Corruption Challenges Continue Despite New Mining Code in DR Congo

By Elie Kadima | POM, Democratic Republic of Congo

Photo courtesy of POM.

After twelve years of implementing the 2002 Mining Code in the Democratic Republic of Congo, the problem of community poverty in mining zones had not been resolved. This was due to the absence of provisions in the code to boost community development. POM (Platform of Civil Society Organizations intervening in the Mining sector) believed strongly that reforms could be made to the Mining Code that would improve the lives of communities impacted by mining activities and ensure that communities, mining companies, and the government would all benefit from mining revenues.

POM is a consortium of 22 organizations working on mining issues and our advocacy with partner organizations and communities really transformed the 2002 Mining Code from top to bottom by inserting several provisions related to the development of the communities affected by mining exploitation.

The new and revised Mining Code and its regulations were enacted in March 2018. The new Mining Code provided three major community development tools, namely: The mining royalty, the 0.3% quota for community development, and the agreement of contractual obligations between mining companies and impacted communities.

Thanks to these tools, today Decentralized Territorial Entities (ETDs: cities, communes, sectors and chiefdoms) are collecting a lot of money from mining companies.

For this article, we will focus on analyzing the first tool, the mining royalty. The new Mining Code and its regulations require all companies to pay on each sale of mining products a royalty distributed as follows:

• 50% paid into the central government account.
• 25% paid into the account of the province where the mining activities are carried out.
• 15% paid into the account of the Decentralized Territorial Entity.
• 10% for the fund for future generations.

By way of illustration, the two provinces of Haut-Katanga and Lwalaba received a total sum of $300,000,000 in mining revenues for the years 2018, 2019 and 2020. This is a huge amount of money, that simply wasn’t available before, and would have stayed either in the coffers of mining companies or the central government.

So you can see, the advocacy work of POM and other civil society groups has produced a lot of money for ETDs. In the last two years, we have seen a lot of change in communities: Roads repaired, schools and hospitals built and new equipment acquired, water infrastructure built, etc. This is the kind of work permitted within the law which states that the royalties should be used for infrastructure construction and repair work.

However, there remain several challenges to transparency and implementation of the law:

1. ETD facilitators were not trained or prepared to handle such huge amounts in revenue.
2. Several completed works were overcharged. For example, the mayor of Ruashi commune built a large hall, whose actual construction could not have cost more than $70,000, but he declared that $1,000,000, was spent – this is a big scandal right now.
3. There is no guiding manual for the administrative and financial procedures for ETDs. In most ETDs, only one person is the authorizing officer on expenditures as well as the person responsible for executing the expenditures. This leaves the door open to corruption.
4. Many ETD officials are unaware of the procurement law. Currently, most procurements are by mutual agreement rather than made in accordance with the law, which is another bid red flag and opens the door to corruption.
5. Townhall administrations take 30% off the top of the 15% payment due to ETDs before transferring the funds., Again, the law clearly specifies that the money from the mining royalty must be used exclusively for the construction of infrastructure, not administration. The mines division (within the mining ministry) also skims 5% off the top of this money as a service fee without any legal basis.

On average, ETDs are only receiving half of the 15% owed them due to the upfront fees imposed by the various hierarchical authorities. It is unclear what the Governor does with the 25% of the royalty that his office receives. A lack of transparency continues to persist in the management of the revenues.

As POM moves forward in our work, our plan is as follows:

• Reinforce the ETDs in the transparent and efficient management of revenues by providing them with management tools such as a manual for administrative and financial procedures.
• Strengthen the culture of accountability on the part of ETD managers based on the practice of periodically publishing accounts.
• Establish a culture of citizen participation and control in the leaders of Local Development Committees and other ETD stakeholders. This culture takes shape as citizen participation in the development of the ETD budget and in the citizen control mechanism of the ETD mining royalties.
• We hope to find other partners like the Presbyterian Hunger Program that can support our work and walk along side us Because this work requires constant vigilance.

POM will continue to push for greater transparency because greater transparency will lead to more accountability and eventually will lead to even greater improvements in community development in mining zones.

The work of the Presbyterian Hunger Program is possible thanks to your gifts to One Great Hour of Sharing.