Kinshasa, April 11, 2014 Attn: Mr. Jonas Moberg Head of EITI International Secretariat Ruseløkkveien 26, 0251 Oslo, Norway
DRC’s Request for EITI Compliance Review ______
Dear Sir,
I refer to the letter of April 23, 2013 of Mrs. Clare Short, EITI International Chairperson regarding the temporary suspension of the Democratic Republic of the Congo from EITI and hereby request from you to carry out a review of the DRC status and determine if the country has reached EITI Compliance.
We dare believe, following the release of 2011 EITI-DRC Report within the indicated timeframe and the addendum of information to the same report, as provided in Requirement 1.6 of the EITI Norm, that the International Secretariat would undertake this review.
You will find hereto attached the timeline adopted by the Multipartite Group as well as the list of documents to be submitted, which will arrive to you through D.H.L on the 15 April inst.
Moreover, we consider it possible that the review for our country can be carried out within nine weeks instead of fifteen as is indicated in the related TORs. You may understand that our entire Nation is looking forward to this review and that therefore, coming to know earlier the Board’s conclusion is a wish of all.
We would be grateful if you would let us know of any information you may require.
Sincerely yours,
For the Chairperson of the Executive Committee,
Crispin Atama Tabe Mogoli
Deputy Chairperson of EITI-DRC Executive Committee Minister of Hydrocarbons
Certified copies: Matata Ponyo, Prime Minister Daniel Mukoko, Deputy Prime Minister, Minister of Budget Célestin Vunabandi, Minister of Planning, Chair of EITI-DRC Executive Committee Martin Kabwelulu, 1st Deputy Chair of EITI-DRC Executive Committee Bavon N’Sa Mputu Elima, Minister of Environment, Nature Conservation and Tourism, 2nd Deputy Chair of EITI-DRC Executive Committee Professor Jérémy Mack Dumba, EITI-DRC Country Coordinator
DEMOCRATIC REPUBLIC OF THE CONGO
Executive Committee of the Extractive Industries Transparency Initiative
VALIDATION REPORT
This Validation report has been translated from French Should any doubt arise, the French version prevails
February 2013 © CAC 75 EITI Democratic Republic of the Congo
ABSTRACT
Since the Democratic Republic of the Congo joined the EITI in 2005, the implementation of the Initiative has undergone 3 distinct phases: - Phase I: a disrupted launch of the Initiative, with very limited progress (2005 – June 2009) - Phase II: a revival of the Initiative, with significant progress (July 2009 – December 2010) - Phase III: the reinforcement of the Initiative (January 2011 – December 2012) This last phase has enabled the National Initiative to reach a certain maturity, characterised by: - A clear political commitment, conveyed through key actions1 - The highly active involvement of civil society - A strengthened and continuous involvement of extractive companies - Regular activity of the Steering Committee, which now benefits from an enlarged Technical Secretariat2 and a provincial office in Katanga - Numerous awareness campaigns, training seminars and dissemination operations throughout the country, as well as devoted members of the National Assembly, the Senate and the Provincial Assemblies - The elaboration of the 3 new EITI reports covering the 2008-2010 period The last EITI report, reconciling payments and revenues for the year 2010, which we consider to be of high quality3, presents very limited discrepancies (< 1%) for the oil sector and reasonable discrepancies (< 5%) for the mining sector. Nevertheless, and despite important progress made in defining the scope of the EITI reports4, uncertainties remain regarding the evidence supporting its exhaustiveness, specifically in the absence: - For the oil sector, of the State-owned company COHYDRO - For the mining sector, of the provincial taxes, the revenues yielded by the disposal of assets for State-owned companies and the costs for services rendered This difficulty in defining the scope of the DRC most surely finds its source in the complexity of the mining sector, characterised by diverse levels of taxation (national and provincial), numerous collecting entities throughout the country, various types of fiscal regimes (common law coexists with manifold specific contracts and agreements), profuse taxes and fees and partial computerisation of the collecting State agencies. Thus, despite the meaningful efforts made by the Executive Committee, the significant progress made by the National Initiative, as presented above, and the qualitative reconciliation process for 2010, the uncertainties relative to the absence of some benefit streams and extractive companies impede us from confirming the exhaustiveness of the scope as well as that of the payments and revenues included in the 2010 EITI report (Requirements No.9, 14 and 15). On these bases, the EITI in the Democratic Republic of the Congo does not seem to be fully compliant with the EITI Rules, 2011 edition.
1 Regular involvement of the highest State authorities within the multi-stakeholder group, publication of various mining contracts, adoption of a decree bonding the extractive companies to participate in the EITI reconciliation processes, computerisation of 2 State agencies facilitating the production of qualitative data 2 Composed of 10 individuals 3 Use of appropriate reporting templates, of disaggregated data, declared on cash basis and according to the currency of payments and receipts 4 Notably through a study defining the scope of the EITI 2010, conducted previously the launch of the reconciliation process
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EITI Democratic Republic of the Congo
- 41, rue Guérin
77300 Fontainebleau - France Tél : +33 (0)1 64 22 22 70 Fax : +33 (0)1 64 22 49 20
Mr. Minister of the Plan Chairman of the Executive Committee of the EITI Kinshasa DEMOCRATIC REPUBLIC OF THE CONGO
Paris, February 27, 2013
PRESENTATION LETTER
Mr. Chairman,
Context The Extractive Industries Transparency Initiative (EITI) aims to improve the transparency of revenues yielded from extractive activities within countries rich in oil, gas and mining resources. The Democratic Republic of the Congo (DRC) joined the EITI in 2005 and is a candidate country since February 2008. Following the publication of the first Validation report in December 2010, the Democratic Republic of the Congo remained a candidate country "having made significant progress”. To assess the compliance of the country against the EITI Requirements, it was decided that the DRC was to provide an independent assessment of progress made in the implementation of the EITI Rules 2011 edition, to the EITI International Board before 1 March 2013. The period subject to this validation begins on the date the country joined the EITI, and ends on January 20135. As a certified validator from the EITI International Board, CAC 75 has been selected to conduct the Validation of the Initiative in the DRC, in accordance with the procedures agreed upon with you, and in compliance with the EITI Rules, 2011 edition.
Work performed We commenced our work in December 2012, with the analysis of the documents supporting the EITI process in the DRC6. We have reviewed the 2011-2013 EITI work plan, the decrees, the minutes of meetings of the Executive Committee, the 2008-2009 EITI reports as well as
5 So as to enable the elaboration of the Validation report, its translation and its review by the EITI Validation Committee 6 The list of documents used is available in Appendix I
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the draft 2010 EITI report. We have also distributed the self-assessment forms to the extractive companies. Furthermore, we have conducted, from 7 January 2013, a series of interviews in Kinshasa and Lubumbashi, with representatives of the various stakeholders including Mr. Célestin Vunabandi Kanyamihigo, Minister of the Plan and Chairman of the Executive Committee, Mr. Albert Kabuya, representing the PCQVP coalition and also Mrs. Cyril Kamonda Litata, representing State-owned companies. The full list of interviewees is presented in Section 1.1. The draft Validation report was presented and discussed with the Executive Committee on 13 February 2013 in Kinshasa.
The Validation report This Validation report has 5 sections and Appendices. The first part briefly presents the Validation process, the Congolese mining sector, the progress made by the EITI in the Democratic Republic of the Congo (the EITI-DRC), as well as the involvement of civil society and extractive companies in the national process. The second part is dedicated to the overall assessment of the EITI implementation in the DRC. The third part analyses in detail each of the Requirements of the EITI. The fourth part addresses the impact and sustainability of the EITI process in the DRC, as well as the prospects for the National Initiative. The fifth and final section offers recommendations to foster the development of the Initiative. The Appendices contain the list of references used in this Validation report, the 2011-2013 EITI work plan, the self-assessment forms completed by the extractive companies and the payment certificate.
Judgment of the validator Based on the work performed, we believe that the EITI in the Democratic Republic of the Congo has achieved compliance for the following Requirements:
Requirement No.1 Requirement No.6 Requirement No.12 Requirement No.2 Requirement No.7 Requirement No.13 Requirement No.3 Requirement No.8 Requirement No.16 Requirement No.4 Requirement No.10 Requirement No.17 Requirement No.5 Requirement No.11 Requirement No.18 We however consider that the EITI in the Democratic Republic of the Congo has not achieved
compliance for the Requirements No.9, No.14 and No.15.
Suggested recommendations Particular attention should be given to the progress made in some Requirements, for which recommendations are proposed in the final part of this report.
Yours sincerely
Hugues Renaux Partner
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0.
1. SUMMARY
ABSTRACT PRESENTATION LETTER
1. INTRODUCTION ...... 9 1.1.The Validation process ...... 10 1.2.The extractive sector ...... 13 1.3.The progress accomplished by the National Initiative ...... 15 1.4.The involvement of civil society ...... 17 1.5.The involvement of extractive companies ...... 18
2. GLOBAL EVALUATION OF THE EITI IMPLEMENTATION 19 2.1.Our analysis of the EITI Requirements ...... 20 2.2.The Validation grid ...... 21
3. EVALUATION OF EITI REQUIREMENTS ...... 22 Requirement No.1 ...... 23 Requirement No.2 ...... 25 Requirement No.3 ...... 28 Requirement No.4 ...... 29 Requirement No.5 ...... 33 Requirement No.6 ...... 38 Requirement No.7 ...... 41 Requirement No.8 ...... 45 Requirement No.9 ...... 48 Requirement No.10 ...... 57 Requirement No.11 ...... 59 Requirement No.12 ...... 62 Requirement No.13 ...... 65
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Requirement No.14 ...... 68 Requirement No.15 ...... 71 Requirement No.16 ...... 74 Requirement No.17 ...... 77 Requirement No.18 ...... 80 Requirement No.19 ...... 83 Requirement No.20 ...... 86
4. OTHER CONSIDERATIONS ...... 88 4.1. The impact of the EITI ...... 89 4.2. The sustainability of the SLEITI process ...... 90 4.3. Beyond EITI...... 90
5. RECOMMENDATIONS ...... 91
6. APPENDICES ...... 94
Appendix I References Appendix II The EITI work plan Appendix III Self-assessment forms Appendix IV The payment certificate
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KEY ABBREVIATIONS USED IN THIS VALIDATION REPORT
State agencies DGDA Direction Générale des Douanes et Accises DGI Direction Générale des Impôts DGE Direction des Grandes Entreprises DGRAD Direction Générale des Recettes Administratives, Judiciaires, Domaniales et de Participation IGF Inspection Générale des Finances
Civil society PCQVP Publiez Ce Que Vous Payez FEJE Femme et Justice Economique NDS Nouvelle Dynamique Syndicale CEPECO Centre pour la Promotion et l’Education des Communautés de base RRN Réseau Ressources Naturelles ASHADO Association Africaine pour la Défense des Droits de l’Homme
Extractive sector AMC Anvil Mining Congo AMCK Anvil Mining Company Katanga CDM Congo Dongfang International Mining CHEMAF Chemical of Africa CMSK Compagnie Minière du Sud Katanga COHYDRO Congolaise des Hydrocarbures COMIDE Congolaise des Mines et de Développement COMISA Compagnie Minière de Sakania CPP Contrats de Partage de Production GECAMINES Générale des Carrières et des Mines KCC Kamoto Copper Company KICC Kinsenda Copper Company METALKOL Compagnie de Traitement des Rejets de Kingamyambo MIBA Société Minière de Bakwanga MIOC Muanda International Oil Company MUMI Mutanda Mining SAKIMA Société Aurifère du Kivu et de Maniema SCMK – Mn Entreprise Minière de Kisenge Manganèse/Société Commerciale de Kisenge Manganèse SECAKAT Société d’Exploitation de la Cassitérite au Katanga SEK Société d’Exploitation de Kipoyi SICOMINES Sino-Congolaise des Mines SMKK Société Minière de Kabolela et de Kipese SODIMICO Société de Développement Industriel et Minier du Congo SODIMIKA Kimpe Mabaya Kapapa
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SOKIMO Office des Mines d’Or de Kilo-Moto/Société de Kilo-Moto SOMIKA Société Minière du Katanga STL Société de Traitement du Terril de Lubumbashi TFM Tenke Fungurume Mining
Others CTB Coopération Technique Belge FC Congolese franc MFC Millions of Congolese francs MDTF Multi-Donor Trust Fund DRC Democratic Republic of the Congo ToRs Terms of Reference USD US Dollars
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INTRODUCTION 1.1. The Validation process Objectives Process Stakeholders met
1.2. The extractive sector The oil and gas sector The mining sector
1.3. The progress accomplished by the National Initiative
1.4. The involvement of civil society
1.5. The involvement of extractive companies
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1.1. The Validation process
Objectives
Validation is an essential feature of the EITI process. It serves two critical functions. Firstly, it promotes dialogue and learning at the country level. Secondly, it safeguards the EITI brand by holding all the EITI implementing countries to the same global standard.
Process
The EITI is a robust, but flexible standard that is country-led and allows an implementation which is adapted to local needs and circumstances. However, the quality of implementation can only be ensured with one single Validation methodology applicable to all Candidate countries. The EITI International Board supervises Validation to ensure quality, consistency and sustainability of the process. The main steps of an EITI Validation are: • Multi-stakeholder group agreement to commence Validation The MSG must agree on when to schedule the Validation, how the process will be conducted, and who should oversee the process throughout. • Procurement of a validator Policy Note No.2 sets out the steps and modalities for procurement. The implementing country finances the cost of Validation (see Policy Note No.4). • Validation The validator assesses the adherence to the EITI Principles and Criteria by assessing compliance with the 20 EITI Requirements (see section 4.4, below). Validation is a consultative process. The validator should meet with the multi-stakeholder group, the organisation contracted to reconcile the figures disclosed by extractive companies, the government and other key stakeholders (including civil society and extractive companies not in the multi-stakeholder group). The validator should also consult available documentation, including: - The EITI work plan, and other planning documents such as budgets and communication plans - The MSG’s Terms of Reference, and minutes from MSG meetings - The EITI reports, and supplementary information such as summary reports and associated communication materials - Company forms The validator should produce a draft Validation report for comments by the MSG and the EITI International Board. The EITI International Board – via the Validation Committee – will review the draft Validation report to ensure that it is exhaustive and provides an adequate basis for establishing the country’s compliance with the EITI Requirements. The Validation Committee’s comments on the draft Validation report must be addressed in the final version of the report. The final version of the Validation report should be formally endorsed by the multi-stakeholder group and the government. The country publishes the final Validation report. • The EITI International Board analyses the report and decides on the status of the country The EITI International Board will review the final Validation report and decide on the status of the country.
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Stakeholders met
The series of discussions organised during the Validation process enabled us to meet various representatives of the EITI stakeholders. Thus, we were able to talk with Mr. Jean-Yves Parant, Kiala Lazarus and Jean-Marie Bambile representing KPMG, the firm in charge of drafting the 2010 EITI report. These meetings were held in Kinshasa and Lubumbashi, within a secured environment, which facilitated a constructive and free dialogue with the validator.
Members of the government Name Function Organisation M. Sadok Bigamza Vice-Minister Ministry of Plan M. Pierre Mwaku Nzaji Counsellor in charge of good governance, Ministry of Mines transparency and mining traceability Prof. Daniel Mukoko Samba Vice-Prime Minister and Minister Vice-Primature, Ministry of Budget M. Roger Shulungu Vice-Minister Ministry of Finance M. Jean-Pierre Molobonzama Beta Head of the Legal Unit DGI M. Jean Kolamba Tschibang Head of Unit at the DGE DGI M. Robert Mbarushimbana Kahmano Provincial Director DGI M. Damou Katangak Head of the Collections Unit DGI M. André Monga Numbi Head of Unit DGDA M. Simon Kapajika Head of Unit DGDA M. Menama Mongundu Head of the Partnerships Unit DGDA M. Fely Emony-N.Likala Deputy Director DGRAD M. Kayumba Bihamba Head of the Revenue Accounting Unit DGRAD M. Blaise Bwele Mika Head of Collections Unit (Katanga) DGRAD
Executive Committee Name Function Organisation Government constituency M. Céléstin Vunabandi Kanyamihigo Minister Ministry of Plan M. Martin Kabwelulu Minister Ministry of Mines M. Crispin Atama Minister Ministry of Hydrocarbons M. Patrick Kitebi Minister Ministry of Finance
Name Function Organisation Civil society constituency M. Jean-Paul Katende Representative Association Africaine de Défense des Droits de l’Homme (ASHADO) M. Albert Kabuya Representative Publiez Ce Que Vous Payez (PCQVP) Name Function Organisation Extractive industries constituency Mme Cyrille Kamonda Litata Representative Public companies M. Simon Tuma Waku Representative Mining companies Mme Françoise Van de Ven Representative Forestry companies
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Technical Secretariat Name Function Organisation Prof. Jéremy Mack Dumba National Coordinator Secrétariat technique M. Jean-Jacques Kayembe Mufwankolo Technical Expert Secrétariat technique M. Franck Nzira Iya Tegera In charge of discrepanciesSecrétariat technique M. Robert Nzomba Giboba In charge of data collection Secrétariat technique Mme Léonie Kiangu In charge of capacity building Secrétariat technique Mme Marie-Louise Djuma In charge of communication Secrétariat technique
Other stakeholders Name Function Organisation M. Steve Panza Representative MMG Kinsevere M. Kassongo Bin Nassor Deputy Director Public Relations TFM M. Emmanuel Umpula Director ACIDH M. Jean-Pierre Okenda Representative POM/ACIDH M. Jean-Marie Kabanga Representative POM/GANVE M. Ibond Rupas Anzam Representative POM/SADRI M. Chrisitan Bwenda Representative CEPAS Mme Denise Nagembo Representative CDF M. Elie Kadima Representative MDR
Reconcilers Name Function Organisation M. Jean-Yves Parant Managing Partner KPMG M. Lazare Kiala Supervisor KPMG M. Jean-Marie Bambile EITI Manager KPMG M. Anton Mélard de Feuardent Partner Fair-Links
Technical partners and donors Name Function Organisation M. Rodney Dyer Head of Unit DFID M. Paul Mabolia Yenga National Coordinator PROMINES M. Jean-Luc Mutombo-Mudiay Senior Officer CTB
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1.2. The extractive sector
The oil and gas sector
The oil and gas reserves of the DRC are mainly located in the region of the Bas-Congo, both onshore and offshore. The production of oil and gas amounted to 25,000 bbl/d7 in 2010. This production is run: - Onshore by Perenco and Lirex, subsidiaries of Perenco. The State-owned company Congolaise des Hydrocarbures (COHYDRO) is a shareholder of Lirex8 - Offshore by Muanda International Oil Company (MIOC), subsidiary of Perenco. Its partners are Teikoku and Chevron9 Moreover, various extractive companies such as Soco, Surestream or Energufl were in exploration in 2010, also in the Bas-Congo region. The Albertine Graben basin, located at the border with Uganda, has attracted an increasing number of exploring companies since 2006; thus, permits have been delivered, amongst others, to South Africa Congo Oil in 2007 and to Divine Exploration Group in 200810. The oil and gas sector is governed by the law No.67-231 of 11 May 196711. The State has signed two concessions agreements in 1969, notably with Perenco12. Since then, production sharing agreements (PSA) are signed with arriving operators13.
The mining sector
Reserves The DRC holds some of the world’s greatest mineral reserves. The province of Katanga is one of the world’s richest regions in cobalt, with 47%14 of worldwide reserves; the DRC also ranks 2nd in terms of worldwide copper reserves, behind Chile. The central area of the country, made up of the 2 Kasais, is one of the world’s richest regions in diamonds. The north-east of the country further holds vast resources of gold, and the eastern provinces – Maniema, as well as Nord and South Kivu – contain important resources of coltan and cassiterite15.
The main mineral reserves of DRC
7 Périmètres des rapports ITIE-RDC 2010-2011, Hart Group (17 octobre 2012) 8 2010 Minerals Yearbook Congo, USGS (June 2012), p. 9 et Site de Perenco-rep : www.perenco-drc.com 9 Id. 10 Geps Report Democratic Republic of Congo, IHS (November 2011) 11 Rapport de Validation, CAC 75 (septembre 2010) 12 Oil fiscal laws, Direction Générale des Impôts website : www.dgi.gouv.cd (2012) 13 The oil contracts, Ministère des Mines website : www.mines-rdc.cd (2012) 14 2010 Minerals Yearbook Congo, USGS (June 2012) 15 Rapport de Validation, CAC 75 (septembre 2010)
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Production The production of cobalt and copper is very important and has grown significantly since 2006. In 2010, the DRC produced 51% of the world’s cobalt16, with 61,000 tons extracted17, and 3% of the world copper, with 440,000 tons extracted18. More than 360 companies exploring or producing cobalt and copper operate in Katanga. The main ones, of international status, operate in partnership with the State-owned company GECAMINES19. Amongst them, we specifically note20: - Tenke Fungurume Mining (TFM), held by Freeport McMoran (56%) and GECAMINES (20%). TFM produced 8 000 tons of cobalt and 115,000 tons of copper in 2010 - Katanga Mining, which operates in a joint venture with GECAMINES (75%/25%) the mines of Kamoto and T17 and which produced 4 000 tons of cobalt and 70,000 tons of copper in 2010 - Boss Mining, which primarily operates the mine of Mukondo and which produced 5 000 tons of cobalt and 60 000 tons of copper in 2010 The production of diamonds in the DRC (16.8 million carats in 201021) represents 25% of the world’s production of industrial diamonds and 5% of the world’s production of jewellery diamonds22. The industrial production is ensured by la Société Minière de Bakwanga (MIBA), 80% of which is held by the government and 20% by SIBEKA, a Belgian company. MIBA mainly produces industrial diamonds from the region of Kasai Oriental23. Despite the growing presence of multinational mining companies, artisanal mining remains central in the DRC: it is estimated that 90% of the mining production derives from it and the country could count up to 2,000,000 diggers24. Artisanal mining covers mainly gold, tantalum and cassiterite. The sector is largely unstructured; the artisanal producers deliver their production to negotiators, who resell it to upgrading plants in the country25. The mining sector is governed by the law No.007 of 11 July 2002 on the Mining Code, by the 26 Mining Regulations enacted by the decree No.038/2003 of 26 March 2003 and by the Investment Code. The Chinese Contract In March 2008, the governments of the DRC - represented by GECAMINES - and China - represented by the Groupement d’entreprises chinoises27 - signed a collaboration contract which resulted in a joint- venture, the Sino-Congolaise des Mines (SICOMINES), 32% of which is held by GECAMINES and 38% by the Groupement d’entreprises chinoises. This cooperation project of 6.2 Billion USD aims for the construction of infrastructures in the DRC, which will be financed by a mining project. In practice, SICOMINES holds mining licenses for several mineral deposits located in the province of Katanga, where the joint-venture intends to invest 3.25 Billion USD. 66% of the mining benefits will be used for the reimbursement of the mining and infrastructure projects; the remaining 34% will be distributed as dividends to the shareholders. A certain number of infrastructure works have begun; the mining project, however, has not started yet.
16 Cobalt is widely used in the metal working industry to produce high-performance alloys, www.wikipedia.org (January 2013) 17 Rapport de Validation, CAC 75 (septembre 2010) 18 2010 Minerals Yearbook Congo, USGS (June 2012) 19 Rapport de Validation, CAC 75 (septembre 2010) 20 Id. 21 Id. 22 2010 Minerals Yearbook Congo, USGS (June 2012) 23 MIBA website : www.mibardc.net 24 Périmètres des rapports ITIE-RDC 2010-2011, Hart Group (17 octobre 2012) 25 Rapport de Validation, CAC 75 (septembre 2010) 26 Concerning these 2 texts, see the Ministère des Mines website: http://mines-rdc.cd (2012) 27 According to the study Périmètres des rapports ITIE-RDC 2010-2011, Hart Group (17 octobre 2012), p. 32, this grouping is composed of the Exim Bank of China, the CREC (China Railway Engineering Corporation) and the SINOHYDRO company
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1.3. The progress accomplished by the National Initiative
2005 2006 2007 2008 2009 2010 2011 2012 2013
Phases Phase I Phase II Phase III Public statement Candidate country
Multi-stakeholder group
2007 EITI report Dissemination
2008-2009 EITI report Dissemination 2010 EITI report Dissemination Communication
Chronogram of activities of the EITI-DRC (2005-2013)
Since the DRC joined the EITI in 2005, the implementation of the Initiative counts 3 distinct phases: - Phase I: a disrupted launch of the Initiative, with very limited progress (2005 - June 2009) - Phase II: a revival of the Initiative, with significant progress (July 2009 - December 2010) - Phase III: the reinforcement of the Initiative (January 2011 - January 2013)
Phase I: a disrupted launch of the Initiative, with very limited progress (2005 - June 2009) In 2005, the Initiative was built around 3 main bodies: a Steering Committee of 26 members, in charge of defining the strategic orientations for the Initiative; a Technical Committee of 40 members, in charge of the operations of the EITI and defining a EITI work plan; lastly, a Permanent Secretariat, composed of a Coordinator and 3 deputies, structured in 3 sub- committees. This cumbersome Initiative was recomposed in 2007 with just as many members however: a Steering Committee of 29 members, in charge of strategic orientations; a Consultative Council of 42 members and an Executive Secretariat, managed by a EITI Secretary and structured in 4 sub-committees. The functioning of this institutional structure, counting more than 70 members coming from various horizons, sometimes without any connection with the EITI, heavily strained the development of the National Initiative. Even if EITI work plans have been drafted for 2007- 2008 and 2009, they have not been published and have only been partially implemented. No reconciliation work was done and no EITI report was published during that period. We further understand that the National Initiative did not obtain the funding needed for its improvement.
Phase II: a revival of the Initiative, with significant progress (July 2009 - December 2010) Deemed too complex, the institutional structure of the EITI-DRC was simplified in July 2009 and structured around an Executive Committee of 16 members (8 representatives of the government, 4 representatives of civil society and 4 representatives of extractive companies) and a Technical Secretariat. These 2 structures make up the National Committee of the EITI, chaired by the Minister of the Plan.
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In July 2009, a reconciler was recruited and data for 2007 was reconciled. The first EITI report was presented to the Executive Committee in December 2009 and it was officially published in March 2010; it is available on the EITI website www.itierdc.org and its synthesis was distributed in 4 national languages in Kinshasa, as well as in the provinces of Katanga and Bas-Congo. Despite the fact that it was based on uncertified EITI reporting templates and that it presented significant discrepancies, the report seems to have enabled the National Initiative to gather the EITI stakeholders. Furthermore, a 2010-2011 EITI work plan has been established based on the partially implemented 2009 EITI work plan, and with the prospect of financial support from the Multi- Donor Trust Fund (MDTF), administered by the World Bank. It is our understanding that the funds needed to implement this work plan have not been made available, which impeded the implementation of the planned actions. After a first Validation process finalised in December 2010, the EITI International Board decided "to designate the DRC as a candidate country close to compliance", despite some indicators being declared unmet.
Phase III: the reinforcement of the Initiative (January 2011 - January 2013) The Executive Committee adopted an ambitious action plan for 2011-2013 in September 2011, but the lack of funding delayed its implementation by almost a year. The second EITI report covering the years 2008-2009 was however published in January 2012, 16 months after its official launch. In 2012, the Technical Secretariat of the EITI was staffed, and a new coordinator was appointed. The significant funding and the human and technical reinforcement of this operational structure, has restored the operational capabilities and dynamics of the EITI-DRC. Finally, the Initiative has benefited this year from record funding and numerous communication activities and training have been implemented. The EITI 2010 report, published in January 2013 with short notice, reflects a strengthened ownership of the process by stakeholders. In their opinion, these two reports illustrate the genuine progress of the EITI-DRC, particularly in terms of consolidation of the scope and participation. Launched in December 2012, the new Validation process should lead to the publication of the report no later than 1 March 2013.
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1.4. The involvement of civil society28
An institutional structure favourable to civil society participation The institutional structure of the EITI in the DRC, both the old one and the one adopted in July 2009, leaves much room for the representatives of civil society. Indeed, they have successively benefited from 16 seats out of 69, 16 seats out of 71 and 4 seats out of 16 since July 2009, increasing their proportional representation (from approximately 22% to 25%). In the Executive Committee, civil society is currently represented by: - Mr. Albert Kabuya, representative of the coalition Publiez Ce Que Vous Payez (PCQVP) - Mr. Jean-Claude Katende, representative of the Association Africaine de Défense des Droits de l’Homme (ASHADO) - Mr. Jacques Bakulu, representative of the Centre pour la Promotion et l’Education des Communautés de base (CEPECO) - Mr. Jean-Pierre Muteba, representative of the Nouvelle Dynamique Syndicale (NDS) Their fields of competence grant them the awareness needed in the treatment of issues related to the transparency of the extractive sector.
Independence of action and freedom of speech The representatives of civil society consider that their representation within the Executive Committee is sufficient and that they can work soundly. The minutes of meetings of the Executive Committee allow for the confirmation of these statements. We also find that the organisations sitting in the Executive Committee are able to produce, whether alone or with other structures, public documents on the implementation of the EITI as well as on the situation of the oil and mining sectors. The wording used in the publications of organisations sitting in the Executive Committee is striking (“the exploitation of the natural resources has fostered democratic deficit, corruption and sometimes civil wars. As a result, the province of the Bas-Congo is one of the poorest oil-rich regions in the world”), as is the wording used in the publications of organisations involved in transparency issues (“at present, [the EITI] faces several challenges, especially with regards to the sincerity of the EITI reporting templates (even if audited) submitted by State agencies, State-owned and private companies”).These positions confirm the freedom of action and speech of civil society members.
The mobilisation of civil society for trainings While the first Validation report was severe regarding the limited budget dedicated to building the capacities of civil society in the 2010-2011 EITI work plan, this budget was raised to more than 115,000 USD in the 2011-2013 EITI work plan, thus showing the government’s intention to remove any obstacles to the participation of civil society in the EITI. In this regard, members of the Executive Committee have benefited from the following workshops: - Capacity-building workshop for the EITI stakeholders in the province of the Kasai Occidental, on 22 and 23 August 2012 - Capacity-building workshop for the EITI stakeholders in the Oriental province, on 7 and 8 September 2012 - Capacity-building workshop for the EITI trainers in the dissemination of the EITI in the provinces of the Kasai Oriental, Equator, Bas-Congo and Bandundu, between September and December 2012 Moreover, representatives of civil society sitting in the Executive Committee regularly participate in the organisation and presentation of workshops on the EITI and the extractive sector, proposed to a wider audience.
28 See Requirements No.4 and No.6 for further details
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1.5. The involvement of extractive companies29
An institutional architecture favourable to the participation of extractive companies As seen in Requirements No. 2 and 4, the institutional structure of the EITI in the DRC, both the old one and the one adopted in July 2009, leaves much room for the representatives of extractive companies. Indeed, they have successively benefited from 16 seats out of 69, 16 seats out of 71 and 4 seats out of 16 since July 2009, increasing their proportional representation (from approximately 22% to 25%). In the Executive Committee, extractive companies are currently represented by: - Mr. Robert Munganga, representing State-owned companies - Mrs Yvonne Mbala, representing oil companies - Mr. Simon Tuma Waku, representing mining companies - Mr. Dieter Haag, representing forestry companies The scope of the 3 EITI reports published so far by the DRC, actually includes State-owned, oil and mining companies. The inclusion of the forestry sector is currently being examined. The representatives of the extractive companies regularly attend the meetings of the Executive Committee and certain extractive companies included in the EITI scope – AMC, Ashanti Gold, De Beers or Chevron – belong to groups that have joined the EITI at the international level. In addition, while the decree of 16 July 2009 encourages a voluntary involvement of extractive companies in the EITI, the Ministerial order of 23 March 2012 stipulates that: “following the Rules enacted by the Extractive Industries Transparency Initiative, the mining companies are bound to report […] all the payments made to the State”. Indeed, all the extractive companies included in the scope of the 2010 EITI report have submitted their EITI reporting templates; all of their declarations are presented on a disaggregated basis in the Appendices to the report.
The renewed mobilisation of extractive companies The expansion of the scope of extractive companies from one EITI report to the next has enabled extractive companies to renew their participation in the National Initiative. Thus, the 60 oil and mining companies in the scope participated in the elaboration of the 2010 EITI report; they were 41 (out of 41) for the 2008-2009 EITI report and 26 (out of 27) for the 2007 EITI report. As for civil society, the extractive companies benefited from actions to strengthen their capacities: the 2011-2013 EITI work plan dedicates them a training budget of 90,000 USD. Indeed, since the latest Validation report, extractive companies have been able to participate in the following workshops: - Capacity-building workshop for the EITI stakeholders in the province of the Kasai Occidental, on 22 and 23 August 2012 - Capacity-building workshop for the EITI stakeholders in the Oriental province, on 7 and 8 September 2012 - Capacity-building workshop for the EITI trainers in the dissemination of the EITI in the provinces of the Kasai Oriental, Equator, Bas-Congo and Bandundu, between September and December 2012 We note that some extractive companies have, in 2012, contributed financially with more than 184,000 USD to the implementation of the National Initiative. While some may find that this contribution creates a risk for a potential conflict of interest, this funding proves first and foremost, after 2011 was struck with a lack of financial support, the commitment of numerous extractive companies to sustain the EITI in the DRC.
29 See Requirements No.4 and No.7 for further details
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2. GLOBAL EVALUATION OF THE EITI IMPLEMENTATION
2.1. Our analysis of the EITI Requirements
2.2. The Validation grid
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2.1. Our analysis of the EITI Requirements
Considering the results of this analysis, we consider that the EITI in the Democratic Republic of the Congo is compliant with the following Requirements:
Requirement No.1 Requirement No.6 Requirement No.12 Requirement No.2 Requirement No.7 Requirement No.13 Requirement No.3 Requirement No.8 Requirement No.16 Requirement No.4 Requirement No.10 Requirement No.17 Requirement No.5 Requirement No.11 Requirement No.18 However, we cannot conclude that the EITI in the Democratic Republic of the Congo complied with the Requirements No.9, No.14 and No.15.
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2.2. The Validation grid
Requirement met Requirement unmet
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3. EVALUATION OF EITI REQUIREMENTS
Requirement No.1 ...... 23 Requirement No.2 ...... 25 Requirement No.3 ...... 28 Requirement No.4 ...... 29 Requirement No.5 ...... 33 Requirement No.6 ...... 38 Requirement No.7 ...... 41 Requirement No.8 ...... 45 Requirement No.9 ...... 48 Requirement No.10 ...... 57 Requirement No.11 ...... 59 Requirement No.12 ...... 62 Requirement No.13 ...... 65 Requirement No.14 ...... 68 Requirement No.15 ...... 71 Requirement No.16 ...... 74 Requirement No.17 ...... 77 Requirement No.18 ...... 80 Requirement No.19 ...... 83 Requirement No.20 ...... 86
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Requirement No.1 The government is required to issue an unequivocal public statement of its intention to implement the EITI
Evidence
Evidence stated in the EITI Rules, 2011 edition Finding Paragraph
a) The statement has been made by the head of State or government Yes 2 b) The statement has been made at a formal launch event, publicised through the national Yes 1 and 2 media, or placed on a dedicated EITI website c) The statement indicates the measures and actions the government intends to take to meet Yes EITI Criteria d) A copy of the statement has been sent to the EITI International Secretariat Yes 1
See EITI Rules, 2011 edition, p. 15
1. A public statement in March 2005 The government of the DRC manifested for the very first time its intention to join the EITI during a speech from the Vice-President of the Republic, given at the 2nd EITI international conference, organised in London on 17 March 2005.
2. A commitment reaffirmed since New public statements confirming the government’s commitment to the EITI have been reaffirmed since, such as: - Statements by the Ministers of Finance, of the Plan, of Mines, of Oil and Gas and of Environment at the Conference on the EITI process in the DRC, that took place in Kinshasa on 8 and 9 January 200830 - The statement of the President of the Republic, Mr. Joseph Kabila, on the home page of the website of the National Initiative www.itierdc.org, which confirmed/claimed that the DRC was committed and accepted “voluntarily the framework for exchange and consultation represented by the EITI Initiative and all the norms it enacted”31 - The letter of the Prime Minister, Mr. Mapon Matata Ponyo, dated 2 June 2012 and sent to the Chair of the EITI International Board, Mrs Clare Short, restating “the commitment undertaken by the government to pursue the implementation” of the EITI32
References
N° 8-280 Lettre du Premier Ministre de RDC à la Présidente de l'ITIE réitérant l'engagement du gouvernement de RDC dans la mise en œuvre de l'ITIE (2 juin 2012) 7-50 Discours du Président de la République Joseph Kabila, site Internet ITIE RDC http://itierdc.org 4-460 Discours des différents responsables ITIE lors de la Conférence sur le processus ITIE-RDC
30 Discours des différents responsables ITIE lors de la Conférence sur le processus ITIE-RDC (8-9 janvier 2008) 31 Discours du Président de la République Joseph Kabila sur le site ITIE RDC www.itierdc.org 32 Lettre du Premier Ministre de RDC à la Présidente de l'ITIE réitérant l'engagement du gouvernement de RDC dans la mise en œuvre de l'ITIE (2 juin 2012)
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Opinion of the stakeholders
The stakeholders confirm the government’s commitment to the EITI, publicly formalised and regularly reaffirmed since.
