Economics: Africa: Congo mining industry and govt officials ripoff labour & society

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An election is coming in the Democratic Republic of Cong with its capital in Kinshasa and its economic engine in the province of Katanga where mining is the most developed source of employment and corporate profits. There's another country named Congo as well, with its capital in Brazzaville. You'll often see it referred to as "Congo (Brazzaville)", sometimes you'll see DR Congo referred to simply as "Congo (Kinshasa)," since it's been anything but a democratic republic. That's why the upcoming elections on Jul30,2k6 are so important. The folowing press statement was received by refWrite on Jul 7,2k6, and as the elections approach it seems more timely than ever. It focusses on two commodities produced in Katanga for the world market, copper and cobalt. The statement gives a picture of primary economic relations within this industrialized sector of a large African country's economy that needs tax revenues desperately to build the national infrastructure that is of vital importance in Central Africa's quest for democracy, stablity, civil order, and prosperity inclusive of the general population.

The copper and cobalt mining industry in Katanga, in southeastern Democratic Republic of Congo (DRC), continues to be plagued by fraud, abuse and political interference, Global Witness said in a new report released today. “In the run-up to elections, politicians and companies have been scrambling to get their hands on ever-greater shares of the lucrative mineral trade, with little or no regard for the welfare of the Congolese population,” said Patrick Alley, Director of Global Witness. “The plunder of the DRC’s natural resources continues to undermine the country’s opportunities for peace, stability and development.”

Africa > Democratic Republic of Congo:

The new report by Global Witness, entitled “Digging in Corruption: Fraud, abuse and exploitation in Katanga’s copper and cobalt mines”, is based on field investigations in Katanga and neighbouring Zambia in 2005 and 2006. It documents corruption, extortion and illicit exports in the informal (artisanal) mining sector in Katanga, and the ruthless exploitation of artisanal miners by the government and trading companies.

Global Witness’s research confirmed entrenched patterns of illicit exports of minerals across the DRC-Zambia border, with government and security officials either turning a blind eye to false or inaccurate export certificates, or actively colluding with trading companies to circumvent control procedures. Large quantities of minerals are leaving the country undeclared, representing a huge loss for the Congolese economy – but a vast gain for a small number of powerful actors. The big influx of foreign companies pouring into Katanga since 2004 has presented yet more opportunities for the political elite to enrich itself. The report describes how government and security officials are taking a cut at every stage of the process, systematically extorting payments from artisanal miners – who typically earn no more than US $ 2 or 3 a day – as well as from middlemen known as négociants, transporters and other actors in the mining sector.

Global Witness also documented the harsh labour conditions in the artisanal mines, the complete absence of safety precautions and the failure of both the government and companies to take responsibility for the health and safety of tens of thousands of artisanal miners. “Scores of miners have died in 2005 alone, mostly when trapped under collapsing mineshafts,” said Patrick Alley. “No one is investigating these deaths or taking action to prevent further accidents. The government seems indifferent to their plight and trading companies are happy to continue buying products mined in these conditions in the full knowledge that miners are risking their lives every day.”

The preceding paragraph is especially poignant to me, since my maternal grandfather started working in the bituminous coal mines of Pennsylvania when he was 14 years old, working far too many hours a day. He'd come home black as soot, collapse, his mother (my greatgrandmother) would strip him, bathe, and put him in the comfort of his bed. He became a member of the United Mine Workers. He contracted black lung disease, which brawt him an untimely death. As a youngster, I visited him whlie he was on his death bed, our death watch. After the whole family had come on those final days to express their love, and feel their anguish, Frank Balchunas died. A family man, a stalwart member of First Congregational Church, Mount Carmel, Pennsylvania, and a stalwart member of the United Mine Workers. Papap, RIP. ...Back to Katanga:

Corruption is also rife in the industrial mining sector in Katanga. The report highlights interference by political actors based in the capital Kinshasa, particularly in the negotiation of mining contracts. Several large contracts have been rushed through in 2005, signed by an unelected transitional government which has itself been responsible for large-scale looting of natural resources. The terms of many of these contracts provide for a disproportionately large share of the profits for foreign or multinational companies, leaving a negligible amount for the state mining company Gécamines.

Resentment is growing among the population of Katanga as they see vast profits flowing out of the country with no change in their own economic situation. An artisanal miner in Katanga told Global Witness: “We know that the Congo is rich. But despite this, we don’t even have enough to eat. Only one category of people profits.”

