Africa's Public Procurement & Entrepreneurship Research Initiative – APPERI


Democratic Republic of Congo

Conflict minerals reporting guidance published


October 1, 2013 | Helen Gilbert

The guidance, compiled by the Responsible Sourcing Network and Enough Project, has been produced ahead of the 31 May 2014 deadline that requires companies who source minerals from the Democratic Republic of Congo to submit their first conflict minerals disclosures to the US Securities and Exchange Commission (SEC).

Policies should articulate a commitment to ensuring sourcing practices do not support conflict, human rights abuses including forced labour, mass atrocities and crimes against humanity, the Expectations for Companies’ Conflict Minerals Reporting guidance stated.

It detailed how firms should commit to exercising supply chain due diligence and consider the implementation of a supply chain transparency system that allows for the identification of the smelters and/or refiners in its minerals supply chain.

The metals tin, tantalum, tungsten and gold – also known as 3TG – should only be sourced from conflict-free covered countries, while companies should only use 3TG minerals from smelters that have been audited and verified as conflict free by a credible programme such as the Conflict-Free Sourcing Initiative, the document states.

Other recommendations include developing a conflict minerals programme that incorporates a description of the steps that will be taken to identify, assess, mitigate and respond to risks.

At a minimum steps should include supply chain surveys, supplier training, supplier and smelter encouragement, and an obligation to participate in the Conflict Free Smelter programme or equivalent, provided such industry schemes adhere to international standards, audits and unannounced spot checks, the report stipulated.

Darren Fenwick, senior government affairs manager at the Enough Project and report co-author said advocates for a clean minerals trade were keen to understand how companies, who are connected to the Congo through mineral sourcing, are addressing their connection to the conflict that has resulted in millions of deaths.

“Companies whose reports show compliance benefit from positive public sentiment and increased brand recognition,” he said.

Fellow co-author Patricia Jurewicz, Responsible Sourcing Network director added: “Investors would like to see their companies establish baselines the first year and specify the steps they are taking so we can then measure improvements in transparency and accountability reporting over time. Our paper provides a set of specific indicators that can be tracked to allow for comparability between annual reports.”


How Canada Dominates African Mining

April 18, 2013
Foreign companies from a range of countries compete in Africa‘s mining sector. But according to a number of measures, those from one country dominate: Canada.

Artisanal miners being chased away from a majority Canadian-owned gold mine in northern Tanzania. Photograph by Tamara Herman.

When asked to think about foreign mining contracts in Africa, many people’s minds will jump to China, or perhaps one of the former colonial powers such as the UK or France. China’s construction and agricultural projects in particular are at the core of the ‘Africa Rising’ narrative, as are the Asian giant’s more than 1.3 billion consumers.

Some readers might be surprised therefore to learn that Canada – with a population less than one-tenth that of China’s and geographically about as far from Africa as one can get – has quietly grown to become one of the largest stakeholders in Africa’s mining sector – possibly the largest, depending on how you quantify it.

A grizzly competitor

“We certainly are one of the biggest players [in Africa] in several respects”, Pierre Gratton, president and CEO of the Mining Association of Canada, told Think Africa Press. “It’s a largely undeveloped, unexplored continent, which makes it interesting….A new frontier. Our industry is often one of the first to go where no-one has gone before.”

Countries competing with Canada in African mining include the UK, France, Australia, China, and South Africa, but ranking their relative dominance is all but impossible; countries measure and declare assets and investments using different methodologies and with varying levels of transparency. However, documents provided by Natural Resources Canada seem to portray a relatively accurate picture of the country’s activities in Africa.

According to these documents, in 2011 – the most recent year for which statistics are available – 155 Canadian companies were operating in 39 African countries. Their combined assets* totalled more than $30.8 billion, up from $26.5 billion in 2010.

Canadian firms were most active in East Africa, with $12.7 billion on the ground in 2011. West Africa came next with $9.9 billion invested, followed by Southern Africa ($4.9 billion), Central Africa ($3.4 billion), and North Africa ($36.7 million).

Ranked in descending order by value of assets, Canada’s most important mining partners in 2011 were: Zambia, Mauritania, South Africa, Madagascar, Democratic Republic of the Congo, Ghana, Tanzania, Mali, Senegal, and Eritrea.

While Canada is a major force in African mining, current projects on the continent actually only comprise a minority of Canadian companies’ operations overseas. According to Natural Resources Canada, assets in Africa accounted for just 21.5% of Canadian mining companies’ cumulative assets abroad. The majority are in Latin America.

