1 Executive Summary
What are the problems?
The DRC is a country of extraordinary natural wealth but this wealth has never been used for the benefit of the Congolese population. Instead, the country is currently emerging from one of the world's worst conflicts, which has resulted in the deaths of up to 3.5 million people. This conflict has been fuelled by the (mainly) illicit trade in natural resources.
During the war, numerous rebel groups funded their occupation of eastern DRC through the exploitation of minerals, such as diamonds, coltan and cassiterite (tin ore). The problems with coltan have been well documented. In 2000 demand soared, the price soared and military groups in the DRC responded by funding themselves using coltan exploitation. The price of coltan fell in 2001 and demand for the mineral decreased.
Exactly the same thing is now happening with cassiterite (tin ore). A massive increase in demand for tin caused tin prices to rise dramatically in early 2004. Tin ore is now being used by military groups to fund themselves. It is found in the same areas as coltan, and is being traded by the same networks.
Despite reunification of the country, much of North Kivu still remains under the control of the pro-Rwandan group, RCD-G. Over the past year, fighting has broken out around key mining towns, with the RCD-G, the FARDC (national army) and Mai-Mai militias vying for control of these areas. Battlefield enemies have been cooperating to share the spoils of war between them.
South Kivu is supposedly under the control of the transitional government and the FARDC army. However, with the army receiving low and erratic pay, many of the soldiers illegally tax the miners to supplement their income. The soldiers are doing what has always been done in this region: turning to natural resources and the control of mines to support themselves. The FDLR (Rwandan Hutu rebels) also, illegally, control mines and mining revenues.
Smuggling across the border into Rwanda means that large quantities of cassiterite and coltan are leaving the DRC unrecorded and untaxed, presenting a loss to the Congolese economy. With all processing occurring outside the country, no value is being added inside the DRC.
Rwanda, through which most of the minerals transit, is currently exporting five times more cassiterite than it produces. This report demonstrates that Rwanda may have imported a substantial quantity of cassiterite during each of the last five years, roughly 400 -- 900 tonnes annually in the three years 1999 -- 2002 and about 1500 -- 1800 tonnes in each of 2003 and 2004. It is highly likely that these imports derived predominantly from eastern DRC, including conflict areas, although this is not reflected in their import statistics.
Why does it matter?
Cassiterite from conflict areas in eastern DRC is being purchased by foreign companies and ending up on the international market. There are no international mechanisms in place to regulate this trade, therefore allowing various armed factions, many with appalling human rights records, unfettered access to world markets, in order to generate funds.
The Kinshasa government does not record cassiterite exports from eastern DRC and does not receive tax revenues from the trade. Meanwhile Rwanda, which is the main conduit for cassiterite exports, is reaping major benefits. Thus the stabilisation of Rwanda is being achieved at the expense of the DRC's peace, security and its treasury.
Much of the fighting that is still occurring in the east of the country is driven by the desire to control natural resources. This violence in eastern DRC is one of the main factors that has led to the postponement of the country's first elections for 45 years, and has stalled the reunification and reconstruction of the country.
Meanwhile, artisanal miners are working in hazardous conditions for very low pay, in mines that are often controlled by the military. Fighting around mining areas -- for the control of lucrative mining revenues -- is common. Violence and displacement in North and South Kivu are widespread. Under-
Consumers have no way of knowing whether items they buy fuel conflict or not. Tin is used in a wide variety of consumer goods, most obviously in tin cans, but also recent regulation means that all new circuit boards now contain tin rather than lead. As a reader of this report you are likely to come into contact with tin on a daily basis and will have no means of knowing whether this has originated from a conflict zone.
What can be done?
The DRC Government should:
- Extend its administrative control into
the mining areas of the Kivus to ensure that essential controls over the
mining industry are in place, including the accurate reporting of production
and export statistics and the collection of appropriate fiscal revenues.
This information should be made widely available to the public.
- Ensure that all production and export
that does not fall under government control is declared illegal and investigated.
- Ensure that constitutional safeguards
are in place to guarantee transparent and accountable resource exploitation,
and that a right to information and of redress is available for ordinary
- Require the Ministry of Mines to register
all artisanal miners. This is mandatory according to the Mining Code, and
is a crucial step towards gaining control over the sector.
- Establish agricultural projects in the
Kivu provinces, including development of road building projects, to regenerate
the agricultural sector. This will improve food security as agricultural
production has collapsed in the Kivus as farmers have taken more lucrative
employment as miners.
