To be published as HC 1133-i i

House of COMMONS



International Development Committee

Inquiry into Working Effectively in Fragile and ConflictAffected States: DRC, Rwanda and Burundi

Tuesday 13 September 2011

Daniel Balint-Kurti and Mike Davis

David Leonard and Joanna Wheeler

Evidence heard in Public Questions 40 - 98


1. This is a corrected transcript of evidence taken in public and reported to the House. The transcript has been placed on the internet on the authority of the Committee, and copies have been made available by the Vote Office for the use of Members and others.

2. The transcript is an approved formal record of these proceedings. It will be printed in due course.

Oral Evidence

Taken before the International Development Committee

on Tuesday 13 September 2011

Members present:

Malcolm Bruce (Chair)

Pauline Latham

Jeremy Lefroy

Mr Michael McCann

Chris White


Examination of Witnesses

Witnesses: Daniel Balint-Kurti, Campaign Leader, DRC, Global Witness, and Mike Davis, Campaign Leader, Conflict Resources, Global Witness, gave evidence.

Q40 Chair : Good morning. Thank you very much for coming in to give evidence. We have, as a Committee, had submissions in evidence from you before, and indeed not least on the issue of conflict states and specifically the DRC, so I have no doubt we will be going over ground that we have been through before, but thank you very much. I just wonder if you could, for the record, introduce yourselves, then we will start.

Daniel Balint-Kurti: I am Daniel Balint-Kurti. I head the DRC team at Global Witness.

Mike Davis: My name is Mike Davis, and I am a campaign leader at Global Witness, covering what we call Conflict Resources.

Q41 Chair : Thank you both very much indeed. To take the basic question to get us into this, I think it is generally acknowledged that the DRC in particular is one of the richest countries in Africa in terms of its resource allocation but not in terms of its people. What do you think are the links between the conflicts that have been going on for so many years in the DRC and the natural resource extraction?

Mike Davis: In the east of the country, as you probably know, there has been conflict of varying levels of intensity going on for around 15 years. You have an array of armed groups operating there, and I include in the term "armed groups" units of the national army, which are all, to a greater or lesser extent, involved in the mineral trade, in terms of deriving financing from it and illegally controlling it. All of those different armed actors also have an appalling record in terms of human rights abuses against the civilian population. The minerals in question are primarily the ores from which you get tin, tantalum-which is often known by the name of the ore coltan-tungsten and gold. The armed actors involved include the FDLR, a Hutuled militia whose command includes people believed to have been involved in the 1994 genocide in Rwanda. Also, as I said, there are units of the national army. Many of the most powerful of those are former rebels from another insurgent group called the CNDP.

The means by which these diverse groups derive financing from the mineral trade include primarily the illicit control of mine sites, the control of transport routes by which the materials are conveyed once they are mined and the illegal taxation of these materials along those routes. You also have illicit business interests, which are sometimes operated by civilian proxies on behalf of more senior commanders. You also have a pattern of armed raids and ambushes by some of the groups to derive money from the minerals trade. The reason that this is important is that it allows groups that would otherwise struggle to survive and continue to operate in the abusive way that they do to sustain their operations. It also-"it" being the opportunities to gouge moneys from the minerals trade-provides a perverse incentive to units of the national armed forces that should be curtailing this kind of activity.

The consequence of that is that you have what one might call a militarisation of the minerals trade. You have a very powerful agent for the continuation of the conflict, in terms of the money flowing in and those incentives. This exacerbates an existing problem of the widespread predation of armed groups, state and nonstate, on the civilian population. In some cases, this link between the natural resources exploitation and the activities of armed groups is very acute indeed. You may have heard of a particularly notorious series of mass rapes in the Walikale district of North Kivu a little over a year ago. Those were instigated in part by groups that the UN Group of Experts has described as a criminal network set up by the national army. One of the primary purposes of this group is to earn for itself and its military patrons a bigger share of the minerals cake. They have been advised by members of the national army command that one of the best ways of doing this is to terrorise civilians through sexual violence, so that they can achieve greater notoriety and power in the region.

Q42 Chair : That raises the next question of the role of donors in this situation. As a passing comment, however, I have to say that I had a meeting with the governor of North Kivu and the Education Minister. It is interesting what you said about the role of the army because when I asked the Education Minister to give her comment on this, she said, "All we need to do is get these Rwandans out of our country and we’ll solve our problem", in other words, a total blanking of what you have just described is happening. That clearly indicates there is a problem of local governance not facing up to the issue, but what is the role for international donors? Can they and, if so, how can they ensure that these minerals are actually used for the benefit of the region rather than to tear it apart? Is that through greater regulation and transparency? Is it by supporting the local governments’ capacity and willingness actually to police, regulate and enforce what you might call lawful, rather than unlawful, extraction?

Mike Davis: We believe that there is a very important role for donor governments to play, not least the UK Government, which, along with the USA, is the leading donor to the Government in Kinshasa, as well of course as neighbouring Rwanda. We would draw your attention to two things in particular, which we think the UK and other donor governments should be doing. One is to do with influencing the behaviour of companies that use these materials. I have doubt that you are fully aware that the companies along this international supply chain, which is generally global in scope, include British and European ones. The other thing is using the influence that the British Government does have, as the leading donor in Kinshasa and also in Kigali, to persuade those Governments to take more action themselves to address this problem. With respect to Congo itself, the key thing that we believe the UK Government needs to do more to impress upon counterparts in Kinshasa is the need to pull their national army out of the illegal minerals trade.

To elaborate slightly on the first point about company behaviour, it is widely acknowledged, including by the UN Security Council repeatedly-and the UK is a permanentfive member-that natural resource exploitation plays a key role in furthering the conflict in eastern Congo. Companies of course are key conduits for that. These materials do not stay in eastern Congo after they are mined; they do not stay in Africa. They go primarily to Asia and then on to markets around the world, including this one. We have international companies involved in all parts of the supply chain, including some British firms even at the top end of the supply chain involved in trading and smelting. We believe, and the UN Security Council and its group of experts believe, that one of the best ways of tackling this minerals conflict nexus is to set clear standards for companies to make sure that they are making sure that their transactions are not putting money in the wrong hands and not facilitating violence and abuse in eastern Congo.

Those standards are in fact very clearly laid out already. They are called due diligence standards for supply chain controls. They were developed by the OECD and the UN Group of Experts, and signed off last year. The UK Government, as an OECD member and a member of the Security Council, has, at least on paper, fully bought into those standards, but could be doing a great deal more to ensure that British companies are abiding by them. So far, few companies are. This is a big problem for obvious reasons, and is the main rationale for our call on the UK Government to follow the lead already taken in the USA and push for legislation to be passed, at the European level, to put these due diligence standards into law.

Q43 Mr McCann: That brings me seamlessly to my question. What impact the DoddFrank Act has actually had on mineral trade in the DRC?

Mike Davis: The very simple answer is that we do not know what the longterm impact is yet, because the law has not even been fully completed, as you know. The Securities and Exchange Commission has yet to announce the regulations that flesh out what the legislators have called for. However, we have already seen a number of changes in the minerals sector, which can, in part or in whole, be attributed to the impending arrival of DoddFrank, or rather DoddFrank in its full form. Those include some very positive impacts. For the first time in five years, the Congolese Government has removed national army units from the region’s most important mine, which is called Bisie in Walikale in North Kivu, which accounts for around 70% of the tin ore production from the province. That is pretty unprecedented in terms of the history of this conflict.

Despite the comment about denials in some quarters, the Congolese Government has also begun to address publicly the role of its own armed forces in the conflict minerals trade. You have had President Kabila speaking out against mafia groups within his own army, which is extraordinary. You also had tacit support from the Congolese Government for UN Security Council sanctions resolutions last November, which are aimed at cutting the national army out of the minerals trade as much as the rebels. You have also had some initial moves towards reform closer to the ground, at the provincial level: the establishment of committees in North and South Kivu, involving government, industry and the military to look at this problem.

At the same time, there have been negative trends in the sector too, in the past year. The level of declared trade from North and South Kivu provinces has declined significantly. Smuggling has continued, but the overall impact is that quite a lot of people have, for the time being at least, lost opportunities to work in the sector. In the first instance, that is directly attributable to President Kabila’s suspension of mining in the east between September last year and March this year. It is also to do with purchasing decisions announced by the two major electronics industry organisations, the ICC and JESSI, which demanded a higher standard of control for minerals coming out of Congo than, in fact, DoddFrank demands, but there is no doubt that these moves are definitely being enacted in a landscape that is shaped by DoddFrank.

We do not believe that the downturn in the sector will last. Partly, that is simply because of the equation of supply and demand. Congo is a very important producer of tantalum in particular. It is a significant producer of tin. Its sector is not being efficiently exploited at the moment and everyone knows this. There are untapped reserves that it will be difficult for industries to ignore in anything beyond the short term. We also point to the fact that a number of companies, amid the current hue and cry that we cannot trade in Congolese materials, have actually been making moves to be embedded in the sector in eastern Congo.

You have the world’s leading capacitor manufacturer, AVX, teaming up with Motorola to pilot a project, which they claim will use these due diligence standards, nearby in Katanga. You have the thirdbiggest producer of tin in the world, Malaysia Smelting Corporation-the main destination for tin ore from eastern Congo-setting itself up with the Congolese Government with the framework for industrial mining in eastern Congo for the first time. You have a delegation that will shortly go to eastern Congo, headed by one of Hillary Clinton’s deputies, in which she will be accompanied by an array of companies that are sufficiently interested in doing further business in Congolese materials that they are making the trip.

