Conflict Minerals initiatives in DR Congo: Perceptions of local mining communities. Ken Matthysen & Andrés Zaragoza Montejano - PDF

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Conflict Minerals initiatives in DR Congo: Perceptions of local mining communities Ken Matthysen & Andrés Zaragoza Montejano 1 Editorial Conflict Minerals initiatives in DR Congo: Perceptions of local

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Conflict Minerals initiatives in DR Congo: Perceptions of local mining communities Ken Matthysen & Andrés Zaragoza Montejano 1 Editorial Conflict Minerals initiatives in DR Congo: Perceptions of local mining communities Authors: Ken Matthysen & Andrés Zaragoza Montejano (IPIS) Editing: Fiona Southward, Steven Spittaels, & Anna Bulzomi (IPIS); Frédéric Triest (EurAc); Chantal Daniels (Christian Aid); Zobel Behalal (CCFD); Koen Warmenbol ( ) Layout: Anne Hullebroeck Front Cover image: Artisanal miners working in Kalimbi mine, near Nyabibwe (IPIS, April 2013) Antwerp, November 2013 Acknowledgements: This project has been made possible through the support of Humanity United. The report reflects the views of the authors and can in no way be taken to reflect the views of Humanity United. The report has been developed in cooperation with the European Network for Central Africa (EurAc). 2 Executive Summary The exploitation of minerals is an important source of income for many communities in eastern Democratic Republic of Congo (DRC). Yet this mineral wealth also plays a significant role in the continuation of insecurity in parts of the country. Revenues from mineral trade have given armed groups the means to operate, and provided off-budget funding to (often poorly paid) state security forces. Whilst recognising that this mineral wealth is not one of the root-causes of conflict, their trade does play a central role in funding and fuelling conflicts in the DRC, further weakening the already fragile government. Over recent years, several domestic, regional and international initiatives have been developed to address the so-called conflict minerals problem and the high level of informality in the DRC s artisanal mining sector. The approaches taken by these initiatives include the development of certification schemes, traceability systems and due diligence measures. The initiatives have provoked varying reactions regarding their impact on local livelihoods. This report aims to provide insight into the impact of initiatives on the livelihood strategies of local communities in the DRC, based on field research in a wide range of mining areas; and document the perceptions of local stakeholders of these initiatives and their impacts. The report discusses the socio-economic consequences of the suspension of artisanal mining in 2010, instigated by the DRC president, and a subsequent de facto embargo, as most international mineral traders abstained from returning to the DRC in reaction to Section 1502 of the American Dodd-Frank Act. The research further reveals how the socio-economic situation has gradually improved, although not yet to pre-suspension levels, and insecurity has decreased, in less isolated mining areas that are more closely watched by the international community and local stakeholders. More remote areas, on the other hand, which have not yet profited from more concrete initiatives to resuscitate trade, have not witnessed an improvement of the socio-economic or security situation. In many areas, miners have responded to this decline by turning to the informal gold mining sector. A number of issues are listed that need to be addressed to ensure the success of a possible EU initiative on responsible sourcing of minerals from conflict-affected and high-risk areas. These issues include the need for local ownership, the question of political will, formalisation, lack of information in the field, and a lack of capacity to implement initiatives in the mining sector. Finally, the report s findings show how these so-called conflict minerals initiatives cannot substitute for a broader development policy by the DRC government. A possible EU initiative should therefore be part of a comprehensive approach that addresses, among other things, governance issues and the malfunctioning security sector. 3 Table of Contents Introduction 6 Background information 8 Case Studies North Kivu - Rubaya North Kivu Walikale South Kivu - Nyabibwe South Kivu - Idjwi Maniema Kalima and Kailo Maniema Lubutu North Katanga Kisengo and Sango Mutosha 30 General Findings Socio-economic consequences The need for a comprehensive approach Local ownership Political will Formalisation The lack of information in the field The lack of capacity to implement initiatives in the mining sector 40 Conclusions and recommendations 41 Abbreviations 45 Appendix Appendix 1 Tantalite world market price 47 Appendix 2 Tin world market price 48 Appendix 3 Tungsten world market price 49 Appendix 4 Overview of domestic, regional and international initiatives to address the so-called conflict minerals problem and the high level of informality in