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

Missouri Town Braces for Possible Racial Unrest

Situation in Ferguson hinges on whether white police officer will be indicted for August shooting death of unarmed black teen; decision could come Monday More

Video Ukraine Marks Anniversary of 1930s Deadly Famine

President Poroshenko compares Soviet-era ‘genocide’ to current tactics of pro-Russia rebels in Ukraine's east More

S. Philippines Convictions Elusive 5 Years After Election-related Killings

Officials vowed to deliver justice as the nation marked the anniversary of the country's worst political massacre that left 58 dead, more than half media More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
New Skateboard Defies Gravityi
X
November 21, 2014 5:07 AM
A futuristic dream only a couple of decades ago, the hoverboard – a skateboard that floats above the ground - has finally been made possible. While still not ready for mass production, it promises to become a cool mode of transport... at least over some surfaces. VOA’s George Putic reports.
Video

Video New Skateboard Defies Gravity

A futuristic dream only a couple of decades ago, the hoverboard – a skateboard that floats above the ground - has finally been made possible. While still not ready for mass production, it promises to become a cool mode of transport... at least over some surfaces. VOA’s George Putic reports.
Video

Video Falling Gas Prices Impact US Oil Extraction

With the price of oil now less than $80 a barrel, motorists throughout the United States are benefiting from gas prices below $3 a gallon. But as VOA’s Kane Farabaugh reports, the decreasing price of petroleum has a downside for the hydraulic fracturing industry in the United States.
Video

Video Tensions Build on Korean Peninsula Amid Military Drills

It has been another tense week on the Korean peninsula as Pyongyang threatened to again test nuclear weapons while the U.S. and South Korean forces held joint military exercises in a show of force. VOA’s Brian Padden reports from the Kunsan Air Base in South Korea.
Video

Video Mama Sarah Obama Honored at UN Women’s Entrepreneurship Day

President Barack Obama's step-grandmother is in the United States to raise money to build a $12 million school and hospital center in Kogelo, Kenya, the birthplace of the president's father, Barack Obama, Sr. She was honored for her decades of work to aid poor Kenyans at a Women's Entrepreneurship Day at the United Nations.
Video

Video Gay Evangelicals Argue That Bible Does Not Condemn Homosexuality

More than 30 U.S. states now recognize same-sex marriages, and an increasing number of mainline American churches are blessing them. But evangelical church members- which account for around 30 percent of the U.S. adult population - believe the Bible unequivocally condemns homosexuality. VOA's Jerome Socolovsky reports that gay, lesbian, bisexual and transgender evangelicals are coming out. Backed by a prominent evangelical scholar, they argue that the traditional reading of the bible is wrong.
Video

Video Ebola Economic Toll Stirs W. Africa Food Security Concerns

The World Bank said Wednesday that it expects the economic impact of the Ebola outbreak on the sub-Saharan economy to cost somewhere betweenf $3 billion to $4 billion - well below a previously-outlined worst-case scenario of $32 billion. Some economists, however, paint a gloomier picture - warning that the disruption to regional markets and trading is considerable. Henry Ridgwell reports from London.
Video

Video Mexico Protests Escalate Over Disappearances

Protests in Mexico over 43 students missing since September continue to escalate, reflecting growing anger among Mexicans about a political system they view as corrupt, and increasingly tainted by the drug trade. Mounting outrage over the disappearances is now focused on the government of President Enrique Pena Nieto, accused of not doing enough to end insecurity in the country. More from VOA's Victoria Macchi.
Video

Video US Senate Votes Down Controversial Oil Pipeline - For Now

The U.S. Senate has rejected construction of a controversial pipeline to transport Canadian oil to American refineries. The $5 billion project still could be approved next year, but it faces a possible veto by President Barack Obama. As VOA’s Michael Bowman reports, the pipeline has exposed deep divisions in Congress about America’s energy future.
Video

Video Can Minsk Cease-fire Agreement Hold?

Growing tensions between government troops and separatists in eastern Ukraine further threaten a cease-fire agreement reached two months ago in the Belarusian capital of Minsk. Critics of U.S. policy in Ukraine say it is time the Obama administration gives up on that much-violated cease-fire and moves toward a new deal with Russia. VOA's Scott Stearns has more.
Video

Video Chaos, Abuse Defy Solution in Libya

The political and security crisis in Libya is deepening, with competing governments and, according to Amnesty International, widespread human rights violations committed with impunity. VOA’s Al Pessin reports from London.
Video

Video US Hosts Record 866,000 Foreign Students

Close to 900,000 international students are studying at American universities and colleges, more than ever before. About half of them come from Asia, mostly China. The United States hosts more foreign students than any other country in the world, and its foreign student population is steadily growing. Zlatica Hoke reports.
Video

Video Ferguson Church Grapples with Race Relations

Many white residents of Ferguson, Missouri, say they chose to live there because of the American Midwest community's diversity. So, they were shocked when a white police officer killed an unarmed black teenager in August – and shaken by the resulting protests and violence. Some local churches are leading conversations on how to go forward. VOA’s Ayesha Tanzeem reports.

All About America

AppleAndroid