Wednesday, 27 July 2016

GLOBAL WITNESS COMMENT ON NEW PANAMA PAPERS LEAK ON SECRET DEALS IN AFRICA

GLOBAL WITNESS COMMENT ON NEW PANAMA PAPERS LEAK ON SECRET DEALS IN AFRICA

28/07/2016

On 12 May 2016, the Anti-Corruption Summit London 2016 
came just weeks after the Panama Papers thrust offshore
 secrecy and corruption into the international spotlight,
 and represents an historic opportunity to tackle crime
, poverty and instability at the source. 

“The ICIJ’s latest Panama Papers leak shows that in 44 out of 54 African countries, anonymously owned companies were used to assist oil, gas and mining deals and exports. This gives a window on to the murky underworld of secret deals and sham companies that is robbing people in the world’s poorest continent of their futures. Rather than being used to build hospitals and schools, these huge sums are siphoned off through offshore companies, helped by lawyers and other professionals, and then spent on luxury goods and property in the US and UK. If we are serious about ending corruption and the damage it does, we must end anonymously owned companies,’ said Rachel Owens, Senior Campaigner at Global Witness

Global Witness

Tuesday, 26 July 2016

World Bank suspends funding for DR Congo's Inga 3 power project

World Bank suspends funding for DR Congo's Inga 3 power project

26/07/2016


The $14 billlion Inga 3 power project in the Democratic Republic of Congo could be in jeopardy after the World Bank suspended its funding.
The lender said on Monday that it withdrew its funding following disagreements over the “strategic direction” of the project.
“This follows the Government of DRC’s decision to take the project in a different strategic direction to that agreed between the World Bank and the government in 2014,” the lender said in a statement.
In 2014, World Bank had approved a $ 73.1 million grant for the first phase of the mega hydro power project and went ahead to disburse 6 percent of the funding.
At stake, is a project that has the capacity to generate a record 44,000 MW of electricity at a cost of nearly $100 billion upon completion and could power half of Africa ,while some say it will be the largest dam in the world.
Inga 3 which sits on Congo River has had false starts due to red tape and disagreements between the Congolese government and its partners on the project.
However, Congo’s government remains confident that the project will continue adding that construction is expected to begin in June next year and last for about 5 years.
“It’s nothing serious, Inga is a private- public partnership… the process continues,” said Bruno Kapandji the head of the government agency overseeing the Inga 3 project.
Two rival consortiums one led by China Three Gorges Corporation and the other includes Spanish engineering giant Activdades de Construccion y Servicios SA, are expected to submit their final bids on Sunday.
Campaigners also argue that much of the power to be generated by the power project is set to be exported or used to support big industries like mining, rather that benefiting the Congolese population.
Congo’s government had agreed to deliver 2,500 MW of electricity to South Africa by 2021. 
Reuters


Monday, 25 July 2016

Fresh wave of Chinese firms to go after Congo’s riches — report

Fresh wave of Chinese firms to go after Congo’s riches — report


25/07/2016

In May, Freeport agreed to sell its stake in Tenke mine to 
China Molybdenum for $2.7 billion to help cut its debt.

First was Latin America, now Africa. No matter where the projects are located, if they are promising copper or gold assets, Chinese investors are coming for it.
The imminent acquisition of Freeport-McMoRan’s Tenke Fungurume mine in the Democratic Republic of Congo is just the latest sign of a growing trend, as analysts expect the Asian nation to continue its quest for a steady supply of metals, mainly copper, cobalt and gold.
According to a report released Friday by BMI Research, the DRC will remain the destination of choice for Chinese mining investors in the coming years, thanks to the country’s low production costs and the largest undeveloped high-grade (2-3% compared to global average of 0.8%) copper deposits in the world.

The analysts argue that China's slowing gold production growth as a result of depleting domestic reserves and rising production costs will also boost the presence of Asian investors in the DRC's largely untapped gold sector:

DRC's growing economy — with an average annual real GDP growth rate of 7.9% during 2011-2015, and the mining industry accounting for 10.9% of GDP in 20 15 — will increasingly absorb most foreign investment in the African region with South Africa's production costs on the rise.

Infrastructure boost
In many ways, China is repeating a known strategy for those in the mining industry. At the turn of the millennium, the country moved to secure supplies of traditional commodities, such as oil and industrial metals, sometimes through acquisitions, other times through investments and loans-for-oil deals with nations including Angola and Venezuela, which held big deposits of the raw materials.
In Africa, they are now also investing in infrastructure, but the experts at BMI say it will take years for those ventures to benefit the region’s mining sector.

As an example, they mention a $6 billion loan in place since 2009 between Exim Bank of China and the DRC, which is expected to improve Congolese infrastructure and boost the development of mines in return for control over some copper deposits.
Progress on the matter continues. Last month, the Congolese government awarded a $660 million contract to a consortium of Chinese investors to build a 240 mega watt hydroelectric project at Busanga, near the location of the Sicomines copper project, which is a joint venture between DRC-owned Gecamines S.A., China Sinohydro and the China Railway Group Ltd.

