News / Africa

Report: DRC Mining Deals Highlight Resource Corruption

Africa Progress Panel head and former UN secretary General Kofi Annan, Februay 15, 2011.Africa Progress Panel head and former UN secretary General Kofi Annan, Februay 15, 2011.
x
Africa Progress Panel head and former UN secretary General Kofi Annan, Februay 15, 2011.
Africa Progress Panel head and former UN secretary General Kofi Annan, Februay 15, 2011.
Nick Long
The Africa Progress Panel, a research organization chaired by former U.N. Secretary-General Kofi Annan, says most Africans are not getting a fair deal out of their countries’ natural resources.  In its annual report, the panel highlights several mining deals in the Democratic Republic of Congo as examples of how, it said, natural resource wealth has been mismanaged.  

The 10-member Africa Progress Panel includes Kofi Annan, former Nigerian president Olusegun Obasanjo, a former head of the International Monetary Fund, Michel Camdessus, and the singer and activist Bob Geldof.

The panel's annual report, released Friday, focuses on Africa’s oil, gas and minerals, which it said offer a once-in-a-millennium opportunity to lift people out of poverty.

But not if they are managed the way they have been in the Democratic Republic of Congo, the panel argues.

The report looks in particular at five mining deals since 2010, involving the sale of assets by the DRC state mining company Gecamines.  It estimates the Congolese state lost at least $1.35 billion through these transactions - equivalent to twice its annual spending on health and education combined.

And that is just some of the losses, says the pressure group Global Witness, which has campaigned on this issue for decades.  Daniel Balint-Kurti is one of Global Witness’s Congo researchers.  

"You see that five deals were highlighted, and that is because there were five deals between 2010 and 2012 for which sufficient data exist to do a proper calculation of losses to the Congolese state," said Balint-Kurti.

Last year, British member of parliament Eric Joyce, who was chairing an all-party parliamentary group on Africa's Great Lakes region, claimed the DRC had lost more than $5 billion from mining deals over the previous four years.

Activists within the DRC agree there have been serious problems of governance in the country’s mining sector.  Jean Pierre Okenda works for the Extractive Industries Transparency Initiative, an international effort aimed at exposing tax evasion and lost revenue from natural resources.

He said he thought the Africa Progress panel was right to highlight the DRC case, because in his view, it demonstrates not only mismanagement, but also corruption on a grand scale.

DRC government spokesman Lambert Mende told VOA the figures in the panel's report on Congo need to be verified, and put in perspective.   He said the government wants to know about losses to the public treasury, but it does not want unproven claims to be made about the country or about its partners.

The government would like to know more about the methodology used in the report, he added.

Okenda suggests the methodology is simple.  

Take the case, he said, of SMKK, one of the companies sold by the DRC state mining company.  It was sold for $15 million, says Okenda, and a few months later it was resold by the new owner, an offshore company, for $75 million.  And that has been the pattern, he says in these five deals that were all conducted in secret without a tender.

Global Witness said it is particularly troubling that all the mining assets sold in these deals appear to have passed through the ownership of the same company.  That would not have been known, said Balint-Kurti, if it were not for years of investigation which finally revealed identities that were hidden by certain offshore, secret tax havens.

One of those tax havens used by companies involved in the DRC deals was the British Virgin Islands.

Global Witness argued Britain should pressure its overseas territories like the Virgin Islands to change their laws so that companies registered there are required to declare their owners.

"The system of keeping company ownership secret has a large role to play in ripping off poor African states," said Balint-Kurti.

British Prime Minister David Cameron has said he will try to persuade the G8 group of nations to agree to end this kind of offshore secrecy.

You May Like

Lesotho Faces New Round of Violence, Political Crisis

Brutal killing of military officer has sent former leaders back into S. Africa where they're watching anxiously as regional officials head in to try to restore peace More

Video US Diplomat Expects Adoption of Srebrenica Anniversary Resolution

Samantha Power says there's broad consensus about killings in Bosnia's war, but Russia calls resolution 'divisive,' backs countermeasure at UN More

UN Report Exposes Widespread Boko Haram Atrocities

Damning report graphically details pattern of vicious, widespread atrocities committed by Islamist militants More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Family of American Marine Calls for Release From Iranian Prisoni
X
Heather Murdock
July 01, 2015 8:59 PM
As the crowd of journalists covering the Iran talks swells, so too do the opportunities for media coverage.  Hoping to catch the attention of high-level diplomats, the family of American-Iranian marine Amir Hekmati is in Vienna, pleading for his release from an Iranian prison after nearly 4 years.  VOA’s Heather Murdock reports from Vienna.
Video

