Resource extraction in the Democratic Republic of Congo

Resource extraction in the Democratic Republic of Congo

The Democratic Republic of the Congo (DR Congo, or DRC) is a nation full of complexity and seeming contradictions. The DRC, previously known as Zaire, is rich in natural resources ($24 trillion of minerals, by one estimate), species diversity, and human social and cultural diversity. But it is also a nation rife with struggles. Current patterns of resource extraction have severely compounded the nation’s troubles.

Natural Resources

The conditions that facilitate the biological diversity also make the country a primary location for natural resources such as minerals, the timber and wildlife that compose the biological diversity, some agricultural crops and even some small oil reserves (Anonymous 2000). Most experts agree that the DR Congo has the largest untapped deposits of raw mineral ores in the world, with estimates of around $24 trillion worth of mineral resources (equivalent to the combined Gross Domestic Product of Europe and the United States). The major ores found throughout the DRC are:

*Coltan (an ore that is used in the manufacturing of electrical devises such as cell phones and laptop computers)

Wildlife is also a valuable resource. Large mammals are exploited for many uses across the country and around the world, including illegal trade in elephant tusks, and as bushmeat. Some of the trees are harvested for lumber, collected and used as fuel wood in local villages certain species such as Prunus africana have the bark striped of them for use in medicines (UN 2001). Much of the resource extraction is done in small unregulated operations. Recently, more money is being invested into the extraction and refining of some of the ores found in the DRC, primarily copper/cobalt, which may help regulate the extraction and reduce environmental impacts (Creamer 2007). However, many small unregulated artisenal mining operations still exist for minerals such as coltan that can be mined with little capital investment. Because artisenal mining operations require little capital they are unregulated and occur primarily within protected areas, around endangered or threatened species. Artisenal mining often occurs in riparian zones.

During periods of violence, resources have been looted from the original collectors by both Congolese and foreign soldiers, and civilians or they are extracted by soldiers, locals organized by military commanders (much of the time Rwandan and Ugandan commanders) and by foreign nationals (UN 2001).

The Democratic Republic of the Congo is not only rich in natural resources and species diversity but in human social and cultural diversity as well. A nation with a relatively low human population density of about 60 million (CAFOD, 2007), the DRC is home to over 200 different tribes and a rich variety of cultural traditions (Heale 1999). But it is also a nation rife with struggles. Due to a variety of factors such as war and other violent conflicts, economic inequalities, and disease, the DRC experiences some of the highest poverty rates (Heale 1999) and mortality rates in the world (Coghlan 2006).

The current patterns of resource extraction have proven to be a major factor in creating and perpetuating many of these struggles. Although it is important to understand that not all resource extraction operations in the DRC are equally problematic, some mismanaged activities, including some irresponsible mining practices, have led to a multitude of problems for local peoples. Problems include social group dysfunction (communities and families), mining-related illnesses, human rights violations (which include child laborers in the mining industry and abuse of women), and changes in human land and resource use which are causing great environmental damage. In order to begin the transformation toward sustainability, it is essential that the links between social and environmental issues surrounding resource extraction practices be more clearly understood.

Countries and International Corporations Illegal Resource Extraction in the DRC

Secretary-General of the UN at the time, Kofi A. Annan, was requested by the UN security council to establish a panel to investigate the alarming amount of illegal resource being exported from the DRC. Annan complied and what follows are many of the findings the panel of experts discovered from their investigation.

Mass Scale Looting

After Rwanda, Uganda, and Burundi’s successful invasion of eastern and southeastern DRC a great deal of what the UN labeled “mass scale looting” started to take root (UN 2001, p. 8). While initial invasion tactics were still being worked out, military commanders were busy making business deals with foreign companies for the Congo’s vast mineral reserves (UN 2001). Between September 1998 and August 1999 existing stockpiles of minerals, agricultural products, timber, and livestock were illegally confiscated from Congolese businesses, piled onto trucks, and sold as exports from the confiscating countries (UN 2001). Rwandan and Ugandan troops forced local businesses to close their doors by raiding and harassing civilian owners. Cars were stolen to such an extent that Uganda showed a 25 percent increase in automobiles in 1999 (UN 2001). DARA-Forest Company illegally extracted and sold Congolese timber on the international market. Some examples of mining corporations abuse of the weak DRC state include Bechtel Corporation paying for costly NASA satellite studies and infrared maps of the Congo to determine where minerals were and an American Mineral Fields executive allowing rebels to use his private leer jet for a $1 billion mining deal (Montague 2002). Some parallel the mining corporations rush to acquire coltan rich land in rebel territory of the DRC to the Conference of Berlin in 1885 (Montague 2002).