Conclusion
The initial statement of the government confirming its commitment to implement the EITI, and the regular public confirmations stated since, lead us to conclude that the EITI-DRC is compliant with this Requirement.
Requirement No. 1 is met
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Requirement No.2 The government is required to commit to work with civil society and extractive companies on the implementation of the EITI
Evidence
Evidence stated in the EITI Rules, 2011 edition Finding Paragraph
a) Companies and civil society have substantively been engaged in the design, Yes 1 and 2 implementation, monitoring and evaluation of the EITI process b) There are no more obstacles to civil society and company participation process Yes 1 and 2 c) There is an enabling framework for civil society organisations and companies in Yes 1 and 2 implementation of the EITI d) The government has refrained from actions which result in narrowing Yes 1 and 2 or restricting public debate in relation to the implementation of the EITI e) Civil society and company representatives have been able to speak freely on Yes 2 transparency issues f) Civil society and company representatives have had the right to communicate Yes 2 and cooperate with each other
See EITI Rules, 2011 edition, p. 15
1. A strong and continuous commitment of the government to work with civil society and extractive companies The government has regularly committed itself to working with civil society and extractive companies, especially during: - The informal meeting with civil society and the private sector under the presidency of the World Bank, on 6 September 2007, during which government representatives restated their commitment to “complying with the principles of transparency and participation in all the EITI components in its governance”33 - The Conference on the EITI process in the DRC on 8 and 9 January 2008, during which the Minister of the Plan announced: “the government, civil society and extractive companies must join hands from now on” 34 - The seminar held on 9 and 10 July 2009, regarding information sharing and exchange with civil society on the implementation of the EITI and the mission of the PCQVP coalition35 - The workshop for awareness raising of extractive companies and civil society, held in the presence of the Minister of the Plan on 28 and 29 January 2010, which brought forth the need for “an active participation of extractive companies and other partners from society as a whole” in order to ensure the success of the EITI36 Moreover, the government has committed to work with the stakeholders to strengthen the EITI process, in various occasion, and notably: - Capacity-building workshop for the EITI stakeholders in the province of Kasai Occidental, on 22 and 23 August 201237
33 Mémo concernant la réunion informelle entre le Ministère du Plan, la société civile et le secteur privé (6 septembre 2007) 34 Discours des différents responsables ITIE lors de la Conférence sur le processus ITIE-RDC (8-9 janvier 2008) 35 Rapport de synthèse du séminaire d'information et d'échange avec la société civile sur la mise en œuvre de l'ITIE et la mission de la coalition PCQVP en RDC (10 juillet 2009) 36 Atelier de renforcement des capacités et sensibilisation des parties prenantes à l'ITIE dans la province du Katanga, discours de présentation et Termes de Références (28-29 janvier 2010) 37 Rapport de l'atelier de renforcement des capacités des parties prenantes de l'ITIE dans la province du Kasaï Occidental (22-23 août 2012)
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- Capacity-building workshop the EITI stakeholders in the Oriental province, on 7 and 8 September 201238 - Capacity-building workshop for the EITI trainers in the dissemination of the EITI in the provinces of Kasai Oriental39, Equator40, Bas-Congo41 and Bandundu42, between September and December 2012
2. An institutional structure favourable to the participation of the civil society and the extractive companies The government created favourable conditions for the participation of civil society and extractive companies in the EITI, through the adoption of the following texts: - The decree No.05/160 of 18 November 2005 on the creation, organisation and functions of the National Committee of the EITI-DRC. By this decree, the National Committee is placed under the authority of the Minister of the Plan and has clearly identified objectives. Its seats are equally distributed amongst the various stakeholders: civil society and extractive companies are represented by 32 members - The ordinance of 3 September 2007, amending and supplementing the decree No.05/160 of 18 November 2005 on the creation, organisation and functions of the National Committee of the EITI- DRC. By this ordinance, civil society and extractive companies keep their 32 seats - The decree No.09/27 of 16 July 2009 on the creation, organisation and functions of the National Committee of the EITI-DRC. By this decree, the organisation is simplified; civil society and extractive companies henceforth hold 8 seats out of 16 In addition, since the publication of the first Validation report, civil society and extractive companies were able to participate in the following training workshops: - Capacity-building workshop for the EITI stakeholders in the province of Kasai Occidental, on 22 and 23 August 201243 - Capacity-building workshop for the EITI stakeholders in the Oriental province, on 7 and 8 September 201244 - Capacity-building workshop for the EITI trainers in the dissemination of the EITI in the provinces of Kasai Oriental45, Equator46, Bas-Congo47 and Bandundu48, between September and December 2012 If the Requirements No.6 and 7 detail the involvement of civil society and extractive companies in the implementation of the EITI, we note in the minutes of the meetings of the Executive Committee that both representatives of civil society and extractive companies
38 Rapport de l'atelier de renforcement des capacités des parties prenantes de l'ITIE dans la province orientale (7- 8 septembre 2012) 39 Rapport de l'atelier de formation des formateurs pour la vulgarisation de l'ITIE dans la province du Kasaï Occidental (18-19 septembre 2012) 40 Rapport de l'atelier de formation des formateurs pour la vulgarisation de l'ITIE dans la province de l'Equateur (11-12 octobre 2012) 41 Rapport de l'atelier de formation des formateurs pour la vulgarisation de l'ITIE dans la province du Bas-Congo (13-14 novembre 2012) 42 Rapport de l'atelier de renforcement des capacités des formateurs à la mise en œuvre de l'ITIE dans la province du Bandundu (1 décembre 2012) 43 Rapport de l'atelier de renforcement des capacités des parties prenantes de l'ITIE dans la province du Kasaï Occidental (22-23 août 2012) 44 Rapport de l'atelier de renforcement des capacités des parties prenantes de l'ITIE dans la province orientale (7- 8 septembre 2012) 45 Rapport de l'atelier de formation des formateurs pour la vulgarisation de l'ITIE dans la province du Kasaï Occidental (18-19 septembre 2012) 46 Rapport de l'atelier de formation des formateurs pour la vulgarisation de l'ITIE dans la province de l'Equateur (11-12 octobre 2012) 47 Rapport de l'atelier de formation des formateurs pour la vulgarisation de l'ITIE dans la province du Bas-Congo (13-14 novembre 2012) 48 Rapport de l'atelier de renforcement des capacités des formateurs à la mise en œuvre de l'ITIE dans la province du Bandundu (1 décembre 2012)
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express themselves freely; furthermore, their points of view are taken into account in the deliberations.
References
N° 6-105 Atelier de renforcement des capacités et sensibilisation des parties prenantes à l'ITIE dans la province du Katanga, discours de présentation et Termes de Référence (28-29 janvier 2010) 5-310 Décret n°09/27 du 16 juillet 2009 portant création, organisation et fonctionnement du Comité National ITIE-RDC 4-460 Discours des différents responsables ITIE lors de la Conférence sur le processus ITIE-RDC (9 janvier 2008) 3-430 Mémo concernant la réunion informelle entre le Ministère du Plan, la Société Civile et le secteur privé (6 septembre 2007) 1-100 Décret n° 05/160 du 18 novembre 2005 portant création, org anisation et fonctionnement du Comité National ITIE-RDC Other references available in Appendix I
Opinion of the stakeholders
The stakeholders confirm the commitment of all the stakeholders to the EITI implementation and the regular interaction of the actors.
Conclusion
The favourable institutional environment, the participation of all stakeholders in the EITI-DRC, the organisation of awareness raising and training campaigns and the commitment of the EITI members on issues of transparency lead us to conclude that the EITI-DRC is compliant with this Requirement.
Requirement No. 2 is met
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Requirement No.3 The government is required to appoint a senior individual to lead on the implementation of the EITI Evidence
Evidence stated in the EITI Rules, 2011 edition Finding Paragraph
a) The appointment of the senior individual has been publicly announced Yes 1 b) The appointee has the confidence of all stakeholders and is situated in relevant agencies Yes 1 or ministries c) The appointee has the authority and freedom to coordinate action on EITI and is able to Yes 1 mobilise resources for country implementation
See EITI Rules, 2011 edition, p. 15
1. A senior official coordinating the implementation of the EITI since 2007 The implementation of the National Initiative has been coordinated by Mr Olivier Kamitatu Etsu, Minister of the Plan, until April 2012. His nomination was formalised by the decree No.05/160 of 18 November 2005 on the creation, organisation and functions of the National Committee of the EITI-DRC. Mr Célestin Vunabandi Kanyamihigo, Minister of the Plan to date, now leads this group. In accordance with the recommendations of the Source Book, the Chairman of the National Committee is a senior official, who benefits from the stakeholders' trust. He has the power and freedom to coordinate the EITI and to mobilise the necessary financial resources.
References
N° 1-100 Décret n° 05/160 du 18 novembre 2005 portant créati on, organisation et fonctionnement du Comité National ITIE-RDC
Opinion of the stakeholders
The stakeholders confirm this analysis and make no specific comment.
Conclusion
The government has appointed senior officials to coordinate the implementation of the EITI, which leads us to conclude that the EITI-DRC is compliant with this Requirement.
Requirement No. 3 is met
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Requirement No.4 The government is required to establish a multi-stakeholder group to oversee the implementation of the EITI
Evidence
Evidence stated in the EITI Rules, 2011 edition Finding Paragraph
a) The implementation of the EITI is overseen by a multi-stakeholder group comprising Yes 1 and 2 appropriate stakeholders b) EITI implementation requires a decision-making process that includes all stakeholders Yes 3 c) Each stakeholder group had the right to appoint their own representatives Yes 2 d) Civil society groups involved as members of the multi-stakeholder group are independent Yes 4 e) Members of the multi-stakeholder group have been able to operate freely, without coercion Yes 4 f) Members of the multi-stakeholder group have had the capacity to carry out their duties Yes Cf. Requirements 6 and 7 g) i The multi-stakeholder group has agreed to clear public TORs and keeps written Pending 3 record of their discussions and decisions ii The TORs include provisions on the endorsement of the Country Work Plan and its possible Pending 3 revision iii The TORs include procedures for choosing an organisation to undertake the Pending 3 reconciliation iv The members of the multi-stakeholders group have agreed internal governance rules and Pending 3 procedures, including voting procedures h) i The government has ensured that senior government officials are represented on the multi- Yes stakeholder group 2 ii The government has ensured that the invitation to participate in the group was open and Yes Cf. Requirements 6 transparent and 7 iii The government has ensured that stakeholders are adequately represented Yes 2 iv The government has ensured that there is a process for changing group members which Yes 2 does not include any suggestion of coercion
See EITI Rules, 2011 edition, p. 16
1. An institutional structure encouraging the multi-stakeholder nature of the EITI Committees The texts initially adopted by the government formalising the institutional structure of the Initiative refer to the multi-stakeholder nature of the various Committees and encourage an equitable distribution of seats amongst its members: - The decree No.05/160 of 18 November 2005 on the creation, organisation and functions of the National Committee of the EITI-DRC sets up 3 bodies: a Steering Committee of 26 members, in charge of defining the strategic orientations of the EITI-DRC; a Technical Committee of 43 members, in charge of the operations of the EITI-DRC, and a Permanent Secretariat. This multi- stakeholder group is made up of 37 representatives of the government, 16 representatives of civil society and 16 representatives of extractive companies - The ordinance of 3 September 2007, amending and supplementing the decree No.05/160 of 18 November 2005 on the creation, organisation and functions of the National Committee of the EITI- DRC. The Initiative is reorganised around a Steering Committee of 29 members, a Consultative Council of 42 members and an Executive Secretariat. This multi-stakeholder group is now made up of 39 representatives of the government, 16 representatives of civil society and 16 representatives of extractive companies
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2. A revision of the institutional architecture that preserves its multi-stakeholder nature The institutional structure of the EITI in the DRC was revised in July 2009 in order to rationalise the framework of the Initiative – deemed too complex – around an Executive Committee and a Technical Secretariat, which now make up the National Committee. This new architecture, simplified and adapted to the national context, still preserves the multi- stakeholder nature of the Executive Committee as well as its role. The Executive Committee is now composed of 16 members, 8 of which represent the government, 4 the civil society and 4 the extractive companies.
• The Executive Committee The decree No. 09/28 enacts, in its article 6, that “the Executive Committee is the body in charge of the orientation, the oversight, the decisions-making, the monitoring and the assessment of the implementation of the EITI principles and criteria”. It also stipulates that the Executive Committee has the responsibility of approving the EITI work plan and choosing the reconciler in charge of the EITI reports. The Ministers of Plan, of Mines and of the Environment respectively hold the presidency, the first vice-presidency and the second vice-presidency of this body. The 3 constituencies are made up of the following stakeholders49:
• The government constituency - The Minister of the Plan - The Minister of Finance - The Minister of Mines - The Minister of Oil and gas - The Minister of the Environment - A representative of the Cabinet of the President of the Republic - The Deputy Head of the Cabinet of the Prime Minister, in charge of the economic and financial matters - The Deputy Head of the Cabinet of the Prime Minister, in charge of the legal and fiscal matters
• Civil society constituency: - A representative of NGOs specialised in the natural resources of the oil sector - 2 representatives of NGOs specialised in the natural resources of the mining sector - A representative of NGOs specialised in the natural resources of the forestry sector We note that the decree of July 2009 specifies in its article 8 that “the delegates of State- owned and private extractive companies, as well as those of civil society are designated by the structures they represent or, otherwise, by their peers”; to date, the turnover of members seems to have taken place without coercion.
• The extractive companies constituency: - A representative of the State-owned mining companies - A representative of the oil companies - A representative of the private mining companies - A representative of the forestry companies
3. TORs of the Executive Committee that are pending adoption We emphasise that the decree of July 2009 describes explicitly the duties of the National Committee under its article 3: “the National Committee has the mission of implementing the principles and criteria of the Extractive Industry Transparency Initiative in the Democratic Republic of the Congo. To this effect, the Executive Committee is in charge of:
49 According to décret n°09/28 du 16 juillet 2009
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- Collecting statistics on the production, marketing and payments to the State made by the extractive industries, according to the mining, oil and gas, and forestry contracts signed with the State - Publishing the payments made by the extractive industries and revenues collected by the State agencies to inform the public in an accessible, complete and comprehensible manner50 - Having an independent administrator reconciling the data regarding payments made by the extractive industries against revenues collected from them by the State" While it seems that the Executive Committee was willing to adopt TORs or interior regulations, as expressed by the minutes of the meeting held on 3 May 2011 stating: “regarding the draft of the interior regulations, participants should send their amendments to the Technical Secretariat so as to complete the final document”51, we understand that this document is pending adoption; to our knowledge, the absence of adoption of such a document has not undermine the EITI implementation in the DRC in any way.
4. Members of the multi-stakeholder group who act independently Requirement No.2 confirms the free and active participation of the members of civil society and extractive companies during the meetings of the Executive Committee. We also find that civil society organisations sitting in the Executive Committee are able to produce, whether alone or with other structures, public documents on the implementation of the EITI52, as well as on the situation of the oil53 and mining54 sectors. The positions held in these documents confirm the freedom of action and speech observed by civil society members. In addition, no existing element or discussions held allow us to presume that representatives of extractive companies are constrained in their relations with the government or civil society. Finally, representatives of the State are present and actively participate in the various meetings of the Executive Committee, as confirmed by the minutes of the meetings of the Executive Committee.
References
N° 8-93 Liste des activités de la société civile 8-335 Plaidoyer de la société civile en vue de la validation de la RDC comme pays conforme à l’ITIE 5-310 Décret n°09/27 du 16 juillet 2009 portant création, organisation et fonctionnement du Comité National ITIE-RDC 3-440 Ordonnance du 3 septembre 2007 modifiant et complétant le Décret n°05/160 du 16 novembre 2005 portant création, organisation et fonctionnement du Comité National ITIE-RDC 5-310 Décret n°09/27 du 16 juillet 2009 portant création, organisation et fonctionnement du Comité National ITIE-RDC Other references available in Appendix I
50 Décret n°09/27 du 16 juillet 2009 portant créatio n, organisation et fonctionnement du Comité National ITIE-RDC 51 Procès verbal de la réunion du Comité Exécutif concernant un point de situation de l’élaboration des rapports ITIE 2008-2009 concernant la publication des rapports ITIE 2008-2009 (3 mai 2011) 52 Impact of the Extractive Industries Transparency Initiative on the Promotion of Transparency and Accountability in South and East Africa, publié en collaboration avec SARW et l’EITI International, in Liste des activités de la société civile 53 As Le pétrole de la RDC, in Liste des activités de la société civile 54 Plaidoyer de la société civile en vue de la validation de la RDC comme pays conforme à l’ITIE
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Opinion of the stakeholders
The civil society organisations and the extractive companies interviewed find that their coalitions have sufficient reprensentativeness within the Executive Committee. They further confirm that the number of seats granted to them enables decision-making to be a balanced and specific process between the stakeholders. Eventually, they all believe to be adequately represented within the Executive Committee. Some extractive companies, like Bazano, Boss Mining, GÉCAMINES, SODIMIKA, MUMI or Soco, however stressed that the multiplication of meetings between stakeholders (including civil society, but also State agencies) could strengthen the involvement of the EITI55.
Conclusion
The adoption of an efficient institutional structure, which encourages multi-stakeholder participation, the nomination of members of the Executive Committee with appropriate profiles and skills, as well as the independence of action that members of the Executive Committee seem to observe lead us to conclude that the EITI-DRC is compliant with this Requirement.
Requirement No. 4 is met
55 Bazano, Boss Mining, GECAMINES, SODIMIKA, MUMI and Soco self-assessment forms
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Requirement No.5 The multi-stakeholder group, in consultation with key EITI stakeholders, should agree and publish a fully quantified EITI work plan, containing measurable targets and a timetable for implementation and incorporating an assessment of capacity constraints Evidence
Evidence stated in the EITI Rules, 2011 edition Finding Paragraph
a) A work plan has been produced and agreed with the key EITI stakeholders Yes 1 b) i The work plan has been made widely available Yes 1 ii The work plan includes measurable and time bound targets and objectives Yes 1 iii The work plan incorporates an assessment of any potential capacity constraints No 2 iv The work plan establishes the scope of EITI reporting No 2 c) The work plan identifies domestic sources of funding Yes 3 d) The government has reviewed the legal framework to identify any potential obstacles to Yes 2 EITI implementation e) The first EITI report has been produced within 18 months No f) The work plan has been updated on an annual basis Yes 1
See EITI Rules, 2011 edition, p. 17
1. A 2011-2013 EITI work plan adopted by the Executive Committee in September 2011 The drafting of the 2011-2013 EITI work plan has been the purpose of a specific workshop, organised in Kinshasa on 6 April 2011. The exchanges and debates that took place on this occasion enabled the submission of a fully quantified, consensual and ambitious EITI work plan, covering the period from September 2011 to March 201356. It has been adopted by the Executive Committee during its meeting held on 21 September 201157. Due to the lack of funding in 2011, this EITI work plan has however been revised in February 2012. The adjusted EITI work plan is valid until December 2013 and its estimated budget amounts to 4.8 MUSD58. We observed that 2011-2013 EITI work plan is available on the website of the Initiative www.itierdc.org. The adjusted EITI work plan presents 5 main objectives:
Objectives Proposed budget (USD) Objective 1 : Creation of supporting tools for the EITI implementation 1 306 873 Objective 2 : Publication of the EITI-DRC reports 941 980 Objective 3 : Capacity building, communication and dissemination 1 078 392 Objective 4 : Validation of the EITI-DRC 150 000 Objective 5 : Operations and equipment of the Technical Secretariat 1 303 503 Total 4 780 748
Objectives and estimated budget of the 2011-2013 EITI work plan
56 Plan d’actions chiffré (16 septembre 2011) 57 Procès verbal de la réunion du Comité Exécutif concernant l'adoption du plan d'actions 2011-2013 and l'adoption des Termes de Références du conciliateur pour le rapport ITIE 2010 (21 septembre 2010) 58 Plan d'actions triennal réaménagé de septembre 2011 à décembre 2013 (7 mars 2012). This EITI work plan is also available in Appendix II of this report
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Each objective presents sub-objectives and activities. Each of the 67 activities of the EITI work plan is endowed with a measurable target, a timetable and an estimated budget.
2. A delayed, yet dynamic and sustained implementation of the EITI work plan in 2012 To date, we note that a meaningful number of activities have been implemented, mainly in 2012, due to the lack of sufficient budget in 201159: • Objective 1: Creation of supporting tools for the EITI implementation - Sub-objective 1: Mobilise resources for the implementation of the EITI work plan All the planned activities have been completed, yet with delay according to the initial timetable - Sub-objective 2: Elaborate a communication strategy for the EITI-DRC The main planned activities have been completed, notably the drafting of a strategic communication plan (1.2.1) and the EITI awareness and communication campaign in the 11 provinces of the DRC (1.2.3) 1 planned activity is in progress: the implementation of the provincial committees (1.2.4). To date, out of the 3 programmed, only the Katanga office is operational 1 activity has yet to be launched: the communication strategy validation workshop (1.2.2) - Sub-objective 3: Identify, create and ensure the availability of the tools required for the implementation of the EITI The main planned activities have been completed, notably the drafting of an updated action plan (1.3.1), the restructuring of the Technical Secretariat (1.3.5) and the obligation for the mining companies to submit EITI reporting templates (1.3.7) 1 planned activity has yet to be launched: the audit of the Technical Secretariat of the EITI-DRC (1.3.3) • Objective 2: Publication of the EITI-DRC reports - Sub-objective 1: Publish the 2008 and 2009 EITI reports The main planned activities have been completed, notably the publication of the 2008 and 2009 EITI reports (2.1.2), their translation (2.1.4.2) and dissemination (2.1.4.3) 1 activity is yet to be launched: the analysis of the discrepancies between the 2007, 2008 and 2009 EITI reports (2.1.6) - Sub-objective 2: Publish the 2010 and 2011 EITI reports This sub-objective has only partially been completed, as only the publication of the 2010 EITI report has been launched. Thus, the activities 2.2.1 (Elaboration and adoption of the ToRs for the recruitment of an expert in charge of defining the scope of the 2010 and 2011 EITI reports) to 2.2.8 (Reconciliation and submission of the 2010 and 2011 EITI draft reports) are achieved at 50% 3 out of the 11 planned activities are yet to be launched: the official publication and dissemination of the 2010 report in 11 provinces (2.2.9); the organisation of an information and awareness workshop addressed to members of Parliament (2.2.10); the analysis of discrepancies between the 2007, 2010 and 2011 reports (2.2.11). The dissemination of the 2010 EITI report should be launched shortly • Objective 3: Capacity-building, communication and dissemination All of the 7 activities planned have been completed, notably the organisation of a capacity-building workshop for members of the National Committee (3.1), a capacity-building workshop for civil society (3.2) and a capacity-building workshop for the extractive companies (3.4) • Objective 4: Validation of the EITI-DRC To the date of publication of this Validation report, 9 out of the 14 activities planned have been completed, though with delay according to the initial timetable. This objective will be met once the following activities will have been completed: the presentation of the final Validation report to the Executive Committee (4.11), the drafting of an additional note for the EITI International Board (4.13) and the transmission of an examination request of this Validation report to the EITI International Secretariat (4.14)
59 Analysis based on Plan d'actions triennal réaménagé de septembre 2011 à décembre 2013 avec pourcentage d’avancement (12 juillet 2012)
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• Objective 5: Operations and equipment of the Technical Secretariat All of the 7 planned activities have been completed, including the equipment of the Technical Secretariat (5.3) and the capacity-building of its staff (5.4). All of these activities have been performed with some delay, thus impacting the implementation of the 2011-2013 EITI work plan This EITI work plan does not include an assessment of potential capacity constraints. The EITI work plan provides a study on the elaboration of the scope of the 2010 and 2011 EITI reports (activity 2.2.1), however no definition of the EITI scope is proposed. This two points would undoubtedly have helped solving the problems encountered during the definition of the scope60 of the EITI reports. While the ambition of the EITI work plan and its dynamic implementation, particularly in 2012, are noteworthy, it is nevertheless unfortunate that the elaboration of the 2011 EITI report has not been launched and that, out of the 3 planned, only 1 provincial office is yet operational. Eventually, the delays observed in the publication of the 2010 EITI report – available on 15 January 2013, i.e. 2 years after the accounting year considered in the report – are justified by the will of the Exectuvie Committee to tackle the weaknesses reported in the initial version delivered in October 2012. According to us, these difficulties are now solved; although this approach has indeed delayed the publication of the report, it has in fine enable the quality of the EITI process in the RDC to be enhanced.
3. A hitherto irregular funding of the Initiative, which deserves to be consolidated The sources of funding of the EITI-DRC, identified in the 2011-2013 EITI work plan, have not ensured regular contributions to the EITI-DRC61: Year Source of funds Total State (USD) Donors MDTF PROMINES GIZ CTB SARWA Companies Sub-total
2005* NA NA NA NA NA NA NA NA 0 2006* NA NA NA NA NA NA NA NA 0 2007 68 000 NA NA NA NA NA NA NA 68 000 2008 203 830 NA NA NA NA NA NA NA 203 830 2009 31 000 0 0 0 56 190 0 0 56 190 87 190 2010 59 000 270 000 104 250 0 0 0 0 374 250 433 250 2011 0 230 000 0 0 0 0 0 230 000 230 000 2012 749 641 0 711 940 215 830 87 000 40 000 184 215 1 238 985 1 988 626 ______Total 1 111 471 500 000 816 190 215 830 143 190 40 000 184 215 1 899 425 3 010 896 %37%17%27%7%5%1%6%63%100%
NA : Not avaiblable * No action plan developed Funding of the EITI-DRC (2005-2012) On the funds received since 2005, the State has allocated more than 1.1 MUSD, i.e. 37% of the total budget; the donors, on their behalf, have financed the Initiative to nearly 1.7 MUSD and the companies 0.2 MUSD. We highlight the limited level of financial contribution of the State between 2009 and 2011, and its sharp increase in 2012, with 0.7 MUSD. The implementation of the EITI-DRC has benefitted, since 2011, of an average financial support of more than 1 MUSD; this global figure hides the disparity and irregularity of contributions from one year to the next: indeed, the EITI has received 0.2 MUSD in 2011, against 2 MUSD in 2012 (i.e. 70% of the total amounts received since 2005). This irregularity explains why most of the activities planned in 2011 were in fact completed in 2012.
60 See the detailed analysis presented in the Requirement No.9 61 Information based on Financement du plan d’actions triennal ITIE et affectation des fonds (2012)
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Year Allocation Total To fulfil the implementation of the (USD) abcd Initiative, the EITI-DRC has received 2005* NA NA NA NA 0 3 MUSD for the 2005-2012 period. 62 2006* NA NA NA NA 0 Based on the opposite table , we 2007 NA NA NA 68 000 68 000 understand that this amount has been 2008 NA NA 203 830 0 203 830 allocated to training and dissemination 2009 56 190 0 31 000 0 87 190 (47%), operating expenses (39%) and 2010 104 250 98 647 169 930 60 423 433 250 studies and the EITI reports (10%). 2011 0 78 799 151 201 0 230 000 2012 149 400 1 231 161 608 065 0 1 988 626 The renewal of the staff of the ______Technical Secretariat and the Total 309 840 1 408 607 1 164 026 128 423 3 010 896 importance of the funding received %10%47%39%4%100%explain why expenses have been concentrated on 2012. NA : Not avaiblable a : Studies and EITI reports * No action plan developed b : Training and dissemination Considering the importance of the initial c : Operating expenses estimated budget of the EITI work plan d : Non rationalised (4.8 MUSD) and the irregularity of Distribution of the EITI-DRC funds (2005-2012) contributions so far, the Executive Committee will have to take the necessary measures so that the remaining 2.3 MUSD are effectively received. In order to implement the EITI in the long term, the government and the Executive Committee will have to ensure the sustainability of the funding of the National Initiative.
References
N° 8-264 Financement du plan d’actions triennal ITIE et affectation des fonds (2012) 8-266 Plan d'actions triennal réaménagé de septembre 2011 à décembre 2013 avec pourcentage d’avancement (12 juillet 2012) 8-311 Plan d'actions triennal réaménagé de septembre 2011 à décembre 2013 (7 mars 2012) 7-110 Procès verbal de la réunion du Comité Exécutif concernant l'adoption du plan d'actions 2011-2013 et l'adoption des Termes de Références du conciliateur pour le rapport ITIE 2010 (21 septembre 2011) 7-114 Plan d’actions chiffré (16 septembre 2011) Other references available in Appendix I
Opinion of the stakeholders
Civil society organisations confirm that the 2011-2013 EITI work plan is relevant and that its implementation has enabled the EITI to record significant progress. Civil society however regrets the difficult access to the multi-donors trust fund (MDTF), managed by the World Bank, and appeals the government to maintain its future contributions to the level of 2012. Similarly with the mining company KCC, which mentioned the need to “disseminate these EITI work plans via the Internet”, and to Lirex, according to which “there is not enough communication on the execution of the EITI work plan”63, extractive companies call for a consolidation of dissemination activities within the implementation of the EITI work plan. Regarding activities, all stakeholders agree on the important work that has been carried out in 2012. The company Lirex requests, though, that the 2013 EITI work plan include an
62 Information based on Financement du plan d’actions triennal ITIE et affectation des fonds (2012) 63 See self-assessment forms in Appendix III
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intermediate assessment of its implementation. Some extractive companies have also stressed the need for more regular publications of the reports; in this respect, the company SOMIKA stated that the Initiative would gain in credibility “by catching up the delays between the reporting year [2012] and the fiscal year to report [2010]”.
Recommendations of the validator
R1 – Complete the implementation of the remaining actions R2 – Ensure and sustain the funding of the National Initiative
Conclusion
The adoption by the Executive Committee of an ambitious EITI work plan and the implementation of its key activities, despite irregular funding, lead us to conclude that the EITI- DRC is compliant with this Requirement.
Requirement No. 5 is met.
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Requirement No.6 The government is required to ensure that civil society is fully, independently, actively and effectively engaged in the process
Evidence
Evidence stated in the EITI Rules, 2011 edition Finding Paragraph
a) Civil society has been actively engaged in EITI implementation Yes 2 and 3
b) Effective outreach activities have been undertaken with citizens, civil society groups Yes 2 and/or coalitions c) Civil society representative think they have been provided advance notice of meetings of Yes 3 the multi-stakeholder group d) Due consideration has been paid to addressing potential capacity constraints affecting Yes 2 civil society participation e) The government has taken effective actions to remove obstacles affecting civil society Yes 1 and 2 participation f) Civil society groups involved in the EITI are independent of government and/or Yes 3 companies g) Civil society groups have been free to express their opinions about the EITI Yes 3 h) Civil society groups involved in the EITI have been free to engage wider public debates Yes 2 and 3 on the EITI and capture contributions from other elements i) The fundamental rights of civil society have been respected Yes 3
See EITI Rules, 2011 edition, p. 19
1. An institutional structure favourable to civil society participation As seen in Requirements No.2 and 4, the institutional structure of the EITI in the DRC, both the old one and the one adopted in July 2009, leaves much room for the representatives of civil society organisations. Thus, they have had successively benefited from 16 seats out of 69, 16 seats out of 71 and 4 seats out of 16 since July 2009, increasing their proportional representation (from approximately 22% to 25%). As indicated in the order of July 2009, the following 4 profiles must be represented within the Executive Committee: - A NGO specialised in the natural resources of the oil sector - 2 NGO specialised in the natural resources of the mining sector - A NGO specialised in the natural resources of the forestry sector In addition, the order stipulates in its article 8 that: “the delegates of civil society come from the most acknowledged organisations legally in place, and are specialised in the management of natural resources as well as in governance issues”. Indeed, and as stated in the latest Validation report: "representatives of civil society sitting in the Executive Committee since the reform of July 2009 were selected during a meeting organised by the Southern Africa Resource Watch (SARW) in August 2009, which was attended by the main representatives of the country’s organisations concerned by the EITI, as well as by the 16 civil society members of the former EITI Committee”64. The current list of members of civil society has since changed, but it has preserved the spirit chosen back then: - Mr. Albert Kabuya, representative of the coalition Publiez Ce Que Vous Payez (PCQVP)
64 Rapport de Validation, CAC 75 (septembre 2010)
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- Mr. Jean-Claude Katende, representative of the Association Africaine de Défense des Droits de l’Homme (ASHADO) - Mr. Jacques Bakulu, representative of the Centre pour la Promotion et l’Education des Communautés de base (CEPECO) - Mr. Jean-Pierre Muteba, representative of the Nouvelle Dynamique Syndicale (NDS) Their fields of competence grant them the awareness needed in the treatment of issues related to the transparency of the extractive sector.
2. Numerous awareness raising, communication and training campaigns organised throughout the country While the first Validation report was severe regarding the limited budget dedicated to strengthening capacities of civil society in the 2010-2011 EITI work plan, this budget was increased to more than 115,000 USD in the 2011-2013 EITI work plan, thus showing the government’s intention to remove any obstacles to the participation of civil society in the EITI. With this regard, members of the Executive Committee have benefited from the following workshops: - Capacity-building workshop for the EITI stakeholders in the province of the Kasai Occidental, on 22 and 23 August 201265 - Capacity-building workshop for the EITI stakeholders in the Oriental province, on 7 and 8 September 201266 - Capacity-building workshop for the EITI trainers in the awareness raising of the EITI in the provinces of the Kasai Oriental67, Equator68, Bas-Congo69 and Bandundu70, between September and December 2012 The representatives of civil society who are members of the Executive Committee have also contributed to the organisation and presentation of the following workshops, dedicated to a wider audience: - The information and launching session on the dissemination of the synthetic EITI report in Sud-Kivu, organised in Bukavu on 18 May 2012 - The training seminar on the EITI and the Validation, organised in Bukavu on 20 December 2011 - The 7th EITI-DRC follow-up and assessment seminar, organised by the NGOs of civil society, held in Kinshasa on 26 and 27 July 2011
3. Independence of action and freedom of speech The representatives of civil society consider that their representation within the Executive Committee is sufficient and that they can work soundly. The minutes of the Executive Committee meetings allow us to conclude that civil society members benefit from freedom of speech and that their points of view are effectively taken into account in the deliberations. We also find that the organisations sitting in the Executive Committee are able to produce, whether alone or with other structures, public documents on the implementation of the EITI71
65 Rapport de l'atelier de renforcement des capacités des parties prenantes de l'ITIE dans la province du Kasaï Occidental (22-23 août 2012) 66 Rapport de l'atelier de renforcement des capacités des parties prenantes de l'ITIE dans la province orientale (8 septembre 2012) 67 Rapport de l'atelier de formation des formateurs pour la vulgarisation de l'ITIE dans la province du Kasaï Occidental (18-19 septembre 2012) 68 Rapport de l'atelier de formation des formateurs pour la vulgarisation de l'ITIE dans la province de l'Equateur (11-12 octobre 2012) 69 Rapport de l'atelier de formation des formateurs pour la vulgarisation de l'ITIE dans la province du Bas-Congo (13-14 novembre 2012) 70 Rapport de l'atelier de renforcement des capacités des formateurs à la mise en œuvre de l'ITIE dans la province du Bandundu (1 décembre 2012)
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as well as on the situation of the oil72 and mining73 sectors. The wording used in the publications of the organisations sitting in the Executive Committee is striking (“the exploitation of the natural resources has fostered democratic deficit, corruption and sometimes civil wars. As a result, the province of the Bas-Congo is one of the poorest oil-rich regions in the world”74), as is the wording used in the publications of the organisations involved in transparency issues (“at present, [the EITI] faces several challenges, especially with regards to the sincerity of the reporting templates (even if audited) submitted by State agencies, State- owned and private extractive companies75”).These positions confirm the freedom of action and speech enjoyed by civil society members.
References
N° 8-120 Rapport de l'atelier de renforcement des capacités des formateurs à la mise en œuvre de l'ITIE dans la province du Bandundu (1 décembre 2012) 8-135 Rapport de l'atelier de renforcement des capacités des parties prenantes de l'ITIE dans la province orientale (8 septembre 2012) 8-220 Rapport de l'atelier de formation des formateurs pour la vulgarisation de l'ITIE dans la province du Kasaï Occidental (18-19 septembre 2012) 5-245 Arrêté ministériel du 5 octobre 2009 portant nomination des membres du Comité Exécutif du Comité National de l’ITIE-RDC 5-310 Décret n°09/27 du 16 juillet 2009 portant création, organisation et fonctionnement du Comité National ITIE-RDC Other references available in Appendix I
Opinion of the stakeholders
The civil society organisations met have confirmed being systematically associated with communication activities organised by the Technical Secretariat and the discussions within the Executive Committee. They call, however, for the development of outreach activities (to date carried out by the Technical Secretariat), to be from now on organised by civil society organisations members of the Executive Committee. They finally point out the need for more decentralised activities.