the country s artisanal mining sector 50 4 5 Introduction Since the Democratic Republic of Congo s (DRC) collapse into war fifteen years ago, its mineral wealth has played an important role in the dynamics of conflict and violence at play in the country. Whilst the population of eastern Congo 1 considers mineral exploitation to be a source of income in an environment where few other economic opportunities exist, the fact remains that Congo s mineral wealth plays a significant role in the continuing insecurity in the east. Control of mines and trading routes has played a central role in funding and fuelling warring parties in the DRC. The suffering borne by the Congolese population as a result of ongoing conflict has been great, encompassing extortion, mass rape, widespread displacement and child recruitment by rebel groups. It is important to stress that natural resources are not the root cause of the conflict, but just one factor that can be used to explain the ongoing conflict. The functioning of Congolese state itself has been characterised by weak governance, corruption, lawlessness and impunity. Armed groups retain a presence throughout certain parts of the country and state security forces are both un- and underpaid and lacking discipline. Any social contract between the Congolese government and its citizens is largely absent, and there is much distrust of government officials and institutions. Furthermore, the conflict has a significant regional dimension as a result of foreign rebels seeking shelter in eastern DRC, as well as the country s lengthy and porous borders, the refugee problem in the Great Lakes region, and neighbouring countries that continue to stir up instability in the DRC. International community involvement in the DRC has traditionally focused on, among other things, peacebuilding and peacekeeping, humanitarian assistance, and development projects. Since the beginning of the 21st century, however, the role of natural resource exploitation and its link to conflict have become more apparent. This has triggered the development of a number of domestic, regional and international initiatives to address the so-called conflict minerals 2 problem and the high level of informality in the country s artisanal mining sector. The approaches taken by these initiatives include the development of certification schemes, traceability systems and due diligence measures. 3 The initiatives have provoked varying reactions regarding their impact on local livelihoods. Positions have ranged from criticisms that the Congolese government and internationally initiated programs have closed down trade for artisanal mining production, to the conviction that such measures have decreased conflict funding. Thus, for instance, the UN Group of Experts (GoE) described the different impacts of such initiatives in the Congolese 3Ts 4 sector in their final 2012 report. They reported not only negative socio-economic consequences in some mining zones (e.g. school dropouts and reduced incomes), but also a rise in new commercial opportunities in other areas. They also observed an amelioration of the security situation around the major 3T mine, confirming that, during the reporting period, conflict financing decreased. 5 An overview of these initiatives can be found in Annex 4. While many initiatives have been developed with the intention of benefitting local populations, the voices of those most affected by these initiatives are often not heard. This report therefore aims to: (1) provide insight into the impact of initiatives on the livelihood strategies of local communities in the DRC; and (2) document the perceptions of local stakeholders of these initiatives and their impacts. 1 In this report eastern DRC refers to Orientale province s Ituri district, North Kivu, South Kivu, Maniema and northern Katanga. 2 The OECD defines Conflict minerals as minerals from conflict-affected and high-risk areas and identifies these areas by the presence of armed conflict, widespread violence or other risks of harm to people. It further explains that high-risk areas may include areas of political instability or repression, institutional weakness, insecurity, collapse of civil infrastructure and widespread violence. Such areas are often characterised by widespread human rights abuses and violations of national or international law. (Source: OECD, OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas: Second Edition, 2013, p. 13.) 3 For an overview of these initiatives and a detailed description, consult previous IPIS reports: Verbruggen D., Francq E. & Cuvelier J., Guide to current mining reform initiatives in eastern DRC, IPIS, April 2011; IPIS/CIFOR, The formalisation of artisanal mining in the Democratic Republic of the Congo and Rwanda, December The acronym 3Ts refers to tin, tantalum and tungsten, which are mined in the DRC in the form of cassiterite, coltan and wolframite ore. 5 Final report of the Group of Experts on the Democratic Republic of the Congo, 15 November 2012, UN Doc. S/2012/843, p. 5. 