While we believe that the shortterm downturn in the trade is real and has harmful impacts on quite vulnerable people-and I have been part of meetings myself, in the Kivus, where I have seen this-we do not believe that that is the longterm impact or the legacy of the law. We think that, in a very short space of time, the positive impacts, which we are already seeing, are going to accelerate and we will be looking at a situation where you have the establishment of clean trade, which is playing a hugely important role in pushing out the dirty trade, which everyone acknowledges is a problem.

Q44 Mr McCann: Do we have to wait and see the evidence that DoddFrank is making a difference to the due diligence, or are there other ways or other pressures that can be exerted now to improve due diligence? Given the significant influence that China has in the area, do you think that it will be a positive or negative influence on the whole question of due diligence?

Mike Davis: Those are really important questions. In response to the first part, yes, we believe there is more that can be done now. As I mentioned, we have these international standards ratified by the OECD and the UN Security Council already; they have been in place for several months. They are not legally binding, but they were produced out of a tripartite group involving industry, NGOs, including us, and Governments. They were developed and signed off at the end of last year, with a clear commitment, at that time and since, from industry groups to use them. The UN Security Council, in its Resolutions, has encouraged member states to do whatever it is they can to push companies domiciled in their jurisdictions to start implementing these measures. We believe that there is a lot more the UK Government could be doing now to go to companies and say, "Okay, the debate about a law is currently centred primarily in the US, but we have these standards. You know what they are. They are very clear. Industry has signed up to them. Now please, get on with it and implement them."

As regards the role of China, that key factor is often raised. We are confident that the due diligence standards, which have been developed and are likely to be enshrined in American law, will force a change in the behaviour of Chinese companies, because most of the companies concerned are ultimately suppliers of components and other materials to Western companies that are domiciled in countries that are part of the OECD, domiciled in the US or reporting to the US regulator or domiciled in countries that take these kind of Security Council Resolutions rather more seriously than China does. We think that they will be caught up in the net, if that is the right analogy to be used. They do not have a closed loop within China, at this stage, whereby China could take these raw materials, process them, turn them into consumer goods and sell them only to Chinese. That cannot happen at the moment and they know it.

The other thing to bear in mind is that, in recent discussions we have had with the Congolese and Rwandan authorities, both have spoken in quite serious terms-admittedly this is only talk-about passing these OECD due diligence standards into their own domestic law. Now, if they did that-and it is something we think the UK Government should encourage-that may well have quite an immediate impact on Chinese companies. The general trend that we see in our work, and we do a lot of work to do with corporate behaviour across the world, including Chinese firms, is that while in general Chinese companies and Chinese state interests are often not too fussed about international norms and standards, unless they are forced to be, they do not like to be shown to be breaking their host countries’ own laws, because it goes against the rhetoric of peaceful coexistence, "We are a partner in this with you together," and all this kind of thing. We have seen this in work we have done in the past on Burma, for example, where Chinese companies could not care less about dealing with interests that are associated with grave human rights abuses, but they did not like it all when we pointed out that they were breaking the Burmese Government’s own laws. They changed their practices quite quickly.

I am not suggesting that that will provide an absolute magic bullet, but it is something worth considering when we think about what it is that influences the behaviour of Chinese companies and encouraging the Congolese Government, the Rwandan Government and other neighbouring Governments to pass their own laws. Putting these due diligence regulations into legislation would probably go a long way to address that issue.

Q45 Jeremy Lefroy: On the issue of transparency, what steps do you believe the Government of the DRC has taken to comply with the Economic Governance Matrix?

Daniel Balint-Kurti: The Economic Governance Matrix was pushed on the DRC. They agreed to it but under pressure from the donors, notably the World Bank. This came about as a result of a major donor initiative called PROMINES, along with other programmes, being suspended as a result of a scandal over the confiscation of mining assets from a UK and Torontolisted company, First Quantum. The World Bank was a shareholder in that mining project. When the mine was confiscated and sold on to companies based in the British Virgin Islands, the World Bank was livid, and they suspended aid and said to the DRC, "You have to comply with a number of things." Together with the Congolese Government, they agreed on this thing called the Economic Governance Matrix, under which there were a lot of pledges by the Government, mainly on transparency. The key thing, a really big thing, was that the Congolese Government promised to publish natural resource contracts. All contracts in mining, oil and forest would be published within 60 days of their coming into effect. This is a really big thing and it is very unusual for any country in the world to promise to publish natural resource contracts. That is a brilliant thing.

Q46 Jeremy Lefroy: Has it happened?

Daniel Balint-Kurti: It has happened to a certain extent. A lot of contracts have been published online, not all of them. Contracts have not been published relating to some of the more controversial deals, but it has been partially complied with, which is to be welcomed. Also, there was a decree passed in May where the pledge to publish contracts was enshrined in law. Yes, it has been partially complied with, but there are recent deals, for which contracts have not been published.

Q47 Jeremy Lefroy: Is the World Bank therefore going back and saying, "Hang on, you’re not complying with this. You had better do it or we will need to take action again"?

Daniel Balint-Kurti: It is unclear. We have tried contacting the World Bank since it decided to restart aid to the DRC. It clearly decided that the compliance with the Economic Governance Matrix was sufficient. I think that recent developments and the news that came out in August about secretive sales of mines by the Congolese authorities-by Congolese state mining companies-to interests in the British Virgin Islands, have raised new questions. We think this throws everything into question again. There is a $92 million aid programme with a second phase planned of around $80 million. A large part of that money, tens of millions of dollars, is being given to the Congolese authorities to help them govern the sector. At the same time, the authorities are selling off mines and stakes in mines, worth billions of dollars, without informing anybody, to companies we have never heard of before-nobody has ever heard of before-linked to people close to the President, without telling anybody about it.

We do think there is a contradiction there. You are giving money to help the Government with transparency and governance and, at the same time, the same authorities are conducting major business deals completely behind closed doors. We find out about it almost by chance. Journalists make inquiries to the right people and, eventually, they find out about it, but often there are official denials, and even the denials do not ring true.

Q48 Chair : Do you think the World Bank is turning a blind eye? In the light of what you said, you would not have thought the World Bank would not have rescinded their decision. Clearly companies like First Quantum feel they have been abandoned. Is that your take?

Daniel Balint-Kurti: We do need to know what the World Bank and DFID are doing. PROMINES was funded $50 million by the World Bank and $42 million by DFID. It is a major programme aimed at the Congo. So we need to know if DFID and the World Bank are going to the Congolese authorities and saying, "What has happened here?", demanding explanations, demanding who owns these companies that they have sold all these rights to. "Why did you choose these companies? How much were they sold for? Were they sold for a pittance or nothing at all? Who knows?" They need to be asking for that information.

I think that a lot of the governance aid to Congo should be suspended again. It was suspended after the First Quantum fiasco. Now there is a new fiasco of a similar nature, so a lot of that governance aid should be suspended, because what has happened raises so many questions-questions that need to be answered. If there is a proper explanation, if everything becomes clear, the information is released and we are happy, then start again. The concerns over these secret sales are so strong, because they involve many billions of dollars in a country with a GDP of only around $12 billion and a budget of $6 billion, that it just does not make sense to give tens of millions of dollars in governance aid at a time when we are facing austerity measures. We are cutting back on spending in all areas of social services in Britain. We need that money. If we are going to spend money on aid, it should be money well spent, which is going to bear fruit. We need to think again.

Q49 Jeremy Lefroy: Do you think there is any coincidence between the fact that these sales were made in August and there are elections later this year?

Daniel Balint-Kurti: It is one possibility, yes. The sales were not made in August; the news came out in August. The fact is that the sales appear to have been made this year. Some of them were made, I think, towards the beginning of the year. Yes, there is an obvious connection with the elections coming up on 28 November.

One concern is over the fact that the companies are based in the British Virgin Islands. Also, a concern is that they are linked to this businessman, Dan Gertler. I have recently, just yesterday, been in touch with Dan Gertler’s people, so I am hoping to get a proper explanation from them about what has happened and for them to release information. I am reserving my judgment, but I think there are enough causes for concern for us to say we need answers to these questions. Dan Gertler’s people say they are doing a good job for Congo; they are paying money into the tax coffers and doing business in an area where few other people want to take the risks, but from my point of view so many things raise concerns. Donors need to be asking hard questions and telling us, communicating to MPs, NGOs and the world, what they are doing in these circumstances.

Q50 Jeremy Lefroy: You talked about taxation revenues in relation to Mr Gertler and his company, and we will come back to a question about First Quantum. Are you aware of the amount of taxation revenues received from the mineral sector by the Government of the DRC at the moment?

Daniel Balint-Kurti: I am afraid I do not have those figures in my head. I could pull them out for you, but I do not want to give any wrong information.

Jeremy Lefroy: We would be very grateful.

Daniel Balint-Kurti: A large proportion of tax revenues did come from First Quantum’s Frontier mine, for example. They stated that in their filings. That mine was confiscated and, from what I hear indirectly, it seems that the mine is now flooded, which also raises questions about whether the Congolese authorities are then confiscating the mines and not taking care of the pumps, ensuring they continue to turn over while the previous operators are not around.