However, BMI’s report acknowledges that regulatory uncertainty in the country, mostly linked to a potential revision of its mining code and upcoming presidential elections, will remain a key barrier to the resource sector's long-term growth. They place the country in the 59th position for mining risks out of the 61 countries they list in their Mining Risk/Reward Index.
BMI also warns that the lack of substantial infrastructure and power are two other factors that will weigh on investors decisions in years to come.
Cecilia Jamasmie
Mining.com





Wednesday, 20 July 2016

Agribusiness, a step towards increased food dependency in Africa

Agribusiness, a step towards increased food dependency in Africa

20/07/2016


The village of Yalifombo, on the banks of the Congo River in the Democratic Republic of the Congo (DRC), was an essentially agricultural community. In this village it is possible to observe how the local economy, which revolved around traditional cultivation of oil palm, has collapsed from the dramatic increase in industrial plantations. Throughout the Congo Basin sub-region, whether in Mundemba (Cameroon) or Mboma (Gabon), we see agribusiness increasingly competing with local agricultural economies. The system that certain public policies promote today is destroying systems that have been beneficial to peasant communities for a long time.
African peasant farmers’ organizations and NGOs continue to assert that the future of farming is not in industrial agriculture but in peasant farming, which is feeding the world and is capable of cooling the planet through agroecology and a respect for biodiversity. (1)
For example, in the report “Unlocking the Potential of Family Farms,” the National Rural Coalition (CNCR, for its French acronym) in Senegal shows that family farms—not agribusinesses—are perfectly capable of feeding the country, and indeed currently do. Family farms provide the main source of food for the Senegalese population, meeting 70% of its needs in both rural and urban areas. (2)
However, powerful pressures continue to impose the agribusiness model.
After promises made during the 2003 African Union Summit in Malabo (Equatorial Guinea)—to allocate at least 10% of their national budgets to agricultural investment by 2008—African States are still expecting financial institutions to develop agriculture that will feed their citizens.
Headed by the World Bank with its “win-win” theories, these international financial institutions are trying to redefine African agriculture based on their own programs and a strong complicity with the world of finance, its instruments and the uncertainties that these bring.
In the Democratic Republic of Congo (DRC), a pilot country for these policies, the first of a promised 20 Agroindustrial Parks opened in 2014. Congolese peasant farmers soon denounced this presidential initiative (3), which was an initiative of NEPAD— the New Partnership for Africa’s Development (4).
The allegations concern the lack of consultation, transparency and participation by peasant farmers’ organizations. They also reveal that this program, cheered on by the World Bank, promotes agribusiness. Far from contributing to national development and poverty reduction, Agroindustrial Parks will likely cause forced displacement of communities and land-grabbing.
Thus Congolese peasants are confronting a system which, through tax relief and promotion of certain kinds of crops, is clearly designed to favor foreign investment and not themselves.
In Gabon, another playground for agribusiness, a program entitled GRAINE (5) has formed a public-private partnership between Singaporean group OLAM International and the Republic of Gabon in order to “develop agriculture.”
This program aims to create 30,000 jobs (through self-employment) and occupy 200,000 hectares of farmland. It has already begun to take over land from communities in Mboma in the state of Woleu. (6)
Meanwhile, the best cut of the GRAINE program goes to the US-based company Caterpillar, thanks to a 140 million-dollar contract for the acquisition of 475 bulldozers. Yet, what communities are requesting is simply to retain their lands so that they can grow the food they need.
SIAT is another company heavily involved in the agribusiness sector in Gabon, Ivory Coast and other African countries.
Dedicated to growing oil palm and rubber, among other activities, this company also uses artificial insemination techniques to increase the number of cattle in Gabon. Based in Brussels (Belgium), SIAT owns several concessions and occupies some 15,000 hectares in Gabon.
While SIAT claims to have strong social responsibility, there are doubts as to the credibility and veracity of the Environmental and Social Impact Assessment carried out in 2012 in the Bitam/Minvoul region. (7)
These examples from the Congo Basin show that, although foreign investment projects in agriculture and the agribusiness model are presented as “responsible investments” creating “win-win situations,” it would be more useful for African countries to invest in small-scale farming to guarantee their food sovereignty.
Despite all the facilities granted to it, peasants continue to resist agribusiness. Investments in large-scale agribusiness must be curbed for the sake of communities and peace in the region. It is time to stop promoting policies like the G8’s New Alliance for Food Security and Nutrition (NASAN), the European Union’s Economic Partnership Agreements (EPA), or the US’s Millennium Challenge Corporation (MCC), which are forcing African countries to change their policies on land and seeds.
Food sovereignty goes hand in hand with people’s freedom to produce based on their free and informed decisions; it is not subject to the demands of the world food and agriculture commodities market.
Agribusiness is promoting exactly the opposite: that we must produce rubber, teak, or eucalyptus monocultures.