6 Since this research has focused on the overall impact of initiatives on Congolese artisanal mining communities and these communities perceptions of them, this report will not analyse every initiative individually. The initiatives effects overlap, sometimes supporting and sometimes contradicting one another. As such, none of the initiatives impacts can be assessed in isolation, but rather necessitate a more holistic approach to analysis. It is beyond the scope of this study to assess whether each individual initiative has met all its own principle objectives. This study was developed by the International Peace Information Service vzw (IPIS) in cooperation with the European Network for Central Africa (EurAc) and Humanity United. The report will help EurAc and its member organisations to advise the EU and European Member States on initiatives to formalise the Congolese artisanal mining sector. Furthermore, it aims to offer insights for the European Commission s development of its own initiative on responsible sourcing of minerals from conflict-affected and highrisk areas. The majority of the research was carried out through discussions with focus groups made up of various different stakeholders. Some focus groups included artisanal miners and others included the wives of miners. This was done in order to understand the prevailing situation beyond the microcosm of the mining site. Other focus groups brought together mining officials, traders, mining pit owners, civil society representatives and presidents of miners cooperatives. Besides organising focus groups, the researchers also carried out semi-structured interviews with a range of stakeholders including public servants, academic researchers and local civil society organisations in the towns of Kisangani, Goma, Kindu, Bukavu and Kalemie. The research team visited mining areas across the four eastern provinces of North Kivu, South Kivu, Maniema and (North) Katanga. The selection of sites was designed to reflect a broad picture of the artisanal mining landscape across these provinces. Focus groups were organised in the following towns: Rubaya (Masisi territory), Mubi and Ndjingala (Walikale territory) in North Kivu, Nyabibwe (Kalehe territory) and Idjwi island in South Kivu, Kalima (Pangi territory), Kailo and Lubutu in Maniema, and Kisengo (Nyunzu territory) in North Katanga. These places are depicted on the map on page 5. The report is divided into four sections. The first section provides a brief background and includes information on the Congolese mineral trading chain, the conflict minerals issue, the mining suspension instigated by the Congolese government and the subsequent de facto embargo experienced in the DRC. The second section provides case studies from various mining sites throughout eastern Congo. Each case study examines how various initiatives have impacted on local livelihoods, and how security in the region has evolved over recent years. Case-specific findings are presented at the end of each case study. The third section describes more general findings surrounding the impact of the various initiatives. These findings are based on interviews with stakeholders in the eastern Congolese provincial capitals and on the general findings from the case studies. The fourth section includes the reports conclusions and some recommendations from EurAc on the basis of the findings of this report. 7 Background information Artisanal mining has a long history in the DRC, dating back to colonial times. Since the 1970s it has grown significantly in the eastern part of the country, with the volume and value of artisanal production exceeding that of industrial production by the 1990s. However, the artisanal mining sector is largely informal. Thus despite the existence of a large number of artisanal miners and mineral traders, very few are officially registered. 6 This section aims to provide further background on artisanal mining in the DRC and an overview of some of the more significant initiatives that have been developed to address the conflict minerals issue. The informal and opaque nature of Congo s artisanal mining sector does not necessarily mean that it is chaotic. The sector, its production mechanisms and its trading patterns are in reality quite structured. At the source of the mineral supply chain, hundreds of thousands of miners (called creuseurs ) extract the ores with rudimentary tools and manpower under very difficult working conditions. Local middlemen ( négociants ) buy the minerals at the mines after negotiating the price. Often, these negotiations are not founded on equal bargaining power, as middlemen sometimes pre-finance new artisanal mining projects. After buying the minerals, the négociants transport them to the main trading hubs near the eastern border. Once at the trading houses ( entités de traitement, formerly called comptoirs ), minerals are sorted, processed for the first time, and subsequently exported to the world market. The capacity of state services to oversee the artisanal mining sector is extremely limited. This limited capacity is due to a number of factors including