Conclusion
The adoption of a favourable institutional structure, the nomination of members within the Executive Committee effectively representing civil society, their freedom and regularity of speech, as well as their concrete involvement in awareness and training campaigns lead us to conclude that the EITI-DRC is compliant with this Requirement.
Requirement No. 6 is met
71 Impact of the Extractive Industries Transparency Initiative on the Promotion of Transparency and Accountability in South and East Africa, publié en collaboration avec SARW et l’EITI International, in Liste des activités de la société civile 72 As Le pétrole de la RDC, in Liste des activités de la société civile 73 Plaidoyer de la société civile en vue de la validation de la RDC comme pays conforme à l’ITIE 74 Rapport d’enquête sur l’exploitation pétrolière à Moanda/Bas-Congo, RDC, de 2009 à 2012, CEPECO (mai 2012), p. 12 75 Compte-rendu de la Conférence à l’Université Protestante du Congo (UPC), « ITIE : un outil pour l’amélioration des conditions de vie des populations congolaises » (12 novembre 2012), p. 6
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Requirement No.7 The government is required to engage extractive companies in the implementation of the EITI
Evidence
Evidence stated in the EITI Rules, 2011 edition Finding Paragraph
a) The government has widely engaged with companies Yes 1 b) i Outreach has been undertaken for the companies Yes 3 ii Actions to address capacity constraints affecting companies have been undertaken Yes 4
See EITI Rules, 2011 edition, p. 20
1. An institutional structure encouraging the participation of extractive companies As seen in Requirements No. 2 and 4, the institutional structure of the EITI in the DRC, both the old one and the one adopted in July 2009, leaves much room for the representatives of extractive companies. Thus, they have successively benefitted from 16 seats out of 69, 16 seats out of 71 and 4 seats out of 16 since July 2009, increasing their proportional representation (from approximately 22% to 25%). As indicated in the order of July 2009, the following 4 profiles must be represented: - A representative of State-owned companies - A representative of oil companies - A representative of mining companies - A representative of forestry companies In accordance with the above profiles, the following members have been elected76: - Mr. Robert Munganga, representing State-owned companies - Mrs Yvonne Mbala, representing oil companies - Mr. Simon Tuma Waku, representing mining companies - Mr. Dieter Haag, representing forestry companies The scope of the 3 EITI reports published so far by the DRC actually includes State-owned, oil and mining companies. The inclusion of the forestry sector is currently being examined. The list of these members is available on the website of the National Initiative www.itierdc.org. The representatives of the above extractive companies regularly attend the meetings of the Executive Committee and certain extractive companies included in the EITI scope – AMC, Ashanti Gold, De Beers or Chevron – belong to groups that have joined the EITI at the international level. In addition, while the decree of 16 July 2009 encourages a voluntary involvement of extractive companies in the EITI, the Ministerial order of 23 March 2012 stipulates that: “following the Rules enacted by the Extractive Industries Transparency Initiative, the mining companies are bound to report on a monthly basis, by means of the reporting templates created to this end,
76 Arrêté ministériel du 5 octobre 2009 portant nomination des membres du Comité Exécutif du Comité National de l’ITIE-RDC ; Procès verbal de la réunion du Comité Exécutif concernant la nomination du Représentant des entreprises publiques au Comité Exécutif (23-25 février 2010)
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all the payments made to the State for various purposes”77. Indeed, the 60 extractive companies included in the scope of the 2010 EITI report have submitted their reporting templates; all of their declarations are presented on a disaggregated basis in the Appendix of the report.
2. Outreach activities facilitated by the members of the Executive Committee Participation of extractive companies in the Executive Committee is endorsed by sectors (oil, mining, forestry) or by type of company (State-owned, private). This choice, quite unusual given the fact that multi-stakeholder groups usually count representatives of specific extractive companies, is in fact quite wise. Indeed, it enables the Executive Committee to communicate to a group of companies – rather than to an individual company – and, thus, to reach stakeholders broadly with regards to the decisions taken.
3. A renewed participation of extractive companies in the National Initiative The expansion of the scope of extractive companies from one EITI report to the next has enabled extractive companies to renew their participation in the National Initiative. The organisation of working sessions on the completion of the EITI reporting templates ahead of the launch of the 2010 EITI report has been useful for involving extractive companies in the reporting process. Thus, the 60 oil and mining companies of the scope, in exploration and in production, participated in the elaboration of the 2010 EITI report; they were 41 (out of 41) for the 2008-2009 EITI report and 26 (out of 27) for the 2007 EITI report. We note that some extractive companies have contributed financially in 2012 to the implementation of the National Initiative, for more than 184,000 USD78. While some may find that this contribution creates a risk of potential conflict of interest, after the lack of funding during 2011, this support demonstrates, first and foremost, the commitment of numerous extractive companies in sustaining the EITI in the DRC. Futhermore, the Executive Committee has shown a total transparency on the subject: the contribution levels by company are indeed disclosed on the National Initiative website. Lastly, we note that 29 of these extractive companies participated in the self-assessment exercise.
4. Mobilisation of extractive companies in training campaigns As for civil society, the extractive companies have benefited from activities dedicated to strengthening capacities, since the 2011-2013 EITI work plan dedicates 90,000 USD to the training budget of extractives companies. Thus, since the latest Validation report, extractive companies have been able to participate in the following workshops: - Capacity-building workshop for the EITI stakeholders in the province of the Kasai Occidental, on 22 and 23 August 201279 - Capacity-building workshop for the EITI stakeholders in the Oriental province, on 7 and 8 September 201280 - Capacity-building workshop for the EITI trainers in the awareness raising of the EITI in the provinces of Kasai Oriental81, Equator82, Bas-Congo83 and Bandundu84, between September and December 2012
77 Arrêté ministériel du 23 mars 2012 portant obligation à toutes les entreprises minières de déclarer les paiements effectués à l'Etat dans le cadre de l'ITIE 78 Financement du plan d’actions triennal ITIE et affectation des fonds (2012) 79 Rapport de l'atelier de renforcement des capacités des parties prenantes de l'ITIE dans la province du Kasaï Occidental (22-23 août 2012) 80 Rapport de l'atelier de renforcement des capacités des parties prenantes de l'ITIE dans la province orientale (8 septembre 2012) 81 Rapport de l'atelier de formation des formateurs pour la vulgarisation de l'ITIE dans la province du Kasaï Occidental (18-19 septembre 2012)
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References
N° 8-120 Rapport de l'atelier de renforcement des capacités des formateurs à la mise en œuvre de l'ITIE dans la province du Bandundu (1 décembre 2012) 8-220 Rapport de l'atelier de formation des formateurs pour la vulgarisation de l'ITIE dans la province du Kasaï Occidental (18-19 septembre 2012) 8-310 Arrêté ministériel du 23 mars 2012 portant obligation à toutes les entreprises minières de déclarer les paiements effectués à l'Etat dans le cadre de l'ITIE 5-245 Arrêté ministériel du 5 octobre 2009 portant nomination des membres du Comité Exécutif du Comité National de l’ITIE-RDC 5-310 Décret n°09/27 du 16 juillet 2009 portant création, organisation et fonctionnement du Comité National ITIE-RDC Self-assessment forms (available in Appendix III) Other references available in Appendix I
Opinion of the stakeholders
The stakeholders interviewed have confirmed the will of the Congolese government to involve the extractive companies in the EITI implementation in DRC. They further acknowledged the financial efforts exerted by the extractive companies to support the EITI implementation. In this occasion, they testified that this funding had in no way biased the relationships and the independence of the Executive Committee members. Although all extractive companies also stated that communication within the National Initiative had been constructive, they admitted that some additional communication efforts could be undertaken. Indeed, extractive companies, such as Bazano, Boss Mining, GECAMINES, SODIMIKA, MUMI or Soco, underlined that the additional stakeholders meetings (with civil society and State agencies) could strengthen the dialogue with regards to the EITI.85 MUMI in this respect recommends to “always better inform participants”86; while Lirex stresses that “there is not enough communication on the implementation of the work plan”87 and that communication needs to be improved through the “elaboration of a calendar for meetings, dialogues and activities”88. Ashanti Gold wishes for “a wider dissemination of the EITI-DRC reports through the media”89, and AMCK considers that it would be useful “to put emphasis on advertising campaigns around EITI sessions”90.
82 Rapport de l'atelier de formation des formateurs pour la vulgarisation de l'ITIE dans la province de l'Equateur (11-12 octobre 2012) 83 Rapport de l'atelier de formation des formateurs pour la vulgarisation de l'ITIE dans la province du Bas-Congo (13-14 novembre 2012) 84 Rapport de l'atelier de renforcement des capacités des formateurs à la mise en œuvre de l'ITIE dans la province du Bandundu (1 décembre 2012) 85 Bazano, Boss Mining, GECAMINES, SODIMIKA, MUMI and Soco self-assessment forms 86 MUMI self-assessment form 87 Lirex self-assessment form 88 Id. 89 Ashanti Gold self-assessment form 90 AMCK self-assessment form
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Conclusion
The adoption of a favourable institutional structure, the nomination of members within the Executive Committee effectively representing extractive companies, their freedom and regularity of speech, as well as their concrete involvement in awareness and training campaigns lead us to conclude that the EITI-DRC is compliant with this Requirement.
Requirement No. 7 is met
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Requirement No.8 The government is required to remove obstacles to the implementation of the EITI
Evidence
Evidence stated in the EITI Rules, 2011 edition Finding Paragraph
Legal and regulatory obstacles to EITI implementation have been removed through :
i A review of the legal framework Yes 1 ii A review of the regulatory framework Yes 1 iii An assessment of obstacles in the legal and regulatory framework Yes 1 iv Proposing or enacting legal or regulatory changes designed to enable transparency Yes 1 v Waivers of confidentiality clauses in contracts between the government and companies Yes 1 vi A direct communication with companies and relevant agencies to strengthen Yes transparency vii An agreement on Memoranda of Understanding setting out agreed transparency NA standards between government and companies
See EITI Rules, 2011 edition, p. 20
1. A legal and regulatory framework compliant with the EITI implementation We understand that the legal and regulatory framework in the DRC does not hamper in any way the thorough implementation of the EITI; in fact, participation of extractive companies and ore dealers has been a voluntary process until 2012. Nevertheless, the government has decided to formalise the EITI implementation by adopting the Ministerial order of 23 March 2012 on the obligation of all mining companies to report payments made to the State under the EITI. This order indeed stipulates: “this concerns notably the following mining operators [...]: the holders of exploration and/or production licenses; the processing and transformation entities for minerals in the A, B and C categories; the ore dealers buying and selling diamonds, gold and coloured gemstones”91. In order to strengthen the transparency of the sector, the government has also adopted on 20 May 2011 the order No.11/26 on the obligation to publish any contract on natural resources, which stipulates, in its article 2: “any contract signed between the State or a State- owned company and one or several national or foreign private partners, falling under private or public law, and relative to research, exploration or exploitation of one of the natural resources defined in article 1 here-above is published by the Minister in charge of the sector under which the respective natural resource is administered within sixty (60) days as of the date of its coming into force”92. In this regard, we understand that a certain number of contracts are currently available on the website of the Ministry of Mines93; this publication undoubtedly contributes to a better understanding of the benefit streams in this sector. We also understand that potential confidentiality clauses do not undermine the reconciliation process. In fact, the Executive Committee has decided to present, in the 2010 EITI report, fully
91 Arrêté ministériel du 23 mars 2012 portant obligation à toutes les entreprises minières de déclarer les paiements effectués à l'Etat dans le cadre de l'ITIE, article 1er 92 Décret n°11/26 du 20 mai 2011 portant obligation de publier tout contrat ayant pour objet les ressources naturelles 93 Périmètres des Rapports ITIE-RDC 2010-2011, Hart Group (17 octobre 2012)
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disaggregated data. This presentation had already been adopted for the 2007 EITI report, though for a smaller scope (27 extractive companies); although the disaggregated data used for the 2008-2009 reconciliation process is not available in the Appendices of the report, they are however available on the website of the National Initiative www.itierdc.org.To our knowledge, no extractive company has disapproved this approach.
2. A renewed, more efficient and dynamic institutional architecture of the EITI The institutional architecture of the EITI in the DRC has been revised in July 2009, in order to rationalise the process – deemed too complex – around an Executive Committee and a Technical Secretariat, which now both constitute the National Committee94. This evolution illustrates the government’s ambition to establish a more efficient and dynamic structure than the previous one. The 16 members of the Executive Committee, presented under Requirements No. 4, 6 and 7, thus come from acknowledged institutions in the DRC, and are qualified in dealing with transparency issues. The designated members have the appropriate profiles and the 2011- 2013 EITI work plan leaves significant room for capacity-building activities. These indeed represented 22% of disbursements between 2011 and 2012. Lastly, the creation of provincial offices through the Ministerial order of 6 November 201295 reveals the government’s intention to fully integrate the local dimension in the monitoring of the EITI implementation.
3. A staffed and trained Technical Secretariat The Technical Secretariat has been fully structured and staffed in 2012, therefore providing the EITI-DRC an operational body charged with the daily monitoring and implementation of the Initiative, through the adoption of several texts: - The Ministerial decree of 27 February 2012 appointing the members of the Technical Secretariat of the National Committee of the EITI-DRC - The order No. 12/005 of 28 April 2012 appointing a Coordinator to the Technical Secretariat of the National Committee of the EITI-DRC - The Ministerial order of 14 July 2012 amending and supplementing the decree appointing the members of the Technical Secretariat of the National Committee of the EITI-DRC The new team, composed of 12 individuals, has been able to participate in various trainings for members of the Executive Committee; it has also received significant funding (approximately 0.8 MUSD in 2011-2012), giving it the operational capacities to monitor and implement the Initiative. This renewal has had a positive impact on the Initiative’s dynamism, while easing its implementation.
4. A regular State contribution, with more sustainable funding sources required As presented in Requirement No. 5, the funding of the EITI is characterised on the one hand by the regularity of the State’s contribution, which has financially supported the Initiative since 2007, except for 2011, and on the other hand by an outstanding irregularity of contributions. While 2012 saw a boost in the EITI budget (70% of the total contribution has been received that sole year), the sources of funding will have to be more sustainable for the Initiative to become sustainable.
94 Décret d°09/27 du 16 juillet 2009 portant créatio n, organisation et fonctionnement du Comité National ITIE-RDC 95 Arrêté ministériel du 6 novembre 2012 portant création des antennes provinciales du Secrétariat Technique ITIE-RDC
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References
N° 8-160 Arrêté ministériel du 6 novembre 2012 portant création des antennes provinciales du Secrétariat Technique ITIE-RDC 8-180 Périmètres des Rapports ITIE-RDC 2010-2011, Hart Group (17 octobre 2012) 8-310 Arrêté ministériel du 23 mars 2012 portant obligation à toutes les entreprises minières de déclarer les paiements effectués à l'Etat dans le cadre de l'ITIE 7-130 Décret n°11/26 du 20 mai 2011 portant obligation de publier tout contrat ayant pour objet les ressources naturelles 5-310 Décret d°09/27 du 16 juillet 2009 port ant création, organisation et fonctionnement du Comité National ITIE-RDC Other references available in Appendix I
Opinion of the stakeholders
The stakeholders confirm that the Congolese government went into action to remove the brakes to the EITI-DRC implementation. Members of civil society have emphasised the complexity of access to the MDTF, managed by the World Bank, which has complicated the implementation of the Initiative; in this regard, they suggest amending the access mechanisms to the fund. They also wish the State’s financial participation was more regular.
Recommendation of the validator
R2 – Ensure and sustain the funding of the National Initiative
Conclusion
The quality of the legal and regulatory framework, as well as that of the institutional architecture, added to the regular funding of the EITI work plan by the State, lead us to conclude that the EITI-DRC is compliant with this Requirement.
Requirement No. 8 is met
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Requirement No.9 The multi-stakeholder group is required to agree on a definition of materiality and the reporting templates
Evidence
Evidence stated in the EITI Rules, 2011 edition Finding Paragraph
a) The templates define which revenue streams are included in company Yes 4 and government disclosures b) The templates define a pre-defined and reasonable materiality No 3 threshold c) i The multi-stakeholder group has agreed the scope of revenue streams Partial 4 that companies and the government must disclose ii The multi-stakeholder group has agreed the scope of companies that will report Partial 5 iii The multi-stakeholder group has agreed the scope of government entities that Partial 6 will report iv The multi-stakeholder group has agreed the time period covered by the report Yes v The multi-stakeholder group has agreed the degree of aggregation or Yes disaggregation of data in the EITI report d) The scope of revenue streams contains all revenue streams that are commonly Yes 4 recognised in EITI report e) The multi-stakeholder group has clearly established whether payments to No 4 regional and local government entities are material f) The scope of revenue streams include in-kind payments, infrastructure NA 7 provision and other barter-type arrangements if they play a significant role in the extractive sector g) The multi-stakeholder group has adapted the reporting templates to include NA social payments and transfers, if they are material h) The multi-stakeholder group has explored opportunities to include additional Yes 7 information in the EITI report
See EITI Rules, 2011 edition, p. 21-22
1. A somewhat imprecise preliminary survey for defining the scope of the 2010 EITI report In accordance with the recommendations of the 2008-2009 EITI report, the Executive Committee instructed the realisation of a survey to define the scope of the 2010 EITI report. This survey has been realised by the firm Hart Group. The survey considers a significant number of potential benefit streams and extractive companies. Although it suggests a first scope, the survey rarely draws conclusions, which makes it difficult to understand its recommendations (thus, the presentation of the scope of benefit streams varies greatly between the pages 15, 17, 18, 19, 20 and 21).
2. A design of reporting template adopted, yet not formally validated The survey defining the scope of the 2010 EITI report indicates that: “the design and […] the approval of the reporting templates refer to the tasks of the Reconciler”. The survey suggests “dummy templates” and specifies that “the Technical Secretariat […] and the reconciler […] will have to improve these templates”96. Although we understand that the elaboration of the reporting templates was in fact the object of rich debates within the Executive Committee and that their final design was adopted by
96 Périmètres des rapports ITIE-RDC 2010-2011, Hart Group (17 octobre 2012), p. 48
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“companies and State agencies, […] in the reconciler’s presence”97, there is no formal document upon which this decision could be validated.
3. An undefined materiality threshold The survey defining the scope of the 2010 EITI report mentions the issue of “material discrepancies”98. This notion is however not found elsewhere; in fact, neither the Terms of Reference for the recruitment of the reconciler, nor the 2010 EITI report address the question of the materiality, as a threshold above which the omission of a payment or of a number of payments could affect the results of the report. Thus, the 2010 EITI report recommends: “it is important to define the materiality threshold in a very clear and simple manner, in order to allow companies and State agencies to easily agree on the benefit streams which have to be reported in the future”99. The definition of a threshold for cumulated omissions, above which all undeclared payments could affect the total reported, would have undoubtedly enabled the reconciler, according to our analysis, to address the materiality issue in a pragmatic manner. This threshold is usually calculated based on total tax revenues as declared by State agencies in the Tableau des Opérations Financières de l’Etat (TOFE)100. A threshold of cumulated omissions between 0.5 and 1% of this total seems reasonable, in the context of the DRC. Therefore, for 2010, this threshold could range between 15 and 30 MUSD101.
4. An uncertain scope of benefit streams The ToRs of the reconciler indicate that "[the reconciler, State agencies and companies] will agree on the definition of each revenue and on a single list approved by the Executive Committee”102. We do not have any knowledge of this “single list”, nor of a formal validation of the scope by the Executive Committee. The list proposed in the 2010 EITI report is “the list of the significant benefit streams that companies and the government disclosed”103, made up of the 20 following benefit streams:
97 SODIMICO self-assessment form 98 Périmètres des rapports ITIE-RDC 2010-2011, Hart Group (17 octobre 2012), p. 34 99 Rapport ITIE-RDC 2010, KPMG (15 janvier 2013), p.44 100 TOFE, tel que figurant dans Democratic Republic of the Congo: Third Review of the Three-Year Arrangement Under the Extended Credit Facility, International Monetary Fund (juillet 2011) 101 The TOFE data show a total for fiscal revenues close to 2.6 MUSD. On this basis : 2.6 MUSD x 0.5% 13 MUSD and 2,6 MDS USD 1% 26 MUSD respectively, rounded up to 15 and 30 MUSD 102 Termes de Référence pour le recrutement d'un conciliateur chargé d'élaborer un rapport ITIE pour 2010-2011 (septembre 2011), p. 6 103 Rapport ITIE-RDC 2010, KPMG (15 janvier 2013), p. 26
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List of revenues/payments included in the scope of the 2010 EITI report
• The mining sector We find discrepancies between the scope of the 2008-2009 EITI report, the scope as proposed by Hart Group and the scope of the 2010 EITI report. More precisely, we find that the following potentially significant benefit streams have not been included in the scope of the 2010 EITI report: - The provincial tax on concentrates for export - The provincial tax on road and drainage works - The disposal of assets of State-owned companies - The costs for services rendered The 2010 EITI report does not justify the absence of these benefit streams from the scope of the report104 and the multi-stakeholders group did not make any comment on their exclusion from the scope. Absence of provincial taxes (mining sector) The scope of the 2010 EITI report reads: “there are 2 edicts of the Governor of the province of Katanga, one establishing the provincial tax for the rehabilitation of the urban road and
104 We also note the absence of the following benefit streams, although included in the scope proposed by Hart Group: the fiscal penalties and fees paid to the DGDA, the administrative royalty, the penalties and transaction fees paid to the DGRAD, the contribution on the surface area of the mining and oil concessions.
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drainage infrastructures […] and the other setting the incentive fee for the creation of local units for the transformation of concentrates.”105 The integration of the provincial tax in the scope had been recommended106 by Hart Group. The choice to exclude them in order to implement gradually the EITI-DRC could have been understood but has not been justified in any document. We cannot confirm the effective materiality of the provincial taxes; yet, in the light of the conclusions of the 2010 EITI report, we understand that the amounts of the provincial taxes on concentrates exceeded 25 MUSD in 2010107. The amount of the provincial taxes for the road and the drainage work has not been detailed. The absence of these 2 provincial taxes from the scope of the 2010 EITI report impedes us from concluding that the scope of the benefit streams of the mining sector is exhaustive. Absence of revenues resulting from the disposal of assets of State-owned companies (mining sector) We find that the survey defining the scope of the 2010 EITI report indicates that: “the State- owned companies sold shares in mining operations. […] These sales were regulated by the law 2008/8, which requires […] that the benefits of these sales [be] transferred to the Treasury [...]. These transactions fall under the EITI scope”108. The revenues resulting from the disposal of assets were not included in the scope, in contrast with the recommendation109 of Hart Group. Thus, we cannot conclude that the scope is exhaustive. This is all the more problematic in that a market analysis has highlighted that such operations took place. Indeed, we understand that the GECAMINES sold its shares in the SMKK to Emerald Star Enterprises for 15 MUSD, in February 2010110.
Absence of costs for services rendered (mining sector) The exit rights have not been included in the scope of the 2010 EITI report whereas, according to the 2008-2009 EITI report111, the mining companies reported paying respectively 19 and 16 MUSD in exit rights. These amounts are further disclosed in the disaggregated tables publicly available on the National Initiative website www.itierdc.org. Consulted on this matter, the DGDA notes that the “holders of mining rights are not subject to exit rights” and that “the quoted payments are not justified and should not appear in the 2008- 2009 EITI report”112. Also consulted on this matter, the conciliator of the 2008-2009 EITI report confirms the statements in his report, for which numerous mining companies indeed declared the payments of exit rights in 2008 and 2009. The latter eventually recognized having reported some payments due as costs for services rendered (CSR) in the category exit rights during the 2008-2009 EITI report elaboration. In this context, as there is no cost for services rendered in the scope of the 2010 EITI report, we cannot conclude that the scope of the benefit streams of the mining sector is exhaustive. §
105 Rapport ITIE-RDC 2010, KPMG (15 janvier 2013), p. 19 106 Périmètres des rapports ITIE-RDC 2010-2011, Hart Group (17 octobre 2012), p. 21 107 Rapport ITIE-RDC 2010, KPMG (15 janvier 2013), p. 19 108 Périmètres des rapports ITIE-RDC 2010-2011, Hart Group (17 octobre 2012), p. 38 109 Périmètres des rapports ITIE-RDC 2010-2011, Hart Group (17 octobre 2012), p. 38 110 Gertler earns billions as mine deals fail to enrich Congo, Bloomberg (05 December 2012) 111 Rapport du conciliateur ITIE sur les revenus 2008-2009, Fair Links (février 2012), p.8 112 Lettre de la Direction Générale des Douanes et Accises (18 janvier 2013)
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The definition of the scope of the benefit streams of the 2010 EITI report should have been more precisely supported by the mining, tax and investment codes. As it is today, and in the absence of any convincing justifications, we are unable to confirm the exhaustiveness of the scope of benefit streams of the 2010 EITI report. These shortcomings have in fact urged the reconciler to recommend that: “the Executive Committee will have to pay special attention so that all significant payments be exhaustively covered for the year of the report”113. The insertion of an additional category “Other significant revenues/payments” in the reporting templates would have certainly enabled clarification of this point.
5. An extended, yet apparently incomplete scope of companies We do not hold any document of the Executive Committee that formally validates the scope of companies for the 2010 EITI report.
• The oil sector Absence of the State-owned company COHYDRO (oil sector) We understand that the sector counts a national company, la Congolaise des Hydrocarbures (COHYDRO) which has not been included in the scope of the 2010 EITI report, whereas: - COHYDRO holds shares in PSC in exploration According to the oil contracts disclosed on the website of the Ministry of Mines, COHYDRO would notably own shares in PSCs in exploration on Blocks 1 and 2 in the Albertine Graben114. As a company representing the State, it would have surely been useful to include this company in the scope. Nevertheless, these companies being in exploration, the chances that COHYDRO might have received revenues as representing the State are very limited. - COHYDRO holds shares in PSC in production As stated in §1.2, COHYDRO owns 15% of the shares of a PSC in production115, operated by Lirex (a subsidiary of the Perenco-Rep). Given this situation, the company has most certainly received its shares of profit-oil and cost-oil as representing the State as partner in some PSC in production phase. Consequently, the exclusion of COHYDRO from the scope of the 2010 EITI report impedes us from concluding that the scope is exhaustive. This exclusion is all the more unfortunate as Fair Links as well as Hart Group had recommended the inclusion of all the oil companies in the scope of the future EITI reports. Absence of justification for the exclusion of 8 private companies of the oil The survey defining the scope of the 2010 EITI report indicates that: “an analysis of the overview of the agreements and conventions dated March 2012 shows that 18 partners and 1 operator are present in the [oil] sector in the DRC. The conventions and agreements date back to mid-2010, at the latest, and we include all the companies concerned, so as to make sure that we do not miss any signature bonus reporting”116. However, only 11 companies out of the 19 reported by Hart Group participated in the 2010 reconciliation process. We understand that the 8117 companies have been excluded because they “either rely on foreign law or have cancelled their partnership contracts and do not exist
113 Rapport ITIE-RDC 2010, KPMG (15 janvier 2013), p. 44 114 GEPS Report Republic Democratic of Congo, IHS (November 2011), p. 10 115 Clarification from the Technical Secretary of the EITI-DRC (30 January 2013) 116 Id. p. 34 117 These actors are: Congulf, Solico, INPEX, Foxwhelp Congo, SACOIL, Dominion Petroleum Congo, Companies minière congolaise, COBIT-SRM
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anymore in the DRC”118. For 7 of them, these arguments have been confirmed to the validator by the Minister of Hydrocarbons, in a letter dated 23 February 2013. This letter states that: - “the companies INPEX, SOLICO and SEREPLICO that replaced CONGULF have no commitment with the DRC in accordance with the 1969 Convention - COBIT-SRM and COMICO Sarl are still waiting their approval order for the implementation of their PSCs, for now, they owe nothing to the DRC - Dominion and SACOIL (that became SEMLIKI) having split their shares to SOCO and Total respectively, it is the responsibility of the latters to answer the contractual obligations they have with the DRC”119 Although all the extractive companies listed by Hart Group are not considered here, we nevertheless understand that they undoubtedly did not pay significative taxes to the State of the DRC in 2010 (INPEX, SOLICO and SEREPLICO, Dominion and Sacoil). On the other hand, the nationality of a company (either Congolese or Foreign), its departure from the DRC or the disposal of its share to another company excludes in no way the possibility for such a company to have paid significant payments to the State in 2010 (the signature bonus particularly). In this context, we consider that the exclusion of these 8 companies should have been justified by the multi-stakeholder group during the definition of the scope.
• The mining sector Absence of justification by the multi-stakeholder group of the exclusion of 7 private companies of the mining sector The survey defining the scope of the 2010 EITI report proposes a scope including 48120 mining companies. Although some companies were added to the final scope, the following companies have not been included in the 2010 EITI report: Mining Company Katanga, Congo Cobalt Corporation, DRC Cooper and Cobalt Project, New Dathu Corporation, Jindal Mineral Metals Africa, Kingamiambo Musonoi Tailing and Roan Prospecting and Mining. We understand that the company Mining Company Katanga, which apparently paid 3.4 MUSD to the DGI in 2010121, “is not an extractive company [...] but a mining subcontractor”122; according to our analysis, the 6 other companies listed aboved undoubtedly did not pay any significative taxes to the Congolese State in 2010. In this context, we consider that the exclusion of these 7 mining companies from the scope should have been justified by the multi-stakeholder group when defining the scope. Absence of unilateral declaration by the State agencies of the payments made by the numerous small extractive companies excluded from the scope Given the numerous actors of small size in the DRC, notably in Katanga (>360 mining companies123), it would undoubtedly have been useful to consider an unilateral declaration by the State agencies of the payments made by the numerous companies of small size excluded from the scope.
118 Clarification from the Technical Secretary of the EITI-DRC (January 30, 2013) 119 Courrier du Ministre des Hydrocarbures au Validateur justifiant l’absence de 7 entreprises pétrolières du Périmètre du Rapport ITIE-RDC 2010 (23 février 2013) 120 The 2010 EITI report includes eventually 49 mining companies 121 Périmètres des rapports ITIE-RDC 2010-2011, Hart Group (17 octobre 2012), Annexe E 122 Courrier du Directeur Général de MCK Trucks au Coordonnateur de l’ITIE confirmant les activités de sous- traitant minier (21 février 2013) 123 See §1.2 p. 15
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• The ore dealers Although the survey defining the scope of the 2010 EITI report suggests the participation of the ore dealers in the reporting process, it states that: “after deliberations, the Executive Committee has decided not to include the ore dealers in the scope of the 2010 EITI report”124. Indeed, the 2010 EITI report confirms that: “unlike the 2009 EITI-DRC report, the ore dealers were not included in the 2010 reporting scope. […] The amount reported in 2009 by the ore dealers […] represents 0.8% of reported payments and 0.06% of the reported State revenues. They were not selected in the scope of the 2010 EITI report because of the difficulty of getting information and the insignificant amounts they represent”125. § The selection of companies included in the scope of the 2010 EITI report would have undoubtedly deserved to be supported by the mining directory and registry. In this case, and in the absence of any convincing justifications, we are not able to confirm the exhaustiveness of the scope of companies in the 2010 EITI report. These shortcomings have urged that the reconciler recommend: “upon the definition of the scope, the government will have to make sure that all the companies of each sector will have been identified by the concerned ministries’ technical services”126.
6. A potentially insufficient scope of State agencies The 2010 EITI report presents the scope of State agencies on p.25. This list includes the 3 main State agencies (DGI, DGDA and DGRAD) and the 6 State-owned mining companies. The State-owned mining company COHYDRO is not included in this scope, nor are the State agencies in the province of Katanga.
7. The choice not to include the payments in-kind clarified The inclusion of the benefit streams received by the State of the DRC under the said Chinese Contract is addressed in the survey defining the scope of the 2010 EITI report, which reads: “we note that the Executive Committee of the EITI-DRC addressed the issue which was debated amongst the stakeholders, the large majority of which considers that this contract should not be part of the scope of the EITI. According to the majority’s opinion, SICOMINES should start disclosing once the company starts production”127. The minutes of the meetings of the Executive Committee held on 11 January 2012 stipulate that: “the Chinese contract does not hold any provision such as barter or minerals against infrastructures, unlike what many believe. It is a joint venture contract between a group of Chinese and Congolese companies. The dividends due to the DRC have been paid in advance to the DRC which, in turn, accepts to remit them to a Chinese company for various infrastructures. Once the operation starts, the companies involved in the joint venture will report in the EITI templates”128. Also, the EITI report offers in Appendix 6 a presentation of this contract, drafted by the Technical Secretariat129. This document details all the ways of funding of this Cooperation Project and indicates the financial circuit of the mining project. Based on this document, we
124 Périmètres des rapports ITIE-RDC 2010-2011, Hart Group (17 octobre 2012), p. 45 125 Rapport ITIE-RDC 2010, KPMG (15 janvier 2013), p. 5 126 Rapport ITIE-RDC 2010, KPMG (15 janvier 2013), p. 44 127 Périmètres des rapports ITIE-RDC 2010-2011, Hart Group (17 octobre 2012), p. 37 128 Procès verbal de la réunion du Comité Exécutif concernant le recrutement du conciliateur pour le rapport ITIE 2010 (11 janvier 2012) 129 Rapport ITIE-RDC 2010, KPMG (15 janvier 2013), p. 87
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understand that no eligible payment to the EITI – such as entry rights – was paid to GECAMINES in 2010.
References
N° 8-92 Rapport ITIE-RDC 2010, KPMG (15 janvier 2013) 8-180 Périmètres des rapports ITIE-RDC 2010-2011, Hart Group (17 octobre 2012) 8-315 Rapport du conciliateur ITIE sur les revenus 2008-2009, Fair Links (février 2012), 8-360 Procès verbal de la réunion du Comité Exécutif concernant le recrutement du conciliateur pour le rapport ITIE 2010 (11 janvier 2012) 7-105 Termes de Référence pour le recrutement d'un conciliateur chargé d'élaborer un rapport ITIE pour 2010-2011 (septembre 2011) Other references available in Appendix I
Opinion of the stakeholders
Interviewed stakeholders confirm the quality of the debates organised within the Executive Committee for the definition of the scop of the 2010 EITI report. They however acknowledge that their decisions have not been sufficiently conclusive and formalised. The stakeholders further stress the positive evolution of the coverage of the EITI reports, while highlighting that efforts remain to be made to define an exhaustive scope of EITI report, including all the extractive companies and significative benefit streams. On that matter, they regret that th Hart Group study has not been sufficiently sound and suitable to allows the coverage of the 2010 EITI report to be strengthened. They further underline the necessity to carry on a new scoping study before the elaboration of the next EITI report in the DRC. Thus, some civil society organisations wishes that the ore dealers located in the east of the country be included in the next reports. Moreover, some companies regret that some “significant benefit streams” have not been included in the scope of the benefit streams, like provincial taxes130. We further understand that the integration of the assets disposal and the costs of services rendered could be discussed soon. Some other extractive companies, such as GECAMINES, pointed out that it was necessary to ensure a proper definition of revenues “in order to avoid any misunderstanding in filling in the templates”131. Eventually, we observe that the extractive companies have appreciated the design of the reporting templates used for the 2010 EITI report132; the company AMCK even suggests that they should be normalised for future reports133. All stakeholders agree that efforts made so far should be upheld in order to ensure the exhaustiveness of the scope of the EITI reports.
Recommendations of the validator
R3 – Ensure that all major decisions of the Executive Committee are formally approved R4 – Make sure to guarantee the exhaustiveness of the scope of benefit streams and of extractive companies in the next reconciliation process
130 KCC self-assessment form 131 GECAMINES self-assessment form 132 Boss Mining and GECAMINES self-assessment forms 133 AMCK self-assessment form
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R5 – Make sure to justify the materiality threshold(s) of future reconciliation reports R6 – Make sure to systematically include a category “Other significant revenues / payments” in the scope of benefit streams
Conclusion
The definition of the scope of the benefit streams, of the extractive companies and of the reporting templates were subject to many debates within the Executive Committee, but the final version was not formally approved. Besides, the Executive Committee has not defined a materiality threshold. Although a specific study defining the scope of the 2010 EITI report has been carried out by Hart Group, the justification of the exhaustiveness of the scope of benefit streams and extractive companies in the 2010 EITI report presents major uncertainties. We notice the absence of the following benefit streams in the 2010 EITI report: - The provincial tax on the concentrates for export, exceeding 25 MUSD - The provincial tax on the road and drainage works, considered as significant by the Hart Group firm - The disposal of assets, although a market analysis highlighted that such operation took place for an amount of 15 MUSD - The costs for services rendered, although numerous mining companies indeed reported having paid 16 MUSD in the exit rights category in 2009 Moreover, we note the absence the State-owned company COHYDRO in the 2010 EITI report, although it undoubtedly received its profit-oil and cost-oil shares as the representative of the State partner in some PSC in production as well as dividends. Consequently, the exclusion of some benefit streams and of some companies does not enable us to confirm the exhaustiveness of the scope and thus leads us to conclude that the EITI- DRC is not compliant with this Requirement.
