Congo Kinshasa Documents - UN report on illegal resource exploitation

Author: United Nations (Expert panel appointed by the Secreatry-General)

Date: 16 October 2002

Title: Final report of the Panel of Experts on the Illegal Exploitation of Natural Resources and Other Forms of Wealth of the Democratic Republic of the Congo

Internal reference: Parts of [S/2002/1146]

Original language: French (translation into English by UN).

Concerning: The UN expert panel reports to the UN Security Council on the illegal exploitation of natural resources of Congo Kinshasa (DRC). The panel concludes on widespread illegal operations spearheaded by the Ugandan and Rwandan occupyers and the Kinshasa government together with its Zimbabwean ally. The panel recommended sanctions against several companies and persons involved in the illegal businesses.

Source: UN Security Council

Contents
Paragraphs
I. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1–11
II. Change in tactics by elite networks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12–21
III. Government-controlled area . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22–64
IV. Rwanda-controlled area . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .65–96
V. Uganda-controlled area. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97–131
VI. Collaboration of the Panel with the Porter Commission in Uganda . . . . . . . . . . 132–138
VII. Transit and end-user trade issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139–148
VIII. Observations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .149–154
IX. Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .155–160
X. Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .161–188

Abbreviations

I. Introduction

1. The Security Council, in a statement by its President dated 19 December 2001 (S/PRST/2001/39), requested the Secretary-General to renew for six months the mandate of the Panel of Experts on the Illegal Exploitation of Natural Resources and Other Forms of Wealth of the Democratic Republic of the Congo, and asked the Panel to submit both an interim and a final report. The new mandate stipulated that the reports should include the following:

2. The Security Council also stressed the importance of the Panel’s maintaining a high level of collaboration with all the Congolese players, governmental as well as non-governmental, throughout the national territory.

3. The Panel submitted to the Security Council an interim report (S/2002/565) on 22 May 2002. At the request of the Council, the Panel responded in writing to questions and comments from Council members regarding the interim report and the Panel’s ongoing work. Prior to presenting its interim report, and at the request of the head of the Security Council mission to the Great Lakes region, the Panel travelled to Pretoria on 28 April to brief the mission’s members.

4. To orient its work under the current mandate, the Panel developed two successive plans of action, which were transmitted to the Council. Under these plans, fact-finding focused on diamonds, gold, coltan, copper, cobalt, timber, wildlife reserves, fiscal resources and trade in general.

5. The Panel determined that a central focus of its work should be gathering information about politically and economically powerful groups involved in the exploitation activities, which are often highly criminalized. As a result, the Panel developed the central concept of the elite network (outlined in section II) as an operational thesis.

6. In organizing its investigations, the Panel divided the Democratic Republic of the Congo into three areas, namely, the Government-controlled area, the Rwanda-controlled area and the Uganda-controlled area. These descriptors are based on the identity of the actors that constitute the three principal networks involved in the exploitation. The Panel also concluded that each of these three areas, while conforming to the Panel’s understanding of the elite networks, featured substantive variations.

7. The Panel obtained information from a wide variety of sources, including from Governments (civilian and military representatives), intergovernmental organizations, non-governmental organizations, businesses and private individuals. Owing to the nature of its mandate, gaining access to information has been difficult. Nevertheless, the Panel collected well-substantiated and independently corroborated information from multiple sources. These knowledgeable sources provided documents and/or eye-witness observations. It is this type of information — consisting mostly of documentary evidence — that the Panel has relied on its report.

8. The Panel has operated under a reasonable standard of proof, without recourse to judicial authority to subpoena testimony or documents. It obtains information from sources on a strictly voluntary basis. Furthermore, the Panel has made every effort to fairly and objectively evaluate the information it has gathered.

9. Throughout its work, the Panel has paid close attention to the evolution of the peace process in the Democratic Republic of the Congo, as well as that in neighbouring Burundi. The Lusaka Ceasefire Agreement of 1999 and the Arusha Agreement on Peace and Reconciliation, of 2000, served as important points of reference for its work. The Sun City, Pretoria and Luanda Agreements have also informed the Panel’s work.

10. The Panel was composed as follows:
Ambassador Mahmoud Kassem (Egypt), Chairman
Jim Freedman (Canada)
Mel Holt (United States of America)
Bruno Schiemsky (Belgium)
Moustapha Tall (Senegal).

11. Two part-time technical advisers, Gilbert Barthe (Switzerland) and Patrick Smith (United Kingdom of Great Britain and Northern Ireland), also served with the Panel. In addition, two political officers, an administrator and a secretary assisted the Panel.

II. Change in tactics by elite networks

12. The regional conflict that drew the armies of seven African States into the Democratic Republic of the Congo has diminished in intensity, but the overlapping microconflicts that it provoked continue. These conflicts are fought over minerals, farm produce, land and even tax revenues. Criminal groups linked to the armies of Rwanda, Uganda and Zimbabwe and the Government of the Democratic Republic of the Congo have benefited from the microconflicts. Those groups will not disband voluntarily even as the foreign military forces continue their withdrawals. They have built up a self-financing war economy centred on mineral exploitation.