We are talking about money that is coming into the Government coffers. A lot of that money does come from multinationals. One reason that we in the UK have a particular responsibility regarding Congo’s mines is that they play a large role on the London Stock Exchange and in the FTSE 100. In the case of First Quantum, a scandal that has been widely reported, there is a link to the company ENRC, a FTSE 100 company into which UK pension funds are investing. Ordinary UK investors are putting their money into the FTSE share index, into all FTSE 100 companies, so our money is going into companies that do these deals.

In the case of one of the recent secret sales, regarding Mutanda and Kansuki mines, eventually the news came out in a Glencore initial public offering prospectus. It was on page 800 or something. Somebody found it eventually in August, months after the details of this deal were published. Again, we have reason to look at that closely, because Glencore are partners with the Dan Gertler companies in the Mutanda and Kansuki mines. These deals are not a million miles away from-

Q51 Jeremy Lefroy: Can I just interrupt you there? Are we therefore saying that a company like Glencore, which, as you say, has been subject to a huge initial public offering recently, has actually been participating in deals that have not conformed with the transparency rules that DFID has been cofunding with the World Bank?

Daniel Balint-Kurti: The thing is that the deals may have been done before that Economic Governance Matrix was signed. Regarding the decree that was passed in May, it is unclear whether it applies to natural resource contracts signed before May. They are certainly not complying with the spirit of it. Over and above that, there is the bigger moral question of Congo being a country that is deeply poor; it is 168th out of 169 in the Human Development Index. However, it has massive natural resources, and one of its biggest hopes to become a more prosperous country, for its people to suffer less, is that its natural resources are used for the good of the people. That is not going to happen if deals are done in secret.

I do think that Glencore and ENRC have a moral responsibility. It is also in line with what the Congolese constitution and the Congolese mining code say. The Congolese constitution says that all Congolese should benefit from the country’s resources-that the state has the duty to equitably distribute the benefits of the mining sector. In the mining code, it is stated that the state manages the mining sector. That should be for the good of all. It should not be seen-there should not even be a perception-that these deals are being done for the benefit of a small handful of people in the elite, and not for the good of people on the whole. This is a really big issue.

Q52 Chris White: You argued your case very passionately regarding transparency. I wondered about your having contacted DFID and the World Bank. Would you welcome the support of this Committee to try to help you get some sort of answer?

Daniel Balint-Kurti: It is absolutely necessary. These issues need to be tackled. For people in Congo, it is very difficult for them to raise these issues. We are in a very privileged position where we can say, with responsibility, what we like without the fear of someone coming knocking at our door, without the fear of arrest. We have a duty and we have the opportunity to take action on this, so yes, we should speak up. We should lead inquiries. Withdraw aid where necessary, so that we are not wasting money, and exert pressure as well. Putting pressure on the Government through suspending aid has been shown to work. It showed the first time round, when we suspended aid for PROMINES, when we got the Economic Governance Matrix put in place. Yes, I think we should all be putting pressure in that direction.

Chris White: If you do get a response, the Committee would welcome having sight of it.

Chair : We do have a Minister in front of us, so will have an opportunity to press him.

Q53 Chris White: Moving on slightly, what is the extent of state mining companies allegedly being sold in secret?

Daniel Balint-Kurti: I have done a backoftheenvelope calculation based on what has been announced so far and what has been publicly released. I am not saying there is not a second word on this, and I believe the Dan Gertler companies and the Congolese authorities may argue the figures are different. Based on what we have seen so far, the recent secret sales amounted to well over $2.6 billion-$2.6 billion in a country with a GDP of around $12 billion. They were not announced. We have no idea what these companies are. Yes, it is a lot of money. We are talking about a lot of money.

Q54 Chris White: Would you have any idea of who is actually benefiting from this $2.6 billion?

Daniel Balint-Kurti: As I was saying earlier, Kansuki and Mutanda are two of the four mines involved. Stakes of between about 20% and 25% each were sold in Kansuki and Mutanda to companies that were linked to Dan Gertler. That is announced in the Glencore prospectus. In the case of Frontier and Lonshi, which were two mines that were confiscated from First Quantum, you had the KMT project; that was sold on to ENRC. Later on, Frontier and Lonshi mines were confiscated from First Quantum as well, those two remaining mines. They have now been sold, I believe in their entirety, to a company based in an offshore tax haven called Fortune Ahead-again a company that nobody had heard of before; we have no idea who the owners are. Whether it is linked to Dan Gertler or someone else, we just do not know.

Q55 Chris White: Just for the sake of clarity, who do you think is in a position to monitor and approve these activities?

Daniel Balint-Kurti: The Congolese state. There is a mining ministry, but I was speaking to a donor recently who said that-

Q56 Chris White: I am sorry. Is it constitutionally defined who would approve?

Daniel Balint-Kurti: When you look at the constitution of the mining code, it simply says the state has the duty to manage the country’s resources. There is a mining ministry in Congo, so they manage the mining sector. What happens behind closed doors, we do not really know, but a lot of people talk about people in the presidency exercising a great deal of influence over the mining sector. This is reported in the UN Group of Experts’ reports. They talk about a man called Katumba Mwanke, who some people refer to as President B. We have no dialogue whatsoever with Katumba Mwanke; I mean "we" as in the UK. We are paying a lot of money for governance reforms in Congo. PROMINES, in the first phase, was $42 million of Government money, but from what I understand we do not seem to be in an actual dialogue about these things with the presidency. Now, if the UN Group of Experts is reporting that key figures of the presidency are exercising a lot of influence over the mining sector, deciding on sales and so on, even if this information goes back several years, those same people are still around. We should be speaking with those people. There is a feeling that we are speaking to a few people that we regard as key reformers within the mining ministry-important people, yes-but then other people are taking the decisions.

Q57 Chris White: You keep using the word "we". Presumably you mean the UK Government. When you say "a dialogue", how would you put that down in a couple of bullet points of what you think the UK Government should actually be doing about this?

Daniel Balint-Kurti: As I said before, the UK Government should suspend at least part of the PROMINES aid, because tens of millions of dollars are going towards governance and transparency. The Government of Congo at the moment is not clearly indicating that it is on board with the basic programme. They should then insist on full disclosure of information. That is: why were these companies based in the British Virgin Islands and perhaps other tax havens handed over these resources? Who are the ultimate owners, the people we call the beneficial owners of these companies? I am not saying this is happening in these deals; it may or may not be happening, but the danger is that the shareholders of those companies include people who are corruptly benefiting from the deals. They hide behind the tax havens.

This is something that is a key demand of Global Witness: we should think in wider terms. Tax havens, over which the UK has a lot of influence, including through its membership of the Financial Action Task Force, are a means through which companies can not only deprive very poor nations of huge amounts of revenues, but they also allow people to hide behind screen companies. They do the deals; we have no idea who the shareholders of those companies are. Every jurisdiction in the world should open up the books of the companies that are registered in those countries, and they should say who the ultimate owners of every company registered in their jurisdiction are, otherwise we are essentially allowing financial crime to take place. Otherwise, countries that allow companies to register with anonymous shareholders and anonymous directors are making it much more likely that corruption will be taking place.

Q58 Chris White: I absolutely support what you are saying. In your view, as Global Witness, how achievable do you think this goal is?

Daniel Balint-Kurti: It is very achievable. There are discussions that will be happening over the coming weeks, at the Financial Action Task Force, and they will be considering, among other things, Recommendation 33, which deals with the disclosure of ownership of companies. They are going to be looking at their guidelines. When the UK is engaged in those discussions, they can say that every jurisdiction in the world needs to be open about who owns companies based in their jurisdictions. It is something that the UK has a huge amount of influence over.

Look at what has happened in Congo with the Governance Matrix. It is amazing that the Congolese Government has started publishing contracts. That is a very good step and the Congolese Government should be commended for that. It shows that things that people may imagine just cannot happen-the Government will never do that-can happen. We need to ask; we need to put pressure. A lot depends on the stance that the UK Government and other countries in Europe take.

Q59 Pauline Latham: Clearly it is really criminal that the Congolese Government have got these fantastic resources and they are not benefiting the real people who live there. On every single measure you can come up with, DRC is right down at the bottom and they just need the help. They need that money investing in the country, and it could take off so much pressure from people and help them so much that this just really has to be exposed. The whole business environment in DRC is not good. What three things could DFID actually do to make it better for business to operate and make it more transparent and easier to see what is going on? I am talking about business generally, not just mining.

Daniel Balint-Kurti: My suggestion would be to create a proper environment in which development can take place and in which donor aid would have a much greater effect. One thing I would say is the UK delivers huge amounts of aid to the developing world and we have the ambition to provide more donor aid. Aid to the DRC is going to go up, in a few years, to £258 million a year. Within the space of five years, the UK Government and DFID are going to be providing nearly £1 billion to Congo. In this circumstance, my first recommendation would be that, if the UK authorities see that gross corruption is taking place or even, because often with corruption you just do not know-that is the thing about it-that there are danger signs like the ones I have described, we should never call for humanitarian aid to be disbanded, but aid for governance and so on should at least be disbanded in part, until those concerns are addressed. There should be no truck with corrupt governments. Let us not wait until the President is no longer in power, as happened with Gaddafi, and then, afterwards, we see all the money they have stored away in offshore bank accounts.

My second recommendation goes back to what I have already been telling you about. I will not repeat all of that, but it is crucial that we tackle the issue of offshore tax havens, otherwise known as secrecy jurisdictions, because it is not just about tax; it is about secrecy.