DRC: Communities mobilise to free themselves from a hundred years of colonial oil palm plantations

DRC: Communities mobilise to free themselves from a hundred years of colonial oil palm plantations

20/07/2016



Oil palms are native to the forests of Central and West Africa and inseparable from the region’s peoples and their cultures. Communities in this part of the world have relied on oil palms for thousands of years—as a source of food, textiles, medicines and construction materials.
Most of the world’s oil palms, however, are cultivated far away, in Southeast Asia, and not in forested palm groves, but on massive monoculture plantations where tropical forests used to stand. These oil palm plantations are a product of Europe’s brutal colonial legacy.
When the European colonizers invaded Central and West Africa during the nineteenth century, they came to understand (in a very narrow way) the possible wealth that could be generated from oil palm cultivation. They began taking over the local people’s large oil palm groves and tearing down forests to set up plantations.
One of the pioneers of this effort was Britain’s Lord Leverhulme, who, through a campaign of terror against the local people, took over community palm groves and turned vast swathes of the Congo’s forests into slave plantations. His company’s oil palm plantations would eventually expand throughout West and Central Africa and then to Southeast Asia, and provide the foundation for the multinational corporation Unilever, one of the world’s largest food companies. Unilever sold off its global oil palm plantations about a decade ago but to this day it remains one of the world’s biggest buyers of palm oil.
The communities living next to and within Unilever’s former plantations are amongst the poorest in Africa. At a recent gathering of leaders from African communities struggling against the expansion of oil palm plantations, held in Mundemba, Cameroon, participants on a field visit were shocked by the living conditions of the people in Ndian Town—a community within one of Unilever’s former oil palm plantations in Cameroon, now run by the Cameroonian company Pamol (1). Decades of oil palm plantations had brought only poverty to the community.
The lands of Unilever’s plantations across the Congo Basin have not been returned to their inhabitants. They have instead been sold at a profit to a new batch of companies: some of them domestic, most of them foreign; some of them multinationals with plantations in other countries; some from other business sectors having no experience with plantations. The latter is the case with some of Unilever’s original oil palm plantations— in the Democratic Republic of Congo (DRC).
After 100 years in what is now the DRC, Unilever sold three of its oil palm plantations in 2008 to a company called Feronia, registered until recently in the Cayman Islands. This company, listed on the Stock Exchange in Toronto, Canada and now majority owned by European development funds, had no previous experience in agriculture. Through its sale of these DRC plantations, Unilever made around USD 14 million dollars in cash and left behind around USD 10 million dollars in liabilities to the new owners.
In October 2015, 12 leaders from communities located within the various concessions of Equateur and Oriental provinces in DRC where Feronia operates its plantations (Yahuma, Boteka, Basoko, Yaligimba, Yalifombo, Mosité, Lokutu) gathered in Kampala, Uganda, to share experiences and chart a course of common action to liberate their communities from the occupation and exploitation that they have endured for generations. The meeting was held in Kampala for security reasons.
It was also a moment for the Congolese NGO RIAO-RDC and its international partners to provide the communities with information about Feronia that they were not aware of. Prior to the meeting, Feronia and its main shareholder, the UK development finance institution CDC, had issued statements maintaining that Feronia was improving the lives of workers and the local communities and that it was in full compliance with national and international laws and standards with regards to its land concessions and labour practices. (2)
The community leaders were outraged by the claims made by the company and the CDC. After having shared their experiences, they issued a collective statement to make clear the reality in their communities. The leaders rejected the claims made by Feronia and the CDC, dismissing them as “lies”. They said that the situation for the communities had deteriorated since Feronia took over the plantations in 2008. Their homes, schools, clinics and roads were in awful condition, and contrary to what the company maintains, no new infrastructure or worker homes have been built.
The CDC claimed that the average salaries of plantation workers were increased to US$4 per day, but the leaders say that workers are frequently not paid at all and when they are it’s only at a rate of US$1.5 per day. In response to the company’s claim that workers were receiving “bonuses”, the leaders said that this must be a newly invented word, since the concept was unknown on Feronia’s plantations. The leaders challenged the CDC to come see for itself what Feronia has been doing to local people. “The money that you give to Feronia does not reach the workers and the local communities,” they stated.
What the leaders say the communities want, more than anything, is to get their lands back from the company. They have suffered long enough, and they are tired of false promises.
At the close of the meeting, the leaders established a new alliance of communities affected by Feronia, and pledged to work together to advance their demands.
In January 2016, Feronia became majority owned by the CDC and several European development banks, through their investments in the African Agricultural Fund. This Fund is a Mauritius-based private equity fund financed by bilateral and multilateral African development finance institutions. Its Technical Assistance Facility (TAF) is funded primarily by “the European Commission and managed by the International Fund for Agricultural Development (IFAD). The TAF is co-sponsored by the Italian Development Corporation, United Nations Industrial Development Organisation (UNIDO) and the Alliance for a Green Revolution in Africa (AGRA)”. In addition, development banks from Germany, Belgium and the Netherlands are also involved as investors (3).
Colonialism has come full circle, and once again this exploitation is being justified as “development”, as if the horrors of the colonial plantation system never existed. If European governments are really interested in making amends, they should focus on reparations and support the communities in their demand to bring the occupation of their territories to an end and ensure expiry of concessions in the near future is used to hand the land back to the communities.
Originally published in World Rainforest Movement - Bulletin 224
References:


Wednesday, 13 July 2016

DR Congo Violates Logging Moratorium by Granting 3 Land Concessions

DR Congo Violates Logging Moratorium by Granting 3 Land Concessions

13/07/2016


Democratic Republic of Congo government violated a moratorium on the allocation of new industrial logging concessions in place since 2002, according to Greenpeace.

The Democratic Republic of Congo has violated its own 2002 moratorium on new logging licenses by illegally making three concessions of 650,000 hectares [2,500 square miles] in total in 2015 to two local companies, Greenpeace said Tuesday.
"In a snub to international donors, the DRC [Democratic Republic of Congo] government has violated a moratorium on the allocation of new industrial logging concessions in place since 2002. On the 13th and 16th of August 2015, then Minister of Environment and Sustainable Development Bienvenu Liyota Ndjoli awarded three concessions covering a surface of almost 650,000 ha," the environmental organization said in a statement.
On January 30, Congolese Environment Minister Robert Bopolo Mbongeza declared that work to remove the 2002 ban seeking to protect Congo's tropical rainforest is underway. According to Greenpeace, the minister must have known that his predecessor had illegally granted the concessions and that is why the ban's removal was pursued.
Environmental and anti-corruption organizations urged the DRC to maintain the moratorium following the announcement, saying that lifting it could greatly exacerbate existing environmental issues, Greenpeace added.
Sputniknews

Monday, 11 July 2016

La République démocratique du Congo : de la fin de règne au règne sans fin ?

La République démocratique du Congo : de la fin de règne au règne sans fin ?


11/07/2016


Selon la Constitution, le second mandat de Joseph Kabila doit prendre fin en novembre 2016, date prévue de la prochaine élection présidentielle, et le président en exercice ne peut se représenter pour un nouveau mandat. 

Si les plans et ambitions du président Joseph Kabila ne sont pas clairs, il semble évident qu’il n’entend pas céder le pouvoir dans les délais impartis par la Constitution. Depuis 2014, la vie politique du pays est suspendue à cette incertitude électorale. Nous tenterons de dresser un panorama de la situation politique actuelle en République démocratique du Congo et d’identifier différents scénarios d’évolution possibles.

La République démocratique du Congo : de la fin de règne au règne sans fin ?: TÉLÉCHARGER

ifri

Saturday, 9 July 2016

Support for Facilitation of National Dialogue in the Democratic Republic of Congo

Support for Facilitation of National Dialogue in the Democratic Republic of Congo

09/07/2016

Press Statement
John Kirby
Assistant Secretary and Department Spokesperson, Bureau of Public Affairs
Washington, DC
July 8, 2016


The United States welcomes the recent Inaugural Meeting of the Support Group for the Facilitation of the National Dialogue in the Democratic Republic of Congo (DRC). While not a member of this Group, the United States endorses the conclusions of the meeting, in which participants reaffirmed the crucial importance of holding a successful national dialogue with all Congolese stakeholders; called on stakeholders to create a conducive environment for the dialogue; offered support to the Facilitator and the dialogue process; welcomed ongoing efforts to urgently revise the voter registration list; and appealed for partner support for voter registration and to address Congo’s economic challenges.

The United States urges Congolese political leaders to seize the opportunity afforded by this international Support Group; to ensure protection of political space and democratic rights enshrined in the Constitution; and to work constructively with the Facilitator appointed by the African Union to proceed quickly to an inclusive National Dialogue to find a consensus path forward on DRC’s electoral timeline and its first democratic transfer of power.