13. Facilitated by South Africa and Angola, the Pretoria and Luanda Agreements have prompted the recent troop withdrawals from the eastern Democratic Republic of the Congo. Welcome as they may be, these withdrawals are unlikely to alter the determination of Rwanda and Zimbabwe, and Ugandan individuals, to exercise economic control over portions of the Democratic Republic of the Congo. The departure of their forces will do little to reduce economic control, or the means of achieving it, since the use of national armies is only one among many means for exercising it. All three countries have anticipated the day when pressure from the international community would make it impossible to maintain large forces in the Democratic Republic of the Congo. The Governments of Rwanda and Zimbabwe, as well as powerful individuals in Uganda, have adopted other strategies for maintaining the mechanisms for revenue generation, many of which involve criminal activities, once their troops have departed.

14. The Uganda People’s Defence Forces continue to provoke ethnic conflict, as in the past, clearly cognizant that the unrest in Ituri will require the continuing presence of a minimum of UPDF personnel. The Panel has evidence that high-ranking UPDF officers have taken steps to train local militia to serve as a paramilitary force, directly and discreetly under UPDF command, which will be capable of performing the same functions as UPDF. There will be little change in the control that Ugandans now exercise over trade flows and economic resources. As UPDF continue to arm local groups, only less conspicuously than before, the departure of Ugandan armed forces is unlikely to alter economic activities by those powerful individuals in the north-eastern Democratic Republic of the Congo.

15. Like UPDF, and under pressure from its closest allies, Rwanda has started withdrawing. It has prepared for withdrawal by putting in place economic control mechanisms that do not rely on an explicit presence of the Rwandan Patriotic Army. It has replaced Congolese directors of parastatals with businessmen from Kigali to ensure continuing revenue from water, power and transportation facilities. It has replaced local currency with Rwandan currency. RPA battalions that specialize in mining activities remain in place, though they have ceased wearing RPA uniforms and will continue the activities under a commercial guise. The Panel’s sources have reported that RPA recently undertook an operation to obtain a large number of Congolese passports so as to give an appropriate identity to RPA officers who continue to be stationed at strategically important sites in the Democratic Republic of the Congo.

16. The Panel has learned of other tactics for disguising the continuing presence of an armed force loyal to Rwanda. Reliable sources have reported an initiative by the Chief of Staff of the Armée nationale congolaise, Major Sylvain Mbuki, to reorganize the RCD-Goma forces in order to accommodate large numbers of RPA soldiers inside ANC units and local defence forces made up of pro-Rwanda elements. Most of the ANC units have had RPA leadership for some time, and now, with this reorganization, a significant number of RPA soldiers will be integrated into the ANC rank and file. Instead of departing for Rwanda, large numbers of Rwandan Hutus serving in RPA have been provided with new uniforms and assigned to ANC brigades as Congolese Hutu. Rwanda has diverted attention from those soldiers staying in the Democratic Republic of the Congo by drawing particular attention to those who depart. Ceremonies have been held at points of re-entry. In fact, the number of soldiers who have left the Democratic Republic of the Congo is so far only a portion of the total number of RPA troops in the eastern Democratic Republic of the Congo, which various sources estimate at between 35,000 and 50,000. Simultaneously with the RPA troop withdrawals, Rwandan officials have repatriated to North Kivu thousands of Congolese Tutsi refugees under duress from the camps around Byumba and Kibuye Provinces in Rwanda. Schools in the Rwandan camps have remained closed and some camp structures have been razed to encourage further repatriations. All the Panel’s sources have also suggested that this movement could be part of the new tactic for maintaining Rwanda’s presence in the eastern Democratic Republic of the Congo.

17. Although troops of the Zimbabwe Defence Forces have been a major guarantor of the security of the Government of the Democratic Republic of the Congo against regional rivals, its senior officers have enriched themselves from the country’s mineral assets under the pretext of arrangements set up to repay Zimbabwe for military services. Now ZDF is establishing new companies and contractual arrangements to defend its economic interests in the longer term should there be a complete withdrawal of ZDF troops. New trade and service agreements were signed between the Democratic Republic of the Congo and Zimbabwe just prior to the announced withdrawal of ZDF troops from the diamond centre of Mbuji Mayi late in August 2002.

18. Towards the end of its mandate, the Panel received a copy of a memorandum dated August 2002 from the Defence Minister, Sidney Sekeramayi, to President Robert Mugabe, proposing that a joint Zimbabwe-Democratic Republic of the Congo company be set up in Mauritius to disguise the continuing economic interests of ZDF in the Democratic Republic of the Congo. The memorandum states: “Your Excellency would be aware of the wave of negative publicity and criticism that the DRC-Zimbabwe joint ventures have attracted, which tends to inform the current United Nations Panel investigations into our commercial activities.” It also refers to plans to set up a private Zimbabwean military company to guard Zimbabwe’s economic investments in the Democratic Republic of the Congo after the planned withdrawal of ZDF troops. It states that this company was formed to operate alongside a new military company owned by the Democratic Republic of the Congo.