Active Extraction Phase

When the mass scale looting died down as stocks of minerals were depleted, soldiers were encouraged by commanders to take part in small-scale looting which started an “active extraction phase” (UN 2001, p. 8). Natural resources that were not stolen were often purchased with counterfeit Congolese francs which contributed to inflation. Air transportation companies that had operated in the Congo disappeared and were replaced by companies affiliated with foreign armies. The Congolese government lost out of profits from taxes on natural resources entering and leaving air fields because air services were controlled by foreign Rwandan and Ugandan troops who routinely exported coltan from the Congo. The increase in air transportation networks has also increased exploitation because of the emergence of new transport routes (UN 2001).

Rwanda and Uganda have no known production sites for many of the minerals that were exported at vastly higher rates after their invasion of the DRC (UN 2001). “Free zone areas” make diamonds difficult to track because they can be repackaged and “legally” sold as diamonds from that country (UN 2001, p.17). Coltan is the most profitable mineral export from the Congo, but it is particularly difficult to track because it is often listed as cassiterite, a mineral of lesser quality, for which export taxes are lower. Coltan has been illegally extracted and sold via Burundi since 1995, three years before the invasion (UN 2001). The International Monetary Fund (IMF) states that Burundi has no “gold, diamonds, columbotantalite, copper, cobalt or basic metals” mining operations but has been exporting them since 1998 (UN 2001, p.22). The DRC has been exporting few minerals since the invasion because the destruction of the rural infrastructure has caused mining and agricultural outputs to wane (UN 2001).

In the year 2000 Rwanda spent $70 million supporting about 25,000 troops and Uganda spent $110 million supporting twice as many troops (UN 2001). Rwanda and Uganda finance their war efforts through commercial deals, profit-sharing with companies, and taxation among other things. Rwandan soldiers often steal coltan collected by villagers and sell it to diamond dealers themselves. From dealing in coltan trade alone the Rwandan army may have collected $20 million per month and coltan profits have been used to pay back loans from foreign creditors (UN 2001). The IMF increased aid to Uganda after they gained their trust by paying back some outstanding loans from the West (UN 2001). The World Bank (WB) has awarded Uganda for their successful structural adjustment reform and export earnings by pushing their case for the Highly Indebted Poor Country (HIPC) debt relief initiative (UN 2001). Rebel groups MLC, RCD-Goma, and RCD-ML make their own deals with foreign businessmen for cash and/or military equipment (UN 2001). Battlefields are most commonly centered on areas that hold a lot of diamond and coltan potential and foreign armies occupation of the eastern region is maintained by illegal resource exploitation (UN 2001).

For $1 million per month Rebel group RCD-Goma gave a coltan monopoly to SOMIGL which they in turn poured into efforts to gain control from RCD-ML for mineral-loaded land (UN 2001). To try to get fast cash to gain control of government land the DRC gave a diamond monopoly to International Diamond Industries (IDI) which was supposed to pay the government $20 million but paid only $3 million and continued to extract diamonds from the region and sell them internationally (UN 2001). Upon request of the IMF and WB the DRC is trying to liberalize diamond trade and IDI has threatened to sue because they had a contract they themselves did not honor (UN 2001).

Corporations and Western countries purchasing coltan from Rwanda, Uganda, or Burundi are aware of its origin and aid from western donors is funneled directly into Rwandan and Ugandan war efforts. The German government even gave a loan to a private German citizen to build his coltan export business in the DRC, for which he enlisted the help of RCD-Goma soldiers (UN 2001). Mineral plunder in the DRC was easy once the central authority had collapsed because of the extremely weak financial system, as well as the apparent disregard of illegal conflicts on the part of proper standards by international corporations and governments that imported illegal minerals (UN 2001). The US has it documented that many minerals are purchased from the DRC even though the DRC has no record of exporting them (Montague 2002). A lack of state stability combined with international corporations and foreign government’s interest in investing in Congolese mineral plunder increased the pace at which the DRC was shook off its fragile foundation. The UN does an excellent job of identifying the perpetrators of illegal resource exploitation in the DRC, but was not able to help prevent the economic exploitation of the country (Montague 2002).

