“[OSLEG has] the resources to protect and defend, support logistically, and assist generally in the development of commercial ventures to explore, research, exploit and market the mineral, timber, and other resources held by the state of the Democratic Republic of the Congo.” Extract from the partnership agreement between the Zimbabwean company OSLEG and the Kinshasha based Comiex-Congo, whose majority shareholder was Laurent Desire Kabila, former president of the DRC.

Global Witness Ltd P O Box 6042, London N19 5WP, United Kingdom telephone: + 44 (0)20 7272 6731 fax: + 44 (0)20 7272 9425 e-mail: [email protected] http://www.globalwitness.org/

ISBN 1 903304 05 9 Recommendations contained on page 2

2nd edition: Updated February 2002

Branching Out ’s Resource Colonialism in Democratic Republic of Congo

A Report by Global Witness. February 2002  Branching Out – Zimbabwe’s Resource Colonialism in Democratic Republic of Congo

40 20 ∞ ∞ 0∞ 20∞ 40∞ 60 ∞ Contents

40∞ 40∞  Recommendations  M e d Algiers i t e Tunis r r TUNISIA a Rabat n   Madeira Is. e a n S e Preface (PORTUGAL) a MOROCCO Tripoli

Canary Is. Cairo   (SPAIN) ALGERIA Introduction Laayoun LIBYAN ARAB JAMAHIRIYA EGYPT Western   Sahara The timber deal R e d

S 20 e 20    ∞ MAURITANIA a ∞ . The creation of SOCEBO CAPE VERDE Nouakchott NIGER MALI ERITREA Dakar CHAD Khartoum    Praia Asmara . Supporting information SENEGAL Niamey Lake GAMBIA Bamako Chad n Banjul SUDAN Ade BURKINA FASO f of Socotra N'Djamena DJIBOUTI Gul Bissau (YEMEN) Ouagadougou Djibouti GUINEA-BISSAU GUINEA . Will the deal happen as planned?  B

E NIGERIA G T Conakry H N ETHIOPIA O

C‘TE- A I

Freetown G N Abuja N A

D'IVOIRE A O Addis Ababa SIERRA CENTRAL I LEONE Yamoussoukro L    Monrovia Accra AFRICAN REPUBLIC A . The Malaysian element e Porto LIBERIA m Novo CAMEROON Bangui M Abidjan o L O Malabo YaoundÈ S Lake EQUATORIAL GUINEA UGANDA Turkana Principe Lake  O Albert Mogadishu Zimbabwean military involvement in G Kampala SAO TOME AND PRINCIPE Sao Libreville Tome N KENYA 0 Sao Tome 0∞ ∞ GABON O DEMOCRATIC  C Nairobi DRC AnnobÛn REPUBLIC Kigali (EQUATORIAL GUINEA) Lake OF THE Victoria INDIAN OCEAN Brazzaville Bujumbura CONGO BURUNDI Pemba Amirante Is. Cabinda Lake Dodoma Victoria   (ANGOLA) Tanganyika Zanzibar . Operation Sovereign Legitimacy ATLANTIC UNITED REPUBLIC OF SEYCHELLES Ascension TANZANIA (UK) Luanda Aldabra Is. Providence Is. (OSLEG) – the corporate structure Lake Farquhar Is. OCEAN Nyasa Moroni Agalega Is.  ANGOLA COMOROS (MAURITIUS) develops Lilongwe ZAMBIA MALAWI E Tromelin St. Helena Lusaka U R (FRANCE)   (UK) I Q A Cargados . The Structure of ZDF’s holdings in Lake B C Carajos Kariba M SAntananarivo ZIMBABWE A A MAURITIUS  Z G Port Louis DRC 20 A 20∞ ∞ O NAMIBIA D RÈunion M BOTSWANA A (FRANCE)

Windhoek Gaborone M . The cost of Zimbabwe’s Pretoria Maputo Mbabane  SWAZILAND intervention in DRC AFRICA Bloemfontein Maseru SOUTH LESOTHO AFRICA  Conclusion  Cape Town References 

0 500 1000 km 40 40∞ ∞ The boundaries and names shown and the designations used 0 500 1000 mi on this map do not imply official endorsement or acceptance by the United Nations. 40 60 20 ∞ 0 ∞ 20∞ ∞ ∞

Map No. 4045 Rev. 2 UNITED NATIONS Department of Public Information March 2001 Cartographic Section

10° 15° CENTRAL AFRICAN REPUBLIC 25° 30° SUDAN 5° Uban Bangassou 5° Bangui g i Juba DEMOCRATIC Zongo Yaoundé Bondo Faradje REPUBLIC OF THE Libenge Businga U e le Ki Aketi Buta Watsa bali CONGO g ala Gulu on Bumba PROVINCE Mungbere M International boundary o ORIENTALE UGANDA i n g i Lake u o opor A ruwim i Lake District boundary Ouesso g C L Basoko Albert n Kyoga a a Bafwasende National capital b ong Basankusu

u l Lu District capital O EQUATEUR Yangambi Kampala Jinja Libreville Butembo Kasese Town, village S 0° CONGO Ubundu NORD- 0° Main road Ts L Lake hu L u N ap o a Edward Secondary road a m l Lubutu KIVU Lo a Lake L m a b I m a Victoria Railroad u el Ikela Punia il a i

ak U a ( Airport l A

Inongo C in Lake RWANDA d o i Kivu Bolobo n Kigali g 0 100 200 300 km Lac T Kutu o Butare Mai-Ndombe ) KASAI SUD- 0100 200 mi L N u ken ie Lodja Uvira Bujumbura K Kampene asa ORIENTAL KIVU K i Kibombo U BURUNDI Brazzaville w San il k MANIEMA Kinshasa u Ilebo KASAI u r O SA u A Bulungu Kasongo SH Kenge Mweka Kigoma Pointe-Noire BAS-CONGO KIN 5° OCCIDENTAL Tabora 5° L Cabinda Kikwit Lubao Kongolo M Mbanza- a (ANGOLA) Boma uga k Ngungu BANDUNDU uk e UNITED Mbuji-Mayi Kabalo L L REPUBLIC u ATLANTIC a K K l OF a a w b T sa OCEAN a i a A a TANZANIA N'zeto n n g Mwene-Ditu Manono g o SHABA Moba a n Sumbawanga B L y (KATANGA) u v i u a k Kapanga Pweto a M Luanda L Mbeya u

l U u Lake ANGOLA a Mweru DEMOCRATIC Katanga T ° REPUBLIC OF THE Saurimo Plateau ° 10 CONGO I 10 Dilolo Kasenga ZAMBIA M