Taking stock

However, those numbers describe just the interests of companies headquartered in Canada. Expand the picture to take into account other country’s projects financed on Canada’s Toronto Stock Exchange (TSX) and the TSX Venture, and Canada’s role in mining around the world grows even more substantial.

According to a December 2012 report drafted by the TSX, during the first nine months of 2012, 89% of all global mining equity financings were done on the TSX and TSX Venture (up one point from 2011). The document states that only 7% of mining projects traded on the TSX are located in Africa, but that does not diminish the fact that a lot of money for mining sites in Africa is going through the exchange in Toronto.

“There are approximately 315-20 listed [mining] companies that are not African but are doing business in Africa”, says Bruce Shapiro, president of Mine Africa, a Canada-based business and marketing company. “Of those, over 50% are Canadian. So in terms of the companies that we would normally look at, we certainly dominate that market.”

Shapiro explains that what sets Canada apart is the level of access to finance available on the TSX, where there’s a tradition of an appetite for risk. “Capital, at the moment, is impossible to raise”, he remarks, in reference to struggling developed economies. “But if it wasn’t, it would be relatively easy in Canada, compared to some other markets.”

Shapiro notes that Canada has vast deposits of mineral wealth within its own borders, a long history mining those deposits, and is now taking this expertise to Africa. Looking to the future, he continues, prospectors tend to be moving either into less-explored low-risk areas with stable governments or high-risk regions that tempt miners with the potential of very high rewards.

Rocky relations?

But in addition to a favourable private sector, mining companies are also attracted to Canada for a less-flattering reason, suggests Jamie Kneen, a coordinator for advocacy group MiningWatch Canada.

“There are hardly any Canadian laws of international application”, he says. “If something goes wrong, people may be able to sue in Canada, but that’s not entirely clear – it hasn’t worked yet.”

Kneen explains that while countries such as the US have passed domestic laws that govern corporations’ activities abroad, Canada has not done the same. The current Conservative government has actually voted down several attempts to increase accountability abroad.

One of those attempts to regulate the mining sector overseas was initiated by Member of Parliament John McKay. In April 2009, he proposed a bill that aimed to increase corporate accountability in developing countries, but to no avail.

“It died a glorious death”, McKay recalls on the phone from the Canadian capital of Ottawa. “They [mining lobbyists] don’t play to lose.”

He notes that without such legislation, international corporations based in Canada are left to self-regulate their conduct and adhere to the domestic laws of the countries in which they operate as they see fit.

“We have no ability to tell any mining company what to do, when to do, where to do, or how to do it”, McKay emphasises. In much of Africa, that creates potential for abuse. “Canadian companies are venturing into areas they’ve never ventured before”, he says. “There doesn’t seem to be any hesitation to go into conflict zones and areas where you know darn well you’re going to have some difficulties of some kind.”

Indeed, as Pierre Gratton from The Mining Association of Canada notes, Africa’s mining sector is expected to continue to expand, and Canadian interests on the continent to grow with it.

“There’s a recognition that this is something that we do well here, that we’re good at mining”, he says. “It’s one of the exceptions to the Canadian economy – we tend not to necessarily dominate sectors, but in mining, we do.”

*Natural Resources Canada defines mining companies’ cumulative “assets” as “calculated at acquisition, construction or fabricating costs, and includes capitalized exploration and development costs, non-controlling interest, and excludes liquid assets, cumulative depreciation [sic], and write-off.”

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Iranian bidder sparks halt to $2 bln Uganda dam project

Reuters Africa

September 7, 2012

By Elias Biryabarema

KAMPALA, Sept 7 (Reuters) – Uganda has halted plans to develop a $2.2 billion hydropower dam after objections were raised over the short-listing of an Iranian company in potential contravention of international sanctions, a procurement official said on Friday.

Billed as one of East Africa‘s largest infrastructure projects, construction of the 700 MW Karuma dam on the Nile river was expected to begin by the end of this year aimed at overhauling the east African nation’s stuttering energy supply.

“We received petitions by a whistleblower and representatives of other companies which were left out who said one of the firms that prequalified was an Iranian (firm),” said Vincent Mugaba, spokesperson for Public Procurement and Disposal of Public Assets Authority (PPDA).

“The Iranian company would not have the capacity to conduct international trade in light of sanctions imposed on Iran so we have halted the whole procurement process until we complete an investigation into the matter,” Mugaba said.

Washington and Europe have imposed sanctions on Tehran over its disputed nuclear programme. Some of the sanctions make it difficult for other countries to trade with Iran.

