The Illegal Exploitation of Natural Resources and Other Forms of Wealth in the Democratic Republic of Congo.

Vuyelwa Kuuya

1.A consequence of the chaos and instability caused by the Second Congo War was the widespread illegal exploitation of minerals and resources in that nation. The war took place between August 1998 and July 2003. It was the largest war in modern African history and directly involved 8 African nations, as well as about 25 armed groups. In April 2001, the UN appointed a Panel of Experts to investigate the illegal exploitation of diamonds, coltan, gold and other resources in the Democratic Republic of Congo (DRC). The reports of the Panel accused Rwanda, Uganda and Zimbabwe and a number of individuals as well as corporations of systematically exploiting the resources of the DRC.

2.The UN Expert Panel accused some corporations of being linked to the activities of rebel groups within the DRC. These groups were said to be directly involved in the illegal exploitation and plundering of the natural resources of the DRC. This paper analyses the Panel’s findings on the role of corporations in the conflict. It also provides an evaluation of the manner in which the Panel carried out its mandate. It focuses on the allegations against companies that formed relationships with a particular group, the Rassemblement Congolaise pour la Democratice (Rally for Congolese Democracy), (“RCD”), a Rwandan rebel group which was accused by the Panel of being one of the principal perpetrators of many human rights abuses. The paper also focuses on corporations that allegedly formed relationships with individuals who were found by the Panel to have aided the conflict.

3.The Panel reached the conclusion that

“The role of the private sector in the exploitation of natural resources and the continuation of the war has been vital. A number of companies have been involved and have fuelled the war directly, trading arms for natural resources, which are used to purchase weapons. Others have facilitated access to financial resources, which are used to purchase weapons. Companies trading minerals, which the Panel considered to be ‘the engine of the conflict in the DRC’, have prepared the field for illegal mining activities in the country.”[1]

This paper will asses these and other such findings made by the Panel.

The Expert Panel Reports on the Illegal Exploitation of Natural Resources and Other Forms of Wealth in the Democratic Republic of Congo (the Panel).

4.The Panel was commissioned with the mandate:

“To follow up on reports and collect information on all activities of illegal exploitation of natural resources and other forms of wealth in the Democratic Republic of the Congo, including violation of the sovereignty of that country;

‘To research and analyse the links between the exploitation of the natural resources and other forms of wealth of the Democratic Republic of the Congo and the continuation of the conflict;

‘To revert to the Council with recommendations.” [2]

In addition, the Panel interpreted its mandate to include a special focus on the role of corporations and individuals in fuelling the DRC conflict.[3]

5.The Panel, which was a non-judicial body, subjected the facts it uncovered to a ‘reasonable standard of proof’.[4] As will be discussed later, the ambiguity of this phrase caused confusion amongst companies. This phrase led the Panel to make inflammatory allegations against corporations in the 5 reports and 1 addendum it authored.[5] The making of these allegations left the Panel open to accusations of abuse of ‘company human rights’ by aggrieved corporations, who were uncertain of the legality and legitimacy of the accusations levelled against them, and whose reputations were damaged.

6.The Panel travelled throughout the DRC and to other involved and affected countries within Africa and elsewhere. It conducted interviews with, and collected oral testimony from, inter alia individuals, companies, government officials, representatives of states including presidents, representatives of the United Nations, international organisations and armed groups. Testimony by witnesses was given on a voluntary basis and the identity of witnesses was kept anonymous. The Panel also analysed documentation.

Illegality

7.According to the Panel, there were four instances of illegality that could be identified in the context of the illegal exploitation of natural resources and other forms of wealth in the DRC.

