If there is to be a chance at peace, comprehensive mining reforms are needed to fight poverty and violence in DRC.
Africa watchers will know that the Democratic Republic of Congo (DRC) is once again poised on the verge of violent conflagration. How the country got there and how it might pull itself back from the brink are of keen interest to those of us who work on the “resource curse.” DRC’s pathways into violence, and likely out of it, are deeply connected to its vast mineral resources. Harnessing those resources for development, rather than empowering those who would rip the country apart, is DRC’s defining development challenge – one that implicates everyone with a stake in the country’s future: donor countries, mining companies, civil society, and of course the country’s citizens and government.
DRC’s current crisis stems from President Joseph Kabila’s defiance of the country’s constitution and failure to leave office at the end of his term last year, and the foregoing of elections to choose his replacement.
In 2002, in an attempt to encourage post-war investment in the mining sector following the devastating Second Congo War – or what has been called “Africa’s First World War” – the country, with the support of the World Bank, adopted a new mining code. The code established generous terms for investors in the sector. The Kabila government rushed to sign contracts with mining multinationals. The terms of these contracts were sharply questioned by civil society in DRC and internationally. Finally in 2008, the government ordered a review of the contracts that were negotiated under the code.
In hindsight, it’s clear that the terms of the code were overly generous – something even the IMF now admits. Large firms that invested in the country under the new code, like Swiss-based Glencore, were accused of transfer mispricing, a practice that may have robbed DRC tens of millions of dollars it should have received from mining activities. DRC’s mineral wealth also helped cement Kabila’s hold on power and his ability to provide patronage to his loyalists. Kabila’s unwillingness to relinquish power has been attributed to his reluctance to lose control of these resources and to be potentially held accountable for their mismanagement.
At the end of his term in late 2016, Kabila cited a lack of means to hold an election to choose his successor. But under pressure from popular protests, he signed an agreement on December 31 brokered by the Catholic Church in which he agreed to allow elections to take place by the end of 2017. Unfortunately, since then little has been done to implement the agreement, and Kabila’s intransigence has led to violent protests in the capital Kinshasa. Widespread violence has also affected central Kasai province. Analysts believe that Kabila may be exploiting the violence as a way to keep himself in power.
International donors (including the US) and Congolese civil society (including the influential Catholic Church) have called on Kabila to confirm that he will not seek a third term and pave the way for elections. Whether or not that happens (and it should), reinvigorating the country’s efforts to transparently manage its mineral wealth should be given top priority.
This should start with the adoption of a new mining code that increases the amount of revenue received by the government and enhances oversight of the mining sector to ensure that transfer mispricing and other abusive tax practices do not occur. The code should require the public disclosure of all contracts signed between the government and mining companies to ensure public scrutiny. In addition, an independent body, comprised of civil society, industry, and external experts, should be established to monitor the collection and expenditure of mining revenues. And finally, the capacity of local governments in DRC to spend mining revenues they receive from the central government should be strengthened in collaboration with civil society. Oxfam’s office in DRC is currently working to design a program to further support the work of DRC’s civil society on these issues and contribute to this national reform process.
Despite the current tensions in DRC, there is some cause for hope. Recent efforts to control the flow of conflict minerals from eastern DRC have begun to bear some fruit. The country possesses some strong and effective civil society organizations engaging in the extractive sectors, including the African Association for the Defense of Human Rights (ASADHO), whom I had the chance to meet with during a visit to Kinshasa last year. The mining sector is also relatively transparent. It participates in the Extractive Industries Transparency Initiative and discloses mining contracts as part of that process. And there is currently an effort underway to review and revise the 2002 mining code.
If a major outbreak of violence can be avoided and a peaceful political transition occurs, these factors can help contribute to a renewed effort to improve resource governance in the country. If, however, the current crisis continues to drag on and more violence ensues, DRC may yet again lose an opportunity use its resource wealth to benefit its people and a chance at long-term, long-awaited peace.