corruption, an inability to cover the territory under their responsibility and lack of means, personnel, resources and technical knowledge. The central government s lack of control offers an opportunity for armed groups, including state security services, to profit from the region s mineral wealth. A high level of informality makes it difficult for the government to secure a hold over the artisanal mining sector. This impedes efforts by the state and the international community to effectively tackle the conflict mineral phenomenon prevalent in the DRC, depriving local communities of the many potential benefits that could accrue from the area s mineral wealth. Efforts to address informality and conflict minerals should therefore take into account the wider issue of governance and state control. A number of initiatives have been put in place and what follows outlines some of those that have proved to be most significant. Since the early 2000s, international scrutiny of the conflict minerals issue has grown considerably with numerous reports by the UN Panel of Experts, academics and NGOs. Thus, when President Kabila and the Congolese Minister of Mines suspended all artisanal mining activities in the Kivu provinces and Maniema in September 2010, this was generally understood to be a response to growing international pressure to tackle the link between natural resources and conflict. The suspension aimed to address the involvement of armed groups and members of the regular army, Forces Armées de la République Démocratique du Congo (FARDC), in illegal mineral exploitation to reduce resultant levels of insecurity. Half year after its inception, the mining ban was lifted on 10 March It is now widely regarded to have been a failure. It had serious socio-economic consequences for local mining communities, whilst increasing mineral smuggling and creating opportunities for military units to heighten their control over the mining sector. Instead of officially sanctioning violations of the suspension, many military units perceived the ban as an opportunity to strike beneficial deals with miners and traders who continued to work. 7 Despite the withdrawal of the suspension, mineral trade struggled to revive in 2011 and Buyers in the international 3Ts market had become afraid of damaging their reputations due to the controversy surrounding conflict minerals and moved their sourcing away from the DRC. This is often referred to as the de facto embargo on Congolese 3T minerals. Another factor alleged to have caused companies to turn away from the DRC as a mineral supplier, is the creation of the Conflict-Free Smelter (CFS) programme, an initiative of the US Electronic Industry Citizenship Coalition (EICC) and the Global e-sustainability Initiative (GeSi). This programme has 6 IPIS/CIFOR (December 2012), op. cit., pp More information on the mining ban can be found in: IPIS/CIFOR (December 2012), op. cit., pp. 19, 30; Geenen S., A dangerous bet. The challenges of formalizing artisanal mining in the Democratic Republic of Congo, Resources Policy, 37, 3, September 2012, pp developed a very narrow interpretation, which was difficult to implement, of section 1502 of the US Dodd-Frank Act, which was signed into law in July Section 1502 obliges companies trading on US stock exchanges and implicated in tin, tantalum, tungsten and gold supply from the DRC or its neighbouring countries, to undertake supply chain due diligence. As such, most smelters decided to stop sourcing from the DRC to enable them to acquire conflict-free smelter status. Consequently, local mineral traders were obliged to sell at discounted prices to refiners and smelters who were not seeking CFS approval. 8 Furthermore, US industry has been criticised for its resistance to section 1502 of the Dodd-Frank Act, which has allegedly hampered the issuance of the Securities and Exchange Commission s (SEC) final rule to implement the law. Global Witness, for example, pointed at US Chamber of Commerce and the National Association of Manufacturers, and claimed this delay threatened the effectiveness of the law. Additionally, it added this had serious implications for the population of eastern DRC. 9 A wide range of other initiatives have also been developed to try to ensure that mineral extraction and trade in the DRC and the African Great Lakes region are not tainted by conflict. Certification systems, such as the German Federal Institute for Geosciences and Natural Resources (BGR) Certified Trading Chains (CTC) scheme, have been developed. These systems aim to demonstrate that the minerals in a given supply chain have been produced in a responsible way, by reference to a number of standards. Other initiatives include traceability systems. The tin industry association, International Tin Research Institute (ITRI), have developed a traceability system (itsci) that is operational in the DRC in respect of 3T supply chains. It is designed to identify the mine of origin of certain minerals, making it possible to distinguish clean
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