M L a ze Lake k A be Bangweulu e am M Luena Z L Solwezi Kipushi a A Lobito l The boundaries and names shown and the designations used on a w Sakania W this map do not imply official endorsement or acceptance by the i United Nations. Ndola I 10° 15° 20° 25° 30°

Map No. 4007 Rev. 6 UNITED NATIONS Department of Public Information April 2000 Cartographic Section Branching Out – Zimbabwe’s Resource Colonialism in Democratic Republic of Congo 

 Recommendations  Preface

● The Government of Zimbabwe should unilaterally The first version of this report was released withdraw from the SOCEBO logging deal, as it is contrary in August . Since then there have been to peace initiatives in the Democratic Republic of Congo. significant developments which make the ● The Parliament of Zimbabwe should condemn the release of an updated report necessary. corporate ambitions of Zanu-PF, the ruling party, some of which are detrimental to regional peace, and undermine Firstly, logging has commenced in DRC’s political stability. . Secondly, in mid – late ● To demonstrate its commitment to regional peace, the  the United Nations Panel of Experts Government of the Democratic Republic of Congo on the Illegal Exploitation of Natural should cancel the SOCEBO contract to exploit the country’s forests. Resources of the Democratic Republic of Congo (DRC), under an extension of their The UN Security Council should: mandate, carried out further investigations ● Endorse and expand upon the recommendation contained and were able to obtain important new in the Report of the Panel of Experts on the Illegal Exploitation of details about Zimbabwe’s logging ambitions Natural Resources and Other Forms of Wealth of the Democratic Republic of Congo, that ‘conflict timber’ be categorised as a in the DRC. commodity banned from international trade.* Accordingly, Since then the political situation in the UNSC should impose sanctions on all timber exports Zimbabwe has seriously deteriorated, very from the DRC until it can be demonstrated that these exports do not fund or otherwise contribute to the probably increasing President Mugabe’s continuation of conflict. dependence on the DRC’s natural resources to The UN Security Council and the Commonwealth Heads of fund the forces, both political and military, State should: necessary to his political survival. Therefore ● Condemn the Government of Zimbabwe’s ‘resource the logging deal detailed in this report could colonialism’ in Democratic Republic of Congo. well become a central plank in Mugabe’s ● Exert pressure on both Zimbabwe and the DRC to cancel funding of his increasingly despotic regime the proposed  million hectare logging deal because it and corrupt electioneering. poses a severe threat to the regional peace process, sustainable forestry is not possible in the current climate, and because the forests of DRC have been highlighted by the United Nations Environment Programme (UNEP) as one of only  countries where conservation efforts should be concentrated. List of acronyms

The international community, particularly the EU, its member CIO Central Intelligence Organisation states and the Commonwealth, should: DRC Democratic Republic of Congo ● Place an embargo on imports of natural resources that OSLEG Operation Sovereign Legitimacy SOCEBO Société congolaise d’exploitation have been plundered or expropriated by armed factions, or du bois those linked to them. WHCM Western Hemisphere Capital Management * “New criteria on ‘conflict timber’ should be considered…Failure to abide by WHRE Western Hemisphere Resource [the recommended procedures] should be considered to be complicity on the Exploration part of those countries and they should be listed as countries facilitating ‘illicit ZDF Zimbabwean Defence Forces timber’ and ‘conflict timber product’…” Report of the Panel of Experts on the Illegal ZDI Zimbabwean Defence Industries Exploitation of Natural Resources and Other Forms of Wealth of the Democratic Republic of ZFC Zimbabwean Forestry Congo; . Commission  Branching Out – Zimbabwe’s Resource Colonialism in Democratic Republic of Congo