Historic elections scheduled for 30 July 2006 could provide a unique opportunity for fundamental reform. Global Witness’s report, “Digging in corruption: Fraud, abuse and exploitation in Katanga’s copper and cobalt mines,” contains recommendations for priority actions by the new government, by companies and by international donors. These measures could have long-lasting effects for the development of Katanga province – and for the country as a whole – if they are embarked upon without delay. They include:
- measures to eradicate corruption
- strengthening of export controls
- improvements in labour conditions in the artisanal mines
- greater transparency and fairness in mining contracts

You can download the report in a PDF file, in either French (the country's general language) or English. Hat Tip to AfricaFiles

-- Politicarp

With just a little further digging, the following info on Canadian mining corporations in Katanga emerged.

Corporate Knights [website for Canadian Magazine for Responsible Business] examines the operations of 6 Canadian mining companies in the Congo with respect to the OECD Guidelines for Multinational Enterprises. [OECD = Organization for Economic Cooperation and Development

Parenthesis re OECD: The snippet for the top entry on my search-results page says of the OECD "Brings together countries sharing the principles of the market economy, pluralist democracy and respect..." I couldn't find the conclusion to this statement on the entry's page itself, when clicked up. So, I'm still asking: "Respect" what?. Here's the OECD basic functional material, minus what should be a full principial statement for OECD that I had wanted to find:

The OECD groups 30 member countries sharing a commitment to democratic government and the market economy. With active relationships with some 70 other countries, NGOs and civil society, it has a global reach. Best known for its publications and its statistics, its work covers economic and social issues from macroeconomics, to trade, education, development and science and innovation.

The OECD plays a prominent role in fostering good governance in the public service and in corporate activity. It helps governments to ensure the responsiveness of key economic areas with sectoral monitoring. By deciphering emerging issues and identifying policies that work, it helps policy-makers adopt strategic orientations. It is well known for its individual country surveys and reviews.

The OECD produces internationally agreed instruments, decisions and recommendations to promote rules of the game in areas where multilateral agreement is necessary for individual countries to make progress in a globalised economy. Sharing the benefits of growth is also crucial as shown in activities such as emerging economies, sustainable development, territorial economy and aid.

Dialogue, consensus, peer review and pressure are at the very heart of OECD. Its governing body, the Council, is made up of representatives of member countries. It provides guidance on the work of OECD committees and decides on the annual budget. It is headed by Angel Gurría, who took up the post of Secretary-General on 1 June 2006. ...

Back to copper, cobalt, mining, Katanga Province, DR Congo, and holding multinational mining corporations to best business practices ...:

The OECD Guidelines for Multinational Enterprises are a widely recognized corporate responsibility yardstick meant to apply to multinational companies operating around the world.

Over the course of February and March, Corporate Knights examined six Toronto Stock Exchange-listed mining companies with substantial interests in the Democratic Republic of the Congo to determine how closely their operations suggested adherence to the OECD Guidelines. None of the below is meant to be taken as a conclusion of adherence or non-adherence. The intent is to provide elements of the companies' operations/practices that merit further investigation.

* Anvil Mining Limited
* Banro Corporation
* First Quantum Minerals Limited
* Katanga Mining Limited
* Moto Goldmines Ltd.
* Tenke Mining Corp.

The investigation took Corporate Knights’ Toby Heaps to all corners of the country, involving 11 planes, 5 helicopters, and many jeeps. Heaps interviewed over 130 people ranging from the President of the country to the presidents of the mining operations to children working as informal miners on company property and local chiefs living in huts in the vicinity of mining operations. Local and international NGOs, media, professors, members of the clergy, lawyers, economists, union leaders, diplomats, UN, IMF, IFC and World Bank officials also provided invaluable insight for this article.

In the course of this investigation, Corporate Knights compiled a report evaluating the operations of these six companies in respect to the General Policies of the OECD Guidelines for Multinational Enterprises, assessing each company with a green/yellow/red score in nine different areas on the basis of their conformance with OECD guidelines.

CK's site also provides the OECD Guidelines for Mining Corporations and industrial profiles for each of the Canadian companies doing business there. There are companies from other countries in DR Congo, including at least one company from Communist China that's very interested in that copper and cobalt. In Canada and the USA, if you are a Christian and you invest in any of these companies, you should examine the line of evidence that extends from this basic info.

-- Owlb

Further Resources:
Google research results for terms: companies Katanga mines
Google Search results for term: OECD
Google Search results for terms: election DR Congo > news