The material stakes in the Democratic Republic of the Congo elections

Private interest, not public voice, governs the immediate future of the DRC - the Democratic Republic of the Congo

Pete Jones
5 December 2011

Last Monday 28 November the people of the Democratic Republic of Congo voted in the second general election since the ravages of the 1998-2003 war that eventually caused over 5 million deaths. The conflict, fuelled by a complex mesh of ethnic rivalries, political disputes, and vested interests in Congo's vast mineral wealth, persists to this day in the east of the huge country, particularly in the Kivu provinces. The first elections, in 2006, were characterised by violence as the armed forces and supporters of rival political groups and presidential candidates clashed in the capital, Kinshasa, and in a number of other provinces.

The threat of violence has bubbled near the surface of this election campaign too, and it erupted on Monday and Tuesday as many voters found themselves unable to vote due to a series of errors – thousands queued at polling stations only to be told that their names were not on ballot lists and sent away – and irregularities; there have been widespread reports of ballot stuffing and even of soldiers telling people who to vote for. In response, voters have burned down polling stations and destroyed trucks allegedly full of pre-marked ballot papers, while armed gunmen have opened fire on voters in Lubumbashi in Katanga province. In general, though, violent unrest has been much more limited than in 2006.

The DRC seems only to receive press coverage when a huge event like the election takes place or when journalists can report on gross acts of 'ethnic violence'. The narrative of an incomprehensible, intractable conflict based on ethnic hatred is as dramatic and conveniently simple as it is reductive and misleading. In the DRC, as in many countries beset by conflict, alliances are made and broken across political and ethnic lines according to immediate pragmatic concerns. Political control operates through a Kinshasa bureaucracy backed by the international community and its financial institutions. Politicians work through richly-rewarded patronage networks while the army and regional assemblies have control in specific localities. These are all governance structures that have been hollowed out or, essentially, privatised. The presidential campaigns have, unsurprisingly given this context, been dominated by personalities rather than policies. Over half of the votes have been counted and, despite 11 presidential candidates standing, the race is really a straight fight between the incumbent Joseph Kabila and his main rival Etienne Tshishikadi.

What is at stake for election winners and losers?

Part of the answer lies in private financial interest. The term 'resource curse' is bandied around with abandon in analysis of the DRC's woes and, as with references to ethnic division, sometimes serves to render discussion superficial and abstract. The importance of the DRC's mineral wealth, however, cannot be ignored; armed groups, including divisions of the country's army, fight bloody battles for control over mineral-rich areas in eastern Congo, using mass rape as a means of exerting territorial authority. The absence of state institutions not only allows these crimes to go unpunished but also motivates them; it provides the context for massive financial gain at the expense of state coffers because there is little to prevent huge quantities of cassiterite, copper, coltan and other valuable minerals from being smuggled across the border for export, enriching individuals or groups rather than the state and the people.

When Kabila was elected as president in 2006 he promised to improve security in the eastern Kivu provinces. It would seem natural that the president of the republic would want to crack down on instability, violence against civilians and a situation whereby millions of dollars worth of Congolese resources were being smuggled into neighbouring countries. The population of the Kivus has not seen much improvement on any of these fronts, though. State institutions remain weak or non-existent and armed groups continue to operate, kill and rape with impunity, despite the presence of Monusco, the world's largest UN peace-keeping force. There is no doubt that building a coherent state structure in a country that is two-thirds the size of western Europe, lacks a usable nationwide road system and is covered in some of the world's densest tropical rainforest is a huge challenge. But there also appears to have been a lack of political will to push through the necessary institutional reforms. Kabila's reign has been characterised by a gradual creep of private interest into public space that he has done little to curtail. In fact, it would appear that some of Kabila's closest associates have made huge profits by trading Congolese mineral assets.

The presidential election: a battle of private interests?

The sheer quantity of minerals in Congo's soil means that the rights to extract, process and sell those resources are extremely valuable. A government acting in the best interests of its population should seek to maximise its revenues from the sale of permits to private mining firms and then to secure the most favourable terms for profit-sharing on that which is eventually produced and sold. This requires clarity and accountability: a transparent tendering process to ensure that the most competitive offer wins the permit; publication of contracts signed between the government and private firms to allow for independent scrutiny; clear accounting to show that flows of money from the private firm are ending up in the Congolese state budget and not in private bank accounts. The DRC, under pressure from the IMF, has made some progress on these fronts. The DRC Ministry of Mines has committed itself to publishing natural resource contracts within 60 days of their coming into effect, and there are indeed a number of contracts available on its website.