Mugaba said PPDA had requested the energy ministry, which is managing Karuma’s procurement process, to explain why it had overlooked the impact of sanctions on the Iranian company, Perlite Construction.

“What happened was that when we prequalified the Iranian company the U.S. sanctions had not come into effect but of course we realise that the company might have problems executing the contract if its bid was to be successful,” Yusuf Bukenya-Matovu, a public relations officer at the energy ministry, told Reuters.

“Uganda isn’t bound to respect U.S. unilateral sanctions but nevertheless there are implications. Perhaps there would be problems if the Iranian firm were to win but we’ll cooperate with the PPDA investigation,” he said.


The Karuma dam is expected to more than double the country’s total power output. The state-run Electricity Regulatory Authority says Uganda produces a total of 550 MW while power demand at peaks stands at about 480 MW.

The snag was the latest to stall progress on Karuma, which the government is banking on to help prevent persistent power outages that have put a strain on the economy and discouraged investors from pouring more money into the oil-rich country.

Several years ago, a Norwegian investor that had expressed interest pulled out because it failed to secure funding for the project.

The Ugandan government wants to develop Karuma as a public-private project with the private investor as lead financier.

Uganda is keen to woo investment in its cash-starved energy sector to rapidly increase its generation capacity and in October plans to start pegging power tariffs to changes in inflation, international fuel prices and the exchange rate to make the sector more attractive.

Energy officials say the internal rate of return for energy projects in Uganda is fairly attractive at between 15-18 percent and higher than South Africa’s 12-14 percent, although the country has a higher risk perception.

Commercial hydrocarbon deposits were discovered along the Albertine rift basin along its border with the Democratic Republic of Congo in 2006 and reserves are estimated at 2.5 billion barrels. (Editing by Yara Bayoumy and Jason Neely)

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Congo Copper Mine Deals Questioned


By Patrap Chatterjee

August 2nd, 2012

Eurasian Natural Resources Corporation (ENRC), a global mining company that got its start in Kazakhstan, has won a new $101.5 million license to dig for copper at the Frontier mine in the Democratic Republic of Congo. The company has been criticized by Global Witness for its purchases of rights from offshore companies connected to Dan Gertler, a controversial Israeli diamond merchant.

“The Congolese state has foregone billions of dollars in revenues by secretly selling off its assets on the cheap to offshore companies,” Daniel Balint-Kurti, campaigner for the Democratic Republic of Congo at Global Witness said in a press release issued last month. “With so much at stake in one of the poorest countries on the planet, ENRC must do the right thing and shed full light on its dealings.”

Per-capita income in the Congo is under $300 a year and experts at the Carter Centre, which was founded by former US president Jimmy Carter, say there is a reason. “In a mining sector defined by irregularities and mismanagement, large industrial mining projects can earn huge profits for investors and government officials,” Sam Jones, associate director of the centre’s human rights program, told the Guardian. “(L)ittle revenue finds its way back into desperately impoverished Congolese communities for schools, healthcare, or other social services.”

The Frontier copper mine is located near the town of Sakania in the Congo, about a mile from the Zambian border. It is located in the copper belt that straddles the border of the two countries that has been exploited commercially from the days of Belgian colonization to this day. Indeed the profits from the Union Minière du Haut Katanga, the original mining company in the region, was a major source of wealth for Belgium at the beginning of the 20th century.

First Quantum, a Canadian company, acquired the rights to mine for copper at Frontier in 2001 but was forced to turn it over to Sodimco, a state owned company in 2010 by the Congolese government. The licences were then sold to Fortune Ahead, a Hong Kong shell company. Meanwhile First Quantum filed multiple legal claims demanding $4 billion in compensation for Frontier and other assets nationalized by the Congolese government.

In January this year First Quantum agreed to turn over all its prior mineral rights to ENRC for $1.25 billion. ENRC had already bought rights to the giant Kolwezi tailings project for $175 million and purchased CAMEC, yet another Congolese company that owned a half share in the SMKK copper and cobalt mine.

But exactly who paid whom how much for mining rights in the Congo is up for debate. “ENRC’s purchase of its stake in Kolwezi was structured through a deal between itself and at least seven companies registered in the British Virgin Islands, all connected to Dan Gertler,” states a Global Witness fact sheet. “When ENRC bought the remaining 50 per cent stake in SMKK, it purchased it from another British Virgin Islands company linked to Mr Gertler. Even ENRC’s acquisition of CAMEC involved sale purchase agreements with several offshore companies linked to Dan Gertler which held shares in CAMEC.”