  1. Firstly, activities were defined as illegal if they occurred without the consent of the Government of the DRC.
  2. The second instance of illegality related to action which went against the existing regulatory framework of the DRC. In this context “the carrying out of an activity in violation of an existing body of regulations”[6] was deemed to be an “infringement of the law and considered illegal or unlawful”[7]
  3. Thirdly, activities that were carried out without regard to “widely accepted practices of trade and business” were also considered illegal.
  4. Lastly, the violation of international law, including soft law was also taken to be illegal. Again, the Panel did not provide the content of this body of law. The Panel did not define “soft” law. In the international context, it ‘refers to principles and policies which have been negotiated and agreed between states, or promulgated by international institutions, but which are not mandated by law or subject to any formal enforcement mechanisms. Soft law instruments are given a range of titles, typically, “codes of practice”, “guidelines’’ “recommendations” or “declarations”, but, whatever the terminology, the crucial distinction between a “soft law’ instrument and a treaty is that compliance with the former is ‘voluntary’ (at least in the legal sense.)”[8] Examples of ‘soft law’ instruments that would have been applicable in the DRC at the time of the conflict are listed in Appendix 1.

Exploitation

8.The Panel defined exploitation as

“all activities that enable actors and stakeholders to engage in business in first, secondary and tertiary sectors in relation to the natural resources and other forms of wealth of the Democratic Republic of Congo.”[9]

9.This broad interpretation enabled the Panel to focus on

“extraction, production, commercialization and exports of natural resources and other services such as transport and financial transactions.”[10]

Natural resources and other forms of wealth of the DRC.

10.These were taken to consist of:

  1. “mineral resources, primarily coltan, diamonds, gold and cassiterite (a tinoxidemineral and the chief ore of tin);
  2. agricultural produce, forests and wildlife, including timber, coffee and ivory; and
  3. financial products, mainly in regard to taxes.”[11]

The role of corporations in sustaining the conflict

11.The Panel found that there were several “elite networks” that operated in the DRC. These were defined as “politically and economically powerful groups involved in exploitation activities which are highly criminalised”.[12] The Panel advanced the view that businesses and corporations played a part in sustaining the DRC conflict and provided specific names of such companies. It alleged that corporations that had formed relationships with rebel or armed forces as well as with individuals were involved in fuelling the conflict.

“By contributing to the revenues of the elite networks, directly or indirectly, companies and individuals contribute to the ongoing conflict and to human rights abuses.”[13]

“The consequence of illegal exploitation has been…the emergence of illegal networks headed by either top military officers or businessmen. These …elements form the basis of the link between the exploitation of natural resources and the continuation of the conflict.”

Companies and armed groups.

12.Some formed relationships with the Rassemblement Congolaise pour la Democratice (Rally for Congolese Democracy) or the RCD.

The RCD

This group consisted of between 2000 and 5000 combatants and was sponsored by Rwanda. During the war it was in effective control of most of the eastern DRC. It “assumed all the State administrative functions in the areas it holds.” The Panel stated that there was a “link between the exploitation of the resources and the on-going efforts of the RCD to continue the conflict, or at least to maintain the status quo.”[14] The RCD was the principal perpetrators of several abusive practices in the DRC as is shown in Table 1 below.

Company / Rebel group / Alleged Activities of rebel group / Link between company and rebel group
DaraForest[15]
Citi Bank[16]
Air Boyoma.[17] / RCD
The group held a monopoly over Coltan resources in the Goma area and received U$ 1 million per month in taxes from mining companies in the area.[18] Taxes were ‘aimed at financing and supporting the war effort.’[19] /
  • Between September 1998 and August 1999, RCD forces forcibly seized products and resources from farms, storage facilities, factories and banks.’[20]
  • Between U$1-8 million Congolese Francs were stolen by the RCD from the Kisangani Bank..[21]
  • Locals in Kisangani were murdered and injured when they tried to resist the looting of banks and seizure of other resources by the group.[22]
  • From 1998 the RCD forcibly removed 7 years of mineral resources from mines in Eastern Congo. It removed between 2000 and 3000 tonnes of Cassiterite, and between 1000 and 1500 tonnes of Coltan from the region.[23]
  • In 2000 the group killed 348 elephants in the Kahuzi-BiegaPark. Rebels were found with 2 tonnes of elephant tusks in the Bakavu area. It also seized 3 tonnes of elephant tusks in Isiro.[24]
  • Child labour was utilised by the group in the Kilo Moto and Equateur provinces.[25]
  • The group charged mining companies taxes on about 8 different minerals.[26]
  • The RCD group engaged in arms trading.[27]
/
  • DARA Forest Company obtained Timber concessions from the RCD. This amounted to an illegal extraction of timber because it occurred without authorisation from the government of the DRC.[28]
  • Citibank facilitated loan payments to RCD.[29]
  • A former first Vice-President of RCD was a shareholder in Air Boyoma. It transported natural resources between Goma and Lodja.[30]