Video Family of American Marine Calls for Release From Iranian Prison

As the crowd of journalists covering the Iran talks swells, so too do the opportunities for media coverage.  Hoping to catch the attention of high-level diplomats, the family of American-Iranian marine Amir Hekmati is in Vienna, pleading for his release from an Iranian prison after nearly 4 years.  VOA’s Heather Murdock reports from Vienna.
Video

Video UK Holds Terror Drill as MPs Mull Tunisia Response

After pledging a tough response to last Friday’s terror attack in Tunisia, which came just days before the 10th anniversary of the bomb attacks on London’s transport network, British security services are shifting their focus to overseas counter-terror operations. VOA's Henry Ridgwell has more.
Video

Video Obama on Cuba: This is What Change Looks Like

President Barack Obama says the United States will soon reopen its embassy in Cuba for the first time since 1961, ending a half-century of isolation. VOA White House correspondent Luis Ramirez reports.
Video

Video Hate Groups Spread Influence Via Internet

Hate groups of various kinds are using the Internet for propaganda and recruitment, and a Jewish human rights organization that monitors these groups, the Simon Wiesenthal Center, says their influence is growing. The messages are different, but the calls to hatred or violence are similar. VOA's Mike O’Sullivan reports.
Video

Video US Silica Sand Mining Surge Worries Illinois Residents, Businesses

Increased domestic U.S. oil and gas production, thanks to advances known as “fracking,” has created a boom for other industries supporting that extraction. Demand for silica sand, used in fracking, could triple over the next five years. In the Midwest state of Illinois, people living near the mines are worried about how increased silica sand mining will affect their businesses and their health. VOA’s Kane Farabaugh has more in this first of a series of reports.
Video

Video Blind Somali Journalist Defies Odds in Mogadishu

Despite improving security in the last few years, Somalia remains one of the most dangerous countries to be a journalist – even more so for someone who cannot see. Abdulaziz Billow has the story of journalist Abdifatah Hassan Kalgacal, who has been reporting from the Somali capital for the last decade despite being blind.
Video

Video Texas Defies Same-Sex Marriage Ruling

Texas state officials have criticized the US Supreme Court decision giving same-sex couples the right to marry nationwide. The attorney general of Texas says last week's decision did not overrule constitutional "rights of religious liberty," and therefore officials performing wedding services can refuse to perform them for same-sex couples if it is against their religious beliefs. Zlatica Hoke reports on the controversy.
Video

Video Rabbi Hits Road to Heal Jewish-Muslim Relations in France

France is on high alert after last week's terrorist attack near the city Lyon, just six months after deadly Paris shootings. The attack have added new tensions to relations between French Jews and Muslims. France’s Jewish and Muslim communities also share a common heritage, though, and as far as one French rabbi is concerned, they are destined to be friends. From the Paris suburb of La Courneuve, Lisa Bryant reports about Rabbi Michel Serfaty and his friendship bus.
Video

Video Saudi Leaks Expose ‘Checkbook Diplomacy’ In Battle With Iran

Saudi Arabia’s willingness to wield its oil money on the global diplomatic stage appears to have been laid bare, after the website WikiLeaks published tens of thousands of leaked cables from Riyadh’s Ministry of Foreign Affairs. VOA's Henry Ridgwell reports.
Video

Video Nubians in Kenya Face Land Challenges

East Africa's ethnic Nubians have a rich cultural history that dates back thousands of years, but in Kenya they are facing hardships, including the loss of lands they have lived on for generations. They say the government has reneged on its pledge to award them title deeds for the plots. VOA's Lenny Ruvaga reports.
Video

Video Military Experts Question New Russian Tank Capabilities

Russia has been showing off its new tank design – the Armata T-14. Designers claim it is 20 years ahead of current Western designs - and driving it feels like playing a computer game. But military analysts question those assertions, and warn the cost could be too heavy a burden for Russia’s struggling economy. Henry Ridgwell reports.
Video

Video In Kenya, Police Said to Shoot First, Ask Questions Later

An organization that documents torture and extrajudicial killings says Kenyan police were responsible for 1,252 shooting deaths in five cities, including Nairobi, between 2009 and 2014, representing 67 percent of all gun deaths in the areas reviewed. Gabe Joselow has more from Nairobi.

VOA Blogs