Democratic Republic of Congo
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DRC Reconciliation report for the year 2012 (Final) DEMOCRATIC REPUBLIC OF CONGO EXECUTIVE COMMITEE OF THE EXTRACTIVE INDUSTRIES TRANSPARENCY INITIATIVE RECONCILIATION REPORT FOR THE YEAR 2012 December 2014 DRC Reconciliation report for the year 2012 (Final) This translation into English of the report aims to facilitate understanding by stakeholders, but should not be regarded as the original version. In case of discrepancy between the original French version and this text, please refer to the original French version. Moore Stephens LLP | P a g e 2 DRC Reconciliation report for the year 2012 (Final) TABLE OF CONTENTS INTRODUCTION ............................................................................................................... 6 Background ................................................................................................................................... 6 Objective ................................................................................................................................... 6 Nature and extent of our work ......................................................................................................... 6 1. EXECUTIVE SUMMARY ........................................................................................... 8 1.1. Reconciliation work results ..................................................................................................... 8 1.2. Revenues from the extractive sector .................................................................................... 18 1.3. Production of the 2012 extractive sector .............................................................................. 21 1.4. Exports of the 2012 extractive sector ................................................................................... 21 1.5. EITI Scope ............................................................................................................................ 22 1.6. Completeness and Accuracy of Data ................................................................................... 23 2. APPROACH AND METHODOLOGY ...................................................................... 26 2.1. Scoping Study....................................................................................................................... 26 2.2. Data Collection ..................................................................................................................... 26 2.3. Reconciliation and Investigation of Discrepancies ............................................................... 26 2.4. EITI Data Assurance Process .............................................................................................. 27 2.5. Disaggregation level ............................................................................................................. 27 2.6. Basis of Reporting ................................................................................................................ 27 3. CONTEXTUAL DATA OF THE EXTRACTIVE SECTOR ........................................ 28 3.1 Regulatory framework and context of the hydrocarbons sector ........................................... 28 3.2 Regulatory framework and context of the mining sector ...................................................... 33 3.3 State Participation in the Extractive Sector .......................................................................... 39 3.4 Policy of contract disclosure ................................................................................................. 43 3.5 Projects of reform in the Extractive Sector ........................................................................... 43 3.6 Beneficial Ownership ............................................................................................................ 44 3.7 Collection and distribution of extractive sector revenues ..................................................... 45 3.8 Contribution of the extractive sector ..................................................................................... 48 3.9 Audit practices in the DRC ................................................................................................... 51 4. DETERMINATION OF THE EITI SCOPE ................................................................ 53 4.1. Analysis of materiality ........................................................................................................... 53 4.2. DRC 2012 EITI Standards– Payment flows ......................................................................... 75 4.3. DRC 2012 EITI Standards – Extractive companies ............................................................. 78 4.4. DRC 2012 EITI Standards – Public entities ......................................................................... 81 5. RECONCILIATION RESULTS ................................................................................ 83 5.1. Hydrocarbons sector ............................................................................................................ 83 5.2. Mining sector ........................................................................................................................ 90 5.3. Production and export data of the extractive sector ........................................................... 120 Moore Stephens LLP | P a g e 3 DRC Reconciliation report for the year 2012 (Final) 6. ANALYSIS OF EITI DATA .................................................................................... 121 6.1. Government Revenues ....................................................................................................... 121 6.2. Social payments ................................................................................................................. 126 6.3. Other Significant Payments ................................................................................................ 127 6.4. Sub National Transfers ....................................................................................................... 128 6.5. Specific declaration of the SICOMINES ............................................................................. 129 6.6. Loan and Grants ................................................................................................................. 130 7. FINDINGS AND RECOMMENDATIONS ............................................................... 131 ANNEXES ..................................................................................................................... 137 Annex 1: profile of selected oil companies within the reconciliation scope ................................ 138 Annex 2 : profile of selected mining companies within the reconciliation scope ....................... 140 Annex 3: Structure of the capital and beneficial ownership – oil companies .............................. 145 Annex 4 : Structure of the capital and beneficial ownership – mining companies ..................... 147 Annex 5 : Oil permits Register ..................................................................................................... 155 Annex 6: Declarations reliability– Oil companies ......................................................................... 158 Annex 7 : Declarations reliability– Mining companies ................................................................. 160 Annex 8 : Production of Hydrocarbons data ................................................................................ 168 Annex 9: Production of mines data .............................................................................................. 169 Annex 10: Data mining exports in quantity and value ................................................................. 174 Annex 11 : Table of Infrastructures realisation- SICOMINES ..................................................... 177 Annex 12: Unilateral declarations of the Government Agencies ................................................. 178 Annex 13: Social Payments details – Mining Sector ................................................................... 181 Annex 14: Map of oil blocks of sedimentary basins of the DRC .................................................. 193 Annex 15: Contacted or involved team in the 2012 EITI reconciliation ...................................... 194 Moore Stephens LLP | P a g e 4 DRC Reconciliation report for the year 2012 (Final) List of abbreviations AMR Assessment Notice AFE Financial agencies of the state APPA Association of Oil Producers’ African Countries BCC Central Bank of Congo CAMI Mining Cadastre CDF Congolese Democratic Franc CE Executive Committee CPP Production Sharing Contract DD Customs duties DE Mining Entry Rights DESC Economic, Social and Cultural Rights DGDA Customs and Excise Authority DGI Tax Authority DGRAD Revenue Department DRKAT Provincial Directorate of Katanga’s Revenues EPE Public Entities MSG EITI multi-stakeholder group IBP Corporate Tax IER Special Payroll Tax on expatriates remuneration IGF General Inspection of Finance IM Tax on disposals IPR Payroll Tax ISF Special Fixed-Rate Tax EITI Extractive Industries Transparency Initiative JV Joint-Venture MECN-T Ministry of Environment, Nature Conservation and Tourism PAR Mitigation and Rehabilitation Program PBIC BIC Withholding on industrial and commercial profits. PGE Environmental Management Plan PE Exploitation Permits PER Discharges Exploitation Permits PR Research Permits PEPM Small Mine Exploitation Permits POM Platform of Civil Society Organizations involved in the mining sector