Table 1

13.Table 2 below provides a list of other companies that were involved in activities that sustained the DRC conflict. This was done in various ways such as the payment of taxes to rebel forces who perpetrated human rights abuses, transportation of illegally exploited resources, failure to pay taxes to the authorities in the DRC, supplying arms and facilitating the trade in conflict resources.

Table 2

Company / Conflict sustaining activity
  • Air Navette,[31]
  • Jumbo Safari
  • New Gomair
  • Sun Air Services
  • Kivi Air Services[32]
  • Air Cargo Ziare[33]
/
  • Transportation of arms to rebels and removal of minerals and other forms of wealth from the DRC.

  • Sabena cargo[34]
  • SDV [35]
/
  • They were a part of the ‘chain of exploitation and continuation of war.’[36] Sabena Cargo was allegedly ‘transporting illegal natural resources extracted from the DRC’.[37]

  • Trinity
/
  • This company removed gold and timber from the DRC without paying any taxes to the DRC authorities.[38]

  • 33 companies from Germany, Belgium, Rwanda, Malaysia, Tanzania, Switzerland, Russia, India, the United Kingdom, Netherlands and Pakistan.[39]
/
  • They were involved in the importation of minerals from the DRC through Rwanda.[40]

  • Avient Air
/
  • Supplied services and equipment to the Zimbabwe Defence Forces.[41] These forces trained the FDD rebel group and supplied the group with arms.
  • It also brokered the sale of 6 attack helicopters to the Kinshasa government.[42]
  • It also carried out bombing raids in the Eastern DRC in 1999 and 2000.[43]

  • Somikivu
/
  • Operated in the eastern DRC and continued to pay taxes to rebels.[44]

Several individuals were instrumental in facilitating the exploitation of, and trade in, natural resources in the DRC. These individuals were listed in the final report of the Panel. The Panel suggested that the Security Council place a travel ban and financial restrictions on these individuals.[45] Two of these individuals were Jean-Pierre Bemba who later became vice-President of the Democratic Republic of Congo and Aziza Kulsum Gulamali alleged to have been one of the most notorious arms traffickers in the region. The companies listed in Table 3 formed relationships with these individuals in various ways shown below.

Table 3

Company / Individual / Alleged activities of the individual / Alleged link between individual and company
Air Navette[46] / Jean-Pierre Bemba.[47]
He was the leader of the MLC insurgent group that perpetrated human rights abuses in the DRC. /
  • Unlawful seizure of coffee beans from the EquateurProvince.[48]
  • Seized 200 tons of coffee from a coffee producing company.[49]
  • Instructed MLC insurgents to capture towns and forcibly empty banks of cash reserves.[50]
  • Produced counterfeit Congolese Francs which increased the rate of inflation in the DRC.[51]
  • Used child labour in the extraction of minerals.[52]
/
  • Air Navette transported resources that were seized by Bemba.

Sogem
Cogem[53]
Bank Bruxelles Lambert[54]
Starck[55]
Somigl[56] / Ms Aziza Kulsum Gulamali[57]
She allegedly provided arms to Hutu rebels and was alleged to have been one of the most notorious arms traffickers in the Great Lakes region. She was allegedly involved in the trafficking of ivory and gold /
  • She paid approximately U$1 million to the RCD rebel group per month.[58]
/
  • Sogem and Cogem were clients of Gulamali.[59]
  • BankBruxelles Lambert handled some of Gulamali’s finances.
  • Somigl was a conglomerate of the RCD, Gulamali was the General Manager of Somigl.