Thirdly, a lot of these people who are involved in corrupt deals or deals that look very suspicious come to the UK for shopping, to do business and so on. When we know of people who are involved in corruption, we can bar them from coming to the UK and we can launch investigations into any interest they have in the UK. I think you should do what you can to make sure there is not impunity from corruption and that people are punished for stealing huge amounts of money.

Q60 Pauline Latham: Do you think that would stop it? If they did not come to London, they would go to Paris or New York. They would still be doing it. Just by saying, "You cannot come to Britain," it does not mean they will stop doing what they are doing.

Daniel Balint-Kurti: It would put pressure on them. A lot of people do come to the UK to conduct business, so it would definitely put pressure on them. Global Witness is an organisation that works around the world, and we will be making those same demands of several other countries. You can push for those things. The UK Government can push for those things at the European level. There is no one panacea that will solve everything, but the UK Government has to do its bit to fight against corruption. Those are actions that will have an effect, and then the UK will be doing its bit.

Q61 Chris White: Are your colleagues having the same discussions in Paris?

Daniel Balint-Kurti: These are the recommendations that we are making across the world. Our recommendations, for example regarding the Financial Action Task Force, are made internationally and Global Witness is very engaged with all the people on the Financial Action Task Force. These are not UKspecific recommendations.

Q62 Pauline Latham: But if they cannot go to anywhere in Europe or the States, they will go to China, because China is unlikely to sign up to this as well.

Daniel Balint-Kurti: As Mike was saying earlier, we do think about that and try to put pressure where it counts regarding China. We are increasingly in dialogue with China as well. Global Witness has been looking into this $6 billion Congo/China resources-for infrastructure deal, so we are making recommendations on transparency to the Chinese authorities as well. One could make the same arguments about many moral issues, including selling arms to a brutal dictatorship, where you just say, "If we don’t do it, someone else will, so what the hell?" The thing is that every Government should play its role and do the right thing, and then put pressure, yes, in other areas. The fact that they can then go to other people and do dodgy deals with other people is no excuse for us saying, "Do what you want over here then."

Mike Davis: If I could just add to that very briefly, and it is just a remark that goes beyond Congo, what we see in the work that we do, which focuses very heavily on despotic leaderships in various countries as well as armed groups too, is that, yes, it is quite true that China’s influence is increasing all the time. If you are an upandcoming or even a quite well established kleptocrat somewhere in the world, you will have China very much on your radar. It remains the case, and I think it will remain the case for quite some years to come, that if you are in that kleptocrat’s shoes, when you want money, you are going to look to China as well as to the West. When you want political respectability to buttress your position, China cannot give you that; you have to keep looking to Europe and North America. I do not think that is going to change anytime soon.

Q63 Chair : And a villa on a lake you can visit from time to time.

Mike Davis: That is obviously very nice too.

Q64 Mr McCann: In response to Pauline’s question about what three things DFID could do, the first answer you gave was that you would continue humanitarian aid but you would cut back aid for governance. One of the schemes that we saw when we were in the DRC was voter registration. We know that these governance issues are not sexy; they do not provide and help children to access medicine, but we know that they are imperative in order to build in a generational cycle that will see the country improve. You effectively propose that, if they do not behave properly and there is corruption, we should cut programmes like that because that is aid for governance. I just wonder, although I understand this is an extremely complex issue, whether or not that is just a simplistic approach that cannot be put in place in practice, because it would damage the whole infrastructure of what we are trying to achieve.

Daniel Balint-Kurti: Let me be clear: I am not saying all governance aid should be suspended or cut off. What I am saying is that, at the moment, we have secret deals relating to at least $2.6 billion of mining assets and some of our aid, at least some of the governance and transparency aid through PROMINES, should be suspended. Generally that should be the approach of DFID. When there are very serious corruption issues-I am not talking about a penny here or a penny there, but very big corruption issues-some of our governance aid should be suspended. DFID should be commended for the support it is giving to issues like the elections. Congo does need aid to help it with its elections. Congo benefits greatly and the world benefits greatly from there being democratic elections in Congo. No, I am not saying we should cut off all governance aid and cut off aid for voter registration but, when you are giving money for governance-huge amounts of money for governance in the mining sector-and, at the same time, you are seeing such secretive deals being carried out, yes, there does need to be a reassessment of that particular tranche of aid.

Q65 Pauline Latham: You talk about $2.6 billion. Do you think that is the tip of the iceberg? That is what you know about; do you think there is much more than that?

Daniel Balint-Kurti: The $2.6 billion, which is, I have to stress, a backoftheenvelope calculation here, is a figure relating to the recent secret sales, the news of which came out in August. I am not including in that what happened between First Quantum and ENRC, and also the several billion dollars’ worth of deals that the UN Group of Experts had similar concerns about back in 2002. What is concerning about this is there is a pattern; it is not just a oneoff. It would be bad enough if it was a oneoff but, when you see similar things with slightly different variations happening again and again, you have to stop and think, "Obviously something is going wrong."

Q66 Pauline Latham: Obviously DFID puts a huge amount of money in and is going to continue to put more in. Do you think they should try, by reducing the amount of money they are giving to various things over there, working with other donors to say they need to be doing this as well? Do you think they have got enough influence with other largeish donors, not as large as the UK but other ones? Do you think that they could influence that?

Daniel Balint-Kurti: Yes. They should be very much discussing this with other donors. DFID does a pretty good job of co-ordinating with donors. PROMINES is a joint DFID/World Bank programme, so, ideally, these decisions should be made jointly with other donors. I would very much encourage that.

Q67 Pauline Latham: Do you see it making a real difference to their behaviour? It is such a big place; do you not think it will just continue no matter what anybody else outside does?

Daniel Balint-Kurti: I think that it can make a difference. We have seen what has happened with the Economic Governance Matrix. We have got the Congolese Government to start publishing contracts; that is great. I cannot stand here and affirm that, if we cut off a tranche of aid, suddenly the Congolese Government’s behaviour is going to become really good. The thing is, at least the UK will not be spending tens of millions of dollars-we are talking about $42 million with PROMINES-of taxpayers’ hardearned money on schemes that are greatly threatened by the behaviour of people in the presidency or people working in the state mining companies. We are not looking at the state mining companies or people in the executive. We are dealing with a very specific area of the mining ministry. Let us not spend large amounts of moneys if they do not actually bear fruit. Hopefully, by putting pressure in the right direction, yes, we can have more positive steps towards transparency and a proper responsible way of doing business.

Q68 Chair : Earlier this year, First Quantum spoke at a reception on the Terrace of the House of Commons. Apart from making the case that they felt their assets had been illegally seized and they had not got any satisfaction, the point they were making was that they were a British company; their assets were seized and eventually sold to another Britishregistered company, apparently with connections in Kazakhstan. The London Stock Exchange took no action. The World Bank appear, having initially been very mad about it, to have effectively given the Government of the DRC a second chance. How do you think the Government of the DRC would react to any kind of reduction of aid? Is it not the reality that what some of these people can get in secret deals over minerals is far more valuable than any UK aid? Isn’t the attitude likely to be to shrug?

Daniel Balint-Kurti: I think that the UK Government and other major donors do have influence, because President Kabila cares about his reputation. He cares about his country’s reputation, which affects his own reputation. At the moment, there is a ranking of how easy it is to do business in a list of countries, and the DRC is very, very near the bottom. Kabila has said he wants to get the DRC much further up to the top. The DRC is not going to get further up that list if it is seen to be doing business in a suspicious manner, in a manner that raises concerns. If DFID and the World Bank speak out and say, "We are very, very worried by these deals," it does affect his reputation and the Congolese Government and the President can react. As I have said, that has been demonstrated by what has happened with the Economic Governance Matrix. So yes, I think the Congolese Government can be influenced. I am not saying that is guaranteed, but it can be influenced.

Q69 Chair : On the issue of transparency, should not the London Stock Exchange be doing something about this?

Daniel Balint-Kurti: Yes. As I said, it is a great concern to us that FTSE 100 companies are linked to these deals in one way or another. What happens is a mine is transferred to a company based in an offshore tax haven, like the British Virgin Islands, and then, in the case of ENRC, the company steps in and buys that asset from the company based in the British Virgin Islands. That may happen again, because we have had recent transfers of stakes in mines to companies based in offshore tax havens. So yes, there is a link to the companies on the London Stock Exchange and, yes, the London Stock Exchange should be inquiring about what is happening. We should have transparency so that, when a UK investor puts money in a company, it knows what business that company is doing. It is a basic thing. With ENRC, maybe it is complicated, because I think only 20% of ENRC is listed on the London Stock Exchange. Nevertheless, it is listed on the London Stock Exchange; we should have transparency.

Q70 Chair : The point I am making is to talk about due diligence; the due diligence should be practised not just by the companies trading in these commodities, but by the various agencies that transact the securities attached to them.

Daniel Balint-Kurti: Absolutely. The London Stock Exchange should know the owners of every company that is listed there and all of their subsidiaries. Global Witness published a report about Kazakhmys, the Kazakh mining company, in which we refer to various companies that were linked through ownership to Kazakhmys. The financial authorities in the UK had no idea who owned these companies. When you read it, it is just incredible. We do not know where the money from our FTSE 100 companies is actually going.

Chair : Thank you, both, very much. It was a very interesting insight, and you have offered positives as well as negatives. It is not all bad, but clearly it is still a very messy situation and your evidence is extremely helpful to us and will enable us to question our own Secretary of State very thoroughly. Thank you very much indeed for coming in.