Requirement No. 9 is unmet
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Requirement No.10 The organisation appointed to produce the EITI Reconciliation report must be perceived by the multi-stakeholder group as credible, trustworthy and technically competent
Evidence
Evidence stated in the EITI Rules, 2011 edition Finding Paragraph
i A reconciler has been appointed to reconcile the disclosed company and government Yes 1 figures, and to produce the final Report ii The reconciler is perceived by stakeholders to be credible, impartial, trustworthy and Yes 2 technically capable iii The multi-stakeholder group has agreed the TORs for the reconciler and has overseen Yes 1 the selection process for the reconciler
See EITI Rules, 2011 edition, p. 23
1. The adoption of ToRs and the selection of a reconciler, yet without formal validation At its meeting held on 21 September 2011, the Executive Committee decided to create “an ad hoc commission to complete the ToRs for the recruitment of the reconciler […] made up of delegates from each constituency"134. Although the stakeholders have confirmed having debated and adopted these ToRs during the concerned meeting, no formal document allows us to confirm that these ToRs have effectively been formally adopted by the Executive Committee. After the recruitment of the expert in charge of defining the scope of the 2010 EITI report135, the procedure for selecting a reconciler for the 2010 EITI report has been undertaken in partnership with CTB on 24 May 2012. Out of the 8 firms selected, only 2 submitted a technical and financial proposal. As an outcome to the deliberations, the evaluation report concludes: “based on the results of the assessment of the offers […] we suggest awarding the contract to KPMG”136. This decision has been formalised during the meeting of the Executive Committee held on 18 April 2012.137.
2. The firm selected for the 2010 and 2011 EITI reports is considered credible, impartial, trustworthy and technically competent The stakeholders we have met in Kinshasa and Lubumbashi confirm that the firm selected to elaborate the 2010 EITI report is credible, impartial, trustworthy and technically competent. The self-assessment forms transmitted by extractive companies confirm this statement.
134 Procès verbal de la réunion du Comité Exécutif ITIE-RDC concernant l’adoption du plan d’actions 2011-2013 et l’adoption des TDR du conciliateur pour le rapport ITIE 2010-2011 (21 septembre 2011) 135 Procès verbal de la réunion du Comité Exécutif concernant la présentation officielle des rapports ITIE 2008- 2009 et le lancement des appels d'offres pour le recrutement du conciliateur et de l'expert pour la définition du Périmètre (22 février 2012) 136 Rapport d’évaluation des offres pour la prestation de conciliateur pour l’exercice ITIE 2010 (4 juillet 2012) 137 Procès verbal de la réunion du Comité Exécutif concernant le recrutement de l'expert pour la définition du Périmètre du rapport ITIE 2010 et du conciliateur pour le rapport ITIE 2010 (18 avril 2012)
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References
N° 8-92 Rapport ITIE-RDC 2010, KPMG (15 janvier 2013) 8-300 Procès verbal de la réunion du Comité Exécutif concernant le recrutement de l'expert pour la définition du Périmètre du rapport ITIE 2010 et du conciliateur pour le rapport ITIE 2010 (18 avril 2012) 8-330 Procès verbal de la réunion du Comité Exécutif concernant la présentation officielle des rapports ITIE 2008-2009 et le lancement des appels d'offres pour le recrutement du conciliateur et de l'expert pour la définition du Périmètre (22 février 2012) 7-105 Termes de Référence pour le recrutement d’un conciliateur chargé d’élaborer un rapport ITIE 2010-2011 7-110 Procès verbal de la réunion du Comité Exécutif ITIE-RDC concernant l’adoption du plan d’actions 2011- 2013 et l’adoption des TDR du conciliateur pour le rapport ITIE 2010-2011 (21 septembre 2011) Other references available in Appendix I
Opinion of the stakeholders
The stakeholders we have met have confirmed the quality of the reconciler in charge of the 2010 EITI report. Although some extractive companies (Anvil Mining, Bazano, KCC, Perenco, SODIMICO or even STL) have shared concerns138 on the importance of the discrepancies revealed in the first version of the 2010 EITI report (October 2012), the stakeholders reminded us that important efforts have been undertaken by the Executive Committee and the reconciler: the discrepancies which are now disclosed in the final version of the 2010 EITI report (January 2013) are satisfactory.
Recommendation of the validator
R3 – Ensure that all major decisions of the Executive Committee are formally approved
Conclusion
The ToRs of the 2010 EITI report have been discussed within the Executive Committee and adopted by its members. The various meetings and self-assessment forms confirm that the reconciler of the 2010 EITI report is seen as credible, impartial, trustworthy and technically competent. This leads us to conclude that the EITI-DRC is compliant with this Requirement.
Requirement No. 10 is met
138 See self-assessment forms in Appendix III
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Requirement No.11 The government is required to ensure that all relevant extractive companies and government entities report
Evidence
Evidence stated in the EITI Rules, 2011 edition Finding Paragraph
a) Companies have reported payments to the government, according to agreed templates Yes 3 b) The reporting process applied to all companies, except justified exemptions Yes 3 c) One of the following measures has been implemented: i A legislation makes it mandatory that companies report Yes 2
ii A relevant regulation makes it mandatory that companies report Yes 2 iii Agreements have been negotiated with all companies to ensure reporting as per the NA EITI Criteria iv Recognised steps have been taken to ensure that companies report Yes 1 and 2 d) The government has ensured that all government entities that receive material Yes 4 payments participate in the reporting process
e) The multi-stakeholders group has considered automated on-line disclosure NA
See EITI Rules, 2011 edition, p. 23
1. The authorities’ commitment to involve declaring parties in the 2008-2009 EITI report Since the EITI reporting process was voluntary at the time the 2008-2009 EITI report was drafted, the Congolese authorities got into action to encourage extractive companies and State agencies to complete and submit their reporting templates to the reconciler. These actions have notably consisted of: - The letter from the Chairman of the Executive Committee, dated 15 June 2011, addressed to the declaring State agencies, stating: “the last situation update […] shows that data is still missing and/or have not been submitted in the required format. Because of this deficiency, the EITI-DRC reports are not delivered within the deadline required by the EITI International process. […] Thus, I appeal to everyone’s goodwill to facilitate the collection of such data by the Technical Secretariat, at the latest by 25 June 2011”139 - The letter from the Chairman of the Executive Committee, dated 27 December 2010 addressed to the general managers of the reporting State agencies, in which he notes that the reconciler “has not yet received [their] reporting templates”140 and asks them to “kindly fill in the reporting templates”141 - The letter from the Chairman of the Executive Committee, dated 19 June 2010 addressed to the representatives of the State agencies, of the extractive companies and of the ore dealers, in which he reminds them of the importance of their participation and asks them "to support and facilitate the collection of data for the 2008-2009 EITI report"142. This letter encloses the reporting templates and gives the submission deadline
139 Lettre du Vice Président du Comité Exécutif aux Directeurs Généraux des organismes collecteurs pour une mission urgente de collecte des données complémentaires ITIE-RDC (15 juin 2011) 140 Lettre du Président du Comité Exécutif aux Directeurs Généraux des entités de l’Etat concernant les formulaires de déclarations pour l’exercice ITIE 2008-2009 (27 décembre 2010) 141 Id. 142 Transmission des formulaires de déclarations pour le rapport ITIE 2008-2009 aux représentants des entreprises et des régies financières (19 juin 2010)
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Overall, the 70 extractive companies of the scope (including the ore dealers) had participated in the reconciliation process. The State agencies and the State-owned companies included in the scope of this report had also all fill in and sent reporting templates.
2. The adoption of a legislation making EITI mandatory previous to the drafting of the 2010 EITI report The Congolese authorities have decided to formalise the framework for the implementation of the EITI by adopting the Ministerial order of 23 March 2012 on the obligation for all mining companies to report payments made to the State under the EITI143. This order stipulates in its article 2: “the scope of companies required to report and the benefit streams targeted will be defined by the Executive Committee for the year in question”.
3. An almost complete participation of extractive companies of the scope of the 2010 EITI report We understand that a training seminar on the completion of the reporting templates was organised for the extractive companies previous to the launch of the 2010 EITI report. The 2010 EITI report further states that "all extractive companies included in the scope of the 2010 EITI report have returned their reporting templates.100% of data has been collected"144. However, we understand that the companies COMISA and Frontier should also have submitted their declaration. However, they seem to have "ceased operations in the Democratic Republic of the Congo in 2010. No longer operational today, the benefit streams collected from these 2 companies (76,6 MUSD for Frontier and 1,1 MUSD for COMISA) were declared unilaterally by the State agencies, as instructed by the Executive Committee”145. Finally, the report indicates: "the companies Frontier and COMISA having changed ownership, the new owner was unable to report to the EITI for the simple reason that he was not in possession of the former owner’s records [...]. The Executive Committee has seen it fit to include in this report unilateral declarations as received from the State from these 2 companies"146. We further note real progress in data transmission, the collection of all statements for the 2010 EITI report having been completed in less than a month. The Chairman of the Executive Committee also noted in the press release dated 8 September 2012: "the preparation of this report has seen very significant progress in the data collection"147. The 2010 EITI report further concludes that "the personal involvement of the Ministers of Mines, Hydrocarbons, Finance and officials from the Chamber of Mines was permanent and decisive in achieving this process"148.
4. Complete participation of the State agencies and State-owned companies of the 2010 EITI report All the State agencies and State-owned companies included in the scope of the 2010 EITI report filled in and sent their reporting templates; to our knowledge, there has been no official incentive for their participation, such as a letter similar to those sent for the 2008-2009 EITI report. We emphasise in this regard that the computerisation of the DGI and the DGDA allowed transmitting reporting templates of much better quality in shorter times. The conciliator confirms that this process "significantly improved data collection and reduced the time for the
143 See Requirement No.8 for further details 144 Rapport ITIE-RDC 2010, KPMG (15 janvier 2013), p. 5 145 Rapport ITIE-RDC 2010, KPMG (15 janvier 2013), p. 5 146 Rapport ITIE-RDC 2010, KPMG (15 janvier 2013), p. 25 147 Communiqué de presse du Comité National (année 2012) 148 Rapport ITIE-RDC 2010, KPMG (15 janvier 2013), p. 5
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return of reporting templates. [...] It has not been the case for the DGRAD, where completing the reporting templates is still a manual process. This has made data assembly difficult, especially collection and handling"149.
References
N° 8-92 Rapport ITIE-RDC 2010, KPMG (15 janvier 2013) 8-180 Périmètre des rapports ITIE-RDC 2010-2011, Hart Group (17 octobre 2012) 8-310 Arrêté ministériel du 23 mars 2012 portant obligation à toutes les entreprises minières de déclarer les paiements effectués à l'Etat dans le cadre de l'ITIE 6-103 Lettre du Président du Comité Exécutif aux Directeurs Généraux des entités de l’Etat concernant les formulaires de déclarations pour l’exercice ITIE 2008-2009 (27 décembre 2010) 6-130 Transmission des formulaires de déclarations pour le rapport ITIE 2008-2009 aux représentants des entreprises et des régies financières (19 juin 2010) Other references available in Appendix I
Opinion of the stakeholders
Stakeholders confirm the political commitment of the Congolese authorities in the implementation of the EITI-DRC. They note the regular implication of several line ministries, including the Prime Minister, to ensure that all the extractive companies and State agencies participate in the declaration process. They notice a high degree of participation of the stakeholders of the 2010 EITI report and are satisfied with the approach adopted by the Executive Committee as regards the absence of declaration of the Fontier and COMISA companies.
Recommendation of the validator
R7 – Proceed as soon as possible to the computerisation of the DGRAD
Conclusion
The Congolese authorities have confirmed their intention to involve the EITI declaring parties in the reconciliation process; in addition, they have made recurring efforts so that the State agencies and extractive companies transmit comprehensive reporting templates, according to the required format. The authorities have also adopted a legal mechanism, making it mandatory for all extractive companies and ore dealers included in the scope the EITI report to submit reporting templates. These reasons, lead us to conclude that the EITI-DRC is compliant with this Requirement.
Requirement No. 11 is met
149 Rapport ITIE-RDC 2010, KPMG (15 décembre 2012), p. 44
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Requirement No.12 The government is required to ensure that extractive companies’ reports are based on accounts audited to international standards
Evidence
Evidence stated in the EITI Rules, 2011 edition Finding Paragraph
a) The government has taken steps to ensure that data submitted by companies has been audited to international standards, such as : i Passing legislation requiring figures to be audited to international standards Yes 2
ii Amending existing audit standards to ensure that they are to international standards, Pending 2 and requiring companies to operate according to these iii Agreeing a MoU with all companies whereby companies agree to ensure that NA submitted figures are audited to international standards iv Companies voluntary commitment to submit figures audited to international Yes 2
standards v Agreeing a plan with companies which do not submit figures based on accounts NA audited to international standards vi Being content with the agreed way of addressing figures which are not to audited NA standards b) Companies have obtained from their external auditor an opinion that the Partial 3 information they submit is consistent with their audited financial statements
See EITI Rules, 2011 edition, p. 24
1. Reminder of the methodology The quality of an EITI report fully relies on the quality of the data disclosed in the reporting templates. Making sure that the reporting templates submitted by extractive companies are based on accounts audited to international standards does not guarantee, though, the full reliability of the disclosed data. Indeed, if the financial statements of an extractive company can be reliable, the EITI reporting templates can be misinformed. Therefore, in order to maximise the reliability of the disclosed data, it is necessary that the extractive companies’ declarations be attested by an independent auditor. Such a procedure indeed guarantees that: - The data disclosed in the reporting templates are effectively drawn from the company’s accounts (audited to international standards) - All the data that should be included in the EITI reporting template is effectively and correctly disclosed
2. An adapted legal and regulatory framework and explicit ToRs The ministerial order of 23 March 2012 requiring all mining companies to report payments made to the State under the EITI has strengthened the EITI reporting process, which now has to be conducted “in application of the Rules enacted by the Extractive Industries Transparency Initiative”150. The ToRs of the report further point out that: “the figures disclosed by the companies will have to be attested by their auditors”151. However, it is worth mentioning that “there is no law in the Democratic Republic of the Congo that makes it compulsory for
150 Arrêté ministériel du 23 mars 2012 portant obligation à toutes les entreprises minières de déclarer les paiements effectués à l'Etat dans le cadre de l'ITIE, article 1er 151 Termes de Référence pour le recrutement d'un conciliateur chargé d'élaborer un rapport ITIE pour 2010-2011 (septembre 2011), p. 5
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companies to have their accounts audited"152. Therefore, the transmission of figures based on audited accounts is voluntary. The reconciler notes that the ratification by the DRC of its accession to the OHADA should overcome this deficiency.
3. The main 2010 data have been attested or drawn from audited accounts Of the 60 extractive companies included in the scope153 of the 2010 EITI report154: - 21 extractive companies have submitted their reporting templates attested by an independent auditor - 21 extractive companies have submitted their certified accounts as of 31 December 2010 - 8 extractive companies “that had no activity in 2010” and 7 that were “in joint-ventures” did not submit any documents certifying their figures - 3 extractive companies have submitted confirmation letters signed by the company management Of the 13 extractive companies having reported payments exceeding 15 MUSD: - 5 oil companies (Chevron, Lirex, MIOC, Perenco, Teikoku) and 2 mining companies in production (AMCK and TFM) have transmitted figures attested by their independent auditor. The disclosed data amount to nearly 434 MUSD (56% of the data disclosed) - 4 mining companies in production (Boss Mining, KCC, MUMI, Ruashi Mining) have only transmitted evidence that their accounts had been audited. Their declarations exceed 146 MUSD - 2 mining companies in exploration (METALKOL, Sodifor) did not send any document certifying their figures, for declarations amounting to 90 MUSD
References
N° 8-92 Rapport ITIE-RDC 2010, KPMG (15 janvier 2013) 8-310 Arrêté ministériel du 23 mars 2012 portant obligation à toutes les entreprises minières de déclarer les paiements effectués à l'Etat dans le cadre de l'ITIE 7-105 Termes de Référence pour le recrutement d'un conciliateur chargé d'élaborer un rapport ITIE pour 2010- 2011 (septembre 2011)
Opinion of the stakeholders
The stakeholders confirm the proposed analysis. Despite some weaknesses to provide with documents attesting the data disclosed by the extractive companies (notably the companies METALKOL and Sodifor), the interviewed stakeholders haved declared themselves satisfied with the solutions adopted in regards to the 2010 EITI report.
Recommendation of the validator
R8 – Ensure in future reconciliation reports that the EITI reporting templates submitted by extractive companies have been attested by their external auditors
152 Rapport ITIE-RDC 2010, KPMG (15 janvier 2013), p. 6 153 We highlight that, as seen in Requirement No.9, the scope of the 2010 EITI report shows some weaknesses as regards exhaustiveness 154 Rapport ITIE-RDC 2010, KPMG (15 janvier 2013), p. 6
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Conclusion
Although declaring extractive companies did not comply with the requirements of the Executive Committee or with the best practices in this domain, by submitting figures certified by an external auditor, most of them have based their reporting templates on audited accounts. In this regards and given that the multi-stakeholder group is satisfied with this Requirement, we can conclude that the EITI-DRC is compliant with this Requirement.
Requirement No. 12 is met.
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Requirement No.13
The government is required to ensure that government reports are based on accounts audited to international standards
Evidence
Evidence stated in the EITI Rules, 2011 edition Finding Paragraph
a) The government has taken steps to ensure that data submitted has been audited to international standards, such as : i Passing legislation requiring figures to be audited to international standards NA
ii Amending existing audit standards to ensure that they are to international NA standards, and requiring companies to operate according to these iii Submitting a letter of confirmation from a senior level of the government Partial 4 and 5
ensuring the reliability of the data disclosed iv Being content with the agreed way of addressing the situation, when figures Yes 5 submitted are not audited to international standards b) The government auditor has given an opinion on the accuracy of the government's Partial 5 submissions
See EITI Rules, 2011 edition, p. 25
1. Reminder of the methodology As detailed in Requirement No.12, it is also necessary that the EITI reporting templates of the State be audited to international standards. However, we find the compliance with this indicator particularly complex as, even if internationally acknowledged standards exist for the audit of public accounts155, States are not organised for such audits, whose costs would similarly/likewise be very high.
2. Vague ToRs The ToRs of the 2010 EITI report do not clearly address the question of the certification of the State’s declarations. They indeed specify that “an explanatory note from the Executive Committee will be enclosed with the reporting templates of the State agencies, so as to explain the reasons why their accounts are not attested”156. To date, we have had no notice of this document.
3. Actions conducted by the government for the certification of the State’s reporting templates The 2010 EITI report specifies: “for 2010, the accounts of the declaring State agencies have not been reviewed, as per Requirement No.13, by the Supreme Audit Institution, the body that is legally authorised to do so as part of its prerogatives. Since the accounts of the State agencies have been submitted in an aggregated format to the Supreme Audit Institution, the latter was therefore unable to disaggregate their movements so as to reconcile them with the
155 The International Organisation of Supreme Audit Institutions (INTOSAI) promotes the implementation of the International Standards of the Supreme Audit Institutions (ISSAI). This rules are based on the reference source of the International Standards of Audit and Assurance (ISA), used by the legal and contractual auditors of the companies 156 Termes de Référence pour le recrutement d'un conciliateur chargé d'élaborer un rapport ITIE pour 2010-2011 (septembre 2011), p. 5
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data disclosed under the EITI. To overcome this difficulty, and at the request of the Executive Committee of the EITI-DRC, the Minister of Finance has delegated the Inspection Générale des Finances (IGF) to proceed with the certification of the EITI reporting templates submitted by the declaring State agencies”157. On 8 October 2012, the Minister of Finance sent a letter to the declaring State agencies, copied to the Prime Minister, stating that: “Requirement No.13 requires us to make sure that the reporting templates from State agencies […] are based on accounts audited to international standards. To this end, I am asking you to transmit your 2010 EITI reporting templates to the Inspection Générale des Finances for certification as soon as you receive this letter”158. The letter from the Inspection Générale des Finances (IGF) constitutes an answer to the certification of the EITI templates, as, according to the 2010 EITI report: "the IGF [is] a control and audit body [which has a] general and superior competence in terms of control of public finance and goods”159.
4. Works conducted by the IGF representing a test of coherence rather than an audit The 2010 EITI report concludes: “thus, the works of the IGF consisted mainly in reconciling the receipts disclosed by the State agencies (DGI, DGDA and DGRAD) against those levelled in the General Account of Public Treasury”160. Therefore, we understand that the work of the IGF with regards to the EITI reporting templates consisted of testing the coherence between the EITI data disclosed and those recorded in the general account of Public Treasury. This process cannot be referred to as an audit. However, it allows for the ensurance that the EITI reporting templates accurately disclose the revenues collected by the State of the DRC; the members of the Executive Committee declared themselves satisfied with this certification process161.
5. Contrasting conclusions from the Inspection Générale des Finances The reporting templates submitted by the 3 State agencies have been examined by the IGF, which sent, on 29 November 2012, 3 letters to the Head of the State, the Prime Minister and the General Managers of the DGI, DGDA and DGRAD162. The IGF confirms in these letters the quality of the reporting templates submitted by the DGI: “this re-examination process, as well as the different corrections brought to the references documenting the level of receipts which had not yet been traced in the General Account of Public Treasury, now enable the Inspection Générale des Finances to gather reasonable assurance that payments from extractive industries included the 2010 certification scope, such as reported in the reporting templates submitted by the DGI, accurately reflect these respective payments”. The IGF points out some irregularities in the DGDA reporting templates, but finally concludes: “regarding the limited significance of the untraced payments relative to the total audited payments (4.1%) and given that these payments have been subject to the production of single-repayment cheques by the banks involved, we consider that the reporting templates submitted by the DGDA for 2010 sincerely and accurately reflect the situation of revenues received from the mining companies included in the scope of the 2010 EITI report”.
157 Rapport ITIE-RDC 2010, KPMG (15 janvier 2013), p. 8 158 Lettre du Ministre des Finances aux Directeurs Généraux des organismes collecteurs concernant la certification de leurs déclarations ITIE (7 octobre 2012) 159 Rapport ITIE-RDC 2010, KPMG (15 janvier 2013), p. 8 160 Lettre du Ministre des Finances aux Directeurs Généraux des organismes collecteurs concernant la certification de leurs déclarations ITIE (7 octobre 2012) 161 We nevertheless underline that, in accordance with the detailed analysis provided in Requirement No.9, the scope of the 2010 EITI report shows some weaknesses regards to exhaustiveness 162 Lettres de l'Inspecteur Général des Finances aux Directeurs Généraux des organismes collecteurs concernant la certification des déclarations des recettes encaissées des industries extractives (29 novembre 2012)
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Lastly, the IGF finds important shortcomings in the reporting templates submitted by the DGRAD: “L’Inspection Générale des Finances considers that the data recording system as used by the stakeholders involved in the revenue collection process managed by the DGRAD does not allow tracking easily these revenues in the General Account of the Public Treasury and that, as a consequence, the deficiencies detected in the data recording system impede from providing a reasonable assurance with which payments from the extractive industries in the 2010 certification scope, such as reported in the declarations submitted by the DGRAD, accurately reflect the situation of these payments”. Despite all of this, we find that the overall discrepancies between the declarations submitted by the extractive companies and those submitted by the DGRAD remain limited (2% for the positive discrepancies163, and 3% for the negative discrepancies164).
References
N° 8-92 Rapport ITIE-RDC 2010, KPMG (15 janvier 2013) 8-130 Lettres de l'Inspecteur Général des Finances aux Directeurs Généraux des organismes collecteurs concernant la certification des déclarations des recettes encaissées des industries extractives (29 novembre 2012) 8-200 Lettre du Ministre des Finances aux Directeurs Généraux des organismes collecteurs concernant la certification de leurs déclarations ITIE (7 octobre 2012) 7-105 Termes de Référence pour le recrutement d'un conciliateur chargé d'élaborer un rapport ITIE pour 2010- 2011 (septembre 2011)
Opinion of the stakeholders
The stakeholders have declared themselves satisfied with the certification process as provided by the IGF.
Conclusion
While this Requirement is particularly complex to meet, the satisfying controls of coherence conducted by the IGF on the declarations of DGI and DGDA, as well as the Executive Committee’s satisfaction with the limited discrepancies relative to the declarations of the DGRAD lead us to the conclude that the EITI-DRC is compliant with this Requirement.
Requirement No. 13 is met.
163 Rapport ITIE-RDC 2010, KPMG (15 janvier 2013), Tableaux n°7 (p. 33 ) et 9 (p.36): The positive discrepancies between the amounts reported by the extractives companies and by the DGRAD = (1 418 762 + 5 834 373) = 7 253 135; the total payments paid to the DGRAD = (211 156 269 + 99 751 941) = 310 728 210. The proportion of positive discrepancies in the payments paid to the DGRAD = 7 253 135/310 728 210 2% 164 Following the same steps as above: The negative discrepancies between the amounts reported by the extractives companies and by the DGRAD = (0 + 9 656 081) = 9 656 081; the total payments paid to the DGRAD = (211 156 269 + 99 751 941) = 310 728 210. The proportion of negative discrepancies in the payments paid to the DGRAD = 9 656 081/310 728 210 3%
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Requirement No.14 Extractive companies exhaustively disclose all material payments in accordance with the agreed reporting templates
Evidence
Evidence stated in the EITI Rules, 2011 edition Finding Paragraph
a) Companies have made a comprehensive declaration of payments Partial 1-5
See EITI Rules, 2011 edition, p. 26
1. An oil sector where private companies seem to have submitted complete declarations The 2010 EITI report clearly states that “all the extractive companies selected in the scope of the 2010 EITI report have submitted their reporting templates. Therefore, the data collection was complete at 100%”165.
2. Important discrepancies that prevent concluding that the declarations of the mining sector are exhaustive Based on the sole reporting templates of the mining companies in production, we find a significant negative discrepancy, slightly exceeding 38 MUSD166, i.e. 12% of the total payments disclosed. By looking at the review of the main discrepancies proposed by the reconciler167, we also find that: - The 3 leading negative discrepancies concern the following companies: KCC (9 MUSD), TFM (8,5 MUSD) and Ruashi Mining (5,4 MUSD). KCC and Ruashi Mining have yet provided EITI reporting templates based on audited accounts, and TFM has submitted reporting templates attested by its external auditor - On the State’s side, the declarations are supported by receipts. Thus, “1,014 receipts reported by the DGDA [are] not disclosed by KCC”168, and cause a discrepancy of 7.2 MUSD; “144 collection receipts reported as revenues by the DGRAD, yet not disclosed in the reporting templates of KCC”169 cause a discrepancy of 1.8 MUSD; “2,200 receipts reported by the DGDA [are] not disclosed by TFM”170, and cause a discrepancy of 8.5 MUSD; lastly, “the receipts reported by the DGDA” cause a negative discrepancy of 5.4 MUSD with the reporting templates of Ruashi Mining. In this context, we cannot confirm that mining companies have submitted exhaustive reporting templates.
165 Rapport ITIE-RDC 2010, KPMG (15 janvier 2013), p. 5 166 Rapport ITIE-RDC 2010, KPMG (15 janvier 2013), Tableau n°4 (p. 30). We have excluded from the total amounts declared (116 MUSD) unilateral declarations from the State for Frontier (76 MUSD) and COMISA (1 MUSD) 167 Rapport ITIE-RDC 2010, KPMG (15 janvier 2013), pp. 47-54 168 Id., p. 52 169 Id., p. 53 170 Rapport ITIE-RDC 2010, KPMG (15 janvier 2013), p. 52
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3. Unilateral reporting by the State for certain mining companies Although the EITI Rules allow unilateral reporting, we find that the companies Frontier and COMISA did not disclose their payments171, although it would have enabled reconciling the revenues reported by the State, amounting respectively to 76,6 MUSD and 1,1 MUSD172.
4. An incomplete scope of benefit streams that undermines the exhaustiveness of the declarations of the mining sector We have detailed under Requirement No.9 the reasons why we cannot conclude that the scope of benefit streams of the 2010 EITI report is exhaustive. Indeed, the absence of the provincial taxes, asset disposal and costs for services rendered impedes us from confirming with reasonable assurance that all the extractive companies that have made significant payments to the State in 2010 have indeed been able to disclose them in the 2010 EITI report.
5. An incomplete scope of extractive companies that undermines the exhaustiveness of the declarations of the extractive companies We have detailed under Requirement No.9 the reasons why we cannot conclude that the scope of extractive companies of the 2010 EITI report is exhaustive. Indeed, we underlined the absence of the State-owned company COHYDRO. These omissions impede us from confirming with reasonable assurance that all extractive companies that have made significant payments to the State in 2010 have indeed been able to disclose them in the 2010 EITI report.
Reference
N° 8-92 Rapport ITIE-RDC 2010, KPMG (15 janvier 2013)
Opinion of the stakeholders
The stakeholders confirm this analysis and make no specific comment.
Recommendation of the validator
R4 – Make sure to guarantee the exhaustiveness of the scope of benefit streams and of extractive companies in the next reconciliation process
171 The 2010 EITI report indeed highlights that on p.5: “ the 2 companies Frontier and COMISA stopped their activities in 2010 in the Democratic Republic of the Congo. As they are not operating anymore today, the benefit streams of payments received from these 2 companies (76 558 396 for Frontier and 1 074 837 for COMISA) were disclosed unilaterally by the State agencies as required by the Executive Committee ” 172 Rapport ITIE-RDC 2010, KPMG (15 janvier 2013), p. 29
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Conclusion
We have detailed under Requirement No.9 the reasons why we cannot conclude that the scope of the oil sector is exhaustive. Indeed, the absence of the State-owned company COHYDRO impedes us from confirming with reasonable assurance that the declarations of payments of the oil sector are exhaustive. For the mining sector, some revenues disclosed by State agencies, and supported by receipts, have not been declared by extractive companies. In addition, we have detailed under Requirement No.9 the reasons why we cannot conclude that the scope of the mining sector is exhaustive. Indeed, the absence of provincial taxes, asset disposal and costs for services rendered impedes us from confirming with reasonable assurance that the declarations of payments of the mining sector are exhaustive. Based on these evidences, the EITI-DRC is not compliant with this Requirement.
Requirement No. 14 is not met.
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Requirement No.15 Government agencies exhaustively disclose all material revenues in accordance with the agreed reporting templates
Evidence
Evidence stated in the EITI Rules, 2011 edition Finding Paragraph
a) Government agencies have made a comprehensive declaration of revenues Partial 3-5
See EITI Rules, 2011 edition, p. 26
1. An oil sector where State agencies seem to have transmitted complete declarations Based on the review proposed by the reconciler173, we understand that the discrepancies between the data disclosed by the State and by the oil companies amount to 1.4 MUSD, i.e. 0.4% of the benefit streams declared by the oil companies.
2. Limited discrepancies with declarations from the mining companies The review of discrepancies proposed by the reconciler shows that the positive discrepancies between the figures disclosed by the State and by the mining companies amount to 12 MUSD174, i.e. 2.7% of the benefit streams declared by the mining companies. Only the discrepancies observed with the declarations of the DGRAD are significant (5.8 MUSD), though in reasonable proportions (< 6%).
3. Uncertainties on the exhaustiveness of the DGRAD declarations Under Requirement No.13, we have detailed how the IGF had been delegated to proceed with the audit of the reporting templates submitted by the State agencies. Consequently, and as confirmed by the 2010 EITI report, “the IGF has obtained reasonable assurance that the payments made by the extractive industries in the 2010 certification scope, such as reported in the templates submitted by the State agencies, accurately reflected the respective payments made to the DGI and the DGDA, although the IGF expressed some reservation with regards to the declarations of the DGRAD, which were not reassuring in terms of clarity”175. In its letter dated 8 October 2012 sent to the State agencies, and to the Prime Minister, the IGF concluded its analysis of the DGRAD declarations as follows: “considering the above, the opinion of the IGF is based on the observations of the report made by the control team which can, in many respects, explain the untraced payments [of the DGRAD]. This concerns notably: - The non-exhaustiveness of data in the daily receipt statements of the banks involved [...] - The failure of the DGRAD to keep exhaustive budget records, preventing it from accurately communicating all revenues paid by the contributors [...] - The reporting of incorrect DGRAD payments disclosed to the EITI, leading to several errors in the encoding of [...] the amounts [...]
173 Rapport ITIE-RDC 2010, KPMG (15 janvier 2013), pp. 47-54 174 Rapport ITIE-RDC 2010, KPMG (15 janvier 2013), Tableaux n°4 (p. 30) et 5 (p. 31). The positive discrep ancy between the declarations of the mining companies in production = 10 713 784 ; the positive discrepancy between the declarations of the mining companies in exploration = 1 207 006 175 Rapport ITIE-RDC 2010, KPMG (15 janvier 2013), p. 8
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- The finding in one of the records of the DGRAD/Katanga of a payment for an import of 25,000,000 USD (Entry fee) not included in its EITI declarations”176 The 2010 EITI report also states: “if the computerisation of the reporting templates in 2 State agencies have considerably improved the collection of data [...], this has not been the case with the DGRAD, where input is still manual. This has made the gathering of data difficult, and, above all, its collection and process”177. Considering the above, we can by no means confirm the exhaustiveness of the declarations of the DGRAD: indeed, while the IGF stresses the shortcomings of the DGRAD reporting, the limited discrepancies of extractive companies’ reporting point out quite the opposite.
4. An incomplete scope of benefit streams that undermines the exhaustiveness of the State declarations We have detailed under Requirement No.9 the reasons why we cannot conclude that the scope of benefit streams of the 2010 EITI report is exhaustive. Indeed, the absence of the provincial taxes, asset disposal and costs for services rendered impedes us from confirming with reasonable assurance that all the State agencies that have collected significant revenues from the companies in 2010 have indeed been able to disclose them in the 2010 EITI report.
5. An incomplete scope of extractive companies that undermines the exhaustiveness of the State’s declarations We have detailed under Requirement No.9 the reasons why we cannot conclude that the scope of extractive companies of the 2010 EITI report is exhaustive. Indeed, the absence of the State-owned company COHYDRO notably impede us from confirming with reasonable assurance that all the State agencies that have collected significant revenues from the companies in 2010 have indeed been able to disclose them in the 2010 EITI report.
References
N° 8-92 Rapport ITIE-RDC 2010, KPMG (15 janvier 2013) 8-130 Lettres de l'Inspecteur Général des Finances aux Directeurs Généraux des organismes collecteurs concernant la certification des déclarations des recettes encaissées des industries extractives (29 novembre 2012)
Opinion of the stakeholders
The stakeholders confirm this analysis and make no specific comment. The company Lirex notes however, that “the modernisation of revenue recording and management mainly at the DGRAD is required in view of a proper reconciliation process”178.
176 Lettres de l'Inspecteur Général des Finances aux Directeurs Généraux des organismes collecteurs concernant la certification des déclarations des recettes encaissées des industries extractives (29 novembre 2012) 177 Rapport ITIE-RDC 2010, KPMG (15 janvier 2013), p. 44 178 Lirex self-assessment form
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Recommendations of the validator
R4 – Make sure to guarantee the exhaustiveness of the scope of benefit streams and of extractive companies in the next reconciliation process R7 – Proceed as soon as possible to the computerisation of the DGRAD
Conclusion
We have detailed under Requirement No.9 the reasons why we cannot conclude that the scope of the oil sector is exhaustive. Indeed, the absence of the State-owned company COHYDRO impedes us from confirming with reasonable assurance that the declarations of payments of the oil sector are exhaustive. For the mining sector, we can by no means confirm the exhaustiveness of the declarations of the DGRAD: indeed, while the IGF stresses the shortcomings of the DGRAD reporting, the limited discrepancies of extractive companies’ reporting point out quite the opposite. However, we have detailed under Requirement No.9 the reasons why we cannot conclude that the scope of the mining sector is exhaustive. Indeed, the absence of provincial taxes, asset disposal and costs for services rendered impedes us from confirming with reasonable assurance that the declarations of payments of the mining sector are exhaustive. Based on these evidences, the EITI-DRC is not compliant with this Requirement.
Requirement No. 15 is not met.
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Requirement No.16 The multi-stakeholder group must be content that the organisation contracted to reconcile the extractive companies and government figures did so satisfactorily
Evidence
Evidence stated in the EITI Rules, 2011 edition Finding Paragraph
a) The multi-stakeholder group has made a formal approval of the EITI report Yes 1 b) Other evidence was given (minutes etc.) Yes 2 and 3
See EITI Rules, 2011 edition, p. 48
1. The EITI reports have been formally approved by the stakeholders The 2008-2009 EITI report has been formally approved during the meeting of the Executive Committee held on 26 January 2012, subject to the modifications proposed by the Executive Committee. A final and corrected version of the 2008-2009 EITI report has been transmitted to the Executive Committee on 1 February 2012179. As far as the 2010 EITI report is concerned, its final version has been transmitted to the Executive Committee on 15 January 2013. We have not yet received the minutes of this meeting.
