Kinshasa, where meetings have taken place between government, private sector and NGOs over recent years in order to plan mining law reform

Kinshasa, where meetings have taken place between government, private sector and NGOs over recent years in order to plan mining law reform

The future of Democratic Republic of Congo’s mining law reform is unclear after the country has reportedly abandoned plans to make long-awaited changes.

According to Bloomberg, Congo’s Mines Minister Martin Kabwelulu last week told investors that the country has abandoned plans to update its mining law, saying that commodity prices and energy issues represented a crisis for the sector. Copper output recently dropped for the first time in six years, a blow for DRC, which is Africa’s biggest copper producer.

UK campaigning organisation Global Witness, which focuses on exposing the links between the demand for natural resources, corruption, conflict and environmental destruction, has expressed concern over the announcement.

“Congo’s government appears to have caved in to industry pressure to maintain the cosy fiscal terms and lax regulations governing Congo’s mining sector,” said Nathaniel Dyer, Congo team leader.

“Weak regulation of the mining sector means that Congo’s government does not have the revenues to pay for the schools, hospitals and roads that the population desperately needs. Scrapping the effort to reform this law is a huge missed opportunity in a country where, if managed well, revenues from mining could offer a critical route out of poverty and contribute to stability.”

However, there seem to some indications from the DRC government that the Bill, still in Parliament, could be revived when the economic climate is seen as less risky. Kabwelulu’s chief of staff Valery Mukasa sent Global Witness a message stating that Kabwelulu meant to say merely that the current code remains in effect until it is replaced.

“The government of the Democratic Republic of Congo has not renounced revising the mining code. Quite the contrary,” he wrote.

“However, in the context of targeting potential investors interested in the mining sector, the Mines Minister sought to reassure that the legal framework that governs the sector is the mining code of 2002, still in effect.”

Global Witness maintains that Kabwelulu and Mukasa’s comments are incompatible.

“The messages from the Mines Minister and his chief of staff appear to contradict each other. We would of course welcome a decision to continue with revision to the mining law. Congo’s Mines Minister should now issue a clear statement about the timetable for the passage of the law and a commitment to transparency and anti-corruption rules,” said Dyer.

DRC’s existing mining law dates from 2002, when the country was just coming out of the Second Congo War. Changes to the law have been in negotiation since 2012.

According to Global Witness, strong growth in Congo’s mining sector has been offset by poor governance. Between 2010 and 2012, it states that five opaque mining deals with anonymous offshore companies linked to a friend of President Joseph Kabila cost the state at least US$1.36 billion – “twice the country’s annual health and education spending combined”.

“Congo cannot afford to stick with a system that allows multi-million pound deals to be struck in secret, rather than by open tender, and the real owners of mining rights to hide behind anonymous companies. The government must reverse this decision and resume consultations on a new law that will ensure that mining revenues benefit the Congolese people,” said Dyer.

A draft new law from March 2015 already included some detail on the publication of contracts, the development of a transparent tender process, and the disclosure of beneficial ownership information.

Competition over control of DRC’s mineral wealth has been a contributing factor to the decades of violence and conflict that have plagued the country, following on from a particularly destructive legacy of colonialism.

However the country sees elections approaching in nine months, which could finally lead to a peaceful transition of power.

Global Witness’s analysis of the most recent proposed changes to the mining law can be found here

Source:  Rachel Hamada, thisisafrica.me

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