Examination of Witnesses

Witnesses: David Leonard, Professorial Fellow in Governance, Institute of Development Studies, and Joanna Wheeler, Research Fellow, Participation, Power and Social Change Team, Institute of Development Studies, gave evidence.

Q71 Chair: Thank you very much for also coming in to give evidence. The Committee has been extremely interested by the previous session of evidence. We know that we are dealing with difficult countries, but it is important to know what you are dealing with and to consider what actions you can take to improve the situation. Thank you for coming in to give us your views on this topic. Please introduce yourselves for the record.

Joanna Wheeler: My name is Joanna Wheeler, and I am a research fellow in the Participation, Power and Social Change Team at the Institute of Development Studies. I have been doing a lot of work for the past 15 years on questions related to citizenship, accountability and participation, particularly in violent contexts.

David Leonard: I am David Leonard, a professorial fellow at the Institute of Development Studies. I have been working in and on Africa since 1963, and I have done a fair amount of fieldwork within the last year in South Kivu in the DRC. It is a pleasure to be here.

Q72 Chair: Thank you very much. DFID, particularly under the new Government, is very focused on measuring results, outcomes, value for money and so on, and being able to say that our money is delivering on water sanitation, education, maternal health, or what have you. Is that kind of approach really the right way to judge the impact of our aid development assistance to a country like the DRC?

Joanna Wheeler: That is quite a controversial question. There has been a lot of debate within development circles about the relative merits of a resultsbased approach. On the one hand, it is important to demonstrate that the aid that is being given is being used effectively, but there are some real difficulties with doing this in conflict contexts. I am not saying that the Millennium Development Goals as a set of indicators do not matter: it definitely matters if more children are getting access to school, if more people are getting access to safe drinking water, if those goals are being met. The question is whether or not, in trying to meet those goals, we are also addressing the underlying issues about political equality and justice in those societies. Those issues are sometimes obscured by a focus on the Millennium Development Goals. For example, the question is not necessarily whether you should build a school or a well. The question is, in building a school or in building a well, what opportunities are being given to the citizens in that place to have a stake in how that is being done, or is the building of the school and that well just reinforcing the existing arrangements and potentially worsening the conflict?

David Leonard: To focus more narrowly on the issue of conflict, obviously we are interested ultimately in improving the well-being of poor people in the world. Obviously people who die in an extended conflict have not had their well-being improved. We estimate that about 6 million people have died in the Congo wars so far. The problem is not with the goals that have been mentioned, but we will only achieve those goals if we are able to bring peace over most of the country. If we bring peace over most of the country, we will achieve them rather easily.

Q73 Chair: That perhaps raises the question whether there are indicators that enable you to measure how effectively you are bringing peace as opposed to delivering outcomes.

David Leonard: There are a couple of things that fit within the Millennium Development Goals that are more sensitive to this: mortality rates, child and infant malnutrition rates and school enrolment, in particular school completion rates, both for boys and for girls. All of these things are very highly sensitive to whether or not there is conflict going on in the country. They are indirect measures, but at least they are sensitive to whether or not those things are happening. Joanna, you have also thought a lot about this issue.

Joanna Wheeler: One of the problems with the Millennium Development Goals is they do not necessarily tell us very much about whether the countries in which we are working are becoming more or less democratic, whether or not citizens are more able to hold the Governments to account, or how transparently those Governments are behaving. This was coming up quite clearly in the last evidence session from the previous witnesses. I think we need to look at other indicators, such as empowerment, accountability, the degree of political legitimacy, governance institutions, the degree of local ownership over programmes that are being implemented, and the strength of the civil society in those contexts.

I would also argue that there is sometimes a tendency to see these sorts of indicators as only being relevant in a postrecovery phase. Actually we should be thinking about them right from the beginning, even as part of the humanitarian work; we should not only ask those questions later.

Q74 Chair: The Committee, as you know, when it visited the region, took surface transport to get around. It was not a huge area, but we wanted to be a little more in contact physically with the geography as well as with the political dimension. You drive through Rwanda and into the DRC, and the contrast is immediate. Admittedly we were in Goma, which is still pretty much in the middle of a conflict. Bukavu was somewhat more settled. Since the appalling genocide, Rwanda appears to be making good progress in practical terms-it is still poor, but it is delivering-whereas the DRC is still very fragmented. Given the relationship that DFID has as a major donor in both Kigali and Kinshasa, the question you are left with is what should DFID do that will make a difference and, indeed, should they have a more physical presence in eastern Congo?

David Leonard: I think it is absolutely vital that DFID has a very much increased presence in the eastern Congo.

Q75 Chair: It does not have any presence at the moment. It shares one civil servant in Goma with the FCO.

David Leonard: That is a big improvement. The problem here is that we are dealing with a conflict that has both very deep local roots and complex regional roots. It seems to me that one cannot deal with what is happening in the eastern Congo without dealing with Rwanda, and vice-versa; you cannot think about Rwanda without thinking about the DRC as well. For example, we do not know how much of the wealth that we see evident in Rwanda today is coming from mines in the eastern Congo. There is a complex set of interrelationships here, and that is why the location of the FCO-somebody in Goma-is extremely important, because one needs to have a co-ordinated response over the DRC, over Rwanda, over Burundi, and over Uganda, most especially in thinking about how to move forward in this region.

Certainly part of the problems that we are dealing is that some in the region are being more successful at pursuing their often legitimate interests than others are, and that we have a situation that needs very careful balancing. The presence of DFID in the region needs to address local conflicts. We are very clear about the fact that the larger regional conflict is being fed by a number of quite local conflicts and that those local conflicts are not being addressed. That may dry up the tinder that helps to feed the larger conflict, and that involves managing a set of national and international NGOs operative in the region that can do the kind of mediation, negotiation, peacebuilding and so on between the groups within the eastern DRC, which is not happening at the present. MONUSCO has not done an adequate job in that particular regard. Part of a larger co-ordinating exercise is then also what one’s response is in Burundi, in Rwanda, and Uganda. This is both a diplomatic and a developmental challenge.

Q76 Jeremy Lefroy: You mentioned the importance of looking at the situation in Rwanda, in particular. From your experience in South Kivu, would you say the same about Burundi, and does that have much of an influence on what is going on in the DRC at the moment?

David Leonard: You are already aware that the security situation in Burundi has deteriorated over the last year and a half, and some of that seems to be spilling over. One of the groups, the FNL, seems to perhaps have some operatives in the eastern Congo at the moment, south of South Kivu. There is some spill-over there. It is likely that Rwanda is taking the major lead here; it is very difficult to know. We know that the army of the DRC, the FARDC, has become essentially a Rwandaphone force in the eastern Congo. Now, where do those Rwandaphones come from-those who speak Rwandese? Are they Burundian? Are they Rwandan? Are they from the eastern Congo? Are they from all of those places? Probably, but they are perceived by the other groups in the region as an army of occupation.

It makes it a very, very volatile situation, because basically what is nominally a domestic army is seen as an army of occupation by most of the population of the eastern Congo. That is why one has to deal with the legitimate problems, the legitimate conflicts, that involve Rwandaphone speakers, both in North and South Kivu, and deal with those conflicts, and bring them to some sort of manageable conclusion while, at the same time, trying to deal with the great involvement, probably particularly of Rwandans, in the mines throughout all of eastern Congo. Making all of this work together is a complex task.

Q77 Mr McCann: Can I go back to the governance issues? We know in terms of the MDGs that it is much more difficult to measure your success in governance issues, as opposed to how many children have got access to fresh water, schools, or whatever. Do you believe DFID should increase its work with civil society organisations in governance, and, if so, what objectives do you set and how do you measure those outcomes?

Joanna Wheeler: It is very difficult to measure governancerelated outcomes, and there is a bit of a concern that sometimes the more important things that happen in development are the least easy to measure. If there is a really heavy focus on measuring, there is a risk that we end up doing what is measurable, rather than what is actually most important to do. It is not impossible, and there have been innovations recently in different ways of measuring things that are not as concrete as the number of schools or levels of infant mortality.

There has been some very interesting work on how to measure empowerment, which looks at asking the people who are involved how they themselves understand empowerment and how they would rate their level of empowerment along a set of criteria. There are some ways it can be approached, but we need to use more caution in demanding the measurement of those outcomes. In these contexts, even the act of trying to measure them can be counterproductive.

In answer to your question about working with civil society organisations: yes, quite strongly, there needs to be more work with civil society organisations, there needs to be more focus on civil society strengthening in these contexts. A really important issue within that is: which civil society organisations, and how should you go about it? Obviously some civil society organisations are involved in the conflict. They have a stake in the conflict, and by working with civil society you could potentially be contributing to the conflict.

I wanted to refer to some research that we did over a 10year period, which looked at the outcomes of citizen participation in a range of countries. In those countries classified as tier three, which are considered to be the least democratic and the most fragile, the most successful forms of citizen participation were in very local level associations. I am talking about traditional villagelevel, very local level grassroots associations. They were not necessarily in the formal political process you might expect, and these results were stronger in these fragile countries than they were even in middleincome countries.

The implications of this research are that this local level is a very important area for development intervention to be focusing on and, at the moment, it is relatively absent from DFID’s approach to conflict and fragile affected countries. That is not to say there are not risks involved in working at that level, because there certainly are risks. It is not just because associations are local that they are going to be non-violent and more responsive to and accountable to their citizens.