19. At the same time, local militias and local politicians have supplemented the role that State armies previously played in ensuring access to and control of valuable resources and diverting State revenue. The looting that was previously conducted by the armies themselves has been replaced with organized systems of embezzlement, tax fraud, extortion, the use of stock options as kickbacks and diversion of State funds conducted by groups that closely resemble criminal organizations.

20. Such activities have become increasingly prominent in the techniques of exploitation in the Democratic Republic of the Congo. The Panel has identified three distinct groups engaged in activities in three different areas and refers to them as elite networks. These elite networks have control over a range of commercial activities involving the exploitation of natural resources, diversion of taxes and other revenue generation activities in the three separate areas controlled by the Government of the Democratic Republic of the Congo, Rwanda and Uganda, respectively.

21. The Panel has identified the following elements that are common to all of the elite networks and that are essential to understanding the nature of the exploitation carried out by these networks in the Democratic Republic of the Congo:

IX. Conclusions

155. An embargo or a moratorium banning the export of raw materials originating in the Democratic Republic of the Congo does not seem to be a viable means of helping to improve the situation of the country’s Government, citizens or natural environment. Massive technical and financial assistance for the population would be required to offset the humanitarian impact of such restrictive measures. At the same time, if the Panel in its report does not recommend any punitive measures to curb the illegal exploitation and trade originating in the Democratic Republic of the Congo, this will only encourage a continuation of the exploitation by different criminal organizations. This could easily lead to an increase in these activities. There must be sustained efforts to deter illicit and illegal exploitation.

156. Restrictive measures nevertheless need to be taken vis-à-vis the role of companies and individuals involved in arms supply and resource plundering. The international and multinational dimension of these illegal activities is very important. Ethical and transparent business practices are needed to combat these illegal activities.

157. The establishment of a transitional government in Kinshasa should be accompanied by four elements, namely, the disarmament of all rebel groups in the Democratic Republic of the Congo; phased withdrawal of foreign troops; measures to drastically curb the illegal exploitation and encourage legal exploitation; and the application of serious leverage through multilateral pressures and incentives. To these elements must be added a dynamic monitoring process. All must be phased, interlinked and ongoing. This dynamic package would not only advance the peace process in the Democratic Republic of the Congo, but would also lead to a peaceful and final settlement of the exploitation issue, ensuring that legal modes of resource exploitation prevail. The first two elements seem to be finding their way to an interlinked and phased implementation as a result of the recent agreements signed in Pretoria and Luanda. The third element is intrinsically linked with the fourth, namely applying leverage through incentives and disincentives.

158. In order to readjust the present process of illegal exploitation and encourage legal exploitation, which could contribute to the economic stability of all parties, there is a need to apply forceful disincentives and incentives. These should be monitored through a proactive monitoring body. Until now, all the parties involved in the illegal exploitation have had no strong incentive to alter the economic status quo. It is necessary, therefore, to find measures that address their fears of losing revenues. Such measures will however be effective only if a political process is undertaken simultaneously.

159. Reconstructing and reorienting the region’s economies are essential to peacemaking and peacebuilding. The Panel believes that a peace dividend in the form of economic incentives should be emphasized by the international community in order to promote the parties’ adherence to the peace agreements and encourage confidence-building. The Panel also proposes in its recommendations that a set of disincentives be enacted to apply pressure in the case of non-compliance with the agreements.

160. Many of the Panel’s conclusions about the economic roots and consequences of the conflict have been echoed in ideas associated with the proposals for an international conference on peace, security, democracy and sustainable development in the Great Lakes region. Recently signed agreements may signal that the time for organizing this conference is approaching. Such a conference would be an ideal forum to address the need to reorient the regional trading system to post-conflict imperatives and for negotiating the framework of a multilateral agreement to carry this out. This reorientation will require providing the incentives and means to promote regional economic integration, which would marginalize criminal and military-driven trade in favour of legitimate commercial development that is transparent and growth-oriented. Supporting regional economic integration could help to gradually draw the countries involved in the conflict closer and act as a barrier to future outbreaks of armed conflict.

Abbreviations

ASECNA Agence pour la sécurité de la navigation aérienne en Afrique et à Madagascar

CITES Convention on International Trade in Endangered Species of Wild Fauna and Flora

GTZ Deutsche Gesellschafte für Technische Zusammenarbeit (German Government agency for technical cooperation)

MONUC United Nations Organization Mission in the Democratic Republic of the Congo

RCD Rassemblement congolais pour la démocratie (Rally for Congolese Democracy)

RCD-Congo Rassemblement congolais pour la démocratie (newly formed rebel group made up of MLC and RCD-Goma dissidents)

RCD-K/ML Rassemblement congolais pour la démocratie — Mouvement de libération, initially based in Kisangani, now headquartered in Bunia

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