 Introduction Photo / Fran © A P HIS REPORT focuses on Zimbabwe’s logging ambitions in the DRC – potentially the world’s largest ever timber deal. However, it ç should be remembered that this deal ois Mori is justT one strand of the powerful and intricate corporate web created over the past few years by Zimbabwe’s ruling party, Zanu-PF, and the Zimbabwe Defence Forces, in an attempt to capture both foreign and domestic state and private assets. This network has presumably been created to enhance the personal wealth of those involved, to maintain Zanu-PF’s power base and to recoup some of the costs of Zimbabwe’s chaotic military intervention in DRC. The despotic behaviour of the Zimbabwean government in early , in the lead up to the March elections, can only be maintained by the brutal exercise of power; the Zimbabwean army is therefore crucial to Mugabe’s power-base. In early January the army commander issued a statement Zimbabwe’s President Mugabe looking happy after meeting French President stating that “we [the army] will …not accept, let Chirac, Paris; March . The day before, Mugabe said in Brussels that his alone support or salute, anyone who has a different country was ready to withdraw its forces from DRC. They are still there. agenda that threatens the very existence of our sovereignty…”; in effect, that they would only using funds derived from natural resource support a Zanu-PF victory in the elections. The fact exploitation. It could more accurately be regarded as that Mugabe had doubled army pay the week before South-South colonialism. is very possibly related. Given the Lusaka peace process and the proposed A Zimbabwean company whose board comprises withdrawal of troops from DRC by foreign senior Zanu-PF and military figures have effectively governments, perhaps most disturbing is the fact that created the world’s largest logging concession by the Zimbabwe Defence Forces are still planning to gaining rights to exploit  million hectares of forests exploit DRC’s forests. This casts severe doubt on in the DRC: % of total land area and one and a Zimbabwe’s pledges to withdraw troops from the half times the size of the UK. Logging has already DRC, a scenario which would pose a significant commenced in Katanga province, carried out by the threat to the peace process. It accords with other Zimbabwean military in conjunction with a company sources that suggest that even if the DRC conflict called SAB Congo. The export sales arm of SAB ended, a core of Zimbabwean troops would remain Congo is a London based company, African in DRC. Furthermore, Global Witness received Hardwood Marketing Ltd. reports about the current process of fake troop In a deal made with former President Laurent withdrawals whereby troops are being flown into Kabila, but still being actively pursued, the embattled DRC, and then directly back again, creating the leaders of the Zimbabwean government are illusion that they are returning soldiers. desperate to recoup some of the losses they have In short, to obtain personal wealth and to shore incurred in their disastrous intervention in DRC. up Zanu-PF’s political machine, Zimbabwe’s elite are The vehicle for this ‘resource colonialism’ is pursuing the development of a business empire at the SOCEBO (Société congolaise d’exploitation du bois), expense of a country (DRC) which has seen the a joint venture between Zimbabwean military deaths of . million people and where % of controlled OSLEG (the ironically named Operation children born during the war have or will die before Sovereign Legitimacy) and Kinshasa based company the nd birthday. In this, the Zimbabwean Comiex. It appears that DRC has placed most, if not government is complicit in prolonging one of the all of its timber concessions under the SOCEBO world’s bloodiest conflicts. The growing oppression, umbrella. It is unlikely that SOCEBO can achieve its intimidation and violence against the lawful political over-ambitious production and profit targets, but such opposition, white farm owners, black farm workers, a deal would almost certainly see severe social and all to perpetuate the rule of one man, requires economic impacts on local populations, who virtually extensive funding. This funding is being sought from always suffer at the hands of industrial forest even weaker countries – a new colonialism. concessions, massive revenue loss in DRC and The logging deal is just one part of an extensive massive destruction of the country’s forest resources. Zanu PF inspired and controlled business strategy According to the Addendum to the Report of the which has significant implications both in Zimbabwe [UN] Panel of Experts investigating natural resource and for the region. The strategy is devoted to exploitation in the DRC, released in late ,a controlling not just numerous businesses, but the stated aim of SOCEBO is to “contribute to the war infrastructure essential to virtually all business activity effort in the framework of South-South in the region, including energy and transport. The cooperation”. Even in a continent permeated by strategy centralises both money and power under the resource-based conflicts, this blatant assertion is a control of key Zanu-PF politicians and military surprisingly cynical example of perpetuating conflict leaders. Branching Out – Zimbabwe’s Resource Colonialism in Democratic Republic of Congo 

 The timber deal

S DISCUSSED in Section , Zimbabwe’s intentions to exploit DRC’s natural resources are well documented,A and the corporate structure is in place to manage such exploitation. However, Zimbabwe’s experience with Gecamines (see Section .) and the failed floatation of Oryx Diamonds demonstrates that Zimbabwe has not yet been able to rise to the challenge of resource exploitation in such a difficult climate. Expert opinion relating to the timber deal suggests that, once again, a combination of poor judgement (unrealistic optimism) and a lack of management skills and financial resources means that the projected returns from the deal are extremely unlikely to be met, even in small part. However, some large quick returns would be possible if SOCEBO teamed up with an unscrupulous short-term investor, and Africa’s logging industry is riddled with these. Possibly the first public affirmation of Zimbabwe’s intentions to exploit DRC’s rich timber resources was made in an article Global Witness spoke to the author of this piece in The Herald, a pro-Government newspaper, on who confirmed its veracity. Moreover, the tone of the th January . The article was one of many put conversation suggested that all the Zimbabwean out at this time to counter public criticism of agencies involved were acting under centralised Zimbabwe’s cripplingly expensive military direction; the sections which follow hint at where this involvement in DRC. It was essentially a puff piece direction may come from. He stated that the boasting of the country’s close ties with the Zimbabwe Forestry Commission (ZFC) were government of Laurent Kabila, and of the rich “sluggish” in their response, given that the National natural resources that would be available to Railways of Zimbabwe, Air Zimbabwe and Zimbabwe. “…This co-operation has seen the Zimbabwean mining interests had already begun establishment of a rail link between Harare and their operations. He described the ZFC’s role as Lubumbashi,…the shipment of , tonnes of twofold, either to carry out timber exploitation or to copper concentrates from Gecamines….and the act as a consultancy, seconding others to help with moving in of the Forestry Commission to exploit forest management. The timber would be exported as timber in the vast country”. Zimbabwe is self sufficient, although some could be used for domestic consumption in DRC. He also gave the impression that the ZFC were dragging their feet on the project, stating that the bureaucracy on the Zimbabwean side had been slowing things down, and that there was mistrust on the part of the ZFC of their counterparts in DRC. The engine pushing the process forwards is the Zimbabwe Defence Forces. Global Witness provided information relating to SOCEBO to the UN Panel of Experts investigating resource exploitation in the DRC, and their subsequent investigations unearthed interesting new information. Of great interest is that they interviewed President Mugabe himself, in Harare, and that he was able to comment on the deal. This illustrates the high level of importance accorded to it in Zimbabwe. Mugabe stated that logging should have commenced in May  but had been delayed by an inability to pay customs duties to the Zimbabwe Revenue Service on imported machinery.  Branching Out – Zimbabwe’s Resource Colonialism in Democratic Republic of Congo

