News / Africa

DRC Probes $88M in Missing Mining Revenue

Processing facilities at Tenke Fungurume, a copper and cobalt mine in the DRC's copper-producing south. Government officials are trying to trace millions in missing revenue that mining companies paid to a Congolese tax agency.
Processing facilities at Tenke Fungurume, a copper and cobalt mine in the DRC's copper-producing south. Government officials are trying to trace millions in missing revenue that mining companies paid to a Congolese tax agency.
Nick Long
Anti-corruption investigators in the Democratic Republic of Congo say they can't trace more than $88 million that mining companies paid to a government revenue agency.  
   
The investigation has been carried out by the Congolese branch of a global anti-corruption watchdog, the Extractive Industries Transparency Initiative (EITI).
 
EITI’s Congolese experts say they've been trying for six months to trace $88 million that mining companies paid to a Congolese tax agency called the DGRAD. They say the DGRAD has still not provided any proof that the money was paid to the national treasury.
 
The DRC planning minister has promised a judicial enquiry.
 
The $88 million gap in the public accounts, coupled with smaller amounts that have also gone missing, could mean that the DRC’s bid for full membership of the EITI is suspended. That could make it more difficult for the DRC to obtain loans from the International Monetary Fund (IMF), which last year suspended a $225-million program with Congo, citing lack of transparency in the mining sector.
 
The EITI secretariat, which is based in Europe, says that since last year the DRC’s new government, led by Prime Minister Matata Ponyo, has been working closely with the EITI and is trying hard to account for revenues and to expose mining contracts to public scrutiny.
 
"We indeed understand that the prime minister’s government is very supportive of the EITI," said Tim Bittinger, a spokesperson for the EITI. "The government has put a substantial budget at the disposal of the EITI process, and there have been several government-led meetings on how to reform the mining and oil sectors and the EITI has figured prominently in reform discussions."
 
Bittinger noted that Prime Minister Ponyo has asked EITI to extend the scope of its investigations and to look at how revenues from the mining sector are spent, as well as how they are collected.
 
He said this demonstrates a political will to reform the sector, which was already evident even before the IMF suspended its Congo program.

The EITI board will have to make a decision this week on whether or not to declare the DRC an EITI compliant country, a test the country has already failed twice.  But Bittinger suggested that whatever decision is made, the DRC’s reform drive in the mining sector is likely to continue.
 
"Whatever happens at that level we see substantial momentum and drive in DRC," he said. "We are not sure a decision either way will stop that drive which is quite impressive, and we very much welcome the improvements we have seen over the past years."
 
That view is echoed by Elizabeth Caessens, an independent expert on mining and governance in the DRC. Caessens, who works for the U.S.-based Carter Center, wrote recently that the DRC government has made substantial efforts to disclose information on its mining sector.
 
She said there are doubts about one particular mining deal in which a state-owned concession may have been sold for $60-million less than its real value, but that many other deals have been exposed to scrutiny with the publication recently of more than 100 contracts.
 
Those contracts include some large deals with Chinese mining companies that were previously kept out of the public eye.

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Comment Sorting
Comments
     
by: David from: Washington DC
April 17, 2013 5:06 PM
DRC's Government should deal with engineering and construction companies.


by: Bertin MM from: Cape Town, SA
April 16, 2013 11:50 AM
The Mining sector in the DRC needs a clear reform and a change in the central government in order to have transparency in all the mines in that country. So many contracts are signed in abstracts. There is need for reform, reform and reform again in all sectors. DRC is becoming a such hell if no intervention is made immediately. This is true view.

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