I would say that in combination with working more locally, there needs to be a careful analysis of the context. This comes back to David’s point about the need for staff in DFID who really have grounded local knowledge. This is also another reason why working with partners who are international NGOs or national NGOs that have this local knowledge is so important, because that is a way to mitigate the risks that DFID is potentially exposing itself to by working at this local level.

Q78 Mr McCann: On that specific point, can DFID do that with all its staff based in Kinshasa or does it need an office in the east of Congo with its staff based there as well?

David Leonard: DFID absolutely has to have someone based in eastern Congo. Perhaps that could be a joint appointment with FCO. I know that FCO has now located someone in eastern Congo: the question is what that person’s brief is and whether they, in fact, have the time to do more than what FCO requires of it. If they are fully occupied already, then a DFID presence is essential as well. This is a vast country. You cannot get from Kinshasa to eastern Congo except on UN flights. You probably went in through Rwanda when you were there.

Q79 Chair: It is only a threehour drive from Kigali to eastern Congo, but it is a major flight operation.

David Leonard: Yes. I have been over those same roads. The UN can fly you directly into Goma or Bukavu, but depending on the UN, these are long flights, and you are not getting the local knowledge. I have learned over the years that the lessons I learn in spite of the questions I ask, in spite of what I thought I knew already, rather than because of it, are often the most profound lessons I learn. It is the things you pick up by osmosis that give you the feeling for what is in fact happening, and whether or not your relationships with a particular NGO, and your trust in it, are well founded, or whether you need to move slightly differently. When you are talking about mediating intense and quite violent local conflicts, obviously whom it is that you work with in trying to get those conflicts taken care of is extraordinarily important.

Ideally MONUSCO would be doing this, but we have two big problems with MONUSCO: one is that it is an Anglophone operation in a Francophone country. Virtually all of the soldiers are Anglophone, speak no French whatsoever: they come from Pakistan, India, and so on. In the UN itself, its discussions within UN headquarters are in English, and most senior staff frequently do not speak good French. Furthermore, the UN has decreed that, as this is a dangerous zone, all the senior officers and all troops are on sixmonth rotations. Nobody has any chance to get a detailed understanding of what is going on and they do not follow up.

You get what was a hopeful UN initiative on dealing with the Banyamulenge-Babembe conflict in the south of South Kivu. They had a big meeting, they reached some important first agreements, and then the person left because her sixmonth contract had come to an end, and there was no followup. That is a disaster. DFID plays a very major role in Congo. To use an analogy, you punch well above your weight. You both have the money that DFID is putting in, which is quite substantial, but, in addition, as I saw very clearly when I was doing an evaluation of DFID’s work on the last elections, when DFID, France and Belgium agreed on something they could dictate what it was that the EU did. The poor EU officer would say, "No, we should not spend more money on x or y." France, Britain and Belgium would then cable Brussels that it should be spent, and the money would be spent.

Britain influences the expenditure of moneys that are very substantially greater than what you spend yourselves. Particularly in the eastern Congo, where the French are still persona non grata, so far the French have had to rely on Britain to take the lead. Maybe that is going to change for Rwanda now that President Kagame is visiting Paris as we speak. DFID has a very major role here. Britain is not a trivial actor, it is not a small bit actor; it is a major actor, and how it does its job matters hugely.

Q80 Chair: One comfort is our man in Goma does speak fluent French.

David Leonard: This is not a criticism of the quality of people that DFID has in Kinshasa. When I was doing work there a couple of years ago and met with people in DFID, I was extremely impressed with the quality of people they had. With Oliver Blake in particular, who had served there for about six years and was rewarded with a posting to South Sudan for his success in Congo, I felt, to use an old imperial analogy, that I was looking at a junior Lord Milner at work: somebody out there in the field who was really able to use the strength of Britain and use the relationships with the EU in a way that was carrying very substantial weight. The FCO and DFID have quality people, and have the ability to put people there who can deal with the local languages and so on. We just need to get them into the field so they can make up for the deficits that are particularly evident in the albeit necessary, but still in some ways flawed, MONUSCO operations.

Joanna Wheeler: Can I come back to make a point about that? The implications of what David is saying is that, if you do not have staff outside of the capital city, what you end up with is support for suitcase NGOs; they have a suitcase, and they set up office in the capital city, because that is where the donors are, that is what they know, and that is what they do. They do not necessarily have very much connection back to the communities in other parts of the country.

Q81 Chair: From the practical experience we had-it was International Rescue-they were based in eastern Congo. So the point there is, is it not reasonable for DFID to say, "We are actually working through an organisation on the ground, and given the staffing constraints we cannot afford to have a significant office in Bukavu as well as in Kinshasa, but we do have contracts and deals"? Does that not cover the ground a bit?

Joanna Wheeler: Yes, that helps, but it would help even more if the staff who were in Kinshasa spent more time on trips outside of Kinshasa, for example. There have been some interesting programmes that the World Bank and others have been experimenting with, called Reality Checks and Immersions, in which they send their staff to spend time with a family in a village for four or five days.

Mr McCann: That is what we did.

Chris White: It was one day.

Chair: A day and a night.

Joanna Wheeler: I read about that in the transcript. You would understand what could be gained from that kind of experience. A lot of staff-this is not a criticism of the staff themselves, because they face a lot of constraints-are not necessarily incentivised to do that. The repercussions are that you tend to have a very small group of donordarling NGOs who get all the funding, and then when something goes in a completely different direction, because they are not connected to those communities and they do not really know what is going on back out in other regions of the country, everyone is very surprised. This is exactly what happened in the Arab Spring.

David Leonard: My sense from conversations with DFID field personnel-I do not speak for or have knowledge of what DFID headquarters would say-is they would very much like to have someone present in the east. I think they feel the lack of which I have spoken. Bukavu is a viable place to post somebody; Goma is less pleasant-having a volcano going down the middle of the town does not give you the aesthetic pleasure of Bukavu-but it is a viable place and staff could be found who would be happy to work there. DFID itself feels that lack; at least the field staff feel that lack.

I did not set out to, nor do I wish to, express an opinion about the various international NGOs that are there, but I think we need follow-through and very often effective follow-through requires connection with diplomatic efforts that are going on with other countries in the region. That is something that an NGO, even a very high-powered international NGO, does for us with great difficulty.

Q82 Pauline Latham: You talked about levels of sexual violence, and clearly in conflict areas it is used as a tool of war. It does not just happen there; it happens in other parts of the country just because of the way that women are in the view of society, and there is a lot of gender-based violence. How do you think DFID could take account of that in its programmes over there?

Joanna Wheeler: This is a really important issue for DFID to consider. I would make two concrete suggestions. The first is to recognise that genderbased violence and violence against women is not completely separate from other forms of instrumental and political violence: these things are all related. Experiences of one kind of violence in one setting can affect people in other settings. If women are facing extreme levels of violence in the home, that affects how and whether or not they can be engaged politically, let’s say, and their prospects of acting as political leaders.

We need to look at genderbased violence not as something that happens in isolation but as something that happens in relation to the general conflict, and the dynamics that are fuelling the general conflict. In terms of what DFID needs to do to work on this issue, I would say that they need to work not only with women but also with men. There needs to be a much stronger focus on bringing men in to the work to try to prevent this kind of violence. There have been some quite successful security-sector-based reforms in other countries that have looked at ways of dealing specifically with genderbased violence that I think DFID could draw on.

David Leonard: If I may, please, I just want to add that I think this is something DFID knows how to do. I have done fieldwork also in Sierra Leone. The change in the climate around gender issues in Sierra Leone is quite dramatically different; the international community made a very substantial difference. I have encountered in Hargeisa a detective inspector from Manchester, I think, training the Somaliland police on how to deal with gender issues. This is something that DFID knows how to do and is something to which I believe that it gives priority.

Q83 Pauline Latham: You talked about empowering women, and women getting involved in politics. We are not very good at getting women in here particularly, and a lot of African countries can give us a lesson in how to get more women involved, but not in DRC, because the number of their women elected in the last election went down from 12% to 8%. How do you think donors can help these underrepresented groups in DRC to get into positions of power where they can actually influence policy and what is going on in DRC? Do you see any specific development dividends that you would expect to see as a result of more women being involved and empowered in politics?

Joanna Wheeler: Yes. It depends on which women. There has been quite a bit of research recently at IDS on the role of quotas in bringing women into politics, and, as I am sure you probably know, some countries have been much more successful than others. Rwanda tops the table in terms of percentage of women elected into parliament. The research shows that quotas, if they are adequately enforced and supported with the right kinds of legislation, can and do lead to greater numbers of women in political office.

The question is: what constituencies do those women represent, and does having more women in political office lead to changes in gender relations in the society? That is what we are really interested in; it is not actually the number of women per se in parliament. Therefore, the question is: how do women become legitimate political leaders in those settings, and how do they then get into an elected position in which they can put that leadership to use?

A lot of what happens in different contexts with the quotas is that women are elected, but then they are completely sidelined in the parliamentary or the legislative process. They are not able to really play a substantial role in the decisions that get made. They may be forced to represent, or may actually be actively representing, the perspective of elite groups, as opposed to a broader base. The question is: how can we address the underlying issues around women’s empowerment and, at the same time, push the representation of women formally, which has an important role.