Democratic Republic of Congo Market Research Report Now Available at Research Corridor

Democratic Republic of Congo Market Research Report Now Available at Research Corridor


09/07/2016


Research Corridor has published a new research study titled “Democratic Republic of Congo Market – Growth, Share, Opportunities, Competitive Analysis and Forecast, 2015 – 2022”. The Democratic Republic of Congo market report studies current as well as future aspects of the Democratic Republic of Congo Market based upon factors such as market dynamics, key ongoing trends and segmentation analysis. Apart from the above elements, the Democratic Republic of Congo Market research report provides a 360-degree view of the Democratic Republic of Congo industry with geographic segmentation, statistical forecast and the competitive landscape.
Geographically, the Democratic Republic of Congo Market report comprises dedicated sections centering on the regional market revenue and trends. The Democratic Republic of Congo market has been segmented on the basis of geographic regions into North America, Europe, Asia Pacific and Rest of the World (RoW). The RoW segment consists Latin America and the Middle East & Africa. The Democratic Republic of Congo market has been extensively analyzed on the basis of various regional factors such as demographics, gross domestic product (GDP), inflation rate, acceptance and others. Democratic Republic of Congo Market estimates have also been provided for the historical years 2013 & 2014 along with forecast for the period from 2015 – 2022.
The research report also provides a comprehensive understanding of Democratic Republic of Congo market positioning of the major players wherein key strategies adopted by leading players has been discussed. The Democratic Republic of Congo industry report concludes with the Company Profiles section which includes information on major developments, strategic moves and financials of the key players operating in Democratic Republic of Congo market.
Key Takeaways:
  • Market Dynamics in the Democratic Republic of Congo Market
  • Key Ongoing Regional Trends
  • Democratic Republic of Congo Market Estimates for Years 2013 – 2022
  • Democratic Republic of Congo Market Positioning of Key Players
  • Key Strategies Adopted by the Leading Players
  • Attractive Investment Proposition
  • Democratic Republic of Congo Market Inclination Insights
About Research Corridor
Research Corridor provides End to End Solution for Market Research Consulting and Custom Research Reports. Database of Over 10000 Global Market Reports Research Corridor is world leading company in syndicated market Research Reports.
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Wednesday, 6 July 2016

Waning interest in DR Congo

Waning interest in DR Congo

06/07/2016

DR Congo's Joseph Kabila is still clinging to power even though his country's constitution says he should depart. Despite unrest and repression, Western nations are reluctant to apply pressure on the 45-year-old leader.

The United States is at least trying to bring some pressure to bear on Joseph Kabila's regime. Two weeks ago, it placed Kinshasa police chief Celestin Kanyama on its sanctions black list. US citizens are now no longer permitted to do business deals with him and any assets he might have on US territory have been frozen. The US Treasury said in statement the move sent "a clear message that the United States condemned the regime's violence and repressive actions, especially those of Celestin Kanyama."
Kanyama was responsible for police operations last year in which 40 people were killed in an anti-Kabila demonstration. But the sanctions are not just intended to hit Kanyama. As this is the first time that a close associate of Kabila has been blacklisted, they also contain a message for the DR Congo president himself. He is no longer considered a potential model African leader.
"Joseph Kabila and his government have not fulfilled the expectations that were placed in them both at home and abroad," Ingo Badoreck, DRC expert and General Secretary of the German Africa Foundation told DW.
Joseph Kabila was reelected for a second term in 2011

Kabila's second term in office ends in December and that is when he should step down. However, no date has been set for elections to choose a successor. The opposition suspects Kabila is trying to prolong his stay in power by underhand means. In May, the Constitutional Court ruled that he could remain in office as caretaker president if elections cannot be held punctually. So far Kabila has not said whether he is seeking a third term in office, though many Congolese believe that this is what he intends to do.
Diplomacy, not sanctions
There is mounting tension in DR Congo but the international community appears unwilling to intervene. This is in marked contrast to 2006 when Joseph Kabila became president in the country's first free elections after decades of dictatorship. Some 2,000 European Union troops were on hand to guarantee that the poll, funded by the United Nations Development Program (UNDP), would be free and fair. Almost all Western leaders felt obliged to comment on the outcome.
In view of the seething discontent in DR Congo, many observers would like see the international community taking a renewed interest in the country. "The DR Congo has disappeared off Germany's horizon," said Dominic Johnson, expert on Africa with Germany's taz newspaper.
Perhaps not surprisingly, the German government disagrees and points out that the biggest UN mission in the world is stationed in DR Congo. "Germany supports DR Congo with approximately 260 million euros ($288 million) in development aid annually," Georg Schmidt, Africa Commissioner at the German Foreign Ministry, told DW.
Joseph Kabila (right) reportedly told Frank Walter 
Steinmeier (left) he rejects 'outside interference

Germany, like other EU countries, believes in the power of diplomacy when helping to resolve tensions in DR Congo. "We are trying to talk to both sides, we are supporting the African Union's mediators, so that dialogue can be set in motion," Schmidt said. That would appear to be the limit of European involvement. Sanctions are being discussed but experts consider it unlikely that they will be implemented.
But will diplomacy suffice? Western influence in DR Congo is dwindling. When German Foreign Minister Frank-Walter Steinmeier visited the country in 2015, Kabila is reported to have said to him that he cherishes cooperation with Germany, but he rejects outside interference. China and Russia are now Kabila's key partners because they are interested in the central African state's mineral resources.
European engagement in DR Congo is now far less intense than it was in 2006. "The global political climate has changed and I suspect that DR Congo's complex problems, despite a decade of concerted international assistance, will remain unresolved," said Badoreck, adding. "I think that one has almost arrived at the point where one says the Congolese should find a solution to their problems."
By DW