. The creation of SOCEBO “SOCEBO aims to be the world leader On th January  COSLEG, the Zimbabwe in trading tropical hardwoods.All our Defence Forces (ZDF)/DRC joint venture company operations are environmentally friendly (see Section .), established a subsidiary, SOCEBO – and our products are designed to meet our Société congolaise d’exploitation du bois – to exploit customers specifications in terms of four forest concessions in DRC. The company is delivery time and quality. Sustainable based at No.D Avenue Colonel Ebeya – Kinshasa, forestry management is our business. Our Gombe, DRC. employees are our strength and their development and growth is our concern.” COSLEG hold .% of the shares in SOCEBO, Mission statement of SOCEBO, Société with the remaining .% held by: congolaise d’exploitation du bois. Mawapanga Mwana Nanga – Minister of Finance under Laurent Kabila, appointed by Joseph Kabila as Minister of Fisheries and Livestock. Hemisphere Capital Management (WHCM), a United Kingdom Company with an office in Harare, Abdoulaye Yerodia Ndombasi – Minister of to develop the Katanga concession. WHCM owns Foreign Affairs under Laurent Kabila. % of the shares in the new venture and is Godefroid Tchamlesso – Minister of Defence providing capital and equipment. SOCEBO owns under both Laurent and Joseph Kabila. % of the shares with the remaining % being held by the Congolese state-run Institut National pour Charles Dauramanzi – Global Witness does not l’Etude et la Recherche Agronomique (INERA). It know if this person is the same as Major-General was anticipated that the first timber sales would Dauramanzi, a director of OSLEG. commence in November , and in late  the Francis Zvinavashe – Brother of Vitalis UN Expert Panel received information that the Zvinavashe – commander of the Zimbabwean army. Zimbabwean military were engaged in intensive logging operations in this concession, with SAB- Colin Phiri – Projects Coordinator of the Congo. Zimbabwe Forestry Commission. It was always the intention of the ZDF that they A further joint venture, SAB-Congo, has been actually carry out the logging operations, rather than established between SOCEBO and Western sub-contract a third party company; the Zimbabwe

Zimbabwe troops serving with government allied forces, Mbandaka, DRC; April . © AP Photo / Blaise Musau Branching Out – Zimbabwe’s Resource Colonialism in Democratic Republic of Congo 

Forestry Commission are purely advising on the operations, but these targets are almost certainly over- technical aspects of the project, which is headed by a optimistic. Similarly, the company has probably variety of senior military figures. underestimated start up costs, estimated to be The start-up capital required was just under US$ approximately US$- million per concession. It is million, with the remainder to be made up from this initial investment that SOCEBO lacks, and is borrowing from financial markets (see Section .). probably the only thing that has prevented the The intention is to create four concessions, from operations from commencing. each of which SOCEBO hopes to produce over President Mugabe told the UN Expert Panel that ,m of timber per year at full capacity. commencement of logging operations had been SOCEBO has received the rights to a total land area delayed “owing to an inability to pay the customs of  million hectares: % of the DRC’s total land duties to the Zimbabwe Revenue Service on area; . times the size of the UK. All the concessions machinery imported for the project”. However, the were scheduled to be opened by th April  but directors of SOCEBO told the Panel that the delay the start dates have not been met. The four was caused by lack of capital. The Panel received concessions are located in Katanga, Kasai, Bandundu “credible reports” that the initial start-up capital of and Bas-Congo Provinces. $, had been embezzled by representatives of SOCEBO originally expected to make profits of the diamond buying office of another COSLEG up to US$ million in the first three years of subsidiary, the Mineral Business Company.

Log Exports African Hardwood Marketing Ltd. “SOCEBO was set up …to 2 Millwood St., London W10 6EH Tel: +44 208 960 4153 / +44 7768 44 69 55 and the UK provide for Zimbabwe Fax: +44 208 960 6037 covering the incremental 1/23/02 Connection costs of their peacekeeping Dear ... force [in DRC].” I hope this letter finds you well, per your request, a brief overview of our company As stated above, the Elkin Pianim, owner of African and products. African Hardwood Marketing is the export sales arm of SAB Congo export sales arm of Hardwood Marketing Ltd, the SARL, a forest products firm with concessions in the Democratic Republic of Congo. SAB-Congo is African export sales arms of a SAB produces 11,000 cubic meters of logs per month, and the schedule below Hardwood Marketing details the following on a per species basis: commercial name (where available), SOCEBO joint venture logging in scientific name, local name, monthly output volume in cubic meters of logs.The logs Ltd, of 2 Millwood St., Katanga Province. 25th January are converted into planks by onsite sawmills, air-dried, and then exported by road London W10.The 2002. and rail to ports in and Tanzania. owner of both ... WHCM and SAB- Elkin Pianim Congo is Elkin Pianim, former husband of Elizabeth Murdoch, daughter of media tycoon Rupert Murdoch. African Hardwood Marketing claims Above: Letter from African Hardwood 3 to have an output of 11,000m of sawn timber per month and, Marketing obtained by Global Witness. according to Mr Pianim,“This timber has all been harvested using current best practice in forestry management, and we are working toward obtaining certification from internationally recognized agencies.” ● Realistic start up costs per concession are high, as discussed above. However, according to the UN Panel of Experts, they received The ZDF and its affiliates do not have this kind of money available, ‘credible reports that Zimbabwean military personnel have been and it is unlikely that any legitimate bank would lend against such a carrying out intensive logging operations in the SOCEBO concession in risk. However, Global Witness believes that, based on experience in Katanga, apparently in conjunction with SAB-Congo’. Elkin Pianim Cambodia and Liberia, it would be possible to attract investment confirmed to a Global Witness investigator that the timber originates in from south-east Asian, French, Lebanese or other logging Lubumbashi, in Katanga Province,7 but that he has hired specialists to companies.There are rumours of Malaysian involvement in this carry out the logging operations. Mr Pianim also stated that he had deal, but Global Witness’ investigations did not expose such a link. only been in the timber business for one year, so his assertion that However, Malaysia has a track record in investing in Zimbabwe and AHM operate using current best practice in forestry management is these interests are still in-country. unlikely to be true. ● Transportation would be extremely difficult and costly. Mr Pianim also owns a company called Western Hemisphere Resource Exploration, which is registered in the Isle of Man.This ➛ Some of the concessions are a very long way from suitable company has formed a diamond mining joint venture, this time with transport routes. COSLEG, the Societé Congolaise d’exploitation minière. It is highly ➛ In many areas water transport would be necessary and in DRC this likely that some of the necessary investment required to exploit DRC’s would mean that there would be no means of controlling or natural resources has been provided by companies linked to Elkin monitoring the timber in transit.Whilst in some ways this is an ideal Pianim. scenario for illegal loggers, it also creates the possibilities of timber African Hardwood Marketing is actively looking for markets and theft – which could jeopardise the project. already claims to export timber to Germany.The timber from the ➛ Katanga concession is being transported both by rail through Zambia The nearest concession to Kinshasa is 60km, which with bad roads and Zimbabwe for use in South Africa, and via Tanzania for export means one log truck can do one trip per three days.They would from Dar Es Salaam.The other concessions are further north and, due need 40 trucks to cope with the planned extraction rate, each one to poor road conditions, it is likely the timber would be transported by costing US$50,000. In addition they would need the drivers, fuel river. etc. Currently 80% of logs exported from DRC transit via Congo- Timber in DRC has been exploited for over 60 years by what has Brazzaville and are destined for the European market. Judging by effectively become a cartel, which includes French, Belgian and some regional trends France could become a major importer (as it is already German interests. Unless a company is a member of this cartel, it is from Cameroon, Gabon and Liberia). considered that operating timber concessions would be extremely Whilst logging operations have actually commenced, there are difficult, if not impossible. Entry into the cartel is not easy as the several major obstacles to the project achieving its own targets: pickings are good.  Branching Out – Zimbabwe’s Resource Colonialism in Democratic Republic of Congo

