Press release / Aug. 30, 2016
Congo's Mines Minister calls for "genuine clean up" of gold sector following Global Witness investigation into chaotic boom in country's east
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Global Witness welcomes Minister's comments and calls for action from South Kivu governor
The Democratic Republic of Congo's Minister of Mines has called for a thorough 'clean up' of the chaotic artisanal mining sector in the eastern province of South Kivu. The move follows recent work by Global Witness and by Congolese civil society organisations to expose links between armed groups, the artisanal gold trade and some public officials in the South Kivu territory of Shabunda.
The Minister also calls for the prosecution of provincial mining officials who are found to have acted illegally and puts new restrictions on a Chinese-owned company accused of illegal operations. His comments come in a letter sent to the Governor of South Kivu which recognises "major problems" impacting "mineral supply chains causing fraud and smuggling of minerals" across the province particularly in Shabunda.
In July the Global Witness investigation River of Gold revealed how armed groups received gifts of arms and cash from a private Chinese mining company and made up to $25,000 per month extorted from local miners during a recent two-year gold boom in Shabunda territory. The report also revealed that in just one year, up to $17 million of gold produced by Kun Hou Mining, the Chinese-owned company, went missing and was likely smuggled out of Congo into international supply chains. Congolese civil society groups have raised the alarm about chaos in Shabunda since 2014.
The Governor of South Kivu must respond urgently and publicly, recognising the Minister's letter and support its contents in full - Sophia Pickles
"The Governor of South Kivu must respond urgently and publicly, recognising the Minister's letter and support its contents in full" said Sophia Pickles senior campaigner at Global Witness. "It's time to put words into action and make sure revenues generated from gold production go in to state coffers. The population of Shabunda deserve to benefit from their own country's mineral wealth and not have it swindled away by corrupt officials and cowboy companies".
The local population and civil society groups in Shabunda welcomed Global Witness' report at the time of its publication in July, holding a two day general strike or "ville morte" and calling for Kun Hou Mining to be investigated by the mining authorities. Local leaders published an open letter saying the same, as did Congolese civil society. Members of the private sector Congolese Chamber of Commerce have also shown strong support.
The South Kivu Governor and provincial mining authorities have so far let Kun Hou mining continue to operate freely. Shortly after the publication of Global Witness's report South Kivu's Mines Minister issued a highly restrictive new regulation which prohibits civil society's access to mine sites without special consent. The national Mines Minister has now said this restriction on civil society should be lifted.
In the 24 August letter the Minister, Martin Kabwelulu, also:
Commits to carrying out an independent research mission to Shabunda to look into the evidence of wrongdoing exposed by Global Witness;
Prohibits Kun Hou Mining from signing new contracts with mining cooperatives and from buying and selling gold – going further than an October 2015 instruction to the South Kivu Governor to suspend Kun Hou's activities;
Includes a rare acknowledgment that high ranking members of the Congolese army are preying on the mining sector in South Kivu and asks Congo's Defence Minister to remove them;
Calls for mixed teams to inspect mine sites and new information on mine sites, including the presence of children and pregnant women, to be passed regularly to his office.
"We know that Kun Hou are still present in Shabunda territory and have struck up a new deal with at least one mining cooperative in neighbouring Fizi territory", said Pickles. "Given the company's track record it's unclear why, almost a year after the national minister instructed that Kun Hou Mining be suspended, South Kivu's Governor has allowed the company to continue its operations and even to expand them".
In contrast to the Minister's public intervention, Dubai's mineral supply chain regulator the DMCC (Dubai Multi Commodities Centre) has remained silent. Global Witness showed in July that 12kg of Kun Hou Mining's gold from Shabunda was officially exported to Dubai-based Alfa Gold Corp. All of South Kivu's official gold exports for 2014 and 2015 went to Dubai.
Global Witness is calling for the DMCC to set out what actions it will take in response to the evidence of failures to meet its own responsible sourcing Guidance.
The Congolese government endorsed international supply chain due diligence standards established by the Organisation for Economic Cooperation and Development (OECD) in 2010 and brought them into domestic law in 2012. Chinese industry have also published similar mineral due diligence guidelines which provide directions and advice for companies like Kun Hou Mining to help ensure that their operations are not linked to abuses.
The Congolese government and the South Kivu authorities must ensure that companies in its gold sector adhere to these laws and standards to salvage the credibility of the province's mineral sector and its supply chains.
Sophia Pickles, Campaign Leader and Supply Chain Investigator
1. Congolese civil society first raised the alarm in a 2014 letter written by the NGO OBACADOSHA , and then again in the 2015 report by civil society platform COSOC-GL (Coalition des Organisation de la Société Civile dans la Région des Grands Lacs), http://cosoc-gl.org/2015/la-ruee-vers-lor-a-shabunda/
2. Chinese due diligence guidelines apply to all Chinese companies which are extracting, trading, processing, transporting, and/or otherwise using mineral resources and their related products and are engaged at any point in the supply chain of mineral resources and their related products. "Chinese company" in this regard means legal (for-profit) entities which are registered in China or overseas companies (including subsidiaries which are wholly- or majority-owned or controlled by a Chinese entity or individual. See https://www.globalwitness.org/en/press-releases/global-witness-welcomes-progressive-new-chinese-mineral-supply-chain-guidelines
3. In 2012 the Dubai Multi Commodities Trading Centre (DMCC) issued guidance to assist all "DMCC licensed members and non-members within the UAE's gold and precious metals industry on the implementation of the OECD guidelines on conducting due diligence and developing a risk management framework for responsible supply chain management of gold and precious metals when sourcing from conflict-affected and high risk areas". The document recommends that "all DMCC members and non-members should apply this guidance that incorporates the OECD management on responsible supply chain". See DMCC, 2012, "Practical Guidance for Market Participants in the Gold and Precious Metals Industry", http://www.dmcc.ae/gold-responsible-sourcing-precious-metals In June 2016 the DMCC updated its guidance, which will come in to force in August 2016.
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Letter Mining Minister DRC 24 08 2016 French