equateur and Bandundu Provinces taking the side of logging
companies in conflict; eg reports of deploying police and military
to quell resistance to logging operations.
There are allegations that in May this year two of
the biggest logging companies operating in Congo, which are subsidiaries
of multinationals, provided logistical support to military and
security forces to arrest and imprison number of representatives
of villages who requested that their rights and social obligation
agreements reached with the companies were respected.
There are reports that in May this year two of the
biggest logging companies operating in the DRCSiforco and
Sodefor, both of which are subsidiaries of multinationalsprovided
logistical support to military and security forces to arrest and
imprison a total of 22 representatives of villages who requested
that their rights and social obligation agreements reached with
the companies were respected. In the Siforco case, on 2 May 2011,
naval forces reportedly beat numerous people and raped three girls
and three women. One of those beaten, Frédéric Moloma
Tuka, a man in his late fifties, died that same night, allegedly
from his injuries. Global Witness has not investigated these reports
directly and has not substantiated them but we are sufficiently
concerned that we are calling for an independent investigation.
Global Witness is concerned that huge oil deposits
recently discovered in the "Cuvette Centrale" (a region
covered by intact natural forest) could lead to an extensive allocation
of drilling rights. Brazilian oil service firm HRT Petroleum,
hired by the government to survey the Cuvette Centrale basin,
has reportedly estimated that it could hold potential
reserves of 7.3 billion-13 billion bl of oil and 4 trillion
ft (113bn m) of gas. Whilst the Minister of the
Environment and Forests has suspended drilling in Virunga National
Park (not part of the Cuvette Centrale), we fear that non-protected
areas could be vulnerable to drilling. Involving thousands of
miles of roads and pipelines, this could have a devastating impact
on the forests and its inhabitants, and given experience in Nigeria
and Ecuador is likely to increase the risk of conflict between
companies and local communities.
In order to get funding from international bodies
working to prevent climate change, the DRC has developed plans
to reduce emissions from deforestation. These plans, including
the Readiness Preparation Proposal, bizarrely, actually proposes
to increase the amount of forest to be opened for logging
by about 10 million hectares.
Global Witness is deeply concerned that, according
to forest administration officials interviewed by Global Witness
in Equateur and Bandundu Provinces, the government has not yet
put into place a control system to monitor compliance with the
law of operations in the country's forests. Timber is leaving
sites without any inspection of species felled or volumes produced.
Worse, according to government sources the upgrading of roads
in the Provinces of Orientale and North Kivu has accelerated the
transport of illegally cut timber to Rwanda and Uganda. The lack
of any road control facilitates the illegal trade of timber.
8 June 2011