Gregory Mthembu-Salter, Phuzumoya Consulting presentation - 9th Multi-stakeholder Forum for...
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Transcript of Gregory Mthembu-Salter, Phuzumoya Consulting presentation - 9th Multi-stakeholder Forum for...
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Getting closer to responsible gold in Orientale and Kampala Gregory Mthembu-Salter, Phuzumoya Consulting
OECD/UN Group of Experts/ICGLR Conference May 4-6, 2015
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Province Orientale, Democratic Republic of Congo
Soon to be divided into four…
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Good news: Conflict levels in Orientale are
from their peak
• Cannot be because of conflict minerals initiatives in the province because…
• There have hardly been any…
• It means less Orientale gold is financing conflict
• Although…
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Some gold in the province still does finance conflict… • Non-state
• Forces de Résistance Patriotique en Ituri (FRPI)
• Mai Mai Morgan
• Mai Mai Kumu
• State
• Forces Armées de la République Démocratique du Congo (FARDC) roadblocks
• FARDC commanders controlling pits
• (And politicians and government officials too…)
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The permits making up ‘Concession 40’
Ituri, Province Orientale
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The bad old days
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Operation Artemis
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On “Concession 40”…
• The permits are held by AGK, a joint venture
• Industrial mining stopped decades ago. AngloGold Ashanti was interested in re-starting but abandoned the idea five years ago
• There are estimated to be over artisanal miners digging for gold
• There is no sign of the gold trade financing
• The FARDC taxes transport at road blocks but no evidence that commanders control pits
• SAESSCAM and Division des Mines are largely absent because SOKIMO – a state owned company – is part of AGK
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Criminal semi-industrial mining is a growing threat …
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The Validation – Certification – Export Debate
• Province wants validations right away, but
• Validation teams are waiting for a traceability system
• CEEC has a system but it is too complicated and looks expensive
• There are practical measures that can be implemented like crushing and trading gold in the same centre de negoce
• But the most reliable route to certifiably conflict-free gold will be …
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Negotiated agreements between title holders and artisanal miners Which also needs Congolese law to change
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Zones d’Exploitation Artisanale (ZEAs)… • Have a role to play but…
• They are not a complete solution…
• They cannot replace Mongbwalu!
• Or Mukungwe!
• Or Musebe!
• Sometimes diggers won’t leave and cannot be moved and permit holders need to do a deal
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Not disappearing any time soon
Photo taken in Musebe gold mine, Haut Katanga
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The core of the agreements should be…
• Digger/Co-op/Trader implementation of
• In return for the permit holder…
• Facilitating artisanal production in agreed sites?
• Providing transport?
• Providing social services?
• Providing financing?
• Refining artisanal production?
• Purchasing the production?
• Allowing another recognised buyer to purchase the production?
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What will the revised Mining Code say about this?
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Moving to… Uganda
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Historically a transit route for goods in and out of DRC, including gold… And why not?
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The only companies ever sanctioned by the UN Security Council for financing conflict in the DRC are Uganda
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In 2011, the Ugandan government tightened the rules…
• Gold exporters now had to produce to show where their gold had
come from…
• The
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A Huge Drop in Recorded Gold Exports
0
100
200
300
400
500
600
700
2010/112011/12
2012/132013/14
Gold export (kg)
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Regional Certification Mechanism (RCM) Implementation is moving forward
• BUT
• Not clear how RCM can impact on
•
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Carrots and Sticks
Sticks • Tougher controls at
Entebbe Airport
• Ugandan police investigations of suspected gold smugglers
• New controls from customs authorities in receiving countries
Carrots • The Lodhias’ pilot project
proposal:
• They establish a company to buy traceable non-conflict gold from DRC
• Overseen by a third party
• They pay any taxes owed on this gold to the Congolese authorities
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In Conclusion, what is to be Done? • Legal changes in DRC to enable agreements between artisanal
diggers and permit holders
• Multi-stakeholder negotiation of these agreements, especially in places like Concession 40
• Clarity on when and under what conditions can mine sites be validated in Orientale – what can be done without a traceability system in place first?
• Alongside RCM implementation, better carrots and better sticks in Uganda:
• Improve controls at Entebbe Airport and..
• What about the Lodhias’ proposal?
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