The Effects of Structural Adjustment Programs (SAPs) on the DRC

The problems of the DRC are linked to the fall of their financial system, which was aided by the implementation of foreign (IMF, World Bank) economic policies (Montague 2002) In June 1967, the DRC sought help from the IMF and WB in managing their debt payments. Their reliance on resource extraction had made them vulnerable to changes in the international markets (Umoren 2000). Unfortunately, many aspects of the economic and social realities in the DRC were not taken into account by the IMF in implementing the SAP. The Congolese government had to make preliminary agreements to hand government control to Belgium and create an office of debt management to be run by IMF and WB staff before the structural adjustment loan was granted. The DRC received aid in the form of their first structural adjustment loan of $27 million in 1976 (Umoren 2000). The DRC SAP was supposed to help push developing countries into industrialization by the supply of short term loans and technical support, but the opposite happened in the DRC (Umoren 2000).

Currency devaluation is a primary function of SAPs under the assumption that developing countries have laden debt because they have an overvalued exchange rate. Devaluation can cause “capital flight due to the weak currency, noticeable decline in foreign direct investment, declining industrial output, low export earnings, and a high debt service ratio” (Umoren 2000). Devaluation is meant to correct trade balance, but it causes an instant price escalation of goods and services, which in turn lowers individual purchasing power and causes a drop in real wages (Umoren 2000). The IMF and WB respond to this inflation through measures to deflate the economy by letting go of government employees and programs, lowering wage indexes, and cutting subsidies on public spending in favor of paying back loans to Western donors. A lack of government funding causes agricultural and industrial output to decrease which shrinks export profits.

During the first ten years of SAP there were six currency devaluations in the DRC, each followed by a decrease in export earnings and an increase in their mounting debt. In 1983 the DRC accepted a 77.5 percent currency devaluation which caused a 44 percent rise in their debt ratio by 1984 (Umoren 2000). If currency is devalued, productive outputs must rise by equal proportions to maintain foreign exchange, but with wages now so low and the cost of basic amenities so high it was extremely difficult for the DRC to meet those standards. Long term debt in the DRC was $2,900 million in 1977, it rose to $5786 million in 1986, and swelled uncontrollably after that to $23.7 billion in 1987 (Umoren 2000). Debt overhang became so great the IMF had to put a halt to Western aid to the DRC in 1990 because of their inability to pay any of it back (Umoren 2000).

Impacts of Natural Resource Extraction on the DRC

Environmental Impacts

Resource extraction has many impacts on the cultural and environmental diversity of the DRC; it is difficult to quantify the environmental degradation of the country. As it is unstable and difficult for researchers to enter and do work in the country also it is always difficult to quantify loss of biodiversity as animals are mobile and the lack of roads and navigable rivers make transportation into the wilderness areas difficult for researchers (Hart & Mwinyhali 2001; Draulans & Krunkelsven 2002). Mining is an intensive extraction process and has had many impacts on some wilderness areas including national parks and wildlife reserves such as Kahuzi-Biega and the Okapi Wildlife Reserve both of which are world heritage site. Mining in these areas are typically done through artesinal mining which is a small scale mining method that takes place in river beds it can be very environmentally damaging. Artesinal mining degrades riparian zones, creating erosion and heavy silting of the water, landscape destruction and the tailings are often dumped into the rivers and could be contaminated with mercury and cyanide degrading the health of the river systems putting the wildlife and people at risk (Sheppard 2001; UN 2002). Miners and refugees are relocating to parks in search of minerals a reported 10,000 have moved into Kahuzi-Biega and 4,000 to the Okapi Wildlife Reserve. This increases the pressures on wildlife as timber is cut down and used as fuel wood to cook with and wildlife is killed for its meat. Also, as people enter into these areas animals such as primates are collected for trade on the black market. Others are poached for their hides, or for the tusks such as elephants (Hart & Mwinyihali 2001; Draulans & Krunkelsven 2002). The extent of logging has been difficult to quantify. Much of the logging that occurs is primarily for target hardwood species, rather than clear-cutting which can be assessed by satellite imaging (Hart and Mwinyihali 2001). Observations have shown an increased number of logging trucks moving across borders. Logging destroys valuable habitat for animals and increases the access into forested areas making it easier for poachers, miners and refugees to access areas (Hart and Mwinyihali 2001). Refugees from the conflicts afflicting the DRC and neighboring countries are relocating to the wilderness areas, increasing the pressures on wildlife, which is collected as a primary food source, and timber that is used as fuel wood (Draulans & Krunkelsven 2002).

