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New Congolese oil and mining codes must include strong measures on transparency, tenders and community rights

11th October 2012

As the Democratic Republic of Congo begins the process of revising its mining and oil codes, Global Witness has published its recommendations on how the codes could best ensure transparent and accountable management of these key sectors.

Congo, a country two-thirds the size of western Europe, is hugely wealthy in minerals including copper, cobalt and diamonds. Vast areas of Congo are also gradually being opened to oil exploration, with the potential to transform the country’s economy but also posing serious environmental and corruption risks.

For now, the focus in Congo is on the mining code. Civil society groups, the mining industry and the government have, separately, been elaborating their recommendations before the first version of a new code is submitted to parliament.

Global Witness’s recommendations include a call for the codes to stipulate that all of the state’s mining and oil assets must be sold by public tender. Such a move would help prevent corruption and ensure the state gets the highest possible price for its natural resources. Global Witness is also calling for measures in the codes to ensure full transparency over the real, or “beneficial”, owners of mining and oil companies in Congo, and for all the state’s natural resource revenues to be declared, including details on signature bonuses.

Another key recommendation is that the mining code requires companies to conduct thorough checks on their mineral supply chains, in line with international standards, to make sure that their trading activity is not funding armed groups. The Congolese government has already passed a decree to this effect but inclusion of this measure in the mining code would reinforce it and add weight to American legislation aimed at stemming the conflict minerals trade.

“With these ground rules in place Congo could help avoid many of the problems plaguing the oil and mining sectors,” said Daniel Balint-Kurti, Campaign Leader, DRC, at Global Witness. Global Witness has investigated issues related to corruption and conflict in Congo for several years, recently publishing a series of briefings about controversial oil and mining deals involving large London-listed firms.

Congo’s moves to review its mining and oil codes come at a crucial point in the global campaign for transparency in the world’s extractive industries. In July 2010, the US legislature passed the “Dodd-Frank Act”, which includes measures obliging mining and oil companies to publish what they pay to governments around the world. The law also includes a section obliging companies to check their supply chains to guard against the trade in conflict minerals. These parts of the law became active on 22 August 2012, when the Securities and Exchange Commission published the regulations governing their implementation. The European Union is considering passing similar legislation.

Important transparency measures have also been included in mining and oil codes passed in other African nations over the past two years. A September 2011 mining code in Guinea and a June 2012 oil code in South Sudan both contain provisions obliging companies to declare their beneficial owners. These laws also state that companies must conform with the Extractive Industries Transparency Initiative by declaring all revenues they pay to government – something that Global Witness is also calling for in respect of Congo.

As well as the recommendations outlined above, Global Witness is calling for Congo’s hydrocarbons and mining codes to set clear rules safeguarding local communities and the environment. All mining and oil operations should be prohibited in protected sites, such as national parks or World Heritage Sites. Companies should also disclose their Environmental and Social Impact Assessments for all their areas of operation. The codes should say how mining and oil companies must compensate people who are displaced by their operations and they should state clearly that companies must take full responsibility for pollution caused by their activities.

“With these tools in hand, local communities will be more apt to raise concerns and make decisions during consultations with oil and mining companies and the local government,” said Balint-Kurti.

Notes to editors:

  1. The Congolese government set the revision of the mining and hydrocarbons codes as priorities in its programme d’action du government for the period from 2012 to 2016, when the current parliamentary term ends.
  2. Global Witness has published a range of documents this year about the controversial and secret sales of mining and oil assets by the Congolese government to offshore companies. These documents can be found at www.globalwitness.org/secretsales.
  3. The latest report by a national coalition of Congolese civil society groups with their recommendations for revisions to the mining code can be found at www.globalwitness.org/fr/library/la-société-civile-congolaise-apporte-sa-contribution-au-débat-sur-la-revision-du-code-minier
  4. Global Witness “Citizens’ Checklist” aimed at preventing corruption in the award of oil, gas and mining licences can be found at http://www.globalwitness.org/sites/default/files/A%20citizens%20checklist%20EN%20Jan%202012.pdf