Congo Improves Natural-Resources Accounting

Report
from Voice of America
Published on 04 Jul 2014 View Original

Nick Long

KIGALI — The Democratic Republic Congo, faulted last year for murky reporting on its earnings from natural resources, has improved its accounting enough to be awarded full membership in an international organization touting transparency.

On Wednesday, Congo – with a wealth of natural resources, including plentiful water, plus gold, copper and minerals used to manufacture cellphones – was recognized as a full member in the Extractive Industries Transparency Initiative. The coalition of 45 governments plus companies and civil-society groups exposes tax evasion and lost revenues involving natural resources.

Jonas Moberg, head of the initiative’s secretariat, praised Congo’s “extraordinary level of engagement” in the EITI process. Though the Congo’s natural-resources management could be improved, he said, the process ensures well-informed debate.

Congo was suspended from the EITI last year for insufficient reporting. In particular, the board wanted independent audits of mining companies and tax agencies, plus monitoring of revenue and spending from a $6.3 billion venture between Congo's state mining company and a Chinese consortium.

Bady Balde, manager for central Africa at the EITI secretariat in Norway, told VOA that Congo’s latest report, for 2011, shows much more detail than in the previous year.

"So for 2011, what you see is about $1.4 billion paid to the government at various levels,” Balde said. “There is detailed accounting for this, who has collected the revenues from whom and where they sent the money to. Learning the lessons from the 2010 report, there is now very thorough work that has been done."

The London-based group Global Witness, which campaigns for more transparency and accountability in natural resource management, agreed the DRC has made progress.

"Global Witness thinks there have been great strides forward with EITI in Congo,” said Nathaniel Dyer, a researcher for the group. “EITI has put a lot of new information in the public realm. Saying that, we still have some pretty major concerns about the governance of Congo’s mineral and oil wealth.

“Transparency doesn’t necessarily lead to accountability or to the lack of bad practices."

Dyer pointed to state mining company Gecamines’ sale of five of Congo’s biggest mining concessions in recent years. Another watchdog group, the Africa Progress Panel, said those assets were undervalued, resulting in lost potential revenue of at least $1.35 billion for the Congolese state and people.

"Gecamines has been at the heart of those transactions,” Dyer said. The company doesn’t provide annual reports, he said, saying it’s “acting like a black hole in the middle of Congo’s mining sector."

Balde said EITI so far has concentrated on tracing companies’ actual rather than potential spending, earnings and profit. Going forward, he said, EITI will look at ownership issues, especially when concessions are sold.

He added that EITI also will investigate revenue collection from small-scale mining in Eastern Congo.