Joint venture companies

Incentives for assistance

14.According to the Panel President Kabila

“wielded a highly personalised control over State resources, avoiding any semblance of transparency and accountability. Management control over public enterprise was virtually non-existent and deals granting concessions were made indiscriminately in order to generate quickly needed revenues and to satisfy the most pressing political or financial exigencies.”[60]

15.The Kabila regime

“often used the potential of its vast resources in the Katanga and Kasai regions to secure the assistance of some allies or to cover some of the expenses that they might incur during their participation in the war. Among all of its allies, Zimbabwean companies and some decision makers have benefited most from this scheme…The most utilised scheme has been the creation of joint ventures.”

16.The Panel further stated that Kabila gave incentives in the form of mining concessions to Zimbabwean companies as a way of ensuring the continued support of Zimbabwean troops in the DRC’s war effort. It stated that:

“This scheme of giving incentives for assistance involved Zimbabwean companies receiving vast mining concessions, using their influence with the Kabila regime to develop joint ventures and receiving preferential treatment for their businesses”.[61]

17.The Panel’s assessment was that the

“richest and most readily exploitable of the publicly owned mineral assets of the DRC are being moved into joint ventures that are controlled by…private companies. These transactions, which are controlled through secret contracts and off-shore private companies amount to a million dollar corporate theft of the country’s mineral assets.”[62]

18.These joint ventures were formed as a result of the:

“will of private citizens and businesses who endeavour to sustain the war for political, financial and other gains; for example, generals and other top officers in the Ugandan and Zimbabwean army and other top officials and unsavoury politicians in the government of the DRC.”[63]

This lack of transparency, accountability and order as well as this system of patronage, created the context in which Zimbabwean businesses formed joint ventures during the war.

Zimbabwe Defence Forces (ZDF)

19.Zimbabwe’s official military force is referred to as the ZDF. The ZDF deployed troops to the DRC to assist Kabila in ejecting Rwandese, Ugandan and Burundian troops and rebels from the DRC. Within the ZDF was a division known as the Zimbabwe Defence Industries. Its main role was to take advantage of business opportunities on behalf of Zimbabwean military and government personnel. It formed various joint venture companies with the Kabila government. This was in an environment where “the constrains of governmental controls and regulations and a functioning legal system to enforce them” were “often absent.”[64] Table 4 below shows a few of the joint venture companies that were formed between ZDI companies, Congolese and other companies.

Table 4

Joint venture company / Alleged Zimbabwean partner / Alleged Congolese partner / Alleged other partners
SENGAMINES – the largest joint venture company formed during the DRC conflict / OSLEG
(OPERATION SOVEREIGN LIGITIMACY).
  • 40% share of the Sengamines venture company.
  • Controlled by Zimbabwe Defence Industries and Zimbabwean military personnel.
  • Main contribution was to provide security for the Sengamines mining project
  • No financial or technical capability to exploit minerals.
/ COMIEX CONGO
  • 20% share of the Sengamines venture company.
  • Provision of the resources to be exploited.
/ ORYX NATURAL RESOURCES.
  • 20% share of the Sengamines venture.
  • Provision of financial and technical capabilities needed for resource exploitation.

ORYX ZIMCON / ZIMCON
  • 90% share of the Oryx Zimcon.
  • Main contribution was the deployment of troops to the Kasai area to protect the project infrastructure from invasion by disgruntled resident communities.
/ ORYX
  • 10% share of Oryx Zimcon
  • Provision of financial and technical expertise for the exploitation of the resources.

COSLEG
Largest timber exploration operation in the world. / OSLEG / COMIEX

20.In addition to these joint ventures, the Panel stated that there were others which were formed by elite networks linked to the “smuggling of precious metal, gems, arms trafficking, illegal foreign exchange trading and money laundering.”[65] The elite network consisted of “politically and economically powerful groups involved in exploitation activities which are highly criminalised”.[66]