One of the published contracts is that between the DRC government and Highwind Properties Group, signed in January 2010. Its publication is remarkable because of the controversy surrounding the deal. Highwind Properties Group is made up of four British Virgin Islands-incorporated companies, each linked to Dan Gertler, an Israeli diamond merchant who was granted a monopoly on DRC diamond exports in 2000 and has enjoyed a significant presence in the country ever since. Gertler is a very close associate of Kabila; he was reported to have been the only white man invited to Kabila's wedding, and allegedly stays at the president's residence when in Kinshasa. In January 2010 Gertler's Highwind Properties Group was awarded a permit to exploit and refine a slag heap near Kolwezi in Katanga. This permit had belonged to Canadian mining company First Quantum Minerals (FQM) until the DRC government revoked the license in late 2009 citing a series of contractual irregularities and accusing FQM of not meeting development targets. FQM strenuously denied these allegations and challenged the revocation through the DRC courts, with no luck. It has now taken the DRC government to arbitration in Paris and Washington.

The contract, signed the day after the Kolwezi permit was officially confiscated from FQM, shows that Highwind Properties paid a $60 million “entry fee” to secure the licence. Despite warnings from the Court of Arbitration in Paris not to sell on the rights to the Kolwezi asset while it was still under dispute, in August 2010 Gertler sold a 50.5% stake in his Camrose company, which controlled Highwind Properties, to FTSE 100-listed Kazakh mining giants ENRC for $175 million, thus granting ENRC a significant stake in the Kolwezi project. Gertler received a considerable return on his investment while retaining 49.5% of Camrose and therefore a significant stake in the mine. The deal caused uproar in the City of London, where some ENRC shareholders questioned whether it was appropriate or sensible to take advantage of FQM's as-yet unresolved misfortune.

The controversial saga raises a number of questions. How much did Highwind Properties pay in total for the asset? Why was there no public tendering for the license? What mining experience and expertise did Highwind Properties have, if any, that qualified it to receive the asset? What due diligence did ENRC undertake, before entering into a business relationship with Gertler's company, to assure themselves that corruption was not involved in Highwind Properties winning the permit? Finally who are the beneficial owners of the four companies that make up the Highwind Properties Group? This last question is almost impossible to answer because these companies were all incorporated in the British Virgin Islands, a 'secrecy jurisdiction'. Clearly, publication of the Highwind Properties contract alone is not enough.

Before and since this deal, companies linked to Dan Gertler have come into possession of significant mining assets following a controversial intervention by the DRC government or, alternatively, have secured licenses at what is allegedly a fraction of their market worth. In the most recent case – Gertler-linked entities have reportedly bought stakes in Mutanda and Kansuki mines at below-market prices – the state mining company Gecamines has refused to publish the relevant contracts. When Kabila and Gertler are so close, these kinds of deals inevitably raise suspicions of corruption.

An opportunity to wrest back the public domain?

Etienne Tshisekedi has presented himself as an anti-corruption candidate. He recently met with FQM officials in Canada to tell them that the company would be welcome back in the DRC on 7 December: the day the official election results are announced. It's interesting that the case should function as a battle line between the two main candidates; Tshisekedi on FQM's side, Kabila seemingly on the side of Gertler and ENRC. That this private dispute should start to inhabit the public realm of policy campaigning does not inspire much hope that a Tshisekedi victory will bring a dramatic improvement in accountable governance. Rather, it may simply be that the cast of beneficiaries changes while the mechanisms of private-profiteering stay the same.

What is at stake in this election, then? For the presidential candidates, one would be tempted to suggest that great personal wealth for themselves and their closest associates rests on electoral success. The people of the DRC, however, face an on-going battle to exert a greater degree of control over the running of the country and are faced with the depressing fact that, in the absence of a functioning state, the DRC's mineral wealth makes easy pickings for well-placed businessmen and politicians. No wonder, then, that the elections have been marked by explosions of visceral frustration from people desperate to be heard, and brutal suppression from those in power seeking to preserve their uniquely profitable position.

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