Tuesday, 5 July 2016

RIVER OF GOLD

RIVER OF GOLD

How the state lost out in an eastern Congo gold boom, while armed groups, a foreign mining company and provincial authorities pocketed millions


05/07/2016


Executive Summary
An estimated $28 billion worth of gold lies under the soil in eastern Democratic Republic of Congo (hereafter Congo).[i] But the country’s gold wealth, the majority of which is artisanally mined, has long been ill-used. Preyed upon by armed groups, bandits and corrupt elites the revenues generated by eastern Congo’s artisanal gold sector have all too often funded corruption or fuelled abuses and violent conflict rather than helping to relieve the region’s poverty.
Global Witness’ investigation into a recent gold rush along the Ulindi River in Shabunda territory in eastern Congo reveals the extent of the problems that beset the region’s artisanal gold sector. The Ulindi boom generated more than a tonne of gold per year, worth around $38 million,[ii] whose beneficiaries included armed groups and a predatory Chinese-owned company, Kun Hou Mining, rather than the local population.
Global Witness research reveals that Kun Hou Mining paid Raia Mutumboki armed groups operating along the banks of the Ulindi $4,000 and gave them two AK-47 assault rifles in order to secure access to rich gold deposits on the river bed. Kun Hou Mining ran four semi-industrial river dredging machines along the Ulindi in the boom. Members of the same armed groups also earned up to $25,000 per month by regularly taxing the workers on locally-made dredgers who were doing the dangerous job of manually sucking up gold from the river bed.[iii] Up to 150 of these manually operated dredgers worked along the river at the height of the rush. South Kivu officials charged with oversight of the province’s artisanal gold sector appeared to defend Kun Hou Mining rather than enforce Congolese law and hold the company accountable for its illegal activity.
In some cases, the same authorities worked hand-in-hand with armed men and women from Raia Mutumboki armed groups to illegally tax artisanal gold diggers, in violation of Congolese law. Mining authorities in Bukavu, the regional capital, falsified declarations of origin for the small quantities of Shabunda’s artisanal gold that were officially exported in order to obscure its origins, which are considered “high risk” by international standards.
Global Witness has seen documents that show that at least 12kg of Ulindi gold that had benefited armed groups was exported by a South Kivu gold trading house to its sister company in Dubai.[iv] But the majority of the boom’s gold – and taxes levied on it – have disappeared, almost certainly smuggled out of the country. South Kivu’s provincial accounts for 2014 and 2015 show no evidence of a gold rush. The gold boom left Shabunda town almost as it found it: a deprived enclave with no roads, running water or electricity and its people suffering grinding poverty.
Gold booms are not uncommon in Congo and Shabunda is not an isolated case: four-fifths of eastern Congo’s artisanal miners work in the gold sector.[v] Semi-industrial dredging companies, often Chinese-owned, have been accused by Congolese provincial officials and others of not paying taxes and smuggling gold out of the country in other parts of eastern Congo.[vi] Hundreds of millions of dollars of artisanally produced gold from the country’s east – which may have fuelled human rights abuses and violence – end up on global markets each year, often passing through transit countries such as Uganda, Rwanda, United Arab Emirates (UAE) and Switzerland.[vii] Ultimately the gold ends up in products like jewellery and electronic circuit boards sold around the world.
Shabunda’s gold rush could have played out very differently. Since 2010 companies all along gold supply chains have had access to international guidance developed by the Organisation for Economic Cooperation and Development (OECD) and the United Nations (UN).  This guidance helps them source and trade gold from high-risk areas like Shabunda in a responsible way. Companies operating in Congo’s gold sector have been legally required under Congolese law to implement the OECD guidance since 2012. Recent Chinese industry due diligence guidelines for responsible mineral supply chains,[viii] based on the OECD guidance, provide directions and advice for companies like Kun Hou Mining to help ensure that their operations are not linked to abuses. Guidelines introduced in the UAE in 2012 make clear that all Dubai Multi Commodities Centre members and non-members should manage their supply chains according to the OECD principles. In order for these reforms to translate into meaningful changes in conflict-affected and high risk areas like Shabunda, governments must hold companies and public officials involved in abuses to account.   
Companies either producing or internationally trading Shabunda’s gold did not implement these supply chain due diligence standards. Those companies operating in Congo acted in direct contravention of Congolese supply chain due diligence laws, which Congolese authorities failed to enforce. As a consequence, gold that benefitted armed men and a company operating illegally was left unchecked and traded internationally. Meanwhile the boom and its accompanying huge influx of gold diggers put pressure on already scarce resources in Shabunda town, pushing up food prices and leaving many local people unable to make ends meet. At the same time, mining authorities in Shabunda town ran an illegal taxation racket and, where gold was officially taxed, failed to deposit revenues with the Provincial government. This money is badly needed: in 2014 the town’s only hospital recorded 535 cases of malnutrition.[ix]
