The DRC's natural resources: a roundtable discussion on forestry, mining and the role of donor institutions

The DRC's natural resources: A roundtable discussion on forestry, mining and the role of donor institutions

Presentations at this session were made by Rights and Accountability in Development (RAID), Greenpeace and Rainforest Foundation. These organisations have all recently released reports on the Congo which reveal that mining and logging in the country are out of control, with devastating consequences for local communities and the environment. They called for fairness and accountability in the exploitation of the country's natural resources. Their calls are accompanied by an international appeal, signed by over 100 organisations, to be delivered to the World Bank demanding the renegotiation of mining contracts in the DRC. Since 2001 the World Bank has lent more than $2 billion to the country, encouraging investment in the country's natural resource sectors as a key driver of economic growth. The organisations urge the Bank, as the most influential donor to ensure that its advice and lending do not facilitate private plunder of the country's resources. 40 million people depend on the DRC's rainforest, and few benefit from the logging.

Nikki Reisch, Bank Information Centre

• The DRC is emerging from years of war and conflict.
• Collective assets have been privately obtained, how has this happened?
• The World Bank is the largest and most influential donor.
• The DRC has the world's second largest rainforest.
• They have serious concerns on policy reform processes.

Cath Long, Rainforest Foundation

• 1000s of people depend on the DRC's forests for their livelihoods. The Congolese partners who were to come to this session to speak on this issue were not issued their visas on time.
• Moratorium on logging concessions was issued in May 2002.
• The rights of people who live the forests have not been clarified
• Political will is important. Cameroon, Gabon, Congo-Brazaville have seen foreign logging companies and the rights of local people being extinguished. The DRC could be different, but logging concessions haven't worked, as proven by the Inspection Panel in the case of Cambodia.

Tricia Feeney, RAID

• Following the elections in the DRC, the new government, with encouragement from the World Bank and IMF has announced its intention to review past mining contracts.
• In view of the controversy around key mining contracts in the DRC, RAID commissioned an economic model for renegotiating some of the key copper and cobalt mining contracts.
• Its analysis of the Katanga Mining Limited (KML) Kamoto project found that the long term copper and cobalt price were underestimated, and that the considerable value of Gécamine's assets were not properly assessed.
• RAID are disappointed at how little has been achieved and how much worse the situation has got.
• 0.25 per cent of GDP comes from the mining sector.
• Audits have been carried out by Ernst and Young and Duncan and Allen but little more have been seen of these.
• There has been an acceleration of the transfer of state owned assets, and opacity surrounding the whole issue. The mining contracts should be renegotiated.
• How will the forests sector be any different? Fearful that it will go down the same road as mining.
• Mining contracts were signed during the transitional period. Why was the base rate of copper and cobalt allowed to be so low?

Greenpeace

• Efforts by the World Bank to control the logging industry are failing, while the rainforest is being sold off under the illusion that logging alleviates poverty.
• Global emissions from tropical deforestation contributes up to 25 per cent of total annual human-induced CO2 emissions to the atmosphere. The DRC rainforest contains 8 per cent of global carbon stores. Forest clearance in the DRC will release up to 34.4 billion tonnes of CO2 by 2050.
• The World Bank must help the DRC stop the sell-off of its rainforests.

Giuseppe Topa World Bank

• The Bank will make sure that at the end of the moratorium concessions won't just be handed out. They will not allow free for all. There will be a careful planning process and concessions will be awarded carefully.
• On the legality of the review they will stand firm.
• They welcome NGO advice as assistance for the Bank.
• They have set aside a lot of money to deal with conflict resolution. There was a lot of contention over the legal review.
• The implementation on the ground is very poor. They are trying to improve it and limit exploitation.

World Bank mining expert

• DRC government has been stalling to execute the plan laid out by the International mining council (IMC).
• The election has been disruptive to stopping the Bank from moving the agenda forward.
• Craig Andrews is there now. The issues raised at this meeting are of concern to them.

Filip Verbelen, Greenpeace said that the social conflict issue may be underestimated. The presidential decree allows the private sector to appeal. If titles are cancelled there will be many court cases.

Marc-Olivier Herman, from NGO Broederlijk Delen said that Congolese people do not have the most basic information. The Bank should be promoting transparency. When will we see this? Jean Happi from the World Bank responded that the new contracts have seven pillars, of which one is transparency. They plan to extend technical assistance in mining and forestry, and provide better legal advice to Gécamines.

Pedro Alba said that he was sorry that the Congolese colleagues had not been able to make it. The Bank had invited 6 NGOs and were going to pay for them to come. He would have this meeting again if they arrived. There is widespread opposition to the presence of mining companies on the ground. The report of the review committee will be subject to much scrutiny. The DRC has improved for the better. The Bank is now shifting its programme from emergency operations to sectoral ones. Two main operations:

1. For forestry: building capacity in the ministry of the environment. On the mining sector they are looking at what they can do to build capacity quickly. They are importing capacity from outside in order to improve environmental safeguards.
2. Energy/water sector: Improving power via the Inga power plant. They are working with other international partners in the DRC to improve governance arrangements. They have external review boards to look at their private partners over the next year and a half.

Nikki Reisch pointed out that the audits financed by the World Bank have gone unanswered. It is a question of enforcement and the legal framework is lacking.

Peter Rosenblume said that he was in Congo recently. There is a strong perception that the country's wealth has disappeared. For instance, that of Gécamines. Where has it gone? Gécamines say that they have no control over it.

Elena Gerebizza, from CRBM in Italy stated her concern at the issues affecting DRC: poor country, suffering from civil war, HIPC decision point to which it is struggling to reach completion. It needs are basic services but the Bank is talking about mining and hydroelectricity. Inga will not benefit the DRC's poor.

On the question of education, Pedro Alba stated that education is important to the Country Assistance Strategy. However because there is no banking system getting money to schools is a problem. They are working with the African Development Bank on water in rural areas. Hydropower is very important. If the Bank doesn't do it, someone else will. Grand Inga will not be possible with just public money, so private investment needed. We need a pro-poor approach, and the authorities need a regulatory/ transparency based framework. Road infrastructure is also important. The country assistance strategy draft was sent to the authorities recently. There should be wide consultations on it in 2/3 months.

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Published: 16 April 2007 , last edited: 7 June 2007

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