2. Stakeholders are satisfied with the work done by the reconciler for the 2010 EITI report Various versions of the 2010 EITI report have been delivered to the Executive Committee, the first one being finalized in October; these successive versions are less related to difficulties encountered in the quality of the 2010 EITI report than the will of the Executive Committee to expand the scope of this report, to the benefit of the National Initiative. Members of the Executive Committee have further regularly expressed their satisfaction with the work provided by the reconciler of the 2010 EITI report, notably on the occasion of: - The meeting of the Executive Committee held on 31 August 2012, during which the Executive Committee “stated its satisfaction with the work provided, 30 days after the signing of the contract, and the result reached by the reconciler prompting the former’s congratulations”180. - The press release of 8 September 2012, in which the Executive Committee highlighted their respect of the “firm commitment made by the reconciler KPMG to provide high quality work”181. - The meeting of the Executive Committee held on 19 September 2012, during which the Executive Committee “declared its satisfaction with the work provided by the Reconciler”182. The meetings held in Kinshasa and Lubumbashi, as well as the self-assessment forms transmitted by the participating extractive companies, confirm this statement. Civil society organisations sitting in the Executive Committee and several extractive companies have also stated their satisfaction with the work done by the reconciler.
179 Rapport du conciliateur ITIE sur les revenus 2008-2009, Fair Links (février 2012) 180 Procès verbal de la réunion du Comité Exécutif concernant l'avancement de la collecte des données du rapport ITIE 2010 et le recrutement du validateur (31 août 2012) 181 Articles de presse (2012) 182 Procès verbal de la réunion du Comité Exécutif concernant l'avancement de l'élaboration du rapport ITIE 2010 (19 septembre 2012)
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3. An opinion partially positive for the 2008-2009 report The Executive Committee and the different stakeholders of the EITI-DRC have not declared themselves fully sastified with the work performed by the reconciler of the 2009-2008 EITI report. Indeed, we understand that difficulties appeared in the definition of the scope of this report – notably the integration of the 29 ore dealers – and that the difficulty for the State agencies to declare the payments received did not enable the reconciler to carry on an exhaustive data reconciliation process. These shortcomings are amongst the reasons that explain the discrepancies found in the mining sector.
4. The work performed by the reconciler for the 2010 EITI report is mostly compliant with best practices We understand that for the 2010 data reconciliation process, the reconciler has observed the following fundamental principles: - The definition of a materiality threshold for the analysis of discrepancies (set at 100,000 USD)183 - The use of relevant reporting templates184 - The use of data based on a cash basis185 - The use of data disclosed on a disaggregated basis186 - The use of data disclosed in the currency of receipt and payment187 It would have certainly been useful to define a threshold for cumulated omissions and to add a specific “Other significant revenues/payments” category in the reporting templates. Lastly , based on an increasing practice, it would have been valuable to ask the reconciler to warrant the exhaustiveness of the scope of extractive companies and benefit streams.
References
N° 8-92 Rapport ITIE-RDC 2010, KPMG (15 décembre 2012) 8-100 Articles de presse (année 2012) 8-230 Procès verbal de la réunion du Comité Exécutif concernant l'avancement de l'élaboration du rapport ITIE 2010 (19 septembre 2012) 8-240 Procès verbal de la réunion du Comité Exécutif concernant l'avancement de la collecte des données du rapport ITIE 2010 et le recrutement du validateur (31 août 2012)
Opinion of the stakeholders
The stakeholders confirm this analysis. We reaffirm/highlight here that several extractive companies have shared their appreciation of the format of the reporting templates used for the 2010 EITI report188; the company AMCK even suggested that this format could be standardised for future reports189.
183 Rapport ITIE-RDC 2010, KPMG (15 janvier 2013), p. 47 184 See self-assessment forms in Appendix III 185 Rapport ITIE-RDC 2010, KPMG (15 janvier 2013), p. 4: « our procedures […] [aimed] to established the compared situation of the payments and of the cashings » 186 Rapport ITIE-RDC 2010, KPMG (15 janvier 2013), p. 27: « All the significant payments […] and all the significant revenues […] of the scope have been reported in tables filled with disaggregated data.» 187 Rapport ITIE-RDC 2010, KPMG (15 janvier 2013), p. 27: « All the significant payments […] and all the significant revenues […] of the scope have been reported in tables filled with disaggregated data.» 188 Boss Mining, Formulaire d’auto-évaluation and GECAMINES self-assessment forms 189 AMCK self-assessment form
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Conclusion
The stakeholders have declared being satisfied with the work provided by the organisation in charge of elaborating the 2010 EITI report. This leads us to conclude that the EITI-DRC is compliant with this Requirement.
Requirement No. 16 is met.
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Requirement No.17 The reconciler must ensure that the EITI report is exhaustive, identifies all discrepancies, where possible explains those discrepancies, and where necessary makes recommendations for remedial actions to be taken
Evidence
Evidence stated in the EITI Rules, 2011 edition Finding Paragraph
a) The validator documents any recommendations for remedial actions made by the Yes 1-4 reconciler and assesses the government’s progress
See EITI Rules, 2011 edition, p. 48
1. The 2010 EITI report is complete The EITI report offers a summary of its work on p. 4. It presents on the one hand the data disclosed by the State; on the other the data disclosed by the oil and mining companies, in production, in exploration, State-owned and private. In addition, it provides detailed tables by sector, State agency, benefit streams and extractive company. It analyses in detail the remaining discrepancies and makes recommendations. It encloses in the Appendices the disaggregated tables by benefit stream and by extractive company.
2. The 2010 EITI report identifies discrepancies The 2010 EITI report identifies the discrepancies revealed by the reconciliation of the declarations submitted by the State and the extractive companies. The reconciler presents a distinction between positive discrepancies, which appear “when the figures disclosed by companies are higher than those of the State” 190 (13 MUSD, i.e. 1.7% of the amounts declared paid by the extractive companies) and negative discrepancies, which appear “when the figures reported by companies are lower than those of the State” 191 (39 MUSD, i.e. 5% of the amounts declared paid by the extractive companies). The 2010 EITI report also proposes a reconciliation table by sector, by State agency and by State-owned company192. Each of these tables presents the positive and negative discrepancies; these tables are complemented by graphs presenting the levels of the declarations of extractive companies and State agencies, as well as the positive and negative discrepancies.
3. The 2010 EITI report offers a detailed analysis of the discrepancies The 2010 EITI report also suggests on p. 47 an “analysis report of the discrepancies between declarations”. The reconciler mentions: “the assessment of discrepancies in this chapter refers to the differences between ‘payments’ and ‘revenues’ equal to or higher than 0.01% of the total reported payments by companies of the scope [...]. In other words, any discrepancy exceeding 100,000 USD or 90,000,000 FC is subject to this analysis”193.
190 Rapport ITIE-RDC 2010, KPMG (15 janvier 2013), p. 47 191 Rapport ITIE-RDC 2010, KPMG (15 janvier 2013), p. 47 192 Rapport ITIE-RDC 2010, KPMG (15 janvier 2013), pp. 29-43 193 Rapport ITIE-RDC 2010, KPMG (15 janvier 2013), p. 47
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This analysis presents every positive and negative discrepancy, by benefit stream, State agency and extractive company. For each discrepancy revealed, the reconciler explains why the discrepancy could not be reconciled. For example: “257 receipts reported by AMCK not traced by the DGDA”194 or “565 receipts reported by the DGDA not traced by the CHEMAF”195.
4. The 2010 EITI report presents recommendations The 2010 EITI report presents, on p. 45, the monitoring of the recommendations made in the 2008-2009 EITI report, as detailed below: - Consideration of all oil companies in exploration in the scope of the 2010 EITI report - Careful examination, through extensive discussions between the reconciler and the Executive Committee, of the phase of preliminary analysis, by correctly defining the reporting templates and by raising the awareness of the State agencies and extractive companies on the reporting modalities - Recourse to experienced technical assistance in the preliminary phase, in addition to the reconciler’s assistance - Organisation of awareness raising workshops on the completion of the reporting templates, intended for all declaring parties - Implementation of a mandatory regulation for participation in the EITI The 2010 EITI report further includes the following recommendations: - A clear definition of a materiality threshold - The use of a new fiscal identification number - A more regular publication of the EITI reports - The automation of data collection - A better consideration of the Chinese contracts - A better consideration of all significant payments - The provision by the Central Bank of the Congo of evidence of receipt for all the declarations of the State agencies - The separation of declarations of revenues collected by the Public Treasury from those of delivered services and penalties - The inclusion of provincial taxes - Reduced discrepancies through the improved definition of the benefit streams, the awareness of the declaring parties on the reporting modalities, the awareness of the EITI focal points for rapid reaction to discrepancies identification All the recommendations of the 2008-2009 EITI report have been implemented, excepting the inclusion of all the oil companies in exploration in the scope of the next EITI reports.Given the limited delays between the adoption of the 2010 EITI report and the publication of this Validation report, the Executive Committee has not yet been able to implement the recommendations of the lattest EITI-DRC report. Nevertheless, we suggest that the Executive Committee and the State of the DRC take all the necessary measures so as to fulfil these recommendations in close delays.
Reference
N° 8-92 Rapport ITIE-RDC 2010, KPMG (15 janvier 2013), p. 39
194 Rapport ITIE-RDC 2010, KPMG (15 janvier 2013), p. 48 195 Rapport ITIE-RDC 2010, KPMG (15 janvier 2013), p. 5
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Opinion of the stakeholders
Some stakeholders confirm they find the 2010 EITI complete, with discrepancies identified an explained and recommendations on remedial actions to undertake. Others regret the exhaustiveness of the scope and declarations could not be asserted. However, all the stakeholders declare themselves satisfied with remedial actions proposed to tackle the different discrepancies and consider the proposed threshold, set at 100 000 USD, as adapted to the Congolese mining sector and is weight in the State’s budget. Although certain extractive companies (Anvil Mining, Bazano, KCC, Perenco, SODIMICO or STL196) made some comments relative to the significant discrepancies revealed in the initial version of the 2010 EITI report (October 2012), the stakeholders reminded us that the Executive Committee has since engaged in important actions and that the discrepancies now disclosed in the final version of the 2010 EITI report (January 2013) are satisfactory.
Conclusion
Subject to the analysis of the exhaustiveness of the scope presented under Requirement No.9 and the analysis of the comprehensiveness of payments and revenues detailed under Requirements No.14 and 15, the 2010 EITI report seems complete. It presents an analysis of all discrepancies exceeding 100,000 USD, explains them and proposes recommendations to improve the quality of future EITI-DRC reports. This leads us to conclude that the EITI-DRC is compliant with this Requirement.
Requirement No. 17 is met.
196 See self-assessment forms Appendix III
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Requirement No.18 The government and multi-stakeholder group must ensure that the EITI report is comprehensible and publicly accessible in such a way as to encourage that its findings contribute to public debate
Evidence
Evidence stated in the EITI Rules, 2011 edition Finding Paragraph
a) The report is publicly available in a way that is publicly accessible, Partial 3 comprehensive and comprehensible b) i The EITI report clearly sets out the agreed definition of "material Yes 1 payments and revenues" ii The EITI report lists all registered companies involved in the extractive sector Yes 1 exploration and production, noting which companies participated or not in the EITI reporting process iii The EITI report clearly states if any companies or government entities failed to Yes 1 participate in the reporting process iv The EITI report describes the steps taken by the government to ensure the Yes 1 reliability of the disclosed data v The EITI report describes the methodology adopted by the reconciler to identify Yes 1 discrepancies and to address them c) i The EITI report summarises and compares the share of each revenue Yes 1 stream to total revenue accruing to the respective level of government ii A list of all companies active in each extractive sector is included as an Partial 1 Appendix in the EITI report d) The government and the multi-stakeholder group have ensured that the EITI report was made publicly available in ways that are consistent, including by : i Producing paper copies of the report, which are distributed to all stakeholders Partial 3 ii Making the report available online Yes 3 iii Ensuring that the report is comprehensive and includes recommendations Yes Cf. Requirement 17 iv Ensuring that the report is written in a clear, accessible style and in appropriate Yes 3 languages v Ensuring that outreach events are undertaken to spread awareness of the EITI Pending 3 report e) The government and multi-stakeholders group have ensured that the EITI report Yes 3 and its findings contributes to public debate
See EITI Rules, 2011 edition, p. 27
1. A comprehensive 2010 EITI report ... If Requirement No.17 has enabled us to examine whether the 2010 EITI report was complete, its version from 15 January 2013 also seems comprehensible. Indeed, it provides: - A clear definition of payments and revenues of the scope in Appendix 5. We regret however, that the source of these definitions is not provided - A list of extractive companies which were active in 2010, indicating whether they were included in the scope of the previous EITI reports and in the scope of the 2010 EITI report. We regret, here as well, that the source of this list is not provided - The list of the extractive companies in the scope that did not submit any reporting template (Frontier and COMISA). The EITI report provides explanations for the absence of reporting templates from these extractive companies; the amounts unilaterally reported by the State for these extractive companies is presented in the main reconciliation table on p. 29 - The EITI report describes the measures taken to ensure the reliability of the reported data and details the supporting evidence transmitted both by extractive companies and State agencies, pp. 7- 9
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- The report includes a sharp, detailed analysis of remaining discrepancies, starting on p. 47; it also details: “throughout the reconciliation works, we permanently consulted parties to try and solve discrepancies. In several cases, we agreed on certain differences that were [settled] based on additional evidence presented [by] one or another”197 - A comparison of revenues of each State agency, by type of extractive company (oil, mining, private, State-owned)198. The 2010 EITI report also details payments made by each extractive company to the various collecting agencies199. Furthermore, it presents the share of each benefit stream for each agency, as reported by the State as received and paid by extractive companies200
2. ... with several weaknesses The reconciler indicates in his summary: “Our works have been conducted based on the ISRS standards (International Standards on Related Services) issued by the IFAC (International Federation of Accountants): the ISRS 4400 related to the “engagement to perform procedures regarding financial information” and ISRS 4410 related to “compilation of engagements”201 The ISRS 4410 stipulates that: “since a compilation engagement is not an assurance engagement, the practitioner, […] accordingly, does not express an audit opinion”202. However, we find that the reconciler expresses an opinion, on p. 10. Consequently, we think it would be appropriate for the reconciler, if the latter still wishes to refer to this standard, to suggest a new terminology that does not fall within the scope of audit works. We also bring to light that Appendix 2 of the 2010 EITI report “table of reconciliation of payments by benefit stream, made by mining companies in the production stage” (p. 60) is incorrect; the columns with the extractive companies’ reporting must be reviewed so as to have adequate figures. We point out that this Appendix was correct in the initial version of the report.
3. A formally approved 2008-2009 EITI report The 2008-2009 EITI draft report was formally approved unanimously in the Executive Committee’s meeting held on 26 January 2012203. The 2008-2009 EITI report was published online on the EITI-DRC website, where French, English and Tshiluba versions are available. The official ceremony of the 2008-2009 EITI report presentation took place in Lubumbashi on 27 March 2012, in the presence of members of the Executive Committee, Parliament, as well as representatives of State agencies, extractive companies, civil society organisations and the media. This event was covered by the national press204. Dissemination actions were organised between March and May 2012205, in numerous provinces of the DRC (Katanga, Province Orientale, Bas-Congo, Maniema, Nord-Kivu and Sud-Kivu), these were aimed at local politicians, representatives of civil society, State agencies, extractive companies, religious denominations and various media206. The 2010 EITI report was approved in its final version by the Executive Committee in its meeting on 15 January 2013. We should be provided with the minutes of this meeting soon. The formal publication of the 2010 EITI report was the object of a high-level demonstration, organised on 30 and 31 January in Lubumbashi, chaired by the President of the Republic Mr.
197 Rapport ITIE-RDC 2010, KPMG (15 décembre 2012), p. 48 198 Rapport ITIE-RDC 2010, KPMG (15 décembre 2012), pp. 29-43 199 Rapport ITIE-RDC 2010, KPMG (15 décembre 2012), pp. 33-38 200 Rapport ITIE-RDC 2010, KPMG (15 décembre 2012), pp. 40-41 201 Rapport ITIE-RDC 2010, KPMG (15 décembre 2012), p. 4 202 ISRS Revised, Compilation engagements. 203 Procès verbal de la réunion du Comité Exécutif concernant la présentation du projet de rapport ITIE 2008-2009 par le conciliateur (26 janvier 2012) 204 Articles de presse (année 2012) 205 Activités de dissémination, vulgarisation et renforcement des capacités du processus ITIE en RDC de 2005 à 2012 (2012) 206 Tableau synoptique de dissémination du 2ème rapport ITIE-RDC (8 octobre 2010)
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Joseph Kabila Kabange and named “Conference for the good governance and transparency in the mining sector”.We understand that 815 particpants were registered at this meeting207. The 2010 EITI report is now disclosed on the website of the Natinonal Initiative. According to our analysis, and as detailed in §4.1, the drawing up and the publication of the EITI reports had a genuine impact on the mobilisation and the consideration of the governance and transparency issues in the Congolese extractive sector.
References
N° 8-96 Activités de dissémination, vulgarisation et renforcement des capacités du processus ITIE en RDC de 2005 à 2012 (2012) 8-73 Rapport final des travaux de la conférence sur la bonne gouvernance et la transparence dans le secteur minier de la RDC tenue à Lubumbashi les 30 et 31 janvier 2013 (février 2013) 8-109 Rapport ITIE-RDC 2010, KPMG (décembre 2012) 8-315 Rapport du conciliateur ITIE sur les revenus 2008-2009 (février 2012) 8-340 Procès verbal de la réunion du Comité Exécutif concernant la présentation du projet de rapport ITIE 2008-2009 par le conciliateur (26 janvier 2012) Other references available in Appendix I
Opinion of the stakeholders
The 2010 EITI report was approved by the Executive Committee and its stakeholders. The members of the Executive Committee and Technical Committee understand how important it is to quickly implement the dissemination and communication actions contemplated in the 2011-2013 work plan.
Recommendation of the validator
R9 – Ensure the full dissemination of the 2010 EITI report
Conclusion
A large number of communication actions that were diversified and carried out in different languages have been implemented for the 2008-2009 report. We found that at least as many actions should be carried out for the 2010 EITI report; the Executive Committee seems to be committed to this, as can be seen by the activities conducted for the 2011-2013 EITI work plan. These findings lead us to conclude that the EITI-DRC is compliant with this Requirement.
Requirement No. 18 is met
207 Rapport final des travaux de la conférence sur la bonne gouvernance et la transparence dans le secteur minier de la RDC tenue à Lubumbashi les 30 et 31 janvier 2013 (février 2013)
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Requirement No.19 Oil, gas and mining companies must support EITI implementation
Findings
According to the recommendations of the Validation Guide, we have submitted self- assessment forms to the declaring extractive companies of the EITI process in the DRC. 29 extractive companies sent back their completed self-assessment forms. We observe that the companies METALKOL and SODIFOR, whose EITI reported figures exceed 10 MUSD in the 2010 EITI report did not return any form. Our analysis of these forms is included below; questions and answers are presented hereafter. All self-assessment forms sent back in the context of this Validation report are available in Appendix III.
1. Extractive companies involved in a process which they deem is undoubtedly progressing Many extractive companies acknowledge from one EITI report to the other, the progress made in the data collection and reconciliation process. Some of them (KCC) suggest consolidating these efforts, notably via electronic transmission of the reporting templates: “by enabling communication on the Internet and by sharing problems and answers”208. The creation of a secured forum, which could be hosted on the EITI-DRC website, would be undeniable progress in the consolidation of the dialogue amongst stakeholders. According to KCC: “This [data collection and reconciliation] work would be largely facilitated by the creation, many times requested by the FEC and La Chambre des Mines, of bank accounts specific to the mining sector, opened within each State agency. We reiterate this request in order to improve transparency on what the various State agencies received”209.
2. Extractive companies that wish however for a consolidation of the communication amongst stakeholders Although all extractive companies stated that communication within the National Initiative had been constructive, they admitted that some additional communication efforts could be undertaken. Indeed, extractive companies, such as Bazano, Boss Mining, GECAMINES, SODIMIKA, MUMI or Soco, underlined that the additional stakeholders meetings (with civil society and State agencies) could strengthen the dialogue with regards to the EITI.210 MUMI in this respect recommends to “always better inform participants”211; while Lirex stresses that “there is not enough communication on the implementation of the work plan”212 and that communication needs to be improved through the “elaboration of a calendar for meetings, dialogues and activities”213. Ashanti Gold wishes for “a wider dissemination of the EITI-DRC reports through the media”214, and AMCK considers that it would be useful “to put emphasis on advertising campaigns around EITI sessions”215.
208 KCC self-assessment form 209 Id. 210 Bazano, Boss Mining, GECAMINES, SODIMIKA, MUMI and Soco self-assessment forms 211 MUMI self-assessment form 212 Lirex self-assessment form 213 Id. 214 Ashanti Gold self-assessment form 215 AMCK self-assessment form
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A case that deserves noting is the company SODIMIKA, which deplores having “never been invited to information sessions organised by the EITI”216. Systematic invitation of all extractive companies included in the EITI scope, to awareness and communication sessions would easily help address this issue.
3. Extractive companies also involved financially in the Initiative As presented under Requirement No.7, numerous extractive companies have financially supported the implementation of the EITI in 2012; they assert it clearly in the self-assessment forms as an active means of supporting the EITI. While some may find this contribution creates a risk for potential conflict of interest, this funding illustrates the commitment of numerous companies – and not just those whose headquarters are supporting the international EITI – to sustain the EITI in the DRC.
4. Questions asked and answers obtained The answers given in the forms are presented underneath
Question number
Company Name 1 2 3 4 5 6 7 8 9 101112131415
1 AMC Yes Yes No Yes Yes Yes Yes Yes Yes No No Yes No Yes NA 2 AMCK Yes Yes No Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes NA 3 As hanti Gold Yes Yes No Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes NA 4 Bazano Yes Yes No Yes Yes Yes No Yes Yes Yes Yes Yes No Yes NA 5 Boss Mining Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes NA 6 CHEMAF Yes Yes No Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes NA 7 Chevron Yes NA No Yes Yes Yes Yes Yes Yes Yes Yes Yes NA Yes NA 8 De Beers Yes NA No Yes No Yes Yes Yes Yes Yes No Yes Yes Yes NA 9 GECAMINES Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes NA 10 KCC Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes No Yes No Yes NA 11 Kibali Gold Yes Yes No Yes Yes Yes Yes Yes Yes Yes NA NA NA NA NA 12 SODIMIKA Yes Yes No No Yes Yes No Yes Yes No NA Yes NA No NA 13 Lirex Yes Yes Yes NA Yes Yes Yes Yes Yes Yes NA Yes No NA NA 14 Lugushwa Yes Yes No Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes NA 15 MIOC Yes Yes Yes NA Yes Yes Yes Yes Yes Yes NA Yes No NA NA 16 MUMI Yes Yes No Yes Yes Yes No Yes Yes Yes Yes Yes Yes Yes NA 17 Namoya Yes Yes No Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes NA 18 Perenco Yes Yes Yes NA Yes Yes Yes Yes Yes Yes NA Yes No NA NA 19 Ruashi Mining Yes NA Yes Yes Yes Yes Yes Yes Yes Yes NA NA NA Yes NA 20 SEK Yes Yes No Yes Yes Yes Yes Yes Yes Yes Yes Yes NA Yes NA 21 Soco Yes Yes No Yes Yes Yes Yes Yes Yes Yes Yes Yes No NA NA 22 SODIMICO Yes Yes No Yes Yes No No Yes Yes Yes Yes Yes Yes Yes NA 23 SOMIKA Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes No Yes Yes NA 24 STL Yes Yes Yes NA Yes No No Yes Yes Yes Yes Yes No Yes NA 25 Surestream Yes Yes No Yes Yes Yes Yes Yes Yes Yes Yes Yes NA Yes NA 26 Swanmines Yes Yes No Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes NA 27 Teikoku Yes Yes No Yes Yes Yes Yes Yes Yes Yes Yes Yes No Yes NA 28 TFM Yes Yes No Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes NA 29 Twangiza Yes Yes No Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes NA
NA : Not Applicable
Results of the self-assessment forms
216 SODIMIKA self-assessment form
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Questions in these forms are as follows: 1. Has your company made public statements supporting the EITI process in the DRC? 2. Has the dialogue on the initiative been constructive and can it be improved? 3. Has your company faced obstacles in the implementation of the EITI? If yes, how could these be addressed so as to strengthen the national process? 4. Is your company satisfied with the EITI national work plan (as approved by the multi-stakeholder group)? 5. Has your company committed to support and contribute to the implementation of the EITI national work plan (as approved by the multi-stakeholder group), including abiding by government EITI-related Rules (e.g. laws and MoUs) and, where appropriate, meeting with the stakeholders? 6. Has the data your company has submitted to the organisation(s) contracted to reconcile figures and produce the EITI reports been drawn from accounts audited to international standards? 7. Has the EITI data your company has submitted to the organisation(s) contracted to reconcile figures and produce the EITI reports been certified by an independent auditor, according to international standards? 8. What is the name and contact of the independent auditor of your company in the DRC? At a headquarters’ level? 9. Have all the significant payments your company has made to the State been submitted to the organisation(s) contracted to reconcile figures and produce the EITI reports, according to the agreed-upon EITI reporting templates and schedule? 10. Has your company answered to all the requests of the organisation(s) contracted to reconcile figures and produce the EITI reports, so as to facilitate the reconciliation of declared payments and revenues, according to the EITI reporting templates? 11. In your company’s opinion, does the scope of companies and benefit streams, as defined for the EITI reports in the DRC, correspond to the goals of the EITI, notably in terms of materiality? 12. Is your company satisfied with the reporting templates submitted by the organisation(s) contracted to reconcile figures and produce the EITI reports? 13. Are the discrepancies identified by the organisation(s) contracted to reconcile figures and produce the EITI reports acceptable? 14. Is your company satisfied with the selection and the work performed by the organisation(s) contracted to reconcile figures and prepare the EITI reports? 15. How has your company supported EITI implementation in the DRC?
References
N° Self-assessment forms are in Appendix III
Opinion of the stakeholders
Based on the interactions with stakeholders in Kinshasa and Lubumbashi, we understand that the Initiative gains credibility and sustainability by expanding its communication to all extractive companies in the scope of the EITI reports. Awareness meetings with all these extractive companies before the launch of an EITI report, but also for the resolution of discrepancies, would help improve the quality of the reconciliation process.
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Requirement No.20 The government and multi-stakeholder group must take steps to act on lessons learnt, address discrepancies and ensure that EITI implementation is sustainable. Implementing countries are required to submit Validation reports in accordance with the deadlines established by the Board
Findings
1. A dynamic multi-stakeholder group, committed to ensure the sustainability of the Initiative Since the adoption of the order of 16 July 2009, the Executive Committee has had a simplified dynamic structure, comprised of members with adequate profiles, who were able to improve their technical expertise through regular capacity development workshops. A more dynamic Executive Committee, with more expertise is, in our opinion, a first warrantee of the consolidated implementation of the EITI-DRC.
2. A pragmatic consideration of the previous EITI reports recommendations According to the monitoring of recommendations made by the reconciler of the 2010 EITI report on p. 10, we find that the Executive Committee has adopted the following key measures217: - The implementation of a regulation requiring extractive companies to participate in the reporting process. This recommendation was meant to help catch up “the important delays in the transmission of reporting templates". The Ministerial order of 23 March 2012 on the obligation of all the mining companies to report payments made to the State under the EITI has since been implemented. We find that communication times of reporting templates have considerably decreased since. - Resorting to experienced technical assistance in the preparation phase. The reconciler of the 2008- 2009 EITI report recommended that: “the Technical Secretariat would certainly benefit from an experienced international technical assistance, especially in the EITI report preparation phase”. The Executive Committee decided to recruit an internationally renowned firm in order to define the scope of the 2010 EITI report. - A careful examination of the preliminary analysis phase. Indeed, the previous reconciler recommended extensive discussions between the reconciler and Executive Committee on the definition of the scope. We understand that these discussions actually took place and that the reconciler of the 2010 EITI report expressed his opinions on the definition of the scope of the 2010 EITI report. It was also recommended to define "adapted reporting templates" and to raise awareness "of State agencies and companies to the reporting protocol".
3. The necessity to ensure sustained funding of the Initiative remains As detailed under Requirement No. 5, the implementation of the EITI-DRC has been affected by irregular and disparate payments. Although the Executive Committee adopted an ambitious 2011-2013 EITI work plan and the Technical Secretariat proved its capacity for action and dynamism throughout 2012, we strongly encourage the Executive Committee and Congolese authorities to ensure that the National Initiative benefits from regular and sustainable funding.
217 Cf. le tableau de suivi des recommandations antérieures, in le Rapport ITIE-RDC 2010, KPMG (15 décembre 2012), from p. 46
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Reference
N° 8-92 Rapport ITIE-RDC 2010, KPMG (15 janvier 2013)
Opinion of the stakeholders
The stakeholders confirm this analysis. Regarding the financial constraints which the National Initiative has faced so far, the organisations of civil society appeal to the government to maintain its financial participation at the level of 2012.
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4. OTHER CONSIDERATIONS 4.1. The impact of the EITI
4.2. The sustainability of the EITI process
4.3. Beyond EITI
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4.1. The impact of the EITI The implementation of the EITI in the DRC has enabled, without a doubt, the following achievements218:
Formalisation of the dialogue around the transparency issues The DRC’s accession to the EITI and its Rules opened the way for an organised dialogue amongst all stakeholders concerned by the Initiative, in a context where governance and transparency issues are complex stakes. The formalisation of the National Initiative by the creation of a multi-stakeholder group gathering together members of the government, civil society and extractive companies, facilitated the start of a movement of consultation, dialogue and partnership regarding fundamental governance and transparency matters which, as far as the DRC is concerned, go well beyond the strict implementation of the EITI. Indeed, minutes of meetings of the EITI-DRC Executive Committee, workshops regularly organised on this subject or press articles that we were able to collect show that the dialogue within the institutional structure of the EITI enabled at a national scale, through a contagion effect, to raise issues and questions that had not been debated before except in very specific circles, for example the governance of the “ore dealers” or the fairness of the Chinese contract.
An enhanced involvement of players and strengthened mobilisation in this respect We noticed an enhanced involvement of players in the implementation of the EITI, proven first of all by the evolution of the EITI report scopes, which turned from 27 oil and mining companies in the 2007 EITI report to 54 extractive companies in the 2010 EITI report. Similarly, we noticed that, since 2012, extractive companies have financed the implementation of the EITI. Even if some may see this as a conflict of interest risk, it seems clear that numerous extractive companies – and not only those whose headquarters have joined the EITI - wish this initiative to become wider and more sustainable. However, in order to ensure the viability of this mechanism, the government adopted the Ministerial order of 23 March 2012 with the obligation that all mining companies report payments made to the State under the EITI. The information disclosed is all the more transparent as the Executive Committee decided to present the disaggregated data by extractive company and benefit stream. Note that, to our knowledge, no extractive company opposed this approach.
Reliable and widely accessible information on the contribution of the extractive sector The efforts made by the DRC authorities and the Executive Committee in the EITI process resulted in the availability of clear and reliable information about the extractive sector for all the citizens who wish to access it. Indeed, the information provided through the EITI process is rich, diversified and, more particularly, it had never been so accessible before the country's accession to the Initiative. The accession to the EITI also definitely contributed to the adoption by the government of the order No.011/26 of 20 May 2011, thanks to which mining contracts and their clauses are now available on the website of the Ministry of Mines219.
218 Chapter partially written with support of the document: Impact de l’ITIE en RDC (2012) 219 www.mines-rdc.cd
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Regular organisation of awareness and outreach workshops at Kinshasa, and more particularly in the rest of the country, as well as the publication of documents on the dedicated website www.itierdc.org for those who have access, undeniably helped to reach citizens who had maybe never benefitted from such an amount of information, not to speak of the pedagogy required to appreciate it. Let us note in this respect that the ongoing establishment of the 3 sub-regional committees of the EITI (in Katanga, Lower-Congo and Eastern Province) helps convey at a local level the Executive Committee’s mission of collecting and processing information, thus conferring the EITI-DRC with an authentic national dimension.
4.2. The sustainability of the SLEITI process220 Since the order of 16 July 2009, the Executive Committee has had a simplified and dynamic structure, being made up of members with adequate profiles, who were able to improve their technical expertise through regular capacity development workshops. A more dynamic Executive Committee, with reinforced expertise is, in our opinion, a first warrantee of the EITI- DRC process’ viability. Similarly, the significant progress made in the conduct and publication of the EITI reports enables us to consider that the EITI process has been taken in by the various reporting parties, the Initiative becoming a true working habit as a result of the drafted reports. Last, but not least, the creation of local branches of the Technical Secretariat in the country, through the Ministerial order of 27 February 2012, as well as the multiplication of the awareness and capacity development activities in various provinces prove the government’s will to implement the EITI on a national scale for the long term, by including productive regions in the dialogue on greater transparency and stronger governance of the extractive sector in the DRC.
4.3. Beyond EITI221 More and more Congolese players become interested in the EITI, especially institutions representing the citizens, such as the National Assembly, the Senate and the provincial Assemblies, which have engaged in an institutional cooperation with the Executive Committee. Moreover, the General Prosecutor’s Office of the Republic and the General Finance Inspector actively participated in the solving of any discrepancies for the conciliation of 2010. Such actions allow us to see the repercussions and the leverage effect that the EITI can have beyond the mere circle of its stakeholders. We also understand that the Executive Committee wishes to include the forestry sector starting with the next EITI report. Although this sector deserves to benefit from measures meant to consolidate the follow-up and management mechanisms, we find it is too soon for this new sector to be included in the scopes of future EITI reports. We believe that the challenges to be faced, at least in the mining sector, are real and that the inclusion of a new sector – with all the difficulties it involves – risks the annihilation of all the progress made so far. Consequently, we recommend that the Executive Committee waits until the EITI process matures in the “traditional” sectors of the EITI before extending its experience and know-how to other sectors, as well.
220 Chapter partially written with support of the document: Impact de l’ITIE en RDC (2012) 221 Id.
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5. RECOMMENDATIONS
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+ + Recommendation No.1 Difficulty + + + Complete the implementation of the remaining actions Cost Medium-term Planning Many actions under the EITI work plans have not been completely implemented, including the communication strategy validation workshop (1.2.2), the audit of the Technical Secretariat of the EITI-DRC (1.3.3) and the analysis of the discrepancies between the 2007, 2008 and 2009 EITI reports (2.1.6). We recommend the Executive Committee ensures the actions planned in the EITI work plan are fully implemented and achieved as soon as possible.
+++ Recommendation No.2 Difficulty +++ Ensure and sustain the funding of the National Initiative Cost Medium -term Planning The funding of the National Initiative has been limited and allowed only a partial implementation of the action plans. Only 63% of the planned resources were indeed received by the National Initiative. We therefore recommend the Executive Committee ensure that the necessary fundings to implement the EITI work plans are received in full and without delay.
+ Difficulty Recommendation No.3 + Cost Ensure that all major decisions of the Executive Committee are formally Short-term approved Planning The analysis of the minutes of the meetings of the Executive Committee show that many important decisions have not been formally documented, such as the validation of the conciliation scope or the approval of the reporting templates. We therefore recommend the Executive Committee ensure that the minutes of the meetings held formally record the important decisions taken in sessions.
+ Recommendation No.4 Difficulty + Cost Make sure to guarantee the exhaustiveness of the scope of benefit Short-term streams and extractive companies in the next reconciliation process Planning We recommend the Executive Committee extend the scope of future EITI reports to the State-owned company COHYDRO and to clearly justify the exclusion of the following companies : - In the oil sector: Congulf, Solico, INPEX, Foxwhelp Congo, SACOIL, Dominion Petroleum Congo, Companies minière congolaise and COBIT-SRM - In the mining sector: Mining Company Katanga We further recommend the Executive Committee extend the scope of future EITI reports to the following benefit streams of the mining sector: - The provincial tax on concentrates for export - The provincial tax on road and drainage works - The disposal of assets - The costs for services rendered
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+ Recommendation No.5 Difficulty + + Make sure to define the materiality Cost Medium-term As shown in the analysis presented in Requirement No.9, the definition of Planning materiality, as set out in the 2010 EITI reports of the DRC, is imprecise and does not set any understanding relative to significant revenue streams. We, therefore, recommend the Executive Committee conduct a specific study for the definition of the level of significant benefit streams (specifically supported by the TOFE, which will enable defining a cumulative omissions threshold), as well as for the definition of a specific threshold for remaining discrepancies.
+ Recommendation No.6 Difficulty + Make sure to systematically include a category “Other significant Cost Short-term payments/revenues” in the scope of benefit streams Planning As shown under Requirements No.9, 14 and 15, it is usually complex to ensure the comprehensive census of revenues and payments that significantly contribute to the State budget. We therefore recommend the Executive Committee add a category "Other significant payments/revenues" to the reporting templates of extractive companies and State agencies for future reconciliation processes, in order to enhance the coverage of the EITI reports.
+ + Difficulty Recommendation No.7 + + + Cost Proceed as soon as possible to the computerisation of the DGRAD Medium-term Planning The reconciler has signalled that the completion of the reporting templates from the DGRAD is still manual, which “has made data collation difficult, especially collection and treatment"222. We therefore recommend the DGRAD proceed as soon as possible to its computerisation, similar to the DGI and DGDA that have transmitted qualitative reporting templates in limited delay.