Eastern Congo’s artisanal gold production should benefit Congolese people and the state rather than armed men and predatory companies. For this to happen:
The Congolese government must hold provincial officials to account where they neglect their duties related to the artisanal gold sector or operate illegally. Companies operating illegally in Congo, such as Kun Hou Mining, should be investigated, and where evidence of wrongdoing is found, prosecuted.
Companies at all stages along global gold supply chains must implement the OECD due diligence guidance on responsible mineral supply chains. This includes publishing an annual report detailing the risks found in their supply chain and the measures taken to reduce these.
States have an obligation under international law to ensure companies respect human rights.[x] As such, they must legally require companies under their jurisdiction to undertake OECD standard supply chain due diligence, and must effectively monitor its implementation.[xi] Companies that fail to meet international supply chain due diligence standards laid out by the OECD must be held to account.
Artisanal miners operating in eastern Congo must be properly supported by the Congolese government. SAESSCAM, the Congolese state agency charged with oversight of the artisanal sector, must be urgently reformed or else disbanded.
Finally, donor governments should support diplomatic and development initiatives to promote responsible sourcing and support the Congolese government in establishing sustainable livelihoods for communities in areas where natural resources are extracted. Nascent and still localised efforts to formalise and manage artisanal gold supply chains should be supported and encouraged by governments and the private sector.[xii]
Methodology
Global Witness engages with companies, governments and other partners around the world to tackle the issue of natural resource-funded conflict. For the past 15 years we have reported on the links between the trade in minerals and armed conflict in eastern Democratic Republic of Congo, working with Congolese civil society, policy-makers and business leaders to develop practical solutions.
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[i] OSISA, 2013, “The High Cost of Congolese Gold”,http://www.osisa.org/sites/default/files/high_cost_of_congolese_gold_final.pdf, p.16. Using an international gold price of US$38.5/g the estimated 26 million ounces (737, 087kg) would be worth $28,377,849,500.
[ii] Global Witness calculations for the volumes of artisanal gold produced during the gold boom along the Ulindi River are based on documents collected and interviews during fieldwork in Shabunda town in January and March 2015 and in Bukavu in 2014 and 2015 and documents provided by South Kivu’s mining agency SAESSCAM and Mining Division, as well as estimations provided by an industry expert familiar with Kun Hou’s operations along the Ulindi River. We estimate that the four semi-industrial dredging machines owned by Kun Hou Mining produced around 460kg of alluvial gold per year and over 150 locally-made artisanal dredging machines produced between 550kg and 720kg for the same period. In total we estimate that the two types of machines produced 1,010kg to 1,180kg. To calculate the value of this gold we used a gold price of $38.5/gram, which is an average for the international gold price spanning the period of the gold boom (exact range for calculations is between $38.89 million and $45.43 million). Gold traders interviewed by Global Witness in Shabunda town were selling their gold at the international market price, a phenomenon that is not uncommon at artisanal gold sites in eastern Congo See endnote 3 on calculations for artisanal gold production and taxes by Raia Mutumboki armed groups and endnote 43 on Kun Hou Mining calculations.
[iii] Global Witness estimates that 150 locally-made artisanal dredging machines produced between 550kg and 720kg per year during the gold boom. This estimation was made on the basis of three separate sources including interviews with dredge workers on the Ulindi River and other documents from Shabunda and Bukavu. From these we identified a range of average weekly gold production for artisanal dredgers between 77g and 100g. (The first is partial data from SAESSCAM South Kivu breaking down artisanal dredge production on the Ulindi over a three week period by dredger that shows an average of 77g of gold produced per artisanal dredge per week. The second is from statistics from a gold trading house based in Shabunda town that owns dredgers operating on the Ulindi, which show an average production of 99g per dredge per week. The third data point comes from interviews with dredge workers active along the Ulindi River from which we take an estimated weekly production of around 100g.) Dredge production varies from week-to-week and depending on deposits along the river, as well as other factors including weather and mechanical breakdowns. Also, due to the clandestine way in which the Ulindi’s gold has been managed and traded