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Congo’s flawed oil law should be put on hold to allow time for debate

6th September 2013

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The Congolese parliament should suspend the passage of a controversial oil bill and insert basic measures to prevent corruption and drilling in one of the world’s most important national parks Global Witness said today.

The oil bill, as currently framed, would bring in an opaque system for allocating oil rights and fail to require the publication of oil contracts or the ultimate owners of oil licences. This would increase risks of corruption in the sector. The bill also leaves open the possibility of drilling in Congo’s national parks and World Heritage Sites. [1]

Global Witness is urging the authorities of the Democratic Republic of Congo to open up the oil bill to public consultation, as it has done with the revision of the country’s mining law. The Congolese government is discussing the mining law with civil society and the private sector, while there has been no such public consultation on the oil bill. This is despite the contribution of oil revenues to the national budget, which is expected to increase dramatically in the near future after a recent deal with Angola to exploit offshore fields.

“Oil revenues contribute over $325 million to the Congolese state a year, and this is set to rise sharply,” [2] said Nathaniel Dyer, Global Witness Campaigner. “This new oil bill is an opportunity for Congo and its people to benefit from its fledgling oil industry but in its current state it’s not fit for purpose. It’s vital that safeguards are built in now to prevent corruption in the sector.”

Global Witness is calling for:

  • an open tender process for the allocation of oil rights;
  • the publication of the names of the ultimate owners or beneficiaries of companies with oil rights; 
  • the publication of oil contracts;
  • the deletion of a controversial article in the oil bill that would pave the way for drilling in Congo’s national parks and World Heritage Sites.

British oil company Soco International has gained the rights to explore for oil in an area in northeast Congo, which includes part of the Virunga National Park, a World Heritage Site. The UK government issued a statement in September 2012 opposing oil exploration in Virunga and resolutions critical of exploration have been passed in the Belgian, German and European parliaments. [3] In August, the World Wide Fund for Nature (WWF) launched a campaign to protect Virunga from oil exploration. [4]

“This bill threatens Africa’s oldest national park, and one of the last mountain gorilla habitats in the world,” continued Dyer. “The oil bill should not be pushed through parliament without any consultation. It is essential that the bill has robust environmental and anti-corruption safeguards.”

In recent years Global Witness and other organisations have raised serious concerns about the management of Congo’s natural resources. The Africa Progress Panel, chaired by former UN Secretary General Kofi Annan, estimates that the Congolese state lost out on at least $1.36bn between 2010 and 2012 as mining assets were sold at undervalued prices to offshore companies. This is almost double Congo’s annual spending on health and education combined.

Oil deals are already being done in opaque circumstances in Congo, in more than one occasion involving the same players as the secret deals in the mining sector. All parties concerned insist that there was no wrongdoing.

/Ends

Contact:

Nathaniel Dyer, +44 (0)20 7492 5855 and +44 (0)77 11 006 799, ndyer@globalwitness.org

Colin Robertson, +44(0)20 7492 5862 and +44 (0)7803 605 362, crobertson@globalwitness.org

Notes to editors:

The oil bill is set to be voted on by the lower house of Parliament, the National Assembly, in its next session beginning 15 September. Due to insufficient parliamentary time, it was not discussed in plenary by the National Assembly at its last session which ended on 15 June. Once approved by the National Assembly, there would be a joint-commission of both houses of Parliament to agree a common version and then the bill would then require the approval of the President to enter into law.

  1. The Congo oil law is known by its full title, “Proposition de Loi Portant Régime General des Hydrocarbures”. For fuller recommendations and analysis of Congo’s oil law see:  “Global Witness’s recommendations for the Democratic Republic of Congo’s new hydrocarbons code”, October 2012 (http://www.globalwitness.org/sites/default/files/library/DRC-GW%20hydrocarbons%20brief%20Oct%201012%20ENG.pdf) and “Oil law before Congo parliament fails to safeguard against corruption or environmental damage – Global Witness”, May 2013 (https://www.globalwitness.org/library/oil-law-congo-parliament-fails-safeguard-against-corruption-or-environmental-damage-%E2%80%93-global).
  2. According to the most recent EITI (Extractive Industries Transparency Initiative) figures, oil companies in the DRC reported payments of more than $325m to the Congolese state in 2010 or 43% of all payments from the extractive industries that year. This is set to increase sharply in the next few years following a deal struck between the DRC and Angola in late 2012 to exploit offshore oil fields in shared waters in the Atlantic. Crispin Atama, Congolese Minister for Hydrocarbons, has reportedly said he wants Congolese oil production to increase from 25,000 to 225,000 barrels per day by 2014.
  3. The UK government reaffirmed this position in August 2013, with a foreign office spokesman saying: “The UK continues to oppose oil exploration in the Virunga National Park, a World Heritage site”, http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/10268273/SOCO-in-dispute-with-Foreign-Office-over-Britains-stance-on-controversial-DRC-drilling.html. The Belgian Parliament’s resolution was passed on 29 November 2012 and available here: http://www.lachambre.be/FLWB/pdf/53/2350/53K2350011.pdf. The European Parliament’s resolution was passed on 13 November 2012 and available here: http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+TA+P7-TA-2012-0511+0+DOC+XML+V0//EN. The German Parliament’s resolution was passed on 4 June 2013 and is available here: http://savevirunga.files.wordpress.com/2012/04/german-parliament-motion-eng.pdf. See “Virunga: The real price of energy” in Energy Post on 2 August 2013 for more information: http://www.energypost.eu/index.php/virunga-the-real-price-of-energy/. All links functioning at the time of publication.
  4. For more on WWF’s Virunga Campaign see: http://www.wwf.org.uk/how_you_can_help/virunga/