+ Difficulty Recommendation No.8 + Cost Ensure in future reconciliation reports that the EITI reporting templates Medium-term submitted by extractive companies have been attested Planning We find that some extractive companies have not submitted attested EITI reporting templates. We therefore recommend the Executive Committee ensure that all extractive companies included in the scope of the future EITI reports submit EITI reporting templates attested by their external auditors, in accordance with the recommended action No.18 of the EITI Source Book.
+ Recommendation No.9 Difficulty + + Ensure the full dissemination of the 2010 EITI report Cost Medium-term After the publication of the 2010 EITI report in February, we recommend the Planning Executive Committee conduct the dissemination actions as they are planned in the communication strategy.
222 Rapport ITIE-RDC 2010, KPMG (15 décembre 2012), p. 44
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6. APPENDICES
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Appendix I: References 2012 8-1 – Données sectorielles – Formulaire d’auto-évaluation, AMC 8-2 – Données sectorielles – Formulaire d’auto-évaluation, AMCK 8-3 – Données sectorielles – Formulaire d’auto-évaluation, Ashanti Gold 8-5 – Données sectorielles – Formulaire d’auto-évaluation, Bazano 8-7 – Données sectorielles – Formulaire d’auto-évaluation, Boss Mining 8-10 – Données sectorielles – Formulaire d’auto-évaluation, CHEMAF 8-11 – Données sectorielles – Formulaire d’auto-évaluation, Chevron 8-17 – Données sectorielles – Formulaire d’auto-évaluation, De Beers 8-22 – Données sectorielles – Formulaire d’auto-évaluation, GECAMINES 8-26 – Données sectorielles – Formulaire d’auto-évaluation, KCC 8-27 – Données sectorielles – Formulaire d’auto-évaluation, Kibali Gold 8-28 – Données sectorielles – Formulaire d’auto-évaluation, SODIMIKA 8-31 – Données sectorielles – Formulaire d’auto-évaluation, Lirex 8-32 – Données sectorielles – Formulaire d’auto-évaluation, Lugushwa 8-35 – Données sectorielles – Formulaire d’auto-évaluation, MIOC 8-36 – Données sectorielles – Formulaire d’auto-évaluation, MUMI 8-37 – Données sectorielles – Formulaire d’auto-évaluation, Namoya 8-40 – Données sectorielles – Formulaire d’auto-évaluation, Perenco 8-41 – Données sectorielles – Formulaire d’auto-évaluation, Ruashi Mining 8-46 – Données sectorielles – Formulaire d’auto-évaluation, SEK 8-49 – Données sectorielles – Formulaire d’auto-évaluation, Soco 8-51 – Données sectorielles – Formulaire d’auto-évaluation, SODIMICO 8-53 – Données sectorielles – Formulaire d’auto-évaluation, SOMIKA 8-54 – Données sectorielles – Formulaire d’auto-évaluation, STL 8-55 – Données sectorielles – Formulaire d’auto-évaluation, Surestream 8-56 – Données sectorielles – Formulaire d’auto-évaluation, Swanmines 8-57 – Données sectorielles – Formulaire d’auto-évaluation, Teikoku 8-58 – Données sectorielles – Formulaire d’auto-évaluation, TFM 8-59 – Données sectorielles – Formulaire d’auto-évaluation, Twangiza 8-70 – Données sectorielles – Formulaire d’auto-évaluation, Coalition PCQVP 8-71 – Rapport ITIE – Courrier du Ministre des Hydrocarbures au Validateur justifiant l’absence de 7 entreprises pétrolières du Périmètre du Rapport ITIE-RDC 2010 ((23 février 2013) 8-72 – Rapport ITIE – Courrier du Directeur Général de MCK Trucks au Coordonnateur de l’ITIE confirmant les activités de sous-traitant minier (21 février 2013) 8-73 – Communication – Rapport final des travaux de la conférence sur la bonne gouvernance et la transparence dans le secteur minier de la RDC tenue à Lubumbashi les 30 et 31 janvier 2013 (février 2013) 8-91 – Rapport ITIE – Courrier du DGDA au Coordonnateur du Secrétariat Exécutif de l’ITIE-RDC (18 janvier 2013) 8-92 – Rapport ITIE – Rapport ITIE-RDC 2010, KPMG (15 janvier 2013) 8-93 – Société Civile - Liste des activités de la société civile (2012) 8-94 – Comité National – Rapport d’information aux organisations de la société civile concernant la Conférence Internationale de l’ITIE à Sydney (2012)
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8-95 – Données sectorielles – Historique de la Société Minière de Bakwanga (MIBA), site Internet de la MIBA : www.mibardc.net (2012) 8-96 – Renforcement des capacités – Activités de dissémination, vulgarisation et renforcement des capacités du processus ITIE en RDC de 2005 en 2012 (2012) 8-97 – Données sectorielles – Le code minier, site Internet du Ministère des Mines : www.mines- rdc.cd (2012) 8-98 – Données sectorielles – Les contrats pétroliers, site Internet du Ministère des Mines : www.mines-rdc.cd (2012) 8-99 – Données sectorielles – Fiscalité pétrolière, site Internet de la Direction Générale des Impôts : www.dgi.gouv.cd (2012) 8-100 – Communication – Articles de presse (année 2012) 8-101 – Données sectorielles – Article de Presse « Interview d’Yvonne Mbala, responsable de la Perenco-RDC (2012) 8-105 – Communication – Communiqué de presse du Comité National (année 2012) 8-106 – Société Civile – Rapport de l’atelier régional de formation sur l’ITIE organisé par le CENADEP du 5 au 7 novembre 2012 (15 décembre 2012) 8-107 – Données sectorielles – Gertler earns billions as mine deals fail to enrich Congo, Bloomberg (05 December 2012) 8-109 – Rapport ITIE – Rapport ITIE-RDC 2010, KPMG (1er décembre 2012) 8-110 – Rapport ITIE – Projet de rapport ITIE-RDC 2010, KPMG (décembre 2012) 8-115 – Comité National – Impact de l’ITIE en RDC (Non daté) 8-120 – Renforcement des capacités – Rapport de l'atelier de renforcement des capacités des formateurs à la mise en œuvre de l'ITIE dans la province du Bandundu (1 décembre 2012) 8-130 – Comité National – Lettre de l'Inspecteur Général des Finances aux Directeurs Généraux des organismes collecteurs concernant la certification des déclarations des recettes encaissées des industries extractives (29 novembre 2012) 8-135 – Comité National – Journées de transparence sur le contrat chinois (29 novembre 2012), www.itierdc.com 8-140 – Décision n°16 du 24 novembre 2012 portant désignation des m embres de la commission de recrutement du validateur pour la RDC 8-150 – Renforcement des capacités – Rapport de l'atelier de formation des formateurs pour la vulgarisation de l'ITIE dans la province du Bas-Congo (13-14 novembre 2012) 8-155 – Communication – Compte-rendu de la Conférence à l’Université Protestante du Congo (UPC), « ITIE : un outil pour l’amélioration des conditions de vie des populations congolaises » (12 novembre 2012) 8-160 – Arrêté ministériel du 6 novembre 2012 portant création des antennes provinciales du Secrétariat Technique ITIE-RDC 8-170 – Décision n°8 du 1 novembre 2012 portant désignation des membres de la commission de validation des projets du rapport ITIE-RDC 2010 et du rapport du validateur 8-171 – Société civile – Transparence des revenus miniers en RDC : cas de la province du Katanga, ACIDH (octobre 2012) 8-180 – Rapport ITIE – Périmètres des rapports ITIE-RDC 2010-2011, Hart Group (17 octobre 2012) 8-190 – Renforcement des capacités – Rapport de l'atelier de formation des formateurs pour la vulgarisation de l'ITIE dans la province de l'Equateur (11-12 octobre 2012) 8-195 – Communication – Tableau synoptique de dissémination du 2eme rapport ITIE-RDC (8 octobre 2012) 8-200 – Comité National – Lettre du Ministre des Finances aux Directeurs Généraux des organismes collecteurs concernant la certification de leurs déclarations ITIE (7 octobre 2012) 8-210 – Comité National – Procès verbal de la réunion du Comité Exécutif concernant l'adoption des Termes de Références du validateur et la constitution de la Commission de validation du rapport ITIE 2010 (5 octobre 2012) 8-220 – Renforcement des capacités – Rapport de l'atelier de formation des formateurs pour la vulgarisation de l'ITIE dans la province du Kasaï Occidental (18-19 septembre 2012)
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8-230 – Comité National – Procès verbal de la réunion du Comité Exécutif concernant l'avancement de l'élaboration du rapport ITIE 2010 (19 septembre 2012) 8-235 – Renforcement des capacités – Rapport de l'atelier de renforcement des capacités des parties prenantes de l'ITIE dans la province orientale (7-8 septembre 2012) 8-240 – Comité National – Procès verbal de la réunion du Comité Exécutif concernant l'avancement de la collecte des données du rapport ITIE 2010 et le recrutement du validateur (31 août 2012) 8-250 – Renforcement des capacités – Rapport de l'atelier de renforcement des capacités des parties prenantes de l'ITIE dans la province du Kasaï Occidental (22-23 août 2012) 8-260 – Comité National – Contrat de mandat de conciliation pour l'élaboration du rapport ITIE-RDC exercice 2010 (juillet 2012) 8-261 – Comité National – Rapport d’évaluation des offres pour la prestation de conciliateur pour l’exercice ITIE 2010 (4 juillet 2012) 8-262 – Comité National – Procès verbal de sélection du conciliateur pour l’exercice ITIE 2010 (3 juillet 2012) 8-264 – Plan d’actions – Financement du plan d’actions ITIE et affectation des fonds (2012) 8-265 – Arrêté ministériel du 14 juillet 2012 modifiant et complétant l'arrêté ministériel portant nomination des membres du Secrétariat Technique du Comité National ITIE-RDC 8-266 – Plan d'actions – Plan d'actions triennal réaménagé de septembre 2011 à décembre 2013 avec pourcentage d’avancement (12 juillet 2012) 8-267 – Données sectorielles – 2010 Minerals Yearbook Congo, USGS (June 2012) 8-268 – Société civile – Analyse du rapport ITIE 2008-2009 de la RDC et recommandations (juin 2012) 8-270 – Comité National – Procès verbal de la réunion du Comité Exécutif concernant l'adoption du rapport du Périmètre de l'expert (6 juin 2012) 8-280 – Comité National – Lettre du Premier Ministre de RDC à la Présidente de l'ITIE réitérant l'engagement du gouvernement de RDC dans la mise en œuvre de l'ITIE (2 juin 2012) 8-281 – Société civile – Rapport d’enquête sur l’exploitation pétrolière à Moanda/Bas-Congo, RDC, de 2009 à 2012, CEPECO (mai 2012) 8-285 – Société Civile – Séance d’information et de lancement de la dissémination du rapport ITIE 2008-2009 au Sud Kivu (18 mai 2012) 8-290 – Ordonnance n°12/005 du 28 avril 2012 portant nomination d'un Coordonnateur du Secrétariat Technique du Comité National ITIE-RDC (28 avril 2012) 8-300 – Comité National – Procès verbal de la réunion du Comité Exécutif concernant le recrutement de l'expert pour la définition du périmètre du rapport ITIE 2010 et du conciliateur pour le rapport ITIE 2010 (18 avril 2012) 8-301 – Rapport ITIE – ISRS 4410 (Revised), Compilation engagements, IAASB (March 2012) 8-310 – Arrêté ministériel du 23 mars 2012 portant obligation à toutes les entreprises minières de déclarer les paiements effectués à l'Etat dans le cadre de l'ITIE 8-311 – Plan d’actions – Plan d'actions triennal réaménagé de septembre 2011 à décembre 2013 (7 mars 2012) 8-315 – Rapport ITIE – Rapport du conciliateur ITIE sur les revenus 2008-2009, Fair Links (février 2012) 8-320 – Arrêté ministériel du 27 février 2012 portant nomination des membres du Secrétariat Technique du Comité National ITIE-RDC 8-330 – Comité National – Procès verbal de la réunion du Comité Exécutif concernant la présentation officielle des rapports ITIE 2008-2009 et le lancement des appels d'offres pour le recrutement du conciliateur et de l'expert pour la définition du Périmètre (22 février 2012) 8-335 – Société Civile – Plaidoyer de la société civile en vue de la validation de la RDC comme pays conforme à l’ITIE (20 février 2012) 8-340 – Comité National – Procès verbal de la réunion du Comité Exécutif concernant la présentation du projet de rapport ITIE 2008-2009 par le conciliateur (26 janvier 2012) 8-350 – Comité National – Procès verbal de la réunion du Comité Exécutif concernant la présentation du projet de rapport ITIE 2008-2009 par le conciliateur (23 janvier 2012)
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EITI Democratic Republic of the Congo
8-360 – Comité National – Procès verbal de la réunion du Comité Exécutif concernant le recrutement du conciliateur pour le rapport ITIE 2010 (11 janvier 2012) 2011 7-50 – Communication – Discours du Président de la République Joseph Kabila, site Internet ITIE RDC http://itierdc.org (2011) 7-70 – Société Civile – Compte rendu de la réunion du 20 décembre 2011 organisée par la CENADEP sur « Quelles stratégies en vue de la validation de la RDC comme pays conforme ? » (20 décembre 2011) 7-90 – Données sectorielles – GEPS Report Republic Democratic of Congo, IHS (November 2011) 7-91 – Société Civile – Rapport final de la quatrième réunion de la société civile sur l’ITIE concernant le « Partage des informations sur le processus de validation des rapports ITIE 2008,2009 » (19 novembre 2011) 7-95 – Société Civile – Rapport final du 7eme séminaire de suivi et évaluation du processus ITIE en RDC par les organisations de la société civile du 26-27 juillet 2011 (16-17 novembre 2011) 7-100 – Comité National – Procès verbal de la réunion du Comité Exécutif concernant le recrutement du conciliateur pour le rapport ITIE 2010 (19 octobre 2011) 7-105 – Comité National – Termes de Référence pour le recrutement d'un conciliateur chargé d'élaborer un rapport ITIE pour 2010-2011 (septembre 2011) 7-110 – Comité National – Procès verbal de la réunion du Comité Exécutif concernant l'adoption du plan d'actions 2011-2013 et l'adoption des Termes de Référence du conciliateur pour le rapport ITIE 2010 (21 septembre 2011) 7-111 – Comité National – Invitation des Ministres de RDC à l’atelier d’évaluation du processus de mise en œuvre de l’ITIE-RDC par la Ministre du Plan (12 septembre 2011) 7-112 – Comité National – Procès verbal de la réunion du Comité Exécutif ITIE-RDC concernant les nouvelles règles de l’ITIE 2011 et le plan de travail 2011-2013 (30 août 2011) 7-114 – Plan d’actions – Plan d’actions chiffré (16 septembre 2011) 7-115 – Données sectorielles – TOFE, tel que figurant dans Democratic Republic of the Congo: Third Review of the Three-Year Arrangement Under the Extended Credit Facility, International Monetary Fund (juillet 2011) 7-116 – Société Civile – Rapport sur la 6eme journée d’informations et d’évaluation du processus ITIE par la société civile organisée par l’association Reseau Ressources Naturelles (RRN) les 26- 27 juillet 2011 (27 juillet 2011) 7-120 – Arrêté ministériel du 5 juillet 2011 portant nomination d'un Coordonnateur ad intérim de l'ITIE 7-125 – Comité National – Lettre du Vice Président du Comité Exécutif aux Directeurs Généraux des organismes collecteurs pour une mission urgente de collecte des données complémentaires ITIE-RDC (15 juin 2011) 7-126 – Comité National – Requête de la réévaluation du rapport de Validation de la RDC par le Ministre du Plan adressée à Madame Clare Short (7 juin 2011) 7-130 – Décret n° 011/26 du 20 mai 2011 portant obligation de pub lier tout contrat ayant pour objet les ressources naturelles 7-140 – Comité National – Procès verbal de la réunion du Comité Exécutif concernant l’état d’avancement des rapports ITIE 2008-2009 (2 juin 2011) 7-150 – Comité National – Procès verbal de la réunion du Comité Exécutif concernant un point de situation de l’élaboration des rapports ITIE 2008-2009 (23 mai 2011) 7-160 – Comité national – Lettre du Directeur du Protocole d’Etat au Chef du Protocole du Président de la République concernant l’arrivée de la Présidente de l’ITIE (14 mai 2011) 7-170 – Comité National – Demande d’audience de la Présidente de l’ITIE au Président du Sénat, de l’Assemblée Nationale, au Directeur du Protocole d’Etat et au Directeur du cabinet du Président de la République (14 mai 2011) 7-190 – Comité National – Lettre du Vice Président du Comité Exécutif au conciliateur Fair Links concernant l’élaboration des rapports ITIE 2008-2009 (5 mai 2011)
February 2013 © CAC 75 98 | Page
EITI Democratic Republic of the Congo
7-200 – Comité National – Procès verbal de la réunion du Comité Exécutif concernant un point de situation de l’élaboration des rapports ITIE 2008-2009 concernant la publication des rapports ITIE 2008-2009 (3 mai 2011) 7-210 – Comité National – Atelier de planification des activités du Comité National ITIE-RDC (25 mars 2011) 7-220 – Comité National – Transmission au Président de la République et au Premier Ministre de RDC de l’invitation de l’ITIE-Internationale (1 février 2011) 2010 6-100 – Communication – Articles de presse (année 2010) 6-101 – Validation ITIE – Procès verbal de la 14eme réunion du Conseil d'administration de l'ITIE désignant la RDC comme pays candidat proche de la conformité (13-14 décembre 2010) 6-102 – Comité National – Lettre du Président du Comité Exécutif à la Directrice des opérations de la Banque mondiale concernant la demande de renouvellement du fond multi bailleurs (30 décembre 2010) 6-103 – Comité National – Lettre du Président du Comité Exécutif aux Directeurs Généraux des entités de l’Etat concernant les formulaires de déclarations pour l’exercice ITIE 2008-2009 (27 décembre 2010) 6-104 – Comité National – Invitation du Président du Comité Exécutif au forum ITIE à Lubumbashi du 12 au 15 janvier 2011 adressée aux membres du Secrétariat International de l’ITIE, au conciliateur ITIE 2008-2009 et au validateur ITIE 2012 (27 décembre 2012) 6-105 – Comité National – Lettre du Président du Comité Exécutif aux représentants des parties prenantes concernant la désignation des délégués à la commission préparatoire du forum de l’ITIE à Lubumbashi (19 octobre 2010) 6-110 – Comité National – Invitation du cabinet conciliateur Fair Links par le Coordonnateur du Secrétariat Technique ITIE-RDC (14 octobre 2010) 6-115 – Validation ITIE – Rapport de Validation, CAC 75 (septembre 2010) 6-120 – Comité National – Procès verbal de la réunion du Comité Exécutif concernant l’état de collecte des formulaires pour le rapport ITIE 2008-2009 et l’adoption du rapport du Validateur (6 septembre 2010) 6-130 – Comité National – Transmission des formulaires de déclarations pour le rapport ITIE 2008- 2009 aux représentants des entreprises (19 juin 2010) 6-140 – Comité National – Procès verbal de la réunion du Comité Exécutif concernant l’adoption du modèle de reporting pour le rapport ITIE 2008-2009 et la restitution des ateliers de sensibilisation (14 juin 2010) 6-145 – Comité National – Procès verbal de la réunion du Comité Exécutif concernant le choix du conciliateur pour le rapport ITIE 2008-2009 (13 mai 2010) 6-150 – Rapport ITIE – Rapport ITIE-RDC exercice 2007, Pricewaterhouse-Coopers (12 mars 2010) 6-155 – Société Civile – TDR de la 2eme réunion de la société civile sur l’ITIE du 25 au 26 mars 2010 (12 mars 2010) 6-160 – Comité National – Procès verbal de la réunion du Comité Exécutif concernant les TDR du conciliateur des rapports ITIE 2008-2009 et le plan d’actions 2010-2011 (23-25 février 2010) 6-170 – Renforcement des capacités – Atelier de renforcement des capacités et sensibilisation des parties prenantes à l'ITIE dans la province du Katanga, discours de présentation et Termes de Référence (28-29 janvier 2010) 6-180 – Comité National – Lettre du Président du Comité Exécutif au Secrétaire Général du gouvernement concernant la publication du rapport ITIE 2007 (27 janvier 2010) 6-190 – Validation ITIE – Contrat de mandat de Validation de l'ITIE-RDC (27 janvier 2010) 6-200 – Comité National – Lettre du Président du Comité Exécutif au Premier Ministre de RDC concernant le déblocage des fonds alloués à l'ITIE-RDC (19 janvier 2010) 6-210 – Comité National – Ouverture du Compte courant du Comité National ITIE-RDC (7 janvier 2010)
February 2013 © CAC 75 99 | Page
EITI Democratic Republic of the Congo
2009 5-110 – Comité National – Projet de Charte de l'Atelier du Comité National avec les Services Générateurs de Recettes, les Organismes et les Entreprises Extractives (2009) 5-120 – Plan d'actions – Plan d'actions 2009-2010 approuvé (2009) 5-130 – Comité National – Nouvelle feuille de route pour la Validation de la RDC au processus de l'ITIE (2009) 5-140 – Comité National – Plan de fourniture du transporteur 2010 (2009) 5-150 – Comité National – Procès verbal de la réunion du Comité Exécutif concernant l'adoption du rapport préliminaire et le lancement du processus de Validation (10 décembre 2009) 5-160 – Rapport ITIE – Projet de rapport du conciliateur pour l'exercice 2007, Pricewaterhouse- Coopers (3 décembre 2009) 5-170 – Comité National – Procès verbal de la réunion du Comité Exécutif du 3 décembre 2009 (3 décembre 2009) 5-180 – Validation ITIE – Cahier des charges du validateur (3 décembre 2009) 5-190 – Comité National – Termes de Référence sur la campagne de sensibilisation et de vulgarisation des principes et critères de l'ITIE-RDC (14 novembre 2009) 5-200 – Renforcement des capacités – Atelier de formation sur la transparence et la bonne gouvernance des revenus des industries extractives organisé par l'association Femme Justice Economique (13-14 novembre 2009) 5-210 – Comité National – Lettre du Président du Comité de Pilotage au Premier Ministre de RDC concernant le déblocage des fonds nécessaire au financement de l'ITIE-RDC (7 novembre 2009) 5-220 – Ordonnance n°09/094 du 7 octobre 2009 portant nomination du C oordonnateur du Secrétariat Technique du Comité National ITIE-RDC 5-230 – Comité National – Procès verbal de la réunion du Comité Exécutif concernant la validation du choix du conciliateur, les choix de financement, et le recrutement des membres du Secrétariat Technique (6 octobre 2009) 5-240 – Comité National – Procès verbal de conciliation entre le chargé de mission de l'ITIE et la GTZ (5 octobre 2009) 5-245 – Arrêté ministériel du 5 octobre 2009 portant nomination des membres du Comité Exécutif du Comité National de l’ITIE-RDC 5-250 – Comité National – Procès verbal sur l'utilisation des fonds premier trimestre mis à disposition de l'ITIE par le Trésor Public (2 octobre 2009) 5-260 – Comité National – Etat des besoins relatifs aux actions de l'ITIE, plan d'engagement budgétaire de septembre à décembre 2009 (23 septembre 2009) 5-270 – Comité National – Lettre de la Banque mondiale concernant un octroi de subvention supplémentaire pour l'ITIE-RDC (4 septembre 2009) 5-280 – Comité National – Procès verbal de la réunion du Comité Exécutif concernant l'harmonisation des vues des experts au sujet du cabinet comptable sélectionné pour la conciliation des données (4 septembre 2009) 5-290 – Comité National – Coût du retard accusé dans la mise en œuvre des activités de l'ITIE faute de déblocage du trust fund multi-bailleurs (4 septembre 2009) 5-295 – Comité National – Procès verbal d'attribution du marché de services relatif à une prestation de services (conciliateur 2007) (25 août 2009) 5-300 – Comité National – Procès verbal de la réunion du Comité Exécutif concernant le recrutement du Coordonnateur du Secrétariat Technique (10 août 2009) 5-310 – Décret d°09/27 du 16 juillet 2009 portant création, organisation et fonctionnement du Comité National ITIE-RDC 5-320 – Société Civile – Rapport de synthèse du séminaire d'information et d'échange avec la Société Civile sur la mise en œuvre de l'ITIE et la mission de la coalition PCQVP en RDC (10 juillet 2009)
February 2013 © CAC 75 100 | Page
EITI Democratic Republic of the Congo
5-330 – Comité National – Rapport sur les recettes du trésor provenant des industries extractives (8 juin 2009) 5-340 – Renforcement des capacités – Présentation : La Validation ITIE, Secrétariat International de l'ITIE (3-5 juin 2009) 5-350 – Communication – Discours de bienvenue du Secrétaire Permanent du Secrétariat CTTIE CEMAC à l'occasion du séminaire sur la Validation (3 juin 2009) 5-360 – Renforcement des capacités – Présentation : Survol des indicateurs du tableau de Validation ITIE, Ghislain Pastré (3 juin 2009) 5-370 – Comité National – Rapport de mission de l'équipe polyvalente intérimaire à Lubumbashi (30 avril 2009) 5-375 – Comité National – Lettre d’invitation du Président du Comité de Pilotage au Directeur régional Afrique du Secrétariat International ITIE à une réunion sur les processus de Validation ITIE- RDC (24 avril 2009) 5-380 – Comité National – Compte-rendu des réunions tenues à Kinshasa avec le consultant de la Banque mondiale les 17,18 et 19 avril 2009 (21 avril 2009) 5-390 – Comité National – Rapport de la réunion préparatoire de l'atelier du Conseil Consultatif avec les services générateurs des recettes, les organismes et les entreprises extractives (9 avril 2009) 5-400 – Comité National – Procès verbal de la réunion du Conseil Consultatif concernant la préparation de l'atelier avec les industries extractives et les régies financières (2 mars 2009) 5-410 – Communication – Programme de lancement de la campagne de sensibilisation et de vulgarisation des principes et critères de l'ITIE dans le secteur minier congolais (février 2009) 5-415 – Comité National – Procès verbal de la réunion du Comité de Pilotage concernant l'approbation des recommandations du Comité National (15 janvier 2009) 5-420 – Comité National – Procès verbal de la réunion du Comité National concernant le recrutement du personnel du Secrétariat Technique et l'atelier de renforcement des capacités de janvier 2010 (14 janvier 2009) 2008 4-100 – Communication – Communiqué de presse du Comité National ITIE-RDC concernant la Conférence sur le processus ITIE-RDC du 8-9 janvier 2008 (2008) 4-110 – Communication – Plan média pour la Conférence sur le processus ITIE-RDC (2008) 4-120 – Communication – Article de Presse : Les acteurs valident le programme ITIE-RDC, Economie nationale (27 novembre 2008) 4-130 – Communication – Article de Presse : Présentation du rapport de la mise en œuvre de l'ITIE- RDC, Economie nationale (28 novembre 2008) 4-140 – Comité National – Note circulaire du Président du Comité de Pilotage relative à la rationalisation du Comité National ITIE-RDC basée sur les recommandations formulées par le consultant de la Banque Mondiale (14 novembre 2008) 4-160 – Renforcement des capacités – Atelier de formation sur la transparence et la bonne gouvernance des revenus des industries extractives organisé par l'association Femme Justice Economique (13-14 novembre 2008) 4-170 – Rapport ITIE – Rapport sur la mise en œuvre de l'ITIE-RDC, Ghislain Pastré (octobre 2008) 4-180 – Comité National – Compte-rendu de la rencontre entre le Secrétariat Exécutif de l'ITIE-RDC et Ghislain Pastré, consultant de la Banque mondiale (10 septembre 2008) 4-190 – Société Civile – Lettre du Comité National à la coalition Publiez Ce Que Vous Payez concernant l'ambiance au sein de l'ITIE (4 septembre 2008) 4-200 – Comité National – Invitation au lancement de la campagne de sensibilisation et de vulgarisation des principes et critères de l'ITIE dans le secteur minier congolais (21 août 2008) 4-210 – Comité National – Lettre de désignation du Secrétaire Exécutif Adjoint de l'ITIE (13 août 2008)
February 2013 © CAC 75 101 | Page
EITI Democratic Republic of the Congo
4-220 – Comité National – Procès verbal de la réunion du Conseil Consultatif du Comité National de l'ITIE-RDC composante Industries Extractives (11 août 2008) 4-230 – Comité National – Requête de financement de l'étude diagnostic du secteur bois à la Banque Africaine de Développement (8 août 2008) 4-250 – Arrêté du 6 août 2008 portant nomination des membres du Conseil Consultatif du Comité National ITIE-RDC 4-260 – Comité National – Invitation du Président de la République Démocratique du Congo à la 4eme Conférence Internationale de l'ITIE (5 août 2008) 4-270 – Comité National – Procès verbal de la réunion du Conseil Consultatif du 30 juillet 2008 (30 juillet 2008) 4-280 – Comité National – Procès verbal de la réunion du Conseil Consultatif du 28 juillet 2008 (28 juillet 2008) 4-290 – Société Civile – Lettre du Comité National à la coalition Publiez Ce Que Vous Payez concernant le climat de travail au sein de l'ITIE (22 juillet 2008) 4-300 – Comité National – Compte rendu de la réunion de la Commission Tarifaire du 26 juin 2008 (26 juin 2008) 4-310 – Comité National – Procès verbal de la réunion du Conseil Consultatif du 4 juin 2008 (4 juin 2008) 4-320 – Comité National – Note circulaire du Président du Comité de Pilotage relative à l'application des principes et critères de l'ITIE dans le secteur minier congolais en exécution des recommandations des états généraux des mines (20 mai 2008) 4-330 – Comité National – Procès verbal de la réunion du 15 mai 2008 (15 mai 2008) 4-340 – Comité National – Lettre du Président du Comité de Pilotage au Ministre d'Etat concernant la nomination du Secrétariat Exécutif de l'ITIE (7 avril 2008) 4-350 – Arrêté ministériel du 7 avril 2008 portant désignation du Secrétaire Exécutif du Comité National ITIE-RDC 4-360 – Comité National – Memorandum concernant les observations du rapport de la Commission de Revisitation des contrats miniers (3 avril 2008) 4-370 – Comité National – Procès verbal de désignation du Secrétaire Exécutif du Conseil National ITIE-RDC (13 février 2008) 4-380 – Comité National – Lettre du Président du Comité Exécutif concernant l'acquisition de locaux destinés au Secrétariat Exécutif (13 février 2008) 4-390 – Comité National – Lettre du président de l'ITIE au Président de a République Démocratique du Congo sollicitant son soutien à l'adoption d'une résolution sur l'ITIE (12 février 2008) 4-400 – Arrêté du 8 février 2008 portant nomination des membres du Conseil Consultatif du Comité National ITIE-RDC 4-410 – Plan d'actions – Dispositif institutionnel et plan d'actions de l'ITIE-RDC, Secrétaire Exécutif (janvier 2008) 4-420 – Comité National – Rapport de synthèse de la Conférence sur le processus ITIE-RDC (29 janvier 2008) 4-430 – Comité National – Conférence sur le processus ITIE-RDC, déclaration de Kinshasa (9 janvier 2008) 4-440 – Communication – Programme de la Conférence sur le processus ITIE-RDC (8-9 janvier 2008) 4-450 – Comité National – Termes de Référence de la Conférence sur le processus ITIE-RDC (8 janvier 2008) 4-460 – Communication – Discours des différents responsables ITIE lors de la Conférence sur le processus ITIE-RDC (8-9 janvier 2008) 2007 3-100 – Comité National – Charte d'engagement à la mise en œuvre de l'ITIE (2007) 3-110 – Comité National – Budget ITIE 2007-2008 (2007) 3-120 – Plan d'actions – Plan d'actions 2007-2008 (2007)
February 2013 © CAC 75 102 | Page
EITI Democratic Republic of the Congo
3-130 – Plan d'actions – Plan d'actions 2007 (2007) 3-140 – Arrêté du 31 décembre 2007 portant nomination du Secrétaire Exécutif du Comité National ITIE- RDC 3-150 – Comité National – Lettre du Vice Ministre des Mines à la Ministre des Affaires Economiques de l'Allemagne concernant la mise en place d'un système de traçabilité des produits miniers par empreintes digitales (26 décembre 2007) 3-155 – Arrêté du 10 décembre 2007 portant nomination des membres du Secrétariat Exécutif du Comité National ITIE-RDC 3-160 – Comité National – Lettre du Secrétaire Exécutif au Président du Comité de Pilotage ITIE concernant la disponibilité d'un immeuble public pour l'ITIE (1 décembre 2007) 3-170 – Plan d'actions – Plan d'actions budgétisé 2007-2008 (novembre 2007) 3-180 – Comité National – Compte-rendu de la réunion du Comité de Pilotage concernant la validation du Plan d'actions et du budget 2007-2008 (27 novembre 2007) 3-190 – Comité National – Transmission du Procès Verbal de l'élection du Secrétariat Exécutif au Président du Comité de Pilotage ITIE-RDC (17 novembre 2007) 3-200 – Comité National – Procès verbal de désignation des membres du Secrétariat Exécutif (16 novembre 2007) 3-210 – Plan d'actions – Plan d'actions 2007 budgétisé (14 novembre 2007) 3-220 – Comité National – Lettre au Ministre des Mines concernant la situation du secteur minier en RDC (8 novembre 2007) 3-230 – Comité National – Convocation de la 1ère réunion ordinaire du Conseil Consultatif ITIE (7 novembre 2007) 3-240 – Comité National – Transmission de documents ITIE-RDC au Directeur du Cabinet du Président de la République Démocratique du Congo (6 novembre 2007) 3-250 – Comité National – Lettre du Vice Ministre du Budget au Président du Comité de Pilotage concernant le paiement de la contrepartie du gouvernement en faveur du Comité National ITIE-RDC (3 novembre 2007) 3-260 – Comité National – Lettre du Président du Comité de Pilotage au Ministre du Budget concernant la mise à disposition des fonds sur ressources pour l'ITIE-RDC (30 octobre 2007) 3-270 – Comité National – Lettre du Président du Comité de Pilotage au Représentant du GTZ concernant la présentation du Budget ITIE-RDC 2007-2008 (19 octobre 2007) 3-280 – Comité National – Feuille de présence à la séance de travail du Comité de Pilotage ITIE du 24 octobre 2007 (24 octobre 2007) 3-290 – Comité National – Lettre du Président de l'ITIE au Président de la République Démocratique du Congo concernant l'avancement de la mise en œuvre de l'ITIE-RDC (12 octobre 2007) 3-300 – Arrêté du 12 octobre 2007 portant nomination du Président du Conseil Consultatif du Comité National ITIE-RDC 3-305 – Arrêté du 12 octobre 2007 portant nomination des membres du Conseil Consultatif du Comité National ITIE-RDC 3-310 – Arrêté du 12 octobre 2007 portant nomination des membres du Comité de Pilotage du Comité National ITIE-RDC 3-320 – Comité National – Nomination du Représentant du Ministère des Finances au Conseil Consultatif ITIE-RDC (10 octobre 2007) 3-330 – Comité National – Etat de la contribution du gouvernement à la mise en œuvre de l'ITIE en 2008 (10 octobre 2008) 3-340 – Comité National – Lettre du Président du Comité de Pilotage aux Ministères de RDC concernant la désignation des experts du Conseil Consultatif (10 octobre 2007) 3-350 – Comité National – Plan d'engagement budgétaire par administration (9 octobre 2010) 3-360 – Comité National – Liste des délégués du Comité National ITIE-RDC (5 octobre 2007) 3-370 – Communication – Article de Presse : 15 pays sur le point de mettre en œuvre l'ITIE, Secrétariat ITIE (2 octobre 2007)
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EITI Democratic Republic of the Congo
3-380 – Comité National – Lettre au Président du Comité de Pilotage concernant le recours relatif à l'exclusion des entreprises publiques et leur syndicat au sein du Comité National ITIE-RDC (1 octobre 2007) 3-390 – Comité National – Annonce de désignation des experts de chaque ministère au Conseil Consultatif ITIE (27 septembre 2007) 3-400 – Comité National – Liste des délégués du Comité de Pilotage ITIE-RDC (27 septembre 2007) 3-410 – Société Civile – Liste des membres de la Société Civile au Comité de Pilotage, au Conseil Consultatif et au Secrétariat Exécutif (7 septembre 2007) 3-420 – Comité National – Invitation des représentants des entreprises des industries extractives à une réunion du Comité National (6 septembre 2007) 3-430 – Comité National – Mémo concernant la réunion informelle entre le Ministère du Plan, la Société Civile et le secteur privé (6 septembre 2007) 3-440 – Ordonnance du 3 septembre 2007 modifiant et complétant le Décret n°05/160 du 16 novembre 2005 portant création, organisation et fonctionnement du Comité National ITIE- RDC 3-450 – Comité National – Lettre du Président du Comité de Pilotage au Président de l'ITIE concernant l'état des lieux de l'ITIE-RDC (29 août 2007) 3-460 – Société civile – Prise de position de la société civile de RDC sur le blocage entretenu par le gouvernement dans la mise en œuvre effective du processus ITIE (17 août 2007) 3-470 – Comité National – Lettre du Chargé d'Affaires Internationales de l'Ambassade d'Allemagne en RDC au Président du Comité de Pilotage ITIE-RDC concernant la mission d'assistance-conseil de l'Allemagne (14 août 2007) 3-480 – Société Civile – L'ITIE en RDC, Coalition PCQVP (juillet 2007) 3-490 – Comité National – Lettre du Président du Comité de Pilotage à l'Ambassade de l'Allemagne concernant la définition de la mission d'assistance-conseil proposée par l'Allemagne (27 juillet 2007) 3-500 – Comité National – Contrepartie des projets (24 juillet 2007) 3-510 – Comité National – Lettre du Président du Comité de Pilotage à l'Ambassade d'Allemagne concernant l'offre de mission d'assistance-conseil (18 juillet 2007) 3-520 – Comité National – Désignation des délégués au Comité de Pilotage ITIE-RDC (juin 2007) 3-530 – Comité National – Lettre du Président de l'ITIE au Président de la République Démocratique du Congo concernant l'avancement du processus de Validation ITIE (15 mai 2007) 3-540 – Arrêté ministériel du 2 avril 2007 portant nomination du Coordonnateur National du Secrétariat Permanent ITIE-RDC 2006 2-100 – Comité National – Note du Ministre du Plan concernant le Projet de Décret portant nomination du Coordonnateur National et des Coordonnateurs-Adjoints du Secrétariat Permanent ITIE- RDC (2006) 2-110 – Arrêté ministériel du 3 mai 2006 portant désignation des membres du Comité Technique ITIE- RDC 2-120 – Comité National – Désignation d'un représentant de la Banque Centrale du Congo au sein du Comité National ITIE-RDC (10 février 2006) 2005 1-100 – Décret n° 05/160 du 18 novembre 2006 portant création, organisation et fonctionnement du Comité National ITIE-RDC 1-110 – Comité National – Compte-rendu de la séance du 12 août 2005 (12 août 2005) 1-120 – Comité National – Termes de Référence pour la mise en œuvre de l'ITIE-RDC (9 juin 2005) 1-130 – Communication – Aide Mémoire ITIE, Ambassade de la RDC au Royaume-Uni (mai 2012)
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EITI Democratic Republic of the Congo
Appendix II: The EITI work plan
See separate file
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EITI Democratic Republic of the Congo
Appendix III: Self-assessment forms
See separate file
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EITI Democratic Republic of the Congo
Appendix IV: Certificate of payment
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EITI Democratic Republic of the Congo
Audit and Consulting firm
41, rue Guérin 77300 Fontainebleau – France Tél : +33 (0)1 64 22 22 70 Fax : +33 (0)1 64 22 49 20 [email protected]
February 2013 © CAC 75 108 | Page
TABLE OF CONTENTS
INTRODUCTION 2
Section 1: SUMMARY OF THE 2011 REPORT IN USD 7
1.1. 2011 RECONCILED DISCLOSURES FOR HYDROCARBONS & MINING SECTORS 7 1.2. 2011 RECONCILED DISCLOSURES BY THE HYDROCARBONS SECTOR 7 1.3. 2011 RECONCILED DISCLOSURES BY THE MINING SECTOR 7 1.4. CHARTS OF COLLECTED REVENUE DISTRIBUTION 8 1.5. GENERAL TABLE OF RECONCILED DISCLOSURES FROM 2011 EITI-DRC REPORT 9
Section 2: ADDITIONAL INFORMATION 16
2.1. OVERVIEW OF THE SCOPING STUDY (Requirement 9) 16
2.1.1. Scoping 16 2.1.2. Setting of Reference Scope of Flows 20 2.2. UNDERSTANDING THE SICOMINES PROJECT 28
2.2.1. Wording of Requirement 9f 28 2.2.2. Introduction ………………………………………………………………………… 28 2.2.3. Title-Granting, Financing and Repayment Description and Mechanisms 28 2.2.4. Establishment of a Financial Platform 29 2.2.5. Funding to be Implemented or Mobilized 29 2.2.6. Repayment of Investments of the Group of Chinese Companies 30 2.2.7. Implementation Level of the Cooperation Project (2008-2012) 31 2.2.8. Disclosures of Receipts and Disbursements of SICOMINES in 2011 31
2.3. COMPREHENSIVENESS ISSUES (Requirements 11, 14 and 15) 33
2.3.1. “Zero” Disclosure of some mining companies (SIMCO and COMINIERE) 33 2.3.2. COHYDRO Income Transferred to the State 33 2.3.3. TFM Unreconciled Significant Payments 33 2.3.4. Omission of compensatory royalty controlled by DGDA and included in the 2011 reference scope? 34 2.3.5. Payment of Exit Fees to DGDA by SICOMINES, yet exempted? 34 2.3.6. Subnational Payments in Provinces: 34 2.3.7. Retrocession 35 2.3.8. Gap between data certified by IGF and those reconciled by the Independent Administrator (Requirement No. 15) 36 2.4. DATA RELIABILITY (Requirement No. 12) 36
Section 3: ANNEXURES 37
1
INTRODUCTION
“Multi-stakeholder groups are encouraged to explore innovative approaches to extending EITI implementation to increase the comprehensiveness of EITI reporting and public understanding of revenues and encourage high standards of transparency and accountability in public life, government operations and in business (Requirement 9h).”