There was some interesting research recently done that looked at the case of Liberia and Sierra Leone, and women who had been elected in those contexts. What it showed was that, once women were elected into parliament, there was a huge need for support for those women in those roles. In other words, they were often being elected with no education. They were illiterate. They had problems even getting to and from meetings, because they did not have the financial resources. They were being threatened by various interests. The getting the women into the office is really only the tip of the iceberg. It has to go much further than that to look at what those women are able to do when they are in office, and also who they are actually representing, and how you can address those much wider social dynamics about the limits on women’s empowerment.

Q84 Chris White: What should DFID do differently now to help improve security for civilians in the DRC?

David Leonard: In some ways that is really an extension of comments that I made already. Let me just go over a couple of bullet points. The key thing is addressing local conflicts, and we should bring those to fruition. This means also supplementing and backing up work that is not being done fully by MONUSCO at the moment. It involves paying attention to the way in which Congo conflicts are relating to Rwanda, Uganda and Burundi, and being able to have a co-ordinated response, on the part of the Government of the UK, to the African Great Lakes region. I think one needs to think about that in a co-ordinated way.

At the community level, I would say that the whole approach to state reconstruction in Congo has been very much a topdown one-very much one of: let us rebuild the institutions from Kinshasa out. This neglects the structure of governance that we have had historically within Congo and, in fact, for that matter most other countries in Sub-Saharan Africa, where you have got a basic unit of governance at the community level, very often, in fact most often, some sort of remnant of a traditional government structure, which then relates to a very thin presence of the central state on the ground.

By focusing only on rebuilding the army, or rebuilding the national police, you miss the rebuilding of the structures of governance and strengthening of the structures of governance that are at the community level. In the case of Congo it was the chiefs and the Baami (the kings) but also then the socalled police coutumière-in other words the traditional police who work to the chiefs rather than to the national police force. This is where the real policing takes place, but these people have been completely neglected in the post-conflict period.

The other big issue around the security sector in eastern Congo is to work on basically a repositioning of the army. When the various militias were folded into the Congolese army about three years ago, other ethnic groups were willing to be posted outside of eastern Congo. Rwandaphones were unwilling to be posted outside the province, so that in fact the Congolese army in eastern Congo is almost exclusively a Rwandaphone force; it is seen as an army of occupation. That is a problem.

Finally, there is the issue more broadly of security-sector reform. This is a serious challenge, and whether one can do much about it at the present is unclear to me. If you read the statues, we have just completed doing a study of security sector reform in Bas-Congo-in other words, facing the Atlantic rather than the Great Lakes. We have found that basically nothing has happened at all. If you read the statutes that govern the national police force, it is extremely clear, and, if it were not clear in the law, it is extraordinary clear in practice that the function of the national police force of Congo is to protect the state, it is not to protect the citizens. That is explicit in the legal codes, and it is very thin on the ground.

Trying to approach the security of citizens through the national police force of Congo is approaching it in a way that is likely to be highly resisted and is not likely to be effective in terms of things at the bottom. The long term, of course, and this relates to the testimony that you were having earlier, is the situation that one has at the present, in which basically no security sector personnel, either police or army, are actually being paid. Everybody is living off their posting, and no national tax revenues are being used to pay even subsistence allowances for people operating at the community level, and that sets up a dynamic in which they can be extremely predatory toward their communities.

If you look at the history of armies before the French Revolution, and even during the French Revolution, that armies should be quartered on communities is not historically a new thing. If that practice is regularised, and regulated so that it does not become extreme, that is a possible, viable way of dealing with these problems. In some communities in the eastern Congo they have negotiated relationships with security sector personnel, where basically the community says, "If you would please agree not to rape and kill our women, we will arrange for a certain amount of money, food and housing to be made available for you each month."

In eastern Congo, a well-disciplined security sector personnel are referred to as those who only take what they need. Undisciplined forces are those who predate on their community beyond their own immediate needs. This is the nature of what one has to work with.

Q85 Mr McCann: Is that subsistence corruption?

David Leonard: Yes, it is corruption, but, as I said, well into the French Revolution, well into the 19th Century, it was common for armies to be quartered in an area, and to live off what they were able to take off the land. That was Napoleon’s problem in Spain, which is that there was great resistance to the quartering of French troops in Spain.

I want to put it in a historical perspective, so we do not get completely hung up in a country like Congo with the way in which the UK would do it if it were engaged in a campaign in Europe today. There are ways of dealing with this that are somewhere in between, but the way that it is at the present in Congo is extraordinarily unsatisfactory, and that is a problem that one needs to work carefully toward.

Britain was extraordinary successful with security sector reform in Sierra Leone, really outstanding. Probably the best instance of security sector reform that I know of anywhere in the world, certainly in Sub-Saharan Africa, was what Britain was able to do in Sierra Leone. Whether this is the right moment for Britain to be involved in that or not is something that I would leave to DFID personnel in the field. I would hate to make that judgment from London.

Q86 Chris White: Thank you for that response; it was very full and wide. Carrying on with the issue of security and donors, how should donors take account of the risk associated with armed conflict and how this will affect them in terms of their results?

David Leonard: We get into this complex issue here about duty of care and about what we do allow and do not allow personnel in order to work in the field. I was able to do fieldwork in eastern Congo with a Congolese colleague without any real difficulty. I was frequently the only white person in a particular town at night, but there were a couple of parts of South Kivu that I could not get into, but one can work there more broadly than one might think just if one looks at the global statistics. That is not to say there are not areas which are difficult and which one needs to avoid. Certainly working from Goma, working from Bukavu, from the major areas, I think that one can put personnel there now securely, and that they can co-ordinate the actions of others.

Q87 Chris White: Presumably it depends a lot on who the donor is?

David Leonard: Yes, that is probably true. Again, it is a matter of being in a place where you can get immediate feedback. DFID itself is not going to have a DFID staff member doing negotiations between the Banyamulenge and the Babembe in South Kivu. That is something that an NGO is going to do, but you do need to have a staff member who is sure they have picked the NGOs to work on it that are actually going to be able to mediate neutrally and successfully between these groups, and to hear feedback through the word on the street about what is going on with these particular groups. That is perfectly feasible. There are places where there is banditry, but there is not civil war in eastern Congo at the present time.

Q88 Chris White: Can you extend that to Burundi? What is your view about the situation in Burundi?

David Leonard: Well, in Burundi, the Government is labelling as banditry what some of us might fear is an incipient civil war.

Q89 Chris White: Is that an accurate description in your view?

David Leonard: We are getting what here in the UK we would call terrorist attacks on security locations. In other words, it is not targeted on places where you can make money. The violence that we see still in eastern Congo is by and large either intercommunal or is targeted on making money. We do not get fixed-force fighting at all going on in eastern Congo any longer. There is no military threat to anybody coming out of eastern Congo any longer. That does not mean that there is not insecurity, it does not mean that there is not banditry and so on, that needs to be dealt with, but we are not dealing with battles of forces any longer in eastern Congo.

In Burundi, we are not at that point. I do not think we are going to go to that point because, geographically, the opposition in Burundi is fairly isolated. They are isolated in the western part of the country. They are more likely to do raids on security locations, probably particularly in Bujumbura.

Q90 Chris White: Is it confined to securityrelated targets or is it more random?

David Leonard: I have no access to sources that you do not have access to on this particular matter. I was warned that you might like to pursue the case of Burundi, and I want to make clear I have never done fieldwork in Burundi. I have spent 20 years following the literature on the conflicts in Burundi, so I am aware of the background. When I was told that I might be asked questions about this subject today, I read the International Crisis Group reports and I read Africa Confidential on these issues, which you can do as well, and I do not have access to the intelligence reports on these subjects, which probably you do have, or you could have access to if you wanted to. I am not even clear about what I know and what I do not know, but from those sources at the moment it seems to be lowlevel violence, stretching beyond security targets but still something in need of mediation.

Let me just add that Burundi has not been a major target for DFID involvement, but what is happening there is extraordinarily important in terms of the larger regional dynamics. As you all know, Burundi and Rwanda are sort of the evil twins. Who is evil and who is not at any one moment is not clear, but what is happening in one is not happening in the other, and vice-versa, consistently over time. Burundi never reached the level of genocide that Rwanda did, but it did have genocidal types of conflict over a 25-year period-a very extended period. In the case of Burundi, it was Tutsi dominance rather than Hutu dominance, and that dominance was finally negotiated to an end in the Arusha Accords of 2003, and we have been seeing this fragile movement into a situation in which the rights of Tutsi minorities, and of the Twa minority are protected by the constitution. Therefore, the integrity of the constitution and its enforcement, and the enforcement of minority rights, becomes an extraordinarily important issue, which you will immediately see also has longterm implications for Rwanda.

If Burundi fails that carries a particular message for Rwanda that is very unhappy for the future. In that sense, I see Burundi, Rwanda, eastern Congo, as sort of a threelegged stool, and you cannot choose which of the legs you want to work on. If you are going to get security in that region, you are going to have to address, in some sense, all three legs. That does not mean that DFID needs to be active in Burundi; it does mean that the UK really has to have a very active watching brief in Burundi. You need to have people on the ground who are able to relate to what is happening in Rwanda and eastern Congo, and also probably Uganda, and to play that information actively into what is happening in the other places, and be prepared to take diplomatic action, if not developmental action, in order to deal with the situation.

My argument here is not that DFID open a programme office in Bujumbura, but that the UK FCO needs to have a brief that goes beyond just looking after the UK’s interests in Burundi-that it needs to be considering what is happening in Burundi in light of the whole regional dynamic of conflict.