. Supporting information Before the release of the first edition of this report in August , the Zimbabwean authorities did their best to conceal the existence of the SOCEBO deal. For example, in May  a senior official within the Zimbabwean Ministry of Environment and Tourism, responsible for the ZFC, denied that a company had been established to operate logging concessions in DRC, denied that military affiliates OSLEG or COSLEG were involved, and denied that the ZFC had actually visited the DRC. He did admit that the ZFC was conducting a cost-benefit analysis of exploiting timber in the south-eastern area of DRC, and that concession maps had been drawn up. Many of these activities were carried out by an employee of the ZFC, who visited DRC in May- August  and in , both before and after State Activities Board of the ZFC. The call SOCEBO was formally established. He was carried referred to logging in DRC, and on the speaker on at least one, if not all of these occasions, by phone the person was heard to say that nothing helicopter, suggesting collaboration with the military. has been done yet. Global Witness clearly heard (At this time the current Minister of Agriculture, the “not yet”. He said that they did not know of Hon. J M Made - then Head of Agricultural anything going on at board level, but they may Extension Services - was involved in meetings setting know something at management level. Global up agricultural projects in DRC. These projects never Witness were not able to ascertain the identity of came off). Subsequently the ZFC drew up the harvest the person, other than that he is the son of a plans for the DRC concessions. government minister. In addition to the admission by Elkin Pianim of African Hardwood Marketing that logging had Prior to the release of Global Witness’ report, and commenced in Katanga, the following points support prior to the investigations by the UN Panel of Experts the theory that an extensive logging strategy is being in mid , the closest to an admission of the created. existence of the deal, by the authorities, was on a ● A transport operator interviewed by Global rather bizarre internet site hosted by Global Analysis Witness met with some businessmen in DRC in Zimbabwe. An article accused Global Witness of April , who mentioned that Zimbabwe had being ‘spy agents’ linked to MI, but confirmed that a been granted ‘huge’ timber concessions in DRC. logging deal had been agreed. These were not yet operational. Apparently “huge  trees are involved. One tree will take up a ton . Will the deal happen as planned? truck”. This person’s impression was that the timber was for US buyers, as this was inferred by Based on past experience, Global Witness believes the another business contact. timber deal will not achieve its projected returns. Costs are estimated far too low, and profits too high ● In late /early  a Zimbabwe based bank and too soon. The Zimbabwean agencies concerned made several enquiries, presumably checking do not possess the necessary management or forestry investment security, on behalf of a client wanting skills demanded by the project, they lack financial to import timber to Zimbabwe from DRC. It was and other resources, and are underestimating the apparent the bank was thinking of investing and difficulties the project will face. wanted advice on the feasibility of the project. However, again based upon experience elsewhere, This is in line with SOCEBO’s intention to there is a very serious risk that the project will be borrow from financial markets. underwritten by foreign investors, as the involvement ● In May  Global Witness overheard a of Elkin Pianim demonstrates. There are numerous telephone conversation with a member of the foreign logging companies (especially south east Branching Out – Zimbabwe’s Resource Colonialism in Democratic Republic of Congo 