In 2005, the Democratic Republic of Congo joined the EITI and after having met the candidacy requirements, the country has been accepted as a candidate on November 1, 2007. Since then, the DRC has undertaken the implementation of the EITI through activities aimed at enhancing transparency in revenues from its resources. These activities are included in the work plans approved by the Multi-Stakeholder Group called “Executive Committee” and have been made publicly available.
On 12 February 2010, the Ministers board adopted the first EITI-DRC Report and forwarded it to the Head of State on 12 March 2010.
The Validation Committee of the Board of the EITI had reviewed the initiative process first validation report in the DRC in 2010 concluded that some indicators in the report had to be improved. Corrective measures were thus recommended to the DRC to attain the status of compliant country. Correction of deficiencies noted in these corrective measures would be through the issuance of a new report.
It is under these conditions that the Executive Committee decided to issue this new report with the intent to fill the gaps of the previous report. Similarly, the Board of Directors set the time of issuance of the report to 12 June 2011. The Executive Committee also decided that the report would also cover the combined years 2008 and 2009 on oil, copper, cobalt and on precious materials purchase agencies.
Unfortunately, the 12 June 2011 deadline was not met as the 2008-2009 Report was issued later in February 2012. Among the reasons for this delay can be cited, the setting of a much too ambitious scope of companies and types of revenue to be included, the lack of adequate funding, very limited capacity of many stakeholders to the process, etc.
Thus, in August 2011, the EITI Board required the EITI-DRC to resume the EITI implementation process as "candidate countries" not having met compliance and that for 18 months starting 1 September 2011 through 1 March 2013. Upon completion of this step, the DRC would be submitted to a second validation in accordance with the new rules of the EITI 2011 version and would have to issue another report on the 2010 fiscal year.
After review of the Board’s decision which required that DRC resume the implementation process as a candidate country, the Executive Committee, on request of the Government, during its meeting held on 30 August 2011, committed to continue the process anew, determined to achieve the status of a compliant country.
Instead of keeping drafting EITI reports and implementing the processes which was not achieving compliance, the Executive Committee decided to make a strategic halt in September 2011 in order to assess the whole EITI implementation process in the DRC.
Following this assessment, a series of measures were taken: the adoption of the rules of the Multi-Stakeholder, the development of suitable work plan and roadmap, the audit of the EITI - DRC National Committee accounts, the formal commitment of the Government to regularly
2 finance the process, the representativeness of delegates from each stakeholder, the restructuring of the Technical Secretariat, a quarterly assessment of the process by civil society, the involvement of partners in the progress of the implementation, etc.
Thus, in September 2011, the process for drafting and publication of the 2010 Report was launched.
However, in October 2011, the DRC entered an election period which resulted in the slowdown of Government activities. This led to a long delay in data collection and reconciliation to be included in the 2010 report. It is in April 2012 that the head of state appointed a new government and a new National Coordinator of the EITI. Until things settled and activities resumed, it was only in July 2012 with several new members in the Executive Committee that activities started for the publication of the 2010 Report. A roadmap was adopted which set the publication of the report to 31 December 2012.
The Executive Committee adopted then terms of reference which enabled the recruitment of an Independent Expert to set the scope, define materiality threshold and reconcile payments and revenues disclosed for the year 2010.
Assuming that the data collection was not easy, we were ultimately able to issue the 2010 Report by 15 January 2013. Following this publication, the Executive Committee has recruited a Validator who had to assess the progress of the implementation of the EITI in the DRC. The Validator had been two months to work; January and February 2013, to prepare his/her mission report.
But once again, the conclusions by the Validator were not satisfactory for the Democratic Republic of Congo as the Validator concludes that requirements 9, 14 and 15 have not been met. So the DRC was considered as non-compliant.
The conclusions by the EITI board were even more rigorous: instead of 3 requirements considered as not complied with as concluded by the validator, the Members of the highest board of EITI International concluded that 6 were not met (requirements No. 9, 11, 12, 13, 14 and 15). They were related to the setting of materiality, the completeness and reliability of the disclosures in the EITI reporting process. To the utter disappointment of the DRC, the Board decision was a suspension of the Democratic Republic of Congo.
The letter from the President of the Board to the Prime Minister to inform him of the Board's decision came soon to alleviate this feeling of disappointment and restore hope and even more give reasons to persevere. In the letter dated April 23 - 2014, the efforts of the DRC in the implementation of the process are acknowledged and encouraged.
Ms. Clare Short, Head of the EITI, wrote especially:
“The Board, however, wishes to congratulate the stakeholders for the progress achieved with regards to disclosures of payments and revenues from the oil and mining sectors as well as for the debate that could be generated across the country thanks to the conclusions of the EITI work. The Board has asked me to congratulate your government and the EITI Executive Committee for their efforts and the orientation they have applied for the sustainable implementation of the EITI and for their ongoing commitment to the EITI principles and criteria. While recognizing the magnitude and complexity of the challenges faced by the Congolese government in the implementation of reforms, I encourage all stakeholders involved in the process to use this temporary suspension as an opportunity to focus on the implementation of corrective measures required by the Board of Directors so that they be fully
3 implemented. This may include, in particular, the publication of an additional EITI 2010 report and an additional EITI 2011 report no later than 31 December 2013.
Your country is now referred to as “EITI Candidate Country (suspended)”. The suspension will be lifted once the Board is satisfied that the corrective measures recommended to achieve compliance have been successfully implemented. Compliance will be checked through a review by the Secretariat which will be undertaken within twelve months of the decision. In case the suspension shall remain in force for more than a year, i.e. beyond 17 April 2014, the Board will consider the removal of the Democratic Republic of Congo from the list of EITI countries.”
The decision of the Board communicated to the Prime Minister mentions the following corrective measures:
• In accordance with Requirement 9, agree on a clear definition of materiality specifying the revenue stream that will be included in the scope of revenues to be disclosed, including payments made to and by public companies, and on the coverage of payments and revenues paid to subnational entities and coverage of in-kind payments, and agree on provisions for the creation of infrastructure or other arrangements such as barter. The Board welcomes the fact that the 2010 report covers the "Chinese Contract", the integration of which had also an impact on the compliance to Requirement 9(f).
• In accordance with Requirement 11, the government should make sure that all companies and relevant State entities are involved in the reporting process and ensure the full participation of state-owned companies. The Board reiterates the suggestion contained in Requirement 11(b) stating that if a number of small operators make payments that are not individually significant, which become so when aggregated, the government should disclose the total flow of revenue from these small operators.
• In accordance with Requirement 12, the government must ensure that payments disclosed/reported to the independent administrator are based on accounts audited to international standards.
• In accordance with Requirement 13, the government should make sure that payments disclosed/reported by the State entities to the independent administrator are based on accounts audited according to international standards.
• In accordance with Requirement 14, the government should make sure that all companies falling within the agreed scope of the reporting process comprehensively disclose all of their material payments in accordance with agreed reporting forms.
• In accordance with Requirement 15, the government should make sure that all State entities falling within the agreed scope of the reporting process comprehensively disclose all of their material payments in accordance with agreed reporting forms.
The implementation of these corrective measures may be demonstrated by the publication of an additional EITI 2010 Report or through a 2011 EITI Report. It is required that the 2011 EITI report be published no later than 31 December 2013.
4
Immediately after receiving information of the DRC suspension, the Executive Committee met on April 19, 2013 and through a press release, the Chairperson of the Executive Committee informed the public opinion about the Multi-Stakeholder Group determination to proceed with the publication of a new report on the year 2011 taking into account the corrective measures.
In addition, in order to produce the 2011 Report, the Executive Committee has developed a roadmap that focuses on the following aspects:
1. Stakeholders awareness on the development of the scoping study 2. Conduct of the scoping study to determine the materiality threshold, the scope of companies to be included and the reference base of financial flows 3. Design and adoption of reporting forms 4. Data collection campaign 5. Reconciliation and production of the EITI 2011 report
The adoption of that roadmap was accompanied by the commitment by the civil society, the companies sand by Financial Authorities, all represented in the Executive Committee, to fully participate in the 2011 report drafting process.
In compliance with the deadline as set by the EITI Board, the multi-stakeholder group published its 2011 Report1 on the hydrocarbons sector, in November 2013, and on the mining sector on 31 December 2013 with as the main objective, to address the corrective measures as recommended by the Board. After the publication of the 2011 Report, the Executive Committee, continuing the implementation of the roadmap, presented this report to the general public by encouraging lively debates2 involving all stakeholders on the satisfactory implementation of corrective measures.
From that discussion, it should be noted that a report of votes and minutes have been established and are available on the website link: ((http://www.itierdc.com/Publication_et_rapport/Compte- rendu%20analytique%20de%20la%20Atelier%20ITIE%20RDC%20de%20Lubumbashi%20du%2012%20et%2013_02_2014.pdf).
Similarly, after participating in the discussion of stakeholders, several civil society organizations gathered in various coalitions have separately assessed the implementation process and the quality of the EITI-DRC 2011 Report and have made disclosures as to their satisfaction when all required improvements are introduced in the additional Report.
After all the discussions, stakeholders recommended to the multi-stakeholder group to proceed with the improvement of the 2011 Report. To meet the recommendation by stakeholders, the Executive Committee has developed a complementary note (Appendix No. 9) comprising:
– The statement of requirements to be met, – Opinions and recommendations by the 2010 Validator – Corrective measures from the Board – Suggestions by the International Secretariat in preparation for their review
1http://www.itierdc.com/Publication_et_rapport/Rapport%20ITIE%202011%20Hydrocarbures%20%20vf.pdf http://www.itierdc.com/Publication_et_rapport/Rapport%20itie- rdc%202011%20du%20secteur%20des%20mines%20.pdf 2 http://www.itierdc.com/Publication_et_rapport/Compte- rendu%20analytique%20de%20la%20Atelier%20ITIE%20RDC%20de%20Lubumbashi%20du%2012%20et%2013_02_2014.pd f 5
– The stakeholders opinions
It is thus based on this additional note that the multi-stakeholder group has published this report which includes, in addition to the introduction, three sections:
– Section 1: Summary of the Report 2011 – Section 2: Additional information • Sub-section 1: Overview of the Scoping Study • Sub-section 2: Completeness Issues • Sub-section 3: Understanding the Chinese Contract • Subsection 4: Reliability of disclosures – Section 3: Appendices
In addition to this supplementary report, the Multi-stakeholder Group makes available for the International Secretariat, for its review of the EITI-DRC compliance, a large number of documents and other necessary information usually required for validation.
CélestinVunabandi President of the Executive Committee Ministry of Planning
6
SECTION 1: SUMMARY OF THE 2011 REPORT IN USD
This summary presents the whole of reconciled disclosures of all of the oil and mining sectors companies and of all state entities included in the scope of the 2011 EITI-DRC Report, as well as the distribution of revenues collected from these companies.
1.1. 2011 RECONCILED DISCLOSURES FOR HYDROCARBONS AND MINING SECTORS
Payments disclosed/reported by Financial Authorities : 1 413 111 313 Payments disclosed/reported by Companies of the Oil and : 1 408 273 353 Mining sectors Absolute deviation : 4 837 960
Distribution of revenues collected from Companies of the Oil and Mining sectors (1):
Share pertaining to the Treasury : 929 782 443 (66.0%) Share pertaining to State-owned Companies : 328 742 641 (23.3%) Share pertaining to Province of Katanga : 102 899 271 (7.3%) Share pertaining to DGDA : 35 868 084 (2.5%) Share pertaining to DGI : 5 260 997 (0.4%) Share pertaining to DGRAD : 10 557 877 (0.8%)
1.2. 2011 RECONCILED DISCLOSURES AS REPORTED BY THE HYDROCARBONS SECTOR
Payments disclosed/reported by Financial Authorities 465 655 806 Payments disclosed/reported by oil companies 465 640 388 Absolute deviation 15 418
Distribution of revenues collected from hydrocarbons sector companies (1)
Share pertaining to the Treasury : 459 436 907 (98.67%) Share pertaining to the DGI : 364 326 (0.08%) Share pertaining to the DGRAD : 5 839 155 (1.25%)
1.3. 2011 RECONCILED DISCLOSURES/REPORTS FOR THE MINING SECTOR Payments disclosed/reported by Financial Authorities : 942 617 547 Payments disclosed/reported by Oil and Mining : 947 470 925 companies Absolute deviation : 4 853 378
Distribution of revenues collected from Mining companies (1):
Share pertaining to the Treasury : 470 345 536 (49.80%) Share pertaining to Public Companies : 328 742 641 (34.70%)
7
Share pertaining to the Province of Katanga : 10 899 271 (10.80%) Share pertaining to DGDA : 35 868 084 (3.70%) Share pertaining to DGI : 4 896 671 (0.50%) Share pertaining to DGRAD : 4 718 722 (0.50%)
(1) Distribution of revenues as a percentage of the total of payments made by Companies
8
1.4. CHARTS OF COLLECTED REVENUE DISTRIBUTION
Distribution of collected revenue for oil and mining companies
DGDA & Others DGI DGRAD 2.54% 0.37% 0.75%
Katanga Province 7.28% State Companies 23.26% Public Treasury 65.80%
Distribution of collected revenue for oil companies
DGRAD DGI 1.25% 0.08%
Public Treasury 98.67%
Distribution of collected revenue for mining companies
9
1.5. GENERAL TABLE OF RECONCILED DISCLOSURES FROM THE 2011 EITI REPORT
DISCLOSURES OF DISCLOSURES OF REVENUE DEVIATION COMPANIES’ PAYMENTS FROM
NIF (Tax CORPORATE FINANCIAL DRKAT ON FROM STATE TOTAL OF No. AUTHORITIES BEHALF OF COMPANIES FOR STATE FINANCIAL AGENCIES (AFE) FOR THEIR REVENUE
Number) NAME Phase Sector (A) ABSOLUTE PAID TO KATANGA on their own OWN BEHALF (1)+(2)+(3)+(4) PUBLIC PROVINCE behalf = TREASURE -1 -2 -3 -4 (B) (A) -(B)
DGI DGDA DGRAD Total AFE
1 A0704867Z MUMI M PR 288 966 054 71 070 072 14 293 095 196 076 895 717 096 5 237 814 995 669 6 950 579 288 390 641 575 413 2 A0701284E MIOC P PR 156 317 895 153 273 798 0 0 148 543 0 2 895 518 3 044 061 156 317 859 36 3 A0810758D TFM M PR 147 148 343 126 932 525 13 402 797 0 51 670 8 699 122 0 8 750 792 149 086 114 -1 937 771 4 A0701041Q KCC M PR 120 743 516 70 952 558 12 442 316 31 389 759 1 808 741 5 097 124 1 337 849 8 243 714 123 028 347 -2 284 831 5 A0703938P TEOC/DRC P PR 101 988 598 100 033 304 0 0 61 718 0 1 893 576 1 955 294 101 988 598 0 6 A1215507U PERENCO P PR 81 914 900 81 857 405 0 0 57 499 0 0 57 499 81 914 904 -4 BOSS 7 A0905972C MINING M PR 67 453 791 32 136 768 21 653 445 8 613 836 584 848 4 274 654 29 980 4 889 482 67 293 531 160 260 8 A0703937N LIREX P PR 66 103 464 66 063 504 0 0 39 913 0 0 39 913 66 103 417 47 9 A0703905D CHEVRON P PR 53 670 608 52 562 885 0 0 55 466 0 1 050 061 1 105 527 53 668 412 2 196 10 A0704687D RUASHI M PR 45 478 374 23 303 832 3 890 782 15 045 916 30 083 2 451 627 0 2 481 710 44 722 240 756 134 11 A0701147F GECAMINES M EP 39 784 586 35 205 898 2 174 393 0 0 640 110 323 349 963 459 38 343 750 1 440 836 12 A1007789D SODIFOR M EX 30 446 497 293 520 20 787 30 400 000 0 0 0 0 30 714 307 -267 810 13 A0814445L BAZANO M PR 25 177 477 16 617 850 7 795 400 0 312 820 704 939 227 262 1 245 021 25 658 271 -480 794 14 A0800394N AMCK M PR 21 141 074 13 889 076 1 198 008 4 498 698 1 471 926 314 704 431 1 632 216 21 217 998 -76 924 15 A0708211J CHEMAF M PR 18 989 834 12 075 470 2 883 389 0 393 625 2 276 719 413 728 3 084 072 18 042 931 946 903
10
DISCLOSURES OF DISCLOSURES OF REVENUE DEVIATION COMPANIES’ PAYMENTS
FROM
NIF (Tax CORPORATE FINANCIAL DRKAT ON FROM STATE TOTAL OF No. AUTHORITIES BEHALF OF COMPANIES FOR STATE FINANCIAL AGENCIES (AFE) FOR THEIR REVENUE
Number) NAME Phase Sector (A) ABSOLUTE PAID TO KATANGA on their own OWN BEHALF (1)+(2)+(3)+(4) PUBLIC PROVINCE behalf = TREASURE -1 -2 -3 -4 (B) (A) -(B)
DGI DGDA DGRAD Total AFE
16 A0704865X SOMIKA M PR 15 886 942 10 283 357 3 741 584 250 000 258 611 1 239 615 113 162 1 611 388 15 886 329 613 A0712822 17 W CDM M PR 13 966 860 7 555 473 4 861 705 0 0 1 303 312 0 1 303 312 13 720 490 246 370 18 A0704877K CMSK M PR 10 636 904 5 454 165 4 226 755 401 000 165 698 215 581 0 381 279 10 463 199 173 705 19 A1009298T KICO M EX 10 020 735 24 345 0 10 000 000 0 0 0 0 10 024 345 -3 610 20 A0714791L SMK M EX 9 321 616 910 456 1 073 132 7 198 314 4 805 0 183 448 188 253 9 370 155 -48 539 21 A0700152Z ASHANTI M EX 7 133 634 5 460 569 0 1 500 000 150 847 2 675 0 153 522 7 114 091 19 543 22 A1109197K SMB M EX 6 451 211 908 218 0 5 360 000 0 0 0 0 6 268 218 182 993 23 A0700357X STL M PR 5 454 064 3 114 275 0 0 16 767 438 714 0 455 481 3 569 756 1 884 308 24 A0702049L KIBALI M EX 5 404 284 1 107 738 0 3 700 265 0 227 0 227 4 808 230 596 054 25 A0811655D SEK M PR 4 412 307 2 000 658 1 109 2 544 960 0 139 727 106 310 246 037 4 792 764 -380 457 26 A0815188T CIMCO M PR 4 327 075 2 863 241 488 020 0 19 920 533 764 139 400 693 084 4 044 345 282 730 27 A0906459G ORAMA M EX 3 800 000 0 0 3 804 720 0 0 0 0 3 804 720 -4 720 A0700172 28 W AMC M PR 3 350 933 2 936 442 464 855 0 0 24 882 0 24 882 3 426 179 -75 246 29 A0805833A SOKIMO M EP 2 774 977 1 737 599 0 0 755 0 0 755 1 738 354 1 036 623 30 A0811578U S.M.K.K M PR 2 606 393 2 509 528 0 0 95 324 0 1 250 96 574 2 606 102 291 31 A0700383A SOCO P EX 2 506 850 2 506 828 0 0 0 0 0 0 2 506 828 22
11
DISCLOSURES OF DISCLOSURES OF REVENUE DEVIATION COMPANIES’ PAYMENTS
FROM
NIF (Tax CORPORATE FINANCIAL DRKAT ON FROM STATE TOTAL OF No. AUTHORITIES BEHALF OF COMPANIES FOR STATE FINANCIAL AGENCIES (AFE) FOR THEIR REVENUE
Number) NAME Phase Sector (A) ABSOLUTE PAID TO KATANGA on their own OWN BEHALF (1)+(2)+(3)+(4) PUBLIC PROVINCE behalf = TREASURE -1 -2 -3 -4 (B) (A) -(B)
DGI DGDA DGRAD Total AFE
32 A0811710N CLWM SPRL M PR 2 497 102 2 140 141 343 064 0 8 985 0 0 8 985 2 492 190 4 912 33 WANGA M EX 2 460 000 0 0 2 140 000 0 0 0 0 2 140 000 320 000 AFRICAN 34 A0901048A MINERALS M EX 2 166 980 2 001 521 47 197 0 0 12 855 0 12 855 2 061 573 105 407 35 A0704875H KINSENDA M EX 2 043 969 778 593 1 579 1 200 000 5 567 10 375 0 15 942 1 996 114 47 855 36 SANS NIF8 SEMLIKI P EX 2 000 000 2 000 000 0 0 0 0 0 0 2 000 000 0 SWANMINES 37 A0708266T Sprl M EX 1 750 107 209 617 188 1 600 000 164 282 0 446 1 810 251 -60 144 38 A0814806D RUBAMIN M PR 1 749 207 1 276 496 316 900 0 17 708 57 646 90 000 165 354 1 758 750 -9 543 39 A0704693K BOLFAST M EX 1 441 331 532 697 1 414 233 0 0 37 216 13 713 50 929 1 997 859 -556 528 METAL 40 A0814803A MINES M PR 1 422 755 726 126 675 446 0 2 994 59 824 0 62 818 1 464 390 -41 635 41 A1009299U KANSUKI M EX 1 106 090 1 046 643 2 604 0 0 3 387 0 3 387 1 052 634 53 456 42 A0900939G HUACHIN M EX 1 037 386 1 443 368 83 200 0 29 202 0 26 044 55 246 1 581 814 -544 428 A0704695 43 M COMIDE M EX 974 246 971 570 0 0 3 893 0 0 3 893 975 463 -1 217 44 A0700073N TWANGIZA M PR 952 119 1 108 872 0 0 0 0 0 0 1 108 872 -156 753 45 A0906707B KALUMINES M EX 904 657 892 584 1 140 0 14 920 1 990 0 16 910 910 634 -5 977 46 A0700108B COHYDRO P EP 876 283 869 791 0 0 0 0 0 0 869 791 6 492
12
DISCLOSURES OF DISCLOSURES OF REVENUE DEVIATION COMPANIES’ PAYMENTS
FROM
NIF (Tax CORPORATE FINANCIAL DRKAT ON FROM STATE TOTAL OF No. AUTHORITIES BEHALF OF COMPANIES FOR STATE FINANCIAL AGENCIES (AFE) FOR THEIR REVENUE
Number) NAME Phase Sector (A) ABSOLUTE PAID TO KATANGA on their own OWN BEHALF (1)+(2)+(3)+(4) PUBLIC PROVINCE behalf = TREASURE -1 -2 -3 -4 (B) (A) -(B)
DGI DGDA DGRAD Total AFE
47 A1004150Y KISANFU M EX 827 469 505 412 20 273 278 0 0 0 0 778 710 48 759 48 A0906442N FEZA MINING M PR 761 256 570 866 119 761 0 41 412 75 655 0 117 067 807 694 -46 438 49 A0955555E CHABARA M EX 752 138 1 868 0 750 000 249 0 0 249 752 117 21 50 A0905363Q SODIMICO M EP 725 900 476 320 62 018 0 0 23 839 0 23 839 562 177 163 723 51 A0704870C EXACO M PR 712 809 107 134 692 799 0 0 0 0 0 799 933 -87 124 SEMHKAT 52 A0707219F Sprl M EX 687 654 660 571 34 249 0 17 648 0 0 17 648 712 468 -24 814 53 A0905251T MAGMA M PR 661 905 705 000 224 100 0 0 22 742 12 927 35 669 964 769 -302 864 54 A0802327E MMR M PR 649 901 547 058 0 100 000 0 17 205 0 17 205 664 263 -14 362 55 A1007484X SODIMIKA M EX 602 865 73 146 0 525 000 0 1 320 0 1 320 599 466 3 399 56 A1008279L SHITURU M EX 589 015 562 639 0 0 26 514 0 0 26 514 589 153 -138 57 A0900876N G.A.R SPRL M PR 570 979 483 504 34 635 0 5 264 24 177 0 29 441 547 580 23 399 58 A0907596S LONG FEI M EX 560 551 247 924 0 550 000 0 274 212 0 274 212 1 072 136 -511 585 59 A0709233U LONCOR M EX 379 961 379 582 0 0 0 90 0 90 379 672 289 60 A0906718N JMT M PR 345 255 523 810 0 0 6 261 103 120 0 109 381 633 191 -287 936 61 A0704273D GTL M PR 330 492 259 285 0 0 0 249 122 0 249 122 508 407 -177 915 A0912866 62 W MIZACO M EX 253 388 0 0 720 000 0 0 0 0 720 000 -466 612
13
DISCLOSURES OF DISCLOSURES OF REVENUE DEVIATION COMPANIES’ PAYMENTS
FROM
NIF (Tax CORPORATE FINANCIAL DRKAT ON FROM STATE TOTAL OF No. AUTHORITIES BEHALF OF COMPANIES FOR STATE FINANCIAL AGENCIES (AFE) FOR THEIR REVENUE
Number) NAME Phase Sector (A) ABSOLUTE PAID TO KATANGA on their own OWN BEHALF (1)+(2)+(3)+(4) PUBLIC PROVINCE behalf = TREASURE -1 -2 -3 -4 (B) (A) -(B)
DGI DGDA DGRAD Total AFE
COTA 63 A0814843T MINING M PR 250 514 426 425 209 450 0 4 848 516 805 0 521 653 1 157 528 -907 014 64 A0815428E COMILU SPRL M EX 235 596 238 106 356 0 8 997 51 496 200 60 693 299 155 -63 559 65 A0811080D SCMK-Mn M EP 214 461 199 500 0 0 16 038 0 0 16 038 215 538 -1 077 66 A0706875G SURESTREAM P EX 183 200 183 200 0 0 0 0 0 0 183 200 0 67 A0700186L DE BEERS M EX 174 462 147 658 0 0 27 655 0 0 27 655 175 313 -851 68 A1105861J SAKIMA M EP 160 000 0 0 0 0 0 0 0 0 160 000 KGL- 69 A0901460Y SOMITURI M EX 145 531 0 0 0 0 0 0 0 0 145 531 70 A0906857P MDDK M EX 112 713 124 130 0 0 7 408 0 0 7 408 131 538 -18 825 71 A0802327P SECAKAT M EX 100 000 0 0 100 000 0 0 0 0 100 000 0 72 A0815341K COMMUS M EX 78 345 72 466 0 0 149 0 0 149 72 615 5 730 73 A1001383Q SCIM M EP 73 255 7 653 0 0 0 5 760 0 5 760 13 413 59 842 74 A0700193T KAMITUGA M EX 66 277 0 0 0 0 0 0 0 0 66 277 75 A0700153A NAMOYA M EX 64 357 73 564 0 0 1 206 0 0 1 206 74 770 -10 413 76 A0704883R MKM M EX 61 641 4 089 0 0 0 0 0 0 4 089 57 552 A1103150 77 M OIL OF DRC P EX 58 568 56 637 0 0 1 158 0 0 1 158 57 795 773 78 A0700163L LUGUSHWA M EX 38 759 48 565 0 0 0 0 0 0 48 565 -9 806
14
DISCLOSURES OF DISCLOSURES OF REVENUE DEVIATION COMPANIES’ PAYMENTS
FROM
NIF (Tax CORPORATE FINANCIAL DRKAT ON FROM STATE TOTAL OF No. AUTHORITIES BEHALF OF COMPANIES FOR STATE FINANCIAL AGENCIES (AFE) FOR THEIR REVENUE
Number) NAME Phase Sector (A) ABSOLUTE PAID TO KATANGA on their own OWN BEHALF (1)+(2)+(3)+(4) PUBLIC PROVINCE behalf = TREASURE -1 -2 -3 -4 (B) (A) -(B)
DGI DGDA DGRAD Total AFE
79 A1113021R ENI P EX 27 697 27 697 0 0 0 0 0 0 27 697 0 80 A0814790L MIKAS M EX 23 797 46 809 591 0 0 105 440 0 105 440 152 840 -129 043 81 A1100211S COMIKA M EX 20 367 0 153 0 0 90 0 90 243 20 124 82 A0812843U NESSERGY P EX 6 245 0 0 0 0 0 0 0 0 6 245 83 A0700518X EGMF M EX 2 504 3 945 1 618 0 0 0 0 0 5 563 -3 059 84 A1105484Z FOXWHELP P PA 500 0 0 0 0 0 0 0 0 500 85 A1105476Q CAPRIKAT P PA 500 0 0 0 0 0 0 0 0 500 86 A0800974T SOLICO P PA 498 0 0 0 0 0 0 0 0 498 87 A0811711P VOLCANO M PR 0 250 033 4 022 000 0 36 508 0 0 36 508 4 308 541 -4 308 541 88 A1007580B METALKOL M EX 0 64 602 0 0 0 0 0 0 64 602 -64 602 89 A0900127Z SOMIDEC M EX 0 39 260 398 0 0 5 302 0 5 302 44 960 -44 960 90 A1113407L COMINIERE M EP 0 17 900 0 0 0 0 0 0 17 900 -17 900 91 A0700347L SIMCO M EX 0 3 045 0 0 0 0 0 0 3 045 -3 045 92 A1200750E SEGMAL M EX 0 1 806 0 0 0 0 0 0 1 806 -1 806 93 A0909587G ENERGULF P EX 0 1 239 0 0 29 0 0 29 1 268 -1 268 94 A1007960P SICOMINES M EX 0 0 0 0 0 1 079 0 1 079 1 079 -1 079 95 A0906982A DIVINE OIL P EX 0 619 0 0 0 0 0 0 619 -619
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DISCLOSURES OF DISCLOSURES OF REVENUE DEVIATION COMPANIES’ PAYMENTS
FROM
NIF (Tax CORPORATE FINANCIAL DRKAT ON FROM STATE TOTAL OF No. AUTHORITIES BEHALF OF COMPANIES FOR STATE FINANCIAL AGENCIES (AFE) FOR THEIR REVENUE
Number) NAME Phase Sector (A) ABSOLUTE PAID TO KATANGA on their own OWN BEHALF (1)+(2)+(3)+(4) PUBLIC PROVINCE behalf = TREASURE -1 -2 -3 -4 (B) (A) -(B)
DGI DGDA DGRAD Total AFE
96 A1113961N MANONO M EX 0 0 0 0 0 135 0 135 135 -135 97 A0700201C MIBA M EP 0 0 0 0 0 0 0 0 0 0 A0905460 98 W FRONTIER M PR 0 0 0 0 0 0 0 0 0 0 99 A0906511N COMISA M PR 0 0 0 0 0 0 0 0 0 0 100 SANS NIF21 SOMIMI M EX 0 0 0 0 0 0 0 0 0 0 101 A0809078C JAPECO P PA 0 0 0 0 0 0 0 0 0 0 102 A1006778E IBOS P EX 0 0 0 0 0 0 0 0 0 0 103 A1103823T INPEX P PA 0 0 0 0 0 0 0 0 0 0 104 A0703904C KINREX P PA 0 0 0 0 0 0 0 0 0 0 105 A0703903B SOCOREP P PA 0 0 0 0 0 0 0 0 0 0 106 A1109715Y TOTAL P EX 0 0 0 0 0 0 0 0 0 0 107 SANS NIF10 SOREPLICO P PA 0 0 0 0 0 0 0 0 0 0 108 A0906485K GLENCORE P PA 0 0 0 0 0 0 0 0 0 0 109 COBIT - SRM P IN 0 0 0 0 0 0 0 0 0 0 110 COMICO P IN 0 0 0 0 0 0 0 0 0 0 TOTAL GENERAL 1 408 273 353 929 782 443 102 899 271 328 742 641 5 260 997 35 868 084 10 557 877 51 686 958 1 413 111 313 -4 837 960 Note
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Phase: PR= Production EX= Exploration PA=Partnership EP=State Company IN=Inactive.
Sector: M=Mining P= Oil.