Gertler, an Israeli diamond merchant, has been doing business in Congo for over a decade, working first with Laurent-Désiré Kabila, the former president of the Congo, and now with his son, Joseph Kabila, the current president.

“The nature of these deals raises serious questions about whether corrupt Congolese officials could be benefitting from Congo’s considerable mineral wealth at the expense of the Congolese people,” says Balint-Kurti. “Global Witness has been calling for ENRC to publish the full results of an external audit into its dealings in Congo, conducted by the law firm Dechert.”

It is certainly not the first time Gertler and the Kabila clan have been linked. A lawsuit filed in Israel by Yossi Kamisa, a former Israeli fighter who worked for Gertler, says that the diamond tycoon had offered the elder Kabila military aid to the Congolese army in 2000.

“At the time, the Second Congo War (1998-2003) was raging – one of the most brutal conflicts in the history of the African continent, involving eight countries, dozens of guerrilla organizations and a horrific human toll that included large-scale rape and even cannibalism,” write Gidi Weitz, Uri Blau and Yotam Feldman in Haaretz newspaper. “This did not deter Gertler from realizing his plan to penetrate the lucrative diamond market in the DRC.”

Kamisa’s lawsuit charges that he “witnessed Gertler’s method of operation, involving paying considerable sums of money as bribery to different individuals in the Congo government … all in order to pave the way to a meeting with the president of Congo and to improve the terms of the future agreement that was to be struck between him and the state.”

Gertler denied these allegations, calling them vengeful and baseless, says the newspaper.

Texas oilman is at it again — now with Zuma

Mail&Guardian Online


February 17, 2012

A Nigerian-American oilman, who has become a major backer of President Jacob Zuma, paid R50-million to a wanted Congolese warlord in an illegal gold deal, according to the United Nations.

A UN expert group monitoring compliance with arms sanctions in the Democratic Republic of Congo has identified Kase Lawal, who heads the second-largest black-owned business in the United States, as the financier of the deal. Lawal persisted with the deal even after being told the warlord was the seller, the panel has claimed.

But the transaction imploded last February when security agents in the eastern DRC arrested Lawal’s half-brother and some associates, confiscating the gold they had just bought. Lawal and Camac, the oil and gas group he heads, tried to distance themselves from the events at the time, suggesting it was really one of the associates’ deals.

It was just seven months later, in September last year, that Lawal took pride of place next to Zuma in Houston when Lawal’s alma mater, the Texas Southern University, awarded Zuma an honorary doctorate. Lawal appears to hold some sway at the university — he became its largest alumnus donor in 2009 by pledging $1-million, after which he, too, received an honorary doctorate.

At Zuma’s award ceremony a partnership was announced between Camac and Zuma’s charitable foundation, the Jacob G Zuma RDP Education Trust, in terms of which the company would sponsor beneficiaries of the trust to study at Texas Southern and another Houston university. That, the trust confirmed to the Mail & Guardian, came on top of a five-year, R1-million-a-year Camac endowment to the trust, effective from 2010.

Zuma founded the trust in the 1990s when he was a KwaZulu-Natal MEC. The trust’s website says it is supporting 1 200 young people to get an education…Read more.

IBM launches new centre in Ghana

International Business Machine (IBM) as part of its 100 years anniversary on Thursday announced the opening of a new procurement centre in Ghana to support IBM’s rapid business growth in the region and lay the foundation for additional industry growth initiatives throughout the continent.

The new Accra centre will serve clients and business partners in Ghana and 16 other African countries including Nigeria, Kenya, Burkina Faso, Chad, Congo Brazzaville, Democratic Republic of Congo, Gabon, Madagascar, Malawi, Niger, Seychelles, South Africa, Sierra Leone, Tanzania, Uganda and Zambia.

The procurement centre opening coincided with the launch of the IBM 2011 “Driving Efficiency” road show. 

In a presentation, the Head of Strategic Lead, Muhammed El Shanawany said storage efficiency expectations continue to rise as information keep doubling from 18-24 months, 20 -40 per cent growth per year with 70 percent of IT budget spent on management systems.

IBM will staff the procurement centre with local talent to help ensure the development of new skills for a modern workforce and to help stimulate economic growth market.

IBM previously announced a collaborative partnership with the University of Ghana. Through this partnership IBM provided educational programming, curricula and technology experts to the university.

UN expert urges DRC Government to audit the country’s debt

United Nations

KINSHASA (5 August 2011) – The United Nations Independent Expert on foreign debt and human rights, Cephas Lumina, urged the Government of the Democratic Republic of the Congo (DRC) to undertake an audit of the country’s debt, as a first step to increase transparency and accountability in the management and use of public resources.

