- The recent announcement that the Democratic Republic of Congo is at the brink of "renegotiating critical mining contracts" in mid-July "without policy or procedures" to guide this process or indication of whether requisite expertise will be secured had not gone down well with the Carter Center.
"We support the need for renegotiations wholeheartedly," said John Stremlau, Vice President for peace programs at The Carter Center. "But not without publicly disclosed measures to ensure the integrity of the process."
This development follows four months of official silence on the contract review process. In March this year, the DRC government published the report of the inter-ministerial "Revisitation" Commission established to review upwards of 60 mining contracts, along with letters addressed to companies on the basis of the report. It also announced a ministerial-level Task Force that would provide overall guidance to the next phase of the contract review process.
The Carter Center praised the government for its "good faith demonstration" of its commitment to uphold international standards as it pursues the next phase of the process, which includes renegotiating and terminating contracts. It is not however the least happy about the Task Force's failure to meet the goal of providing direction for the next phase.
The Center is deeply concerned about the apparent lack of recognition of the urgency of the matter by the Task Force, which has held only one or two substantive meetings since its announcement four months ago.
Instead of making public on the whole issues around renegotiated contracts, order of priority and termination agreements, the Congolese government went ahead to enter into new deals with the Chinese government and individual companies, despite the fact that their contracts are still under review. This erodes public confidence in the contract review process, the Center claimed.
"In the absence of publicly announced measures to address these problems and to ensure the integrity of the process, renegotiation is unlikely to result in any improvement, which would be a tragedy for the Congolese people who have so much at stake," said Stremlau.
Congo's deputy Minister of Mines, who admitted problems in the renegotiated contracts and shared the many of the Center's concerns, said the government is seeking to address a number of these problems.
But the Center urged the government to take steps to reform the operation of the Task Force to ensure that it can provide effective political direction for the next phase, show determination and publish the criteria that will guide the contract's next phase review.
During its years of conflict, the DRC concluded billions of dollars worth of mining investment contracts, but several investigations and analysis had uncovered significant irregularities in the award of the contracts, shortcomings in the contracts themselves, and material default in performance.
Many of the contracts were later found to lack basic provisions to ensure that mining companies fulfill their limited obligations, including provisions protecting against pricing practices that would allow mining companies to reduce amounts paid to the government. They also lack provisions to ensure that windfall profits, earned by companies due to current elevated resource prices, are shared equitably.
The review and renegotiation of mining contracts was a critical issue in the democratic elections that brought to an end a decade of war in the Congo. In February 2007, Congo's new government, under President Joseph Kabila and Prime Minister Antoine Gizenga, issued a 'Governance Contract,' laying out its priorities and commitments, including the review of mining contracts.
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