only general estimates are possible. Global Witness estimates assume gold production along the Ulindi based on 150 dredgers working for 48 weeks per year thereby setting aside one month per year for breakdowns and other production stoppages. (Exact calculations are: 77g per week produced by 150 dredgers working 48 weeks a year equals 554.4kg and 100g per week produced by 150 dredgers working 48 weeks a year equals 720kg.) Several sources estimate that 50 of the 150 dredgers on the Ulindi were operating in an upstream portion of the river under control of Raia Mutumboki armed groups. Dredge workers on the Ulindi River told Global Witness in March 2015 that Raia Mutumboki groups on each side of the river taxed dredgers in areas they control 5g of gold per group twice per month – this amounts to almost $20,000 per month for the groups. Added to these payments, each dredge worker operating in areas controlled by armed groups must pay them 1000 Congolese Francs per week. Dredge workers showed Global Witness receipts (‘jetons’) for these payments. Finally, dredges regularly have to contribute ‘rations’ to armed groups of up to 80,000 Congolese Francs per month. Taken together this amounts to up to $25,000 per month earnings for the armed groups. (Exact calculations: 5g collected twice per month from 50 dredgers equals 500g per month, using a price of $38.5/g is the equivalent of $19,250. For ‘jetons’, 50 dredgers each with 10 workers paying 1000 Congolese Francs each week equals 2,000,000 Congolese Francs per month. Rations of 80,000 Congolese Francs per dredge for 50 dredgers per month equals 4,000,000 Congolese Francs. At an exchange rate of 960 Francs to 1 US dollars, this combined 6,000,000 Congolese Francs is worth $6,250. The $19,250 taxed in gold plus the $6,250 taxes on dredge workers and ‘rations’ equals $25,500 per month.) These calculations do not include other taxes by armed groups including a mooring payment of $500 per dredge. Other groups operating under the name “Raia Mutumboki” may also have imposed taxes during the same period but are not included in these calculations. See also COSOC-GL (Coalition of Civil Society Organisations in the Great Lakes Region), 2015,“Etude sur les pratiques de dragues à Shabunda: La ruée vers l’or à Shabunda“,  http://cosoc-gl.org/2015/la-ruee-vers-lor-a-shabunda/, Section 4; Tages Anzeiger, December 2015, Goldrausch im wilden Osten,http://www.tagesanzeiger.ch/wirtschaft/goldrausch-im-wilden-osten/story/20233121
[iv] Publicly available annual export reports complied by the provincial Mining Division in Bukavu show that all of Alfa Gold DRC’s legal gold exports from South Kivu in 2014 and 2015 were exported to Alfa Gold Dubai.
[v] IPIS, 2014, “Analysis of the Interactive Map of Artisanal Mining Areas in Eastern DRC: May 2014 update”, http://ipisresearch.be/publication/analysis-interactive-map-artisanal-mining-areas-eastern-drc-may-2014-update/, p.11
[vi] Global Witness has seen official documents from the provincial Ministry of Mines in (former) Orientale Province, dated February 2015, which detail illegal activities and environmental damaged by semi-industrial dredges along the River Ituri and River Aruwimi, Ituri; see also research conducted by PAX, 2015, “Exploiter (dans) le désordre Cartographie sécuritaire du secteur aurifère à Mambasa occidental“ http://www.paxchristi.net/news-media/resources-pax-christi-member-organisations ; and Southern Africa Resource Watch (SARW), 2014, “Congo’s Golden Web: The people, companies and countries that profit from the illegal trade in Congolese gold”http://www.sarwatch.org/sites/sarwatch.org/files/Publications_docs/congogold3web.pdf p.38
[vii] See for example: Stop-Pillage, 2013, TRIAL, 2013, ”TRIAL files a criminal denunciation to the Swiss Federal Prosecutor against a Swiss refinery company suspected of laundering looted gold from the Democratic Republic of the Congo”  
[viii] Global Witness, 2015, Global Witness welcomes progressive new Chinese Mineral Supply Chain Guidelines, https://www.globalwitness.org/en-gb/press-releases/global-witness-welcomes-progressive-new-chinese-mineral-supply-chain-guidelines/
[ix] Global Witness interview, Shabunda town, March 2015.
[x] For example Congo has ratified all eight of the ILO fundamental conventions, which are legally binding international treaties http://www.ilo.org/dyn/normlex/en/f?p=1000:11200:0::NO:11200:P11200_COUNTRY_ID:102981
[xii] Partnership Africa Canada (PAC), 2015, “Just Gold”http://www.pacweb.org/en/just-gold
[xiii] COSOC-GL, 2015
Global Witness undertook research in Shabunda town, the eponymous hub of South Kivu’s Shabunda territory, on two occasions in 2015 and conducted further interviews in Bukavu, South Kivu’s provincial capital, on three separate occasions in 2014 and 2015. In total we interviewed over 80 people involved in the gold boom that erupted along Shabunda’s Ulindi River in 2013. Interviewees included gold divers, dredge workers, traders and businesspeople brought to Shabunda town by the gold rush as well as local residents, authorities and civil society. We also spoke to a whistle-blower from Kun Hou Mining.
An excellent August 2015 publication by the Great Lakes civil society platform COSOC-GL (the Coalition of Civil Society Organisations in the Great Lakes Region) raised several important and unanswered questions about the Ulindi gold boom and has proved a comprehensive resource. [xiii]