- Ensure that all the FARDC (national army) soldiers receive regular and adequate pay.
The National Assembly should:
- Ensure that, as per its constitutional mandate (the transitional constitution), the commission for reviewing all contracts signed during the war is properly resourced and supported so that it may fulfil its mandate to review the mining contracts, and ensure that the resulting reports are made public.
The International Community should:
- Ensure that new debt relief deals, under
the G8 debt relief programme, are conditional on Rwanda and Uganda actively
preventing the illegal import of minerals from eastern DRC.
- Ensure that the financial stabilisation
of Rwanda and Uganda is not achieved at the expense of their neighbours.
In particular, the following measures should be taken:
- The World Customs Organisation should provide focused assistance to the DRC to highlight discrepancies in the production, import and export statistics of natural resources between the DRC and its immediate neighbours, to highlight possible nondeclaration or misdeclaration by companies and countries, and to detect potential tax evasion.
- The World Bank and the IMF should assist and support the above process, and use the results to address the role of countries such as Rwanda that are enabling illicit resource flows from the DRC.
- The World Bank should assist the government of the DRC to commission an audit of all prospective and active mining sites in order to assess the value of the mineral assets of the DRC and its neighbours, so that plans can be made for appropriate interventions to control future exploitation.
- Demand statistics for mineral production
and export from both central and provincial governments of the DRC and
makes these statistics widely available to the public. The World Bank and
the IMF in particular should demand these statistics.
- Fund SAESSCAM (Service d'Assistance
et d'Encadrement du Small Scale Mining) to ensure that cooperatives are
established and that benefits deriving from the mining industry are fairly
distributed to local communities.
- Support the establishment of agricultural
projects in the Kivus, including the development of road building projects,
to regenerate the agricultural sector. This will improve food security,
as agricultural production has collapsed in the Kivus as farmers have taken
up more lucrative employment as miners.
- Ensure that natural resource governance becomes part of the mandate of the UN Secretary General's proposed UN Peacebuilding Commission and Peace Building Support Office and that such activities should be integrated with the onthe- ground operations of peacekeeping missions and UN support staff.
Neighbouring countries (notably Rwanda and Uganda) should:
- Record and declare all imports of natural
resources from the DRC, in line with World Customs Organisation standards.
- Ban and actively prevent importation of any illegally-exported commodity from the DRC.
Processing and importing countries should:
- Verify the country of origin of their
cassiterite and coltan, and publicise the information. Where the origin
of imports cannot be verified, they should be impounded and the importers
should be prosecuted.
- Impose sanctions on cassiterite and coltan imports from Rwanda until Rwanda can either demonstrate that it is the country of origin, or that it has paid the appropriate taxes to the producer country. This should also apply to imports from Tanzania and South Africa.
The UN Security Council should:
- Put natural resources back into future
mandates of the UN Expert Panel on the DRC, and charge them with investigating
the links between natural resource exploitation and arms trafficking, organised
crime, the funding of rebel groups and other forms of illegal rent capture.
The UN Expert Panel should investigate any companies found to be involved
in this and should also find and freeze looted assets.
- Include monitoring of natural resource
exploitation and control of illegal resource flows in the mandate of MONUC,
in order to prevent capital flight from the DRC, and the funding of armed
factions and political groupings.
- Increase MONUC troop levels in the DRC,
to ensure that there are sufficient personnel in the Kivus to both protect
the public and to carry out the above monitoring activities.
- Use its prerogative to refer cases to the International Criminal Court to seek legal redress for economic crimes which might be linked to war crimes, as defined by the Rome Statute.
- Proactively monitor border crossings and airfields to prevent resource smuggling and arms trafficking.
On the Extractive Industries Transparency Initiative (EITI):
- The DRC government should actively implement
the EITI, in accordance with the EITI minimum criteria, with the full and
broad-based participation of Congolese civil society, including civil society
from areas of resource extraction, and with a view to extending revenue
transparency to transfers from the central to provincial governments. EITI
processes should be given an unambiguous grounding in national laws and
- The World Bank, IMF and other donors
should provide funding and technical support for the implementation of
the EITI in the DRC, especially supporting the watchdog role of civil society
in the iniative. Progress towards the meaningful implementation of the
EITI, in accordance with the EITI minimum criteria should be a condition
of all nonhumanitarian lending and aid to the DRC.
- All oil, gas and mining companies operating in the DRC should actively support the implementation of the EITI in the DRC.
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