Asian, Lebanese and French) which actively target Malaysian involvement in the timber deal would scenarios such as the one presented in DRC. The lack seem to have some foundation, although it could also of rule of law, enforcement capabilities and a be that Zimbabweans would cite Malaysian structured tax regime make DRC a honey pot for involvement simply because they are already involved unscrupulous loggers. Other areas in which Global in so much and are the most likely candidates. Witness works, for example Cambodia, Liberia and In  Mugabe’s government awarded Malaysia’s Cameroon, had no problem attracting companies YTL Corporation a % stake in Hwange power whose intention is to ‘mine’ the forests. It may well be station, usurping an existing competitive tendering that SOCEBO fails to achieve the returns it hopes for. process, whilst the Malaysian Celcom company The kind of company attracted to this type of deal approached Mugabe directly to benefit from the Posts probably won’t hesitate to plunder the forests at an & Telecommunication Corporation’s new cell phone unsustainable rate and simultaneously to bribe senior project. Both of these deals, according to news officials in both Zimbabwe and DRC to look the reports at the time, were allegedly connected to the other way regarding timber royalties and taxes. son of Malaysia’s Prime-Minister Mahathir Zimbabwe has already lost heavily through Mohammed. The Malaysian Hasedat Corporation potentially profitable ventures that went wrong, such cut a deal with the Development Trust of Zimbabwe as the Gecamines cobalt operation and Oryx to secure logging rights in Zimbabwe’s forest diamonds’ failed share flotation. So although the reserves. A chorus of protest against these deals projected returns are extremely unlikely to be came from Zimbabwean businessmen, the achieved, a few well-placed individuals would stand international donor community and, in the latter to become extremely rich – or richer! case, forestry experts and conservationists. No one seems quite clear what resulted from some . The Malaysian element of these deals as a certain amount of backtracking took place in the face of the protests. The YTL deal Zimbabwe and Malaysia enjoy close commercial and collapsed when it was cancelled by the government, political links, which seem often to be intertwined. In apparently at the behest of the World Bank. The some well documented cases Malaysian interests timber deals did not go ahead, but the general appear to have been given preferential treatment in impression is that the Malaysians are still very much various business deals, allowing them to avoid, for involved with senior figures and that the deals are example, statutory competitive bidding processes for dormant rather than dead. public contracts. For these reasons the suspicion of

Forest clearing for timber and land, DRC. © Nick Robinson / Panos Pictures  Branching Out – Zimbabwe’s Resource Colonialism in Democratic Republic of Congo

 Zimbabwean military friends, in particular General Vitalis Zvinavashe, the head of the Zimbabwean army. involvement in DRC During this period Mnangagwa developed a regional strategy to gain control over the region’s rich natural resources, and to take over and expand the infrastructure necessary to transport and market the he timber deal, which is the main end product. This has resulted, so far, in several focus of this report, is just one of major areas of interest: Oryx Diamonds, a joint many business interests being venture between the ZDF, the late Laurent Kabila developed by the Zimbabwean and various business interests; the New Limpopo military in DRC, and comes under Bridge Project, the Beitbridge Railway and the theT same complex corporate umbrella as many of the National Oil Company of Zimbabwe. The timber others. It is worth describing, in brief, the nature of deal will be another major element of this portfolio. these deals to put the timber deal in context, both in terms of its corporate connections, but also the great . Operation Sovereign Legitimacy incentive it offers to offset what has so far been an (OSLEG) – the corporate structure investment disaster for Zimbabwe. develops At the heart of this is the Speaker of the Zimbabwean Parliament, . A From the beginning of Zimbabwe’s involvement in former Chief of Intelligence in Zanu-PF’s military the war in DRC the ZDF had provided advisors to wing, Mnangagwa has extensive military experience Laurent Kabila to help him overthrow Mobutu, as and eastern-bloc training, which resulted in his part of Mugabe’s general support, which also receiving the post of Minister of State Security, in included the provision of US$ million to Kabila. charge of the Central Intelligence Organisation This investment resulted in some quick returns: the (CIO), in the s. At the same time he was Zanu- Zimbabwe Defence Industries’ General Manager, PF treasurer and began to develop the party’s now Col. Dube, secured a $ million* deal to supply extensive business interests., food, uniforms, boots and ammunition to Kabila. In , because of his party loyalty and military The contract to transport these goods went to experience, he was sent by Mugabe to DRC to Zvinavashe Transport, a trucking company owned by investigate the heavy human and material losses Vitalis Zvinavashe the head of the army. suffered by the ZDF. Apparently, at around this time Two more deals followed a special request, in the leadership in the Defence Ministry began to , by Mugabe to Laurent Kabila: report directly to him, rather than to Moven ● Congo-Duka: The formation of Congo-Duka, Mahache, the Minister of Defence. In early  a joint venture between Zimbabwe Defence Mugabe ordered Mnangagwa to take over Industries (ZDI) and its Congolese equivalent, responsibility for the ZDF in DRC, effectively General Strategic Reserves. It was intended that usurping Mahache., Mnangagwa used this this company would supply consumer goods in opportunity to forge close commercial links with DRC. ZDI received government loan guarantees Laurent Kabila, in conjunction with ZDF allies and totalling Z$. billion (US$.m). The company failed to excite Zimbabwean businesses due to government manipulation of payment procedures which converted US dollars to a lower managed exchange rate against the Zimbabwean dollar. Consequently Congo-Duka became bankrupt. ● Gecamines: The appointment of long-time Zanu-PF supporter Billy Rautenbach as head of Gecamines, the DRC state owned cobalt mining company. This deal was forged at a meeting in Kabila’s office at which Rautenbach, Mnangagwa and another man purported to be representing Mugabe represented the Zimbabwean side.† Although this operation produced around US$ million worth of cobalt monthly it is believed that little money was received by the Zimbabwean government, leading to speculation that the money was siphoned off by senior figures. In  Rautenbach was dismissed by the Congolese. At the same time the South African authorities were closing in on Rautenbach for tax reasons, which made his exports from Durban difficult, therefore compromising the viability of Gecamines’ organisation.

* It is unclear whether this is US or Zimbabwean dollars. † According to a journalist interviewed by Global Witness, it is likely that the Congolese signatory on all DRC deals was Dr Pierre-Victor Mpoyo, Minister of State in President Kabila’s office, whose signature appears on virtually all natural resource deals including Gecamines. He was subsequently sacked by Joseph Kabila. Branching Out – Zimbabwe’s Resource Colonialism in Democratic Republic of Congo  © AP Photo / Blaise Musau

Zimbabwe soldiers loading ammunition onto planes, Mbandaka, DRC; April . These soldiers were on their way home as part of the peace process. However, the Zimbabwean army are still operating in DRC, exploiting the country’s resources.