“The Government needs a clear picture of the country’s debt burden to lay the foundation for a transparent and effective public debt management system and avoid a renewed build up of unsustainable debt in the future,” said Mr. Lumina at the end of his ten-day fact-finding mission*.

In July last year, the country qualified for debt relief after completing the Heavily Indebted Poor Countries’ (HIPC) Initiative and was expected to have up to 80 percent of its external debt of $13 billion cancelled.

“I commend the Government for implementing policies that have led to a budget surplus this year and for attaining the completion point under the HIPC Initiative,” Mr. Lumina said. “These achievements will enable the authorities to improve the delivery of human rights-related basic social services, such as water, sanitation, education, health, and housing.”

However, the UN Independent Expert noted, corruption, a narrow revenue base and the fragile security situation in parts of the country remain significant challenges. “Sustainable development will not be possible without resolving them,” he stressed….(*) Check the Independent Expert full end-of-mission statement here.

DR Congo must publish deals to prove its commitment to transparency

DRC, orthographic projection.
Image via Wikipedia, April 11, 2011

The Democratic Republic of Congo must honour its transparency pledges by publishing details of major natural resource agreements, said Global Witness today.  The call comes on the eve of a World Bank meeting that will consider whether conditions for lifting its freeze on new aid to the country have been met, as set out in an “economic governance matrix”, made public today by Global Witness.

Congo’s government has begun to introduce reforms that would increase transparency in its natural resource sector, including the timely publication of mining, oil and forest agreements. These improvements aim to meet the conditions set out in the matrix and, if implemented, could see hundreds of millions of dollars in World Bank aid unblocked.

“Congo’s natural resource sector has long been plagued by corruption and bad management,” said Lizzie Parsons, campaigner for Global Witness.  “In the past the government has dragged its heels in publishing contracts, but these commitments set out in the matrix are a very positive development. Now it must deliver, and seize this golden opportunity to clean up the sector.”

Publishing details of its $6 billion resources-for-infrastructure agreement with China, in which Congo promised Chinese state firms millions of tonnes of copper and cobalt in return for infrastructure projects, would send a clear message that the Congolese government is taking its stated commitments seriously.

Global Witness recently highlighted the opacity of the Congo-China deal in its report China and Congo: Friends in Need.  The report raised concerns that key aspects of the deal – such as the pricing of minerals – were undefined. A renegotiated version of the deal from 2009 has not yet been published, leaving the Congolese public in the dark over its full contents.

Following the publication of China and Congo: Friends in Need, the Congolese government gave Global Witness a list of finalised and planned infrastructure projects to come online within the first phase of construction.

“The sharing of information by the Ministry of Infrastructure and the recent online publication of progress in construction projects by its Infrastructure Unit are encouraging steps towards greater transparency”, said Parsons. “We hope to see similarly positive commitments in the country’s natural resource sector.”

Congo is poised to sign new deals with investors in its natural resource sector. In the past year, major new oil deals have handed blocks in northeastern Congo to Foxwhelp and Caprikat, previously unknown companies based in the tax haven of the British Virgin Islands. It is crucial that these contracts are also published and that the true or “beneficial” owners of the companies, currently hidden from the public eye, are made known. The country has also recently signed an agreement with the China Development Bank covering, among other aspects, mining, oil and infrastructure. However, scant information regarding the agreement is available, including its financial value or the period over which the activities would take place.

“Proposed investments in Congo’s resource sector could transform the country’s future – but only if they are properly managed and subject to public scrutiny,” said Parsons. “The World Bank and other donors to Congo should urge the government to publish natural resource contracts.  Such measures make it easier for Congolese people to better understand how their nation’s money is being spent and to have some assurance that their country’s rich resources will be used to drive development and fight poverty.”

/ Ends


Lizzie Parsons, +44 (0) 207 492 5865 and +44 (0) 7808 761572

Daniel Balint-Kurti, +44 (0) 207 492 5872 and +44 (0) 7912 517 146

Notes to editors:

1. Global Witness’ report, China and Congo: Friends in Need, was launched in Kinshasa on 8 March and is available in EnglishFrench and Chinese. Extra material is also available here, including copies of the September 2007 and April 2008 Congo-China agreements and relevant Chinese state guidelines.

2. A copy of the economic governance matrix in French, infrastructure information relating to the Congo-China deal (also in French),  and cartographic information of planned infrastructure under China deal are all available here.

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