Q91 Jeremy Lefroy: I wanted to come back to the question of MONUSCO. You have already been fairly clear about the problems of being an Anglophone operation in a Francophone country and the six-month rotations. What is your assessment of the effectiveness of MONUSCO’s peacekeeping, and in particular how do you think they are equipped to deal with the elections in November?

David Leonard: Let me address the elections issue first: that is something that the UN tends not to get perfectly. They screwed up in Kenya, but then everybody screwed up in Kenya, including the UK. They did not see the signals in Kenya of what was quite clearly coming. The UN tends to have a specialised branch in dealing with election operations, and their support, and they do it rather well. For my mind, it is a thankless set of tasks trying to provide technical support for an election. As all of you know, from being involved in elections, to have somebody whose whole life is spent doing nothing but dealing with elections is a rather frantic and unsettling life. I cannot imagine why anybody would choose it. If you imagine that your whole life was spent in campaign, it would be an unpleasant life.

The UN deals with that reasonably well. They are able to protect elections, they are able to protect polling stations, to monitor them, and so on. That part I am less worried about; it is not that I am not worried about the elections, but I am not worried about MONUSCO making a good effort in that. Radio Okapi, the UN radio station in Congo, is an extraordinarily important resource, and it is really the only reliable source of information that most people have.

On the other hand, in terms of dealing with the kind of conflict that we are now observing in eastern Congo, which are small force operations, rapid in and out, not major force battles, and so on, MONUSCO is really set up to prevent and contain major force operations. It is rather tin-eared in picking up the sorts of very localised raiding types of conflicts that are now dominating the terrain. That is inevitable, because it is an Anglophone force. It is not that I think that MONUSCO is not still needed, because it would be possible for major force combat to come back again in eastern Congo if we do not still keep it under control, but as I argued earlier, I think we have to move beyond the MONUSCO operations, in terms of protecting specific communities we have to move beyond that to a deeper look at security sector reform. It is not realistic to expect a set of 100 Pakistanis in a remote village to be able to hear that there is a raid planned on a village that is three miles away, and to get there in time to deal with it and stop it. That has not happened. We have had some rather nasty instances.

Q92 Pauline Latham: The other issue in that part of their brief, and we questioned them on this, is they are not allowed to arrest anybody. They know who does the gender-based violence, the raping of the women, when they come in these raids-they know who those people are-but they are not, as part of their brief, allowed to arrest them and hold those people until the police can get there. They might, very dutifully, ring the police, but by the time the police arrive the perpetrators have disappeared into the bush and the police cannot find them, and they will not tell the police who they are. They have no way of stopping this. It seems to me that when they renegotiated the brief they should have included this-that they could hold these perpetrators of sexual violence in a place until such time as they could hand them to the police. That was never raised and never put into the new brief, which I think it should have been. It might have helped the situation if those people were then tried and put into prison, because they had been raping women and passing on AIDS and all sorts of other diseases. That might have helped, and reduced some of the sexual violence that is happening all the time. Those are on the localised skirmishes.

David Leonard: I would support you in that.

Joanna Wheeler: Can I add something to that? That is a good point, but the question that it raises is, who is actually the source of insecurity in these places? Some of the time it is the police, or is representatives of the state-it is members of the armed forces that are seen as the greatest threats. In terms of how to improve security, we cannot necessarily base it on the assumption that the Government is the one who is going to be providing the security. The Government actually might be making the security situation worse, so that is why we have been arguing, both of us, for the need to really understand this from the local perspective: what is it that those women living in those villages see as a source of insecurity, and then how can it be addressed?

Q93 Jeremy Lefroy: My understanding is that the MONUSCO mandate is up pretty soon after the elections. A general perception we had was the MONUSCO mandate was not rigorous enough. Britain and other countries-Britain is spending £100 million or $100 million certainly a year-are spending a lot of money on a mandate that actually, as you say, is good at perhaps preventing large-scale conflict, but is not advancing the situation from there at all. I wondered whether you felt that, building on what Pauline has asked, if the mandate was extended, which clearly is not certain at all-sorry, I am being passed a note here. It has been extended to 12 months in July, so at least it is 12 months next year, but whether DFID or the British Government in this case, because it is a FCO responsibility, should be looking for a stronger mandate at present, or if it is renewed again next July?

David Leonard: I would be reluctant to see the MONUSCO mandate operation completely shut down after the elections. That would be premature. As to whether or not there is a case for scaling back the operations, redefining them, the extension of the mandate that was just described here in terms of being able to take certain types of action could be highly desirable. That could well lead to a scaling of the operations, but that is a detailed decision I do not have specific information about, and I would want to defer on that.

Q94 Jeremy Lefroy: It seems to me, Chairman, we need to look at this, since this mandate is coming up again in July. It is something we do need to look at, and what recommendations we might make.

Chair: Hugh Bayley, who is not here today, has made us actually look at the cost of this operation and the pressure is on. It has utterly changed, and we are just carrying on as if nothing has changed.

David Leonard: I am quite confident the mandate will be renewed through the elections. The elections are scheduled for November. There is a high change that will be postponed, so they may stretch out into the New Year, but I cannot imagine any situation in which MONUSCO would be removed before then. The question is what happens afterward, which also means a lot depends on what happens in the election, which will also give us some further insight as to what the nature of the challenges are. Probably one of the most serious challengers-if not the most serious-to President Kabila in this coming election is from the East: Kamerhe, who was the Speaker of the House, is certainly one of the most significant challengers. I expect Kabila to be re-elected as President; I do not think the Presidency will allow that not to happen, but there could be a significant change in Parliament in the national assembly, and that could also lead to some shift in the dynamics of Congolese politics. It is premature to judge that.

Q95 Jeremy Lefroy: Can I return to MONUSCO? I think this is extremely important for the UK’s national interest, and for DFID, because we are major contributors there. You have quite rightly indicated that the force format of MONUSCO is not particularly well suited to dealing with the problems that exist now. There are 22,000-that is the full deployment; I do not think there are as many as that there at the moment-but they are a very large, several brigade-strong force in eastern Congo. You have got the LRA still active in the North; you have got various minor-not minor for the people involved-small-scale incidents of banditry and more in North and South Kivu. What seemed to me, and generally to the team, was that the force format was the wrong force format to counter what is going on at the moment. If there was a renewal of the mandate, do you think DFID should be exercising a lot of pressure, given our major contribution financially to it, significantly to change that format to make it more mobile, with more helicopters and perhaps more use of special forces included in that mandate, rather than the fairly static infantry companies that we saw?

David Leonard: Let me make several suggestions here. One is that I do not immediately know why it is that we remain committed to an Anglophone force presence in eastern Congo. The presence of France would be objectionable to Rwanda, but both Mali and Senegal have a very good record in peacekeeping, or we could move to a Swahiliphone operation: Kenya has had a very good record in international peacekeeping operations, and Tanzania could be easily involved. In other words, there are some alternatives here that would give an ear to what is happening that is not as tin as we have got right now.

The second thing that you are suggesting is moving to a more mobile type of force. One might really think of this as a gendarmerie type of response. I am not sure helicopters are necessarily-

Q96 Jeremy Lefroy: That is what we were told.

David Leonard: But that is also from the point of view of an army. What we have got there at the moment are armies who are used to moving as armies, and armies move rapidly with helicopters. Gendarmeries move more flexibly. Let me be clear: I am a pacifist; I refused armed service when I was drafted when I was young, so I am not an expert on military matters. You have to take anything I say on this matter with several grains of salt. I do think there is a possibility of a different model here. Whether or not that would be appropriate or not, what the requirements of that are, is certainly something to be explored, but you would need other expertise on this particular matter.

The final issue that you raised had to do with the Lord’s Resistance Army. I personally think that this is really not an appropriate MONUSCO task. We are dealing with a very small residual force of about 200 people that is highly mobile and highly skilled at hiding itself, and the Ugandan armed forces are highly committed to tracking them down and getting rid of them. I do not see that a UN operation would be at all effective or add anything to that security situation that is not already being done. By no means am I suggesting the LRA is not an important problem-it is an important problem-but I do not see MONUSCO, or any other UN operation that I have ever seen having the skills that would be necessary to root out the last bits of this particular problem. We have to see this as a Congolese problem and a Ugandan problem.

Q97 Chair: Thank you very much indeed. Exploring the dynamics of conflict is something that is multi-layered, and could probably take you in an awful lot of different directions, but we certainly have covered a lot of ground, and we are very grateful to you for both the written evidence you have given and coming in to share the evidence with us. I do not think this is the area where you come to definitive conclusions but hopefully some sensible recommendations as to how you use your aid and your influence in ways that actually meet the objective of providing peace and some development opportunities, more than anything else, in a very tormented region. Jeremy?

Jeremy Lefroy: I just wanted to add the point that none of the questions we are asking are in any way playing down the role that MONUSCO plays. We are saying that they have done a good job in getting it to where it is now. It is the question of where it goes from here. They have suffered quite considerably themselves and shown a lot of bravery.

Q98 Chair: I think that point is given; it is the biggest deployment of UN forces in the world, but what we are saying is it looks to us as if the circumstances have changed sufficiently to require it to be approached in a different way. Pauline obviously was making very specific points, but it actually is on the ground and not able to do some of the things that the local community might expect. I take your point: it is very important that you ask the local community how that would work before you just mandate it from New York or whatever. Thank you very much. I think you have given us a lot of food for thought.

Joanna Wheeler: Thank you very much.

David Leonard: Thank you very much for your kind and informed attention.

Prepared 22nd November 2011