GOXI

sharing in governance of extractive industries

Fresh on eiti.org: DR Congo leads the way in disclosing owners of companies

DR Congo leads the way in disclosing owners of companies

Listing of mining company owners particularly noteworthy.
Monday, 19 January 2015 - 11:35am

Shaving off layers of ownership: the DRC’s latest report includes lists of the ultimate owners of oil, gas and mining companies. Image of the Katanga, the country’s richest region in minerals (Flickr).

The Democratic Republic of Congo’s EITI Report goes further than any other to list the natural persons who, directly or indirectly, ultimately own or control a company, a license or other property (‘beneficial owners’) in its country. The 2012 report lists the owners of 40 privately held companies. This task is especially noteworthy for mining companies, whose ownership structures can be difficult to obtain.

Opacity around the real owners of entities can contribute to corruption, money laundering and tax evasion in the extractive sector. Providing information about the owners allows the public to understand the ultimate beneficiaries of extractives deals.

                  Learn more about the EITI’s activities around beneficial ownership

Jonas Moberg, Head of the International Secretariat, said that “as encouraged in the EITI Standard, the DRC determined the names of the beneficial owners of companies operating in the country. “ 

He continued: “The data in this first publication is not complete, but it is a remarkable achievement, given the sector’s complexity. This will no doubt better inform the national debate around the extractive industries.” 

Of the 118 companies reporting to the EITI, 66 are publicly listed on stock exchanges in Australia, Canada, Hong Kong and the United States and therefore do not have to separately disclose their ownership. Of the 52 private companies, 40 disclosed and 12 did not.

Further, the report includes detailed information on licenses and links to publicly accessible contracts.

Increased revenues for the government

The extractives sector continues to play an important role in the country. Oil, gas and mining accounted for 99% of total Congolese exports, 64% of the government budget, 24% of formal employment, and 13% of GDP in 2012.

Compared to 2011 reported revenues increased by 12% to US $1.5 billion. This increase was due to an increase in production in the mining sector and the inclusion, for the first time, of social payments. Industrial scale gold production increased almost tenfold in 2012. There were substantial rises in the production of copper (24%) and diamonds (8%). As a result, the sector’s direct contribution to the government budget increased by 22%, from US $0.9 billion in 2011 to US $1.1 billion in 2012. State owned enterprises received a smaller share of government revenues (12%) than in previous periods (25%).

Mineral smuggling remains a challenge

Despite the positive trend, the reports showed that mineral smuggling from artisanal mining was still costing the government significant revenue. Lost revenues due to mineral smuggling were estimated at US $ 8 million per year for gold alone. The export of the “conflict minerals” tantalum, tin and tungsten (the ‘3Ts’) goes largely undetected in the eastern provinces of Maniema, Nord-Kivu, and Sud-Kivu. This makes artisanal mining a key priority for EITI DRC in 2015.

Contributions to social projects by companies now better understood

The comprehensive disclosure of social payments shows that oil, gas and mining companies paid about US $28 million (2% of total reported revenue) to fund social projects directly benefiting local communities. These projects meet a wide range of needs, ranging from small credit to farmers, to building and maintaining schools and local health centres.

 

For more information about DRC's EITI, visit the country page on the EITI website, contact Bady Balde or visit the DRC’s EITI page.

Note to editors: we encourage the republishing of our content. Please attribute this article with: "DR Congo leads the way in disclosing owners of companies” was published on eiti.org on 19 January 2015.

Views: 278

Add a Comment

You need to be a member of GOXI to add comments!

Join GOXI

Conveners

           GOXI Partners

Videos

  • Add Videos
  • View All

© 2018   Created by Kobina Aidoo.   Powered by

Badges  |  Report an Issue  |  Terms of Service