ocio-cultural repercussions

Congolese life is shaped by internal and external forces; forces which themselves are complexly intertwined. There are many factors which contributed to the Democratic Republic of the Congo’s severe socio-economic hardships, and not all resource extraction operations have had an entirely negative impact on Congolese society at large. That said, the negative consequences brought about by some forms of resource extraction, such as coltan mining, are devastating. For example, worldwide, as demand for goods has increased, so has the demand for tantalum, or coltan (DCA 2006) and reportedly, “much of the finance sustaining the civil wars in Africa, especially in the Democratic Republic of the Congo, is directly connected to Coltan profits” (DCA 2006, pp 1). Within the DRC, there are both wars between Congolese and conflicts between neighboring nations. Although these wars have components of inter-tribal conflict, in several cases the conflicts have been induced by external forces, such as changes in international support and demands for resource extraction (Carayannis 2003). As a result of tantalum mining and wars, societies in the eastern regions of the Congo are experiencing heightened physical and economic insecurity (CAFOD 2007; Jackson, 2002), health problems and human-rights violations. In the Ituri region, a violent conflict is occurring between the Lendu and the Hema tribes. Analysts have determined that the conflict has intertribal as well as economic components brought about by the patterns of coltan extraction.

A health problem brought about by resource extraction is the effect of tantalite (coltan) mining on women and children who work in the mines. As more women are turning to mining for economic survival, they are faced with dangerous tasks such as pounding the stone which contains tantalum. The release of fibers that get into the lungs is affecting both the women and their babies, who are passengers on their mother’s backs (IRIN 2002). “More worrying, the majority of babies, often on the backs of their mothers during the horrendous task of pounding coltan, have started showing similar signs of disease and pain to those of their mothers” (NGO, qtd. in IRIN, 2002).

Another societal problem caused by coltan extraction is the forced labor of children in the mines. According to a recent United Nations report, “Child labor in Africa has significantly increased in Coltan mines. In some regions of the Congo, about 30 percent of schoolchildren are now forced to work in the mines” (DCA 2006). Children in the region are also being forced and coerced to become soldiers.

The resulting labor shift from farming to mining has created a void of sorts in Congo’s socioeconomic system. The change from farm labor to a boom and bust ‘gold rush’ economy has resulted in severe food shortages and insecurity (Jackson, 2002). It is worth noting that the DRC has some of the richest soils and favorable climatic conditions for food production on the African continent. Before Mobutu’s reign, the DRC was one of the major exporters of food to the rest of Africa. “The richly fertile soil (especially that in the eastern highlands which is volcanic in origin) could produce enough food to feed half of Africa, but the country is so poor that at present its people do not produce enough food to feed themselves” (Heale 1999).

Promoting Stabilization of the Congolese Financial System

In 1999, the WB agreed to send members of its staff into poor countries to help them better appreciate what its like to live in poverty so they can make better policy decisions (Elton 1999). This program was called the Grassroots Immersion Program (GRIP), which was coupled with the immersion of 100 WB employees in impoverished countries to sleep next to goats in mud huts while taking a six week Harvard business training course (Elton 1999). Journalist Sarah Elton (1999) stated that the program was a step in the right direction of increasing appreciation among WB employees of the realities of life in highly impoverished countries, but had some shortcomings because the notion that Western economic growth theories are appropriate for all areas remained a stable principle with the WB (Elton 1999). Many economists think countries such as the DRC that lack a working capital market may benefit most from homegrown economic development plans (Umoren 2000).

The UN report included a number of recommendations (UN 2001). First they called for the WB and the IMF to stop supporting Ugandan and Rwandan national budgets because they are being funneled directly into war efforts. The WB and IMF would also benefit from creating policies for doing ethical business with countries that are involved in armed conflicts over natural resources (UN 2001). Umoren (2000) and many other economists also recommend that the IMF rethink devaluations as a SAP instrument because devaluing currency often decreases a country’s prosperity by widening it’s poverty gap (Umoren 2000). The second recommendation was that embargos should be put on minerals and timber coming out of Rwanda, Uganda and Burundi until the conflict is resolved. Further, corporations that profited from the conflict should have their assets frozen and redirected to Congolese who suffered from the war (UN 2001). Third, international certification programs should also be created and implemented for minerals and timber, and an international body should be formed that can review allegations of illegal economic activities and penalize individuals, corporations and governments that violate laws protecting human rights and sovereign nations (UN 2001). The UN Institute for Peace and Global Witness are both organizations working on developing corporate codes of conduct for trading that takes place with conflict areas (Montague 2002). US Congresswoman Cynthia McKinney has drafted legislation to “block assets of corporations involved in illegal mining” (Montague 2002) and a Tobin tax could also be charged on international trade deals to help draw capital to those who need it most (Elton 1999).


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