In mid- Mugabe ordered over , troops, a by the state of the Democratic Republic of Congo”. third of the ZDF’s strength, to deploy in DRC. As discussed below, Zimbabwe initially publicised Laurent Kabila pledged to pay for this support in US its commercial intentions in DRC to appease growing dollars, but was unable to honour this pledge. Instead public concern about its expensive military he offered mining, agricultural and forestry involvement. But as time went on two main factors concessions. Following the failure of their previous led Zimbabwe to cover up the depth of its investments the Zimbabwean’s saw the opportunity to involvement: several of its major investments recoup their losses. The ZDF were already deployed embarrassingly and expensively failed, and the in the resource-rich Kasai Oriental and Katanga extensive international criticism of the role of DRC’s Provinces, and were ideally placed to guard these neighbours profiting from the war. resources for their own benefit. In late November  the UN Expert Panel on In late  Congo-Duka was replaced by DRC visited Zimbabwe but failed to obtain meetings OSLEG (Pvt.) Ltd. This company is regarded as the with Mugabe or most of his senior ministers, who all commercial arm of the ZDF, and is the key to their claimed prior commitments. They did meet with business interests in DRC, including timber. Its Foreign Affairs Permanent Secretary Willard directors are listed as Lt. Gen. Vitalis Zvinavashe, Job Chiwewe who, according to the Zimbabwe Whabara, the Permanent Secretary of the Ministry Independent, told the panel ‘not to concentrate on of Defence, Onesimo Moyo, the Director of the Zimbabwe and its allies in the Congo because they Minerals Marketing Corporation of Zimbabwe and were not exploiters but liberators’. “I urged them to Isiah Ruzengwe, the General Manager of the limit their investigations to the aggressors and their Zimbabwe Mining Development Corporation. internal rebel allies and not to include the SADC OSLEG is represented in DRC by Zvinavashe’ allies in their probe…The context of [the SADC brother, Col. Francis Zvinavashe, retired Major-Gen. allies] relationship with the DRC government exclude Dauramanzi and Brigadier John Moyo. them from being the focal point of the To match their military strength with business investigation”. Accordingly, the UN Expert Panel expertise OSLEG entered into a joint venture with report contained very little information about Comiex-Congo, a Kinshasa based company whose Zimbabwe’s role.* main shareholder was Laurent Kabila. The joint As discussed above, in late , with an extended venture is known as COSLEG (Pvt.) Ltd. According mandate, the UN Expert Panel uncovered significant to the company’s partnership agreement OSLEG has information relating to Zimbabwe’s role in the DRC. “the resources to protect and defend, support logistically, and assist generally in the development of * It should be noted that a plethora of information is available to the commercial ventures to explore, research, exploit and diligent researcher, so it is probably fair to say that the Expert Panel market the mineral, timber, and other resources held could have been more thorough.  Branching Out – Zimbabwe’s Resource Colonialism in Democratic Republic of Congo

. The Structure of ZDF’s holdings in DRC

Joint Zimbabwe Economic Zanu-PF Defence Committee Forces of ZDF

Financial secretary Member V. Zvinavashe E. Mnangagwa Commander ZDF

Comiex- OSLEG (Pvt) Congo Joint venture Ltd

COSLEG Subsidiary

SOCEBO Western (Société Hemisphere congolaise Joint venture Capital d’exploitation Management du bois)

owned by Elkin Pianim

SAB–Congo African Export (logging Hardwood markets incl. Katanga Export sales arm Marketing S.Africa concession) Ltd Germany

owned by Elkin Pianim

. The cost of Zimbabwe’s intervention run into the hundreds, Zimbabwe is believed to have in DRC lost MiG fighters, helicopter gunships, tanks and Zimbabwe’s intervention has incurred heavy costs in artillery. men, materiel and money. These facts add to the In January  the Zimbabwean Finance government’s incentive to recoup at least some Minister said the country’s (then) two year financial losses, which they could use to justify their involvement had cost Z$ billion (US$m), – but role in the country. Michael Qunitana of Africa Defence Journal said In mid  the Zimbabwean government these figures should be treated with caution, stating admitted to the press that  troops had been killed, that an estimated Z$ billion (US$. m) not although the rebel forces opposing Kabila claimed to mentioned by the Minister had been spent on have killed over . Whatever the true facts are, mounting an air bridge to supply their army, and new they are suppressed because detailed casualty figures equipment (gunships etc). Other sources stated that are not released by the ZDF, other than various non- the official figures were direct costs only, and omitted specific and probably inaccurate admissions to the the funds necessary to replace and renew equipment. press. In addition to troop losses, which now certainly This was an additional cost of Z$ billion. Branching Out – Zimbabwe’s Resource Colonialism in Democratic Republic of Congo  © Michel Gunther / Still Pictures

Mayombe Rainforest, DRC.

 Conclusion cost of the war, and it will be hard to maintain this lie through the Presidential elections in . DRC’s timber provides a massive incentive to the unscrupulous logger, and it is an incentive the ZDF is IMBABWE has made no secret of its actively pursuing. The logging has begun so, for the wish to exploit the natural resources of social, economic and ecological future of DRC, and DRC. However, it is probable that indeed for regional security and stability, the with the mounting expenses of the international community must take action. election campaign, especially the need In the recent past the DRC has been racked by a to carryZ out intimidation of the opposition by both the resource based war which has resulted in millions if armed forces and ad hoc gangs, that Mugabe more deaths, appalling atrocities and the social and than ever needs to make the DRC pay. The doubling economic breakdown of the country. That of army pay in January  will add to this burden. Zimbabwe, a country that should be taking a leading Where will Mugabe find the money? Zimbabwe is in role in pursuing regional peace, is in fact attempting economic tatters and such gestures of largess must be to profit by prolonging military intervention, is a funded from somewhere. Certainly, the country has demonstration of the moral bankruptcy of the received Libyan support, but it is highly likely that the nation’s leadership. It is evident that they will stop at government will look to its operations in the DRC. nothing to cling to power. What started as opportunism is now probably a History shows that in the absence of proper forest necessity given the parlous state of Zimbabwe’s management, tropical forests are mined to the economy, which is due in large part to their military detriment of the country concerned. More involvement in DRC, together with intimidation and importantly in the short to medium-term, any natural oppression of their own citizens. It is not just a resource exploitation by warring factions, especially question of recouping some of their losses: if foreign-backed ones, will seriously delay if not Mugabe cannot rescue the economy, and is seen as completely derail the potential for lasting peace and the man who brought about Zimbabwe’s Vietnam in stability in DRC. It is therefore imperative, given that DRC, then his political future is at stake. The DRC’s timber is destined for foreign markets, that the government has already lied to the population, and to international community take strong action to the multilateral lending institutions about the true prevent the Zimbabwean deal going ahead.  Branching Out – Zimbabwe’s Resource Colonialism in Democratic Republic of Congo