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Section 2: ADDITIONAL INFORMATION
2.1. OVERVIEW OF THE SCOPING STUDY (Requirement 9)
2.1.1. Scoping
The Executive Committee had entrusted the scoping study to the Fair Links Firm which submitted the report of the study in compliance with terms of reference. That scoping study has been submitted to a review by stakeholders and by the Technical Monitoring Committee (Committee which includes representatives from each stakeholder and experts from the Technical Secretariat).
Stakeholders have reviewed the Fair Links report and set the scope as follows:
A. HYDROCARBONS SECTOR
It should be noted that for the hydrocarbons sector, all companies have been included within the scope regardless of the payments made by them. No materiality threshold has been set for this sector.
List of companies selected:
1. COHYDRO 15. GLENCORE 2. MIOC 16. JAPECO 3. PERENCOREP 17. KINREX 4. ENERGULF 18. SOCOREP 5. ENI RD CONGO 19. SOREPLICO 6. NESSERGY 20. SOLICO 7. OIL OF DR CONGO 21. INPEX 8. SOCO DRC 22. IBOS 9. SURESTREAM 23. LIREX 10. TOTAL 24. SEMLIKI 11. CAPRIKAT CONGO 25. TEIKOKU OIL 12. CHEVRON ODS 26. COBIT 13. DIVINE INSPIRATION GROUP 27. COMICO 14. FOXWHELP CONGO
B. MINING SECTOR
B.1. Setting of Materiality Threshold
To set the threshold of materiality of payments made to the Government by Companies of the Mining Sector, the multi-stakeholder group has used quantitative criterion based on the sum of all payments ($ 776 550 631.56) as collected from financial Authorities for use in the scoping study.
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All these payments, taken per Company, were classified in their descending order of magnitude so that their aggregation suggests that up to payment of an amount of $ 500 000, 98.28 % of these payments are made by 51 companies that have reached the production and/or exploration phase (plus processing entities). It’s thus the amount of USD 500 000 which was selected as reference for significance of payments of the mining sector for the 2011 Report.
B.2. List of Mining Companies Included into the 2011 Scope
B.2.1. List of Holders of Mining Licenses Filtered Through the $ 500 000 Threshold
(41 companies distributed as follows: 3 “state-owned” companies, 20 companies in exploration phase and 18 companies in production phase)
1. AFRICANMINERALS (BARBADOS) 2. ANVIL MINING COMPANY OF KATANGA (AMCK) 3. ANVILMINING CONGO 4. ASHANTI GOLDFIELS KILO SARL 5. BAZANO 6. BOSS MININGSPRL 7. CHEMICAL OF AFRICASPRL 8. COMPAGNIE MINIERE DU SUD-KATANGA SPRL 9. CONGO DONG FANG MINERALS 10. CONGO LOYAL WILL MINING (CLWM) 11. CONGOLAISE DES MINES ET DE DEVELOPPEMENT (COMIDE) 12. ENTREPRISE GENERALE MALTA FOREST (EGMF) 13. GECAMINES 14. SODIFOR 15. KAMITUGAMINING 16. KAMOTO COPPER COMPANY 17. KANSUKIMININGSPRL (KANSUKI) 18. KASONTOLUPOTO MINES (KALUMINES) 19. KGL – SOMITURI (SOCIETEMINIERE DE L’ITURI) 20. KIBALI GOLD MINES 21. KIMIN / KISANFUMINING 22. KINSENDA COPPER COMPANY (KICC – EX – MMK) 23. KIPUSHI CORPORATION (KICO) 24. LONCORRESOURCES CONGO SPRL 25. MININGMINERALRESOURCES (MMR) 26. MUTANDAMINING 27. ORAMA 28. RUASHIMINING 29. RUBAMIN 30. SHITURUMINING CORPORATION 31. SMKK 32. S. D’EXPLOITATION DE GISEMENTS DE KALUKUNDI (SWANMINES) 33. SOCIETE D’EXPLOITATION DE KIPOI (SEK) 34. SOCIETE D’EXPLOITATION MINIERE DE CHABARASPRL 35. SOCIETE D’EXPLOITATION MINIERE DU HAUT – KATANGA 36. SOCIETEMINIERE DU KATANGA (SOMIKA)
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37. SODIMICO 38. SOKIMO 39. STL 40. TENKEFUNGURUMEMINING (TFM) 41. TWANGIZAMINING
B.2.2. List of Processing Entities (Classified as Companies in Production Phase) Filtered Through the Threshold of $ 500,000
42. BOLFAST 43. CONGO INTERNATIONAL MINING CORPORATION 44. COTA MINING 45. EXPLOITATION ARTISANALE DU CONGO (EXACO) 46. FEZAMINING 47. HUACHIN SPRL 48. JMT 49. MAGMA MINERALS 50. METALS MINES 51. VOLCANO**
Note: In addition to the materiality criterion, the Executive Committee has used three additional criteria to set the 2011 final scope of companies.
B.2.3. Criterion for Inclusion of all State-Owned Companies
N.B.: In addition to 3 state-owned companies that have met the materiality requirement, six more state-owned companies were included because state-owned companies are important in the context of the EITI, not only as contributors but also because they receive certain payments from various partner mining companies.
List of 6 additional state-owned companies
52. LA COMMINIERE* 53. SAKIMA 54. SCMK – Mn 55. SOCIETE CONGOLAISE D’INVESTISSEMENT (SCIM) 56. SOCIETEMINIERE DE BAKWANGA (MIBA)* 57. SOCIETEIMMOBILIERE DU CONGO (SIMCO)*
B.2.4. Criterion for Inclusion of all Companies that are in JV with State-Owned Companies
NB: The Multi-stakeholder Group decided that all companies in a joint venture with state-owned companies are part of the scope even if they do not meet materiality requirement, because those companies in partnership with state-owned companies make significant contract-based payments. So include companies operating in partnership is a measure to prevent omission.
List of 22 companies that are in JV with state-owned companies
58. CLUFF MINING (MINES D’OR DE KISENGESPRL- MDDK) 59. COMAGNIEMUSONOI (COMMUS)
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60. COMPAGNIE MINIERE DE LUISHA (COMILU) 61. COMPAGNIE MINIEREKAMBOVE (COMIKA) 62. GTL 63. LA MINIERE DE KALUMBWEMYUNGA (MKM) 64. LA MINIERE DE KASOMBO (MIKAS) 65. LONG FEI MINING 66. LUGUSHWAMINING 67. MANONO MINERALS* 68. MWANA AFRICA CONGO GOLD (MIZAKO) 69. NAMOYAMINING SARL 70. SECAKAT 71. SEGMAL* 72. SICOMINES* 73. SOCIETE DE BEERSDRC EXPLORATION SPRL 74. SOCIETEMINIERE DE KOLWEZI 75. SOCIETEMINIERE DE MOKU – BEVERENDI (SMB) 76. SOCIETEMINIEREDEZIWAECAILLE (SOMIDEC)** 77. SODIMIKA (KIMPEMABAYA) 78. SOMIMI* 79. WANGA MINING (SOC. MINERAL INVEST INTERNATIONAL CONGO)
B.2.5. Criterion for Inclusion of Companies that Participated in Previous EITI Reports
NB: The multi-stakeholder Group decided that all companies which participated in previous reports are part of the scope even though they do not meet materiality requirement, in order to build on the achievements of previous EITI reports and to sustain the process:
List of 4 Companies which participated in previous reports
80. COMPAGNIE MINIERESAKANIA (COMISA)** 81. FRONTIER** 82. GOLDEN AFRICA RESSOURCES 83. METALKOL*
* Companies that have returned the forms with “ZERO” disclosure (see explanation in section 2.3.1.) ** Companies which stopped activities, thus inaccessible. (See explanation in section 2.3.1.)
Note:
To prevent omission of any significant payment, payments between 100 and 500 KUSD have been subject to unilateral disclosure by Companies. Similarly, in compliance with provisions of requirement 11b, the Government has unilaterally disclosed all other payments from small operators.
B.3. Main Sources of Information Used in Setting the Scope
Scoping work helped set a broad base of literature to cross-check the information available from:
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B.3.3 Cadastre Minier (CAMI): The Cadastre Minier (Mining Cadastre) provided a directory of 606 holders of mining licenses in 2011. Of these, 479 operators were holders of production, production & research or exploration licenses, 127 had quarry and small mining licenses.
After update by the CAMI services of the file in September 2013, it appears that of the 479 operators, 147 were inactive and in the process of cancellation or deletion. Thus of the remaining 332, only 41 made payments above the U.S. $ 500,000 materiality threshold set by the stakeholders. Based on the above criteria (Cf. sections B.2.2 through B.2.5 page 7), more companies have been added to the 41 companies automatically included in the scope.
B.3.2. The Cellule Technique de Coordination et de Planification Miniere (CTCPM)
Provided a directory of 31 processing entities active in 2011. Of these 31 units, only 10 made payments above the materiality threshold (U.S. $ 500,000) and were automatically included in the scope.
B.3.3. Financial Authorities, DGI, DGRAD, DGDA and DRKAT disclosed revenues collected from extractive companies in 2011 per flow.
B.3.4. State-Owned Companies, State-owned companies disclosed payments received from their JV partners, including cash bonuses, asset sales, shares transfer, royalties, etc.
B.3.5. Different Line Ministries Involved: Hydrocarbons, Mines and Portfolio These entities have provided the contracts, licenses, lists of holdings of state-owned companies in JV and other partnerships.
B.3.6. The 2007, 2008-2009 and 2010 EITI DRC Reports B.3.7. The 2010 and 2013 Validation Reports, B.3.8. Publication by the DRC NGOs: PWYP, POM, RRN, Carter Center, etc.
2.1.2. SETTING OF REFERENCE SCOPE OF FLOWS After analysis, the Multi-stakeholder Group, through the scoping study, has identified 63 flows in the reference scope of the mining sector. In view of payments from these 63 financial flows reported by financial Authorities during the scoping study and ranked in descending order of magnitude, 30 flows are material, representing 99.85% of the total amount of U.S.$ 855 899 570 disclosed by financial Authorities and State-owned companies.
To consolidate the scope of financial flows, it should be noted that the JVs unanimously agreed to bring information disclosed by shareholders in their partnerships with state-owned companies which cannot be otherwise obtained.
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List of Definition of 2011 Financial Flows
Source: Regulatory Framework in force in 2011 for extractive companies mainly the Tax Code, the Customs Code, the Mining Code and Regulations.
Taxpayer
No. Type of Financial Flows
Tax Collector Oil companies in production in explorationin Definitions Mining Companies Mining Companies The system in the DRC is declaratory: Companies declare the taxes to be payable. Penalties and fines are imposed if errors are found in the disclosures, or in case of late payment. Documents pertaining to such fines are called TAX COLLECTION NOTICE (AMR).
As for DGI, 50% of the value of fines/penalties (AMR A) are payable to the Treasury and 50% are payable Tax collection notice (AMR) (A 1 DGI into an account of DGI (AMR B). and B) . AMR A includes the principal of adjusted tax and the share of penalties/fines (50%) coming to the Treasury
. AMR B only includes elements of fines or penalties (other 50%) coming to the Financial Authority.
Exceptional tax on the The rights holder is required to pay the exceptional tax on the remuneration of expatriates at the preferential 2 remuneration of expatriates DGI rate of 10% set by the Mining Code instead of the normal rate of 25%. This tax is deductible from profits tax. (IER)
The Personal Property Tax affects incomes from movable capital invested in the Democratic Republic of Congo (of domestic or foreign origin but invested in Congo). The Law provides the exhaustive list of incomes subject to personal property tax:
3 Personal Property Tax (IM) DGI Dividends and incomes of non-active associates’ shares in companies other than joint stock companies; Dividends and other distributions (for mining companies): 10%
1. Interest on bonds and interest on capital borrowed for business purposes; (For mining companies, exemption from this tax on interests from capital in foreign currencies) 2. Percentages;
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Taxpayer
No. Type of Financial Flows
Tax Collector Oil companies in production in explorationin Definitions Mining Companies Mining Companies 3. Charges (for mining companies, 20%)
The professional tax on remuneration affects remuneration of all individuals remunerated by a third party, without being bound by a work contract, including beneficiaries of pensions, active associates’ pay in Professional tax on remuneration 4 DGI companies other than joint stock companies and those of proxies in State-owned companies. These people (Payroll Tax, IPR) subscribe declarations and pay each month, even if these payments are not made while they are withheld at source by the employer.
The Special fixed-rate tax is paid by oil companies subject to the income and profits tax system (IBP). Initially, 5 Special fixed-rate tax DGI it was used to tax companies escaping, by lack of profits, payment of income and profits tax (IBP); it subsequently got extended to all companies.
It is a tax on consumption levied on the sale of products manufactured and placed on the local market (or for self delivery), any services provisions and construction work. The holder of a mining right is liable for domestic turnover tax on sales made and services provided within the country. Product sales to a processing entity located in the country are expressly exempt.
Tax base and rates.
6 Domestic turnover tax (ICAI) DGI Tax rate (for Mining Companies)
a) ICA /Services provisions 18% when the right holder is the beneficiary of the service. 5% when the holder is the real liable.
b) ICA/Sales 3% when the holder acquires assets directly relating to the mining, and 10% when the holder sells to a processing entity
Income and profits Tax Income and profits tax affects professional incomes of commercial, industrial, agricultural, handicraft and real- 7 DGI (Corporate Tax, IBP) estate companies, as well as profits of whatever name and nature made by liberal professions or charges or offices. Income and profits tax is paid from profits made during the past year (including any donations and
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Taxpayer
No. Type of Financial Flows
Tax Collector Oil companies in production in explorationin Definitions Mining Companies Mining Companies advantages whatsoever granted to non-active associates in companies other than joint-stock ones).
Common fees: - 40% of declared profits for all companies; - 30% of declared profits for mining companies; - 1/1000 of turnover declared when the result is showing a deficit or is likely to result in taxation lower than this amount.
Industrial and commercial profits 8 DGI Method of recovery of income tax payable by small and micro enterprises. withholding
These are advances paid in advance by some mining companies in 2011 which will be charged on the payment 9 Prepayment of various taxes DGI of future taxes.
Fees paid for all goods and products strictly intended for the mining, imported by holders of a mining license, their affiliates and subcontractors.
10 Entry fees DGDA The tax base is the CIF value
Rates vary according to the mining phase. When the rights holder is in the search or prospecting phase, it pays 2%. And when it enters the operational phase, all goods are subject to the rate of 5 %.
Regarding consumables and inputs, including petroleum products, the rate is 3 % for both phases. Fees and Royalties received for These are fees paid by mining companies during the export, which are set at 1% of their net market value. 11 DGDA services rendered for export. Following a key, they are allocated between services specifically named by law.
Excise duties affecting some goods on import, particularly for beer, tobacco products, perfumes, liquors and 12 Import excise duties DGDA used vehicles (For mining companies, these duties are usually included in import duties)
13 DGDA Penalties and transactional fines The system in the DRC is declaratory: Companies declare the duties to be payable. Penalties and fines are
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Taxpayer
No. Type of Financial Flows
Tax Collector Oil companies in production in explorationin Definitions Mining Companies Mining Companies for the Treasury imposed if errors are found in the disclosures, or in case of late payment.
As for DGDA, 40 % of the value of fines/penalties are payable to the Treasury
The system in the DRC is declaratory: Companies declare the duties to be payable. Penalties and fines are Penalties and transactional fines imposed if errors are found in the disclosures, or in case of late payment. 15 DGDA for DGDA
As for DGDA, 60 % of the value of fines/penalties are payable to DGDA
Approval of deposit of 16 Charge paid for storage of explosives explosives
Authorization for export of 17 DGRAD Charge paid at the time of export of unprocessed minerals. unprocessed minerals
Other charges for the payment 18 DGRAD Administrative charge paid in addition to the payment of bonuses. of bonus
Signature or production bonuses are bonuses payable to the State at the signing of a contract and/or when the operation or operating rate reaches certain thresholds. 19 Signature or production Bonus DGRAD The amount and terms of payment of signature or production Bonus are defined by the oil agreements or the mining code. For the record, this flow has never been paid by a mining company.
Dividends paid to the State are return on capital paid to the State as a shareholder of a stae-owned or private company. 20 Dividends paid to the State DGRAD The amount of dividends paid to the State is determined in proportion to the shares held. The amounts and terms of dividends are determined by the Board of Directors of the company.
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Taxpayer
No. Type of Financial Flows
Tax Collector Oil companies in production in explorationin Definitions Mining Companies Mining Companies Annual surface duties per square are a payment made annually by every holder of a mining and quarry title. Annual surface duties per mining 21 DGRAD These fees are payable by every operator holder of a mining right (PR, PE, PER, PEPM) and/or a quarry right square (ARPC and AECP). The applicable rates depend on the nature of the mining title. Tax base and rates.
Distributable margin (Profit-Oil Distributable margin is equal to the income obtained after deducting depreciation, operating expenses, and 22 DGRAD public power State) statistical tax. Distributable Margin Rate attributable to the State as public power is 40%.
The stake corresponds to the distributable margin attributable to the State, as an associate in oil projects. Stake rate is 20% (percentage of State’s stake) of the 60% of the distributable margin remaining after allocation of 23 Stake (Profit-Oil Partner-State) DGRAD the distributable Margin of the State as public power. The amount and terms of payment of the stake are set by the Mining Code and the Mining Regulations.
The system in the DRC is declaratory: Companies declare the duties to be payable. Penalties and fines are 24 Penalties paid to DGRAD DGRAD imposed if errors are found in the disclosures, or in case of late payment. As for DGRAD, 40 % of the value of fines/penalties are payable to DGRAD
The system in the DRC is declaratory: Companies declare the duties to be payable. Penalties and fines are 25 Penalties paid to the Treasury DGRAD imposed if errors are found in the disclosures, or in case of late payment. As for DGDRAD, 60 % of the value of fines/penalties are payable to the Treasury
These fees are calculated based on the value of sales made, reduced by transportation cost, analysis cost relating to quality control of commercial product for sale, insurance and marketing costs, etc.. (Art. 240, 241, 242). These fees are split between the State, the Province and the territories. Tax base and rates. The rate of Mining fees DGRAD 26 the mining fees varies depending on the nature of mineral substances: 0.5% for iron or ferrous metals, 2% for non-ferrous metals, 2.5% for precious metals, 4% for precious stones, 1% for industrial minerals, solid hydrocarbons and other substances not mentioned; 0% for common use construction metals.
Royalties, defined in proportion to the turnover, are paid by oil companies to the State. The amount and terms 27 Royalties for oil companies DGRAD of payment of royalties are defined by the oil agreements.
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Taxpayer
No. Type of Financial Flows
Tax Collector Oil companies in production in explorationin Definitions Mining Companies Mining Companies The statistical tax is an excise on the value of exported barrels. The rate of statistical tax is 1% of the FOB 28 Statistical tax DGRAD value of exported oil.
Remunerative tax is an excise, paid directly to the province, on the appraised value of precious materials. The 29 Remunerative tax DGRAD rate of remunerative tax is 1.25%. The amount and terms of payment of remunerative tax are set by the Mining Code and the Mining Regulations.
State- Amounts received by State-owned companies in consideration for the assignment of these assets on intangible 30 Assignment ofAssets owned or tangible property. companies
Dividends paid to State-owned companies are a remuneration paid to State-owned companies as shareholders State- Dividends paid to state-owned of a private company. Dividends paid to State-owned companies are not directly contributory to the State 31 owned companies budget; they are a part of the income of State-owned companies, shareholders on behalf of the State in some companies private companies
State- Lease for a definite or indefinite period, without the right to sub-lease all or part of the rights attached to a farm-out rent and/or monthly 32 owned mining right or a quarry authorization for a fee fixed by agreement between the lessor and the lessee; annuity companies
Key money paid to State-owned companies is concession fees of exploration or operating license paid by State- private companies to State-owned companies that are holders thereof. Key money paid to State-owned Key money paid to State-owned 33 owned companies is not directly contributory to the State budget; it is a part of income of State-owned companies companies companies holding certain licenses they concede (e.g. GECAMINES). The amount and terms of payment of key money paid to State-owned companies are set in the mining contracts between the parties.
State- Payment related to the mining production and the definition of which depends on the contract between the Royalties paid to State-owned 34 owned parties. The amount may be calculated on the value of sales (e.g. Anglo Gold Kilo Sarl Mining agreement), or mining companies companies an additional fee for additional reserves (Tenke Fungurume). This is not strictly a royalty but should be
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Taxpayer
No. Type of Financial Flows
Tax Collector Oil companies in production in explorationin Definitions Mining Companies Mining Companies considered as such in this definition for the EITI report.
Provincial intervention tax for rehabilitation of urban roads and drainage infrastructure as well as roads of 35 Roads and drainage Tax DRKAT provincial interest.
36 Concentrates Tax DRKAT Incentive tax on the creation of local concentrates processing units.
The tax is payable by holders of a concession granted either for exploitation or for exclusive search. The tax is due for the entire year if the taxable items exist as from January. No tax is payable for concessions granted after 31 January. The holder of a Search License is liable for the tax on surface area of mining and hydrocarbons concessions at rates in Congolese Francs equivalent to: – USD 0.02 per hectare for the first year – USD 0.03 per hectare for the second year Tax on surface area of mining 37 DRKAT – USD 0.035 per hectare for the third year and hydrocarbons concessions. – USD 0.04 per hectare for the other subsequent years The holder of a mining operating License is liable for the tax on surface area of mining and hydrocarbons concessions at rates in Congolese Francs equivalent to: – USD 0.04 per hectare for the first year – USD 0.06 per hectare for the second year – USD 0.07 per hectare for the third year – USD 0.08 per hectare for the other subsequent years
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2.2. UNDERSTANDING THE SICOMINES PROJECT 2.2.1. Wording of Requirement 9f
“When agreements based on payments in kind, infrastructure provision and other provisions of barter- type play an important role in the mining, oil or gas sector, the multi-stakeholder group should agree on a mechanism to include benefits flows under these agreements in its EITI reporting process. To this end, the multi-stakeholder group must acquire a good understanding of the terms of the contract, the parties involved, the resources promised by the State, the value of benefits flows compromise (e.g. Infrastructure work) and the importance of these agreements in relation to traditional contracts. When the multi- stakeholder group concludes that these agreements are important, it should develop a reporting process to achieve a level of transparency equal to that which exists for other payments and revenue flows. If the reconciliation of key transactions is not possible, the multi-stakeholder group should agree on an approach in favor of unilateral disclosures of companies/government to be attached to the EITI report.”
2.2.2. Introduction
Undoubtedly, the operation of the Sino-Congolese Cooperation Project commonly referred to as “SICOMINES” meets the provisions of Requirement 9f mentioned above.
Therefore, to meet this requirement, the Executive Committee has addressed the issue by providing maximum lightening to the public, thereby demonstrating its understanding of all these agreements.
Thus in 2013, the Executive Committee got from the Prime Minister the organization of two open workshops so as the Government could provide more light about the SICOMINES project. This has allowed to develop the information below and helped the process to be gradually better understood.
2.2.3. Title-Granting, Financing and Repayment Description and Mechanisms
According to the Multi-stakeholder Group, this cooperation project is not a barter contract. However, we are interested in the latter as it fits in the other barter-type provisions outlined in Requirement 9f. It connects the Government of the DRC represented by Gécamines on one hand, and China represented by the Group of Chinese companies, funded by EXIM BANK, through CREC and SINHOHYDRO companies, on the other hand.
The Cooperation focuses on two projects: the construction of infrastructures in the DRC and the development of a mining project to ensure the financing of these infrastructures.
As part of the implementation of the mining project, the parties have incorporated in September 2008 a joint venture called “La Sino-Congolaise des Mines”, SICOMINES in abbreviated form, in which the Gécamines Group holds 32% and the Group of Chinese companies holds 68%. This mining project aims at exploitation by the joint venture SICOMINES, for an investment of USD 3.25 billion, of deposits of , DIKULUWE, DIMA JUNCTION, MASHAMBA WEST,
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DIMA BASIN, MASHAMBA BASIN and SYNCLINAL DIK, D7 Hill are covered by the Operating License (PE) 9681 and 9682, all located in Mutshatsha Territory, District of Kolwezi, Katanga Province.
The Mining Project and the Infrastructure project are collectively referred to as “Cooperation Project”.
2.2.4. Establishment of a Financial Platform
Incorporation of the JV “SICOMINES Sarl” by the Group of Chinese companies (GEC) and Gécamines Group. The share capital of USD 100 million is split as follows: • GEC : 68% of shares, • Gécamines Group : 32% of shares, Term of SICOMINES Sarl: 25 years renewable.
Missions of the platform: • Incurring loans from EXIM Bank; • Financing infrastructure projects and the development of mineral deposits; • Ensuring the repayment of financing of the Cooperation Project;
2.2.5. Funding to be Implemented or Mobilized
• Initially planned: USD 9 billion; • Current: USD 6.2 billion (upon compromise with the IMF). This funding is mainly provided by banks and financial institutions, with the exception of: • USD 350 million of key money; • USD 32 million as a shareholder's loan to Gécamines (32% of capital); • USD 50 million as a shareholder's loan for the rehabilitation of its main workshops of Panda; • 30% of mining investment as equity, interest-free loan to be paid by the Group of Chinese companies.
2.2.6. Repayment of Investments of the Group of Chinese Companies3
There are two periods for the repayment of investments of the Cooperation Project, as well as a commercial period: – The first period, referred to as the repayment period of investments of the most urgent work (First phase) – The second period, referred to as the period of mining repayment and repayment of the first installment of infrastructures and reduced by the most urgent work that would have been paid (Second phase) – The third period, referred to as commercial period (Third phase)
3Article 6 of the addendum 3 of the cooperation agreement on the development of a mining project and an infrastructure project in the DRC: Article 12 of the cooperation agreement is amended as follows: 22
The JV repayment of investments of the Group of Chinese Companies in the Mining Project and the Infrastructure Project will be made as follows: – During the first period: It will allocate all of its profits to the full repayment of investments of the most urgent work, including the payment of their annual interest of LIBOR (six months) + 100BP (LIBOR of 22 April 2008). – During the second period, the Mining JV will allocate 85 % of its profits to the repayment mining investments and their interests.
After full repayment of mining investments and interests thereof, the Mining JV will allocate 85 % of its profits to the repayment of the first installment of infrastructures (reduced by investments in the most urgent work and interests thereof that would have been paid) and interests thereof. The Mining investments will be made at 30 % as Shareholder's loan repaid without interest. The remaining 70% will be repaid with an annual interest rate of 6.1 %.
Investment of the first installment of infrastructure (Annex 1) will be repaid with an annual interest rate of LIBOR (six months) + 100BP (LIBOR of 22 April 2008).
The Mining JV will allocate 15% of profits to the remuneration of its shareholders in proportion to their shares in the share capital.
Investments of the first installment of infrastructure (including the most urgent work) cannot exceed 3 billion U.S. dollars in principal. Investment and the program of the first installment of infrastructures will be implemented after consultation with the Parties based on income that can be generated from the operation of the Mining JV as presented by the "Economic Model" of the Cooperation Project of the Feasibility Study approved in accordance with Article 6.2 of the this Convention.
– During the third period, it will distribute all of its net profits to its shareholders in proportion to their contribution to the share capital.
Any possible discrepancy between the actual bank rate and the rate applied to the Mining JV will be borne by the Group of Chinese companies.
Notwithstanding the provision of Article 12.1, the Mining JV shall comply with all provisions relating to the repayment of loans in the loan contracts entered into with financial institutions.
2.2.7. Implementation Level of the Cooperation Project (2008-2012)
N Date Acts o. 1. 22 April 2008 Signing of the Cooperation Agreement of the Joint Venture, 2. 22 June 2008 Signing of four contracts of the infrastructure projects
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3. 22 September 2008 Creation of SICOMINES Sarl, 4. November 2008 Transfer of rights and titles of Gécamines to SICOMINES, 5. December 2008 Signing of the loan agreement of U.SD 350 million to fund the four contracts of 22 June 2008 6. 2009 Payment of 50% of key money (USD 175 million) 7. June 2010 Payment of USD 118 million to Fund the second installment of the Infrastructure Project 8. July 2012 Payment of the second installment of key money of USD 50 million 9. End of 2012 Final payment of key money.
2.2.8. Disclosure of Receipts and Disbursements of SICOMINES in 2011
Nature of the project Receipts in USD Disbursement in USD
Mining 0 28,419,200.00
Infrastructures 8,987,918.83 82,721,613.90
Note: – Detailed reporting forms are on the website: http://www.itierdc.com/Publication_et_rapport/formulaires%20Sicominess.pdf – SICOMINES SARL shall benefit from total exemption from taxes and fees as well as customs and tax benefits and other benefits granted under Cooperation Agreement for as long as it has not completed the repayment of investments made by the CONSORTIUM in favor of the mining project and the first phase of Governmental Infrastructures Project. For the third period, the taxes will be calculated in accordance with terms set out in Article 52 of the JV Agreement which provides:
During the third period, the tax calculation will be made as follows: – 30% on taxable profit; – 5% made of various taxes on turnover,
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2.3. COMPREHENSIVENESS ISSUES (Requirements 11, 14 and 15)
During public debates, many issues have been raised for the better understanding of the factors related to the comprehensiveness of data. The Multi-stakeholder Group clarifies below:
2.3.1. “ZERO” Disclosure of Some Mining Companies (see list
A distinction has to be made between two mining companies groups that have declared “ZERO”:
1). MIBA, SIMCO, METALKOL, SICOMINES, COMINIERE, MANONO, SEGMAL et SOMIMI returned their disclosure forms with the word “None” to indicate that they made no payments for lack of activities in 2011, which means that there is no lack of reporting. 2). – SOMIDEC et VOLCANO were closed respectively in 2012 and 2013 to the extent that at the time of data collection between August and November 2013, we were not able to communicate with these companies, proof of closure attached hereto (Annex 8). However, the party made a unilateral disclosure of incomes from these companies in 2011. - FRONTIER and COMISA remained closed during the year 2011.
2.3.2. COHYDRO Incomes Transferred to the State
As for incomes transferred by COHYDRO to the State, there is a letter from the Managing Director of COHYDRO No. CHD/DF/FISC/PM/CC/461/013 of 07 August 2013 sent to the EITI-DRC National Coordinator that notes that: "Apart from the dividends arising from its shareholding in the capital of LIREX - PERENCO, COHYDRO receives no contribution whatsoever from the companies holding operating and/or exploitation license of crude oil." (See: Annex 2 and the Lirex-Perenco & Cohydro Contract on the following link: http://www.itierdc.com/Publication_et_rapport/Contrat%20LIREX-PERENCO%20&%20COHYDRO.pdf).
Such is the case with other state-owned companies, including GECAMINES Sarl which enjoys the full management of incomes from its partnerships. (Annex 3).
2.3.3. TFM Unreconciled Significant Payments
TFM has found in its financial disclosures a payment amounting to USD 11,945,292.78 made with DGDA as “OFIDA-DGDA Entry fees penalties” and another payment amounting to USD 10 million made this time with GECAMINES as “Transfer Bonus”. Since the 2011 EITI scope include no flows thus named, TMF entered these payments under “Other significant payments”.
GECAMINES has in turn acknowledged having received payment of $USD 10 million from TFM but named them in these financial disclosures as the “Transfer Fees”; flows not included either in the EITI 2011scope. This revenue has been unilaterally declared by GECAMINES in “Other significant payments”.
DGDA unilaterally declared the sum of USD 11,945,292.78 received from TFM as “OFIDA- DGDA Entry fees penalties”, flows not included in the scope.
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2.3.4. Omission of the Compensatory Royalty Controlled by DGDA and Included in the 2011 Reference Scope?
The compensation royalty was abolished in 2008 following the financial crisis of that year. Previously, this royalty used to be paid by processing entities. After its abolition, processing entities were asked to pay only the cost of services rendered (FSR) just like the holders of mining rights. However, it should be noted that this royalty appeared in the frame of reference because it was never abolished or otherwise renamed in the electronic file of DGDA which provided the scoping study with the computerized list of duties it covers. This is confirmed by the fact that no company has made any payment whatsoever under this flow.
2.3.5. Payment of Exit Fees to DGDA by SICOMINES, yet Exempted?
Although totally exempt from all customs duties, like all other mining companies, SICOMINES make some smaller payments as computer and prints sale fees. In this case, DGDA declared that it has collected USD 944 and USD 135 to cover for the aforementioned fees. These amounts were not significant enough for SICOMINES to be mentioned. Moreover, the omission of that USD 1,079 affects in no way the quality of the 2011 report.
2.3.6. Subnational Payments in Provinces:
The report contains important payments made by mining companies in Katanga Province (DRKAT). Mainly, these payments come from the Roads and Drainage tax and tax on the export of concentrates or unprocessed minerals.
Unlike Katanga province which receives large sums from mining companies following two edicts of the Governor of Katanga (Annex 4), no other province receives significant payments from extractive companies.
However, it is noted that a tax on surface area of mining and hydrocarbons concessions also called tax on mining and hydrocarbon concessions is collected by some provincial governments.
Following the review of the EITI DRC Report 2011, the Multi-stakeholder Group has obtained additional information on this tax. Indeed, the Mining Code sets the rate of this tax as follows (See Article 238):
PR:
- USD 0.02 per hectare for the first year - USD 0.03 per hectare for the second year - USD 0.035 per hectare for the third year - USD 0.04 per hectare for the other subsequent years
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PE:
- USD 0.04 per hectare for the first year - USD 0.06 per hectare for the second year - USD 0.07 per hectare for the third year - USD 0.08 per hectare for the other subsequent years Therefore, it is determined that the payment made by such holders in other provinces is very low that the companies within the scope provided no information on this tax in the data collection form.
For instance, the amounts collected in some provinces in 2011: - Kasai Oriental: CDF 1,561,250 of Tax on the mining concession, i.e. USD 1,698 - Province Oriental: CDF 66,501,944 of Tax on mining concession surface area, i.e. USD 72,363 - North Kivu: None (see DGR-NK letter in Annex 5) - Bas-Congo: None (see Provincial Governor letter in Annex 6)
Note
We noted in the 2011 EITI DRC Report in the mining sector that an error appears on pages 52 and 69 in the transcript of the disclosure of EXACO and SMK companies under the tax on surface area of mining and hydrocarbons concessions.
The Report states that EXACO declared that it has paid a sum of USD 398,769 to DRKAT for this tax, and yet EXACO is a processing entity that has no mining concession known and does not appear in the directory of CAMI as a mining rights holder.
Likewise, the report indicates that the SOCIETE MINIERE DE KOLWEZI (SMK) declared that it has paid to DRKAT the tax on surface area of mining and hydrocarbons concessions amounting to USD 1,072,000 instead of CDF 1,072,000 due to the fact that this company has only 1 PE and 1 PER. Since SMK has 1 PE of 56 squares (4,757.48 ha) and 1 PER of 68 squares (5,776.94 ha), the tax calculation is made as follows:
- For PE: 4,757.48 X 0,08 USD= USD 380.59 - For PER: 5,776.94 X 0,08 USD= USD 462.15 - That is a total of USD 842.74, equivalent to CDF 774,482.84.
It is therefore impossible for SMK to pay an amount of USD 1,072,000 as tax on the surface area of mining and hydrocarbons concessions.
2.3.7. Retrocession
In accordance with Article 242 paragraph 1 of the Mining Code which provides that "The mining royalty is paid by the holder of the mining operation to the Treasury. The latter is responsible for distributing the revenue from mining royalties according to the following breakdown: 60% will be withheld by the Central Government, 25% paid into an account designated by the Administration of the province where the project is implemented, and 15% into an account designated by the City or Territory where the operation is made."
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It is established that to date this provision is not enforced.
2.3.8. Gap between data certified by IGF and those reconciled by the Independent Administrator (Requirement 15)
Observation:
A gap of USD 3,099,612.05 appears between the amount of USD 105,998,883.05 certified by IGF and that of USD 102,899,271 reconciled for DRKAT without any explanation in the report of the mining sector.
Explanation:
At the time of certification of the disclosure of DRKAT, IGF considered a USD 3,099,612.05 payment made by POLYTRA CONGO. During reconciliation, the Independent Administrator discovers that POLYTRA CONGO is a customs agency and not a mining company and in addition was not part of the scope adopted by GMP. Thus, the payment is not included in the disclosure reconciled between DRKAT and mining companies.
2.4. DATA RELIABILITY (Requirement 12)
Observations:
Four companies did not provide evidence of audit of their accounts or certification of their disclosure on 31 December 2013. These are 2 state-owned companies, SCMK-Mn and SAKIMA and two private companies, MAGMA MINERALS and SODIFOR.
Improvements:
At the request of stakeholders, the Multi-stakeholder Group sought and obtained from the above companies evidence of certification of their disclosure to the EITI DRC in 2011.
First, private companies MAGMA MINERALS and SODIFOR had their 2011 disclosure certified by their External Auditor.
Secondly, the Government sent a mission through IGF to certify disclosures of the two state- owned companies SCMK-Mn and SAKIMA.
Evidence of certification is in Annex 7.
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Section 3 : ANNEXES
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