References

 Mugabe security ‘will not accept’ defeat, Michael Hartnack, The Times of London; th January .  Letter received by Global Witness from Elkin Pianim of African Hardwood Marketing Ltd, by email; rd January .  Addendum to the report of the Panel of Experts on the Illegal Exploitation of Natural Resources and Other Forms of Wealth of the Democratic Republic of Congo. S//.  Interview with senior journalist; May .  Mortality Study, Eastern Democratic Republic of Congo, the International Rescue Committee; February-April .  Telephone conversation with Chris Chivinge, journalist with The Herald; th May .  Telephone conversation between Elkin Pianim and Global Witness investigator; th January .  Interview with anonymous Zimbabwean government official; rd May .  Anonymous informant interviewed by Global Witness; th January .  Interview with anonymous government official (A), Zimbabwe; th May .  Interview with Zimbabwean air transport operator; th May .  Interview with anonymous government official (B), Zimbabwe; th May .  Interview with anonymous public sector worker; nd May .  British Agenda for Zimbabwe, www.glob.co.zw; th June .  Cutting deals to cut down trees, Iden Wetherall, Mail & Guardian; th November .  Zesa/WTL deal collapses, Busani Bafana, Zimbabwe Independent; th December .  Mnangagwa in charge of DRC operations, Brian Hungwe, Zimbabwe Independent; th November .  All reported widely.  The New Scramble for Africa, anon; September .  UN DRC probe team to return to Zim, Dumisani Muleye, Zimbabwe Independent; th November .  Zim sinks $m into DRC war, Kindness Paradza, Financial Gazette; th May .  Newspaper article, MISA; rd January .  DRC war costs taxpayers $ billion in  months. © Michel Gunther / Still Pictures Branching Out – Zimbabwe’s Resource Colonialism in Democratic Republic of Congo 

Global Witness’ previous publications also available on our website: http://www.globalwitness.org

“Can Controls Work? – A Review of the Angolan Diamond Global Witness is a British based non-governmental Control System” organisation which focuses on the links between published September 2001 environmental and human rights abuses, especially “Taylor-made—The Pivotal Role of Liberia’s Forests and Flag the impacts of natural resource exploitation upon of Convenience in Regional Conflict” countries and their people. Using pioneering published September 2001 investigative techniques Global Witness compiles “The Credibility Gap — and the Need to Bridge It information and evidence to be used in lobbying Increasing the pace of forestry reform” and to raise awareness. Global Witness’ information published May 2001 is used to brief governments, inter-governmental “Review of the Sierra Leone Diamond Certification System and organisations, NGOs and the media. Global Proposals and Recommendations for the Kimberley Process for Witness has no political affiliation. a Fully Integrated Certification System (FICS)” published April 2001 “Conflict Diamonds — Possibilities for the Identification, Certification and Control of Diamonds” published June 2000 “Chainsaws Speak Louder Than Words” published May 2000 Acknowledgements “Timber Takeaway — Japanese Over-comsumption — the Forgotten Campaign” Much of the information in this report was published March 2000 obtained on a Global Witness investigation in “The Untouchables — Forest crimes and the concessionaires— Zimbabwe in May 2001. Global Witness would can Cambodia afford to keep them?” like to acknowledge the support and advice of published December 1999 many courageous Zimbabweans who provided “A Crude Awakening — The Role of the Oil and Banking information and context at considerable risk to Industries in Angola’s Civil War and the Plundering of State themselves, and in particular to the independent Assets” media who uncovered Zanu-PF’s corporate published December 1999 web, to which this report adds a small part. “Made in Vietnam — Cut in Cambodia Global Witness would also like to thank the How the garden furniture trade is destroying rainforests” Zimbabwean government for hosting a published April 1999 conference at Victoria Falls, in April 2001, “Crackdown or Pause — A Chance for Forestry Reform in focusing on mitigating the effects of armed Cambodia?” conflict on the environment.This supreme irony published February 1999 provided Global Witness with the perfect “A Rough Trade — The Role of Companies and Governments excuse to carry out its investigations. in the Angolan Conflict” published December 1998 As ever, nothing would have been possible “Going Places — Cambodia’s Future on the Move” without the support of Global Witness’ published March 1998 dedicated team of volunteers and staff. “Just Deserts for Cambodia — Deforestation & the Co-Prime Design by Dan Brown ([email protected]). Ministers’ Legacy to the Country” published June 1997 Printed on 100% unbleached recycled paper. “A Tug of War — the Struggle to Protect Cambodia’s Forests” ISBN 1 903304 05 9 published March 1997 “Cambodia,Where Money Grows on Trees — Continuing Abuses of Cambodia’s Forest Policy” published October 1996 “RGC Forest Policy & Practice — the Case for Positive Conditionality” published May 1996 “Corruption,War & Forest Policy — the Unsustainable Exploitation of Cambodia’s Forests” published February 1996 “Thai-Khmer Rouge Links & the Illegal Trade in Cambodia’s Timber” published July 1995 “Forests, Famine & War — the Key to Cambodia’s Future” published March 1995

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