CNPAV statement regarding the round table agreement between the Ventora group of Dan Gertler and the DRC

Participation in the work of the round table

On April 12, 2022, the Office of the President of the Republic invited representatives of civil society to the feedback round table on the amicable settlement agreement for all disputes between the DRC and the Ventora group of economic operator Dan Gertler. Representatives of seven member organizations of the  Congo is not for sale coalition  (CNPAV) coalition were invited.1

During the said round table which was held on April 13-14, 2022, the Deputy Director of Cabinet of the President of the Republic André Wameso, main speaker, projected two documents: (1) an unsigned version of the amicable settlement of all disputes between the DRC and Dan Gertler and (2) a signed annex to this memorandum of understanding, entitled “final documentation”. No hard copy was delivered.

The CNPAV welcomes the initiative which has made it possible to enrich the understanding of the contextual elements which led to the signing of the memorandum of understanding as well as the commitment of the President of the Republic concerning the participation of civil society in future renegotiation processes. mining contracts. However, these steps cannot replace the obligations of transparency to which the Republic is subject, nor the government prerogatives in the management of the extractive sector. The CNPAV will express a separate and detailed opinion on the said processes.

Moreover, the round table did not allow us to erase our fears regarding the content of the agreement. On the contrary, rather than obtaining compensation for past and future losses suffered as a result of transactions with Mr. Gertler, it will be the DRC that will pay compensation to Dan Gertler and not the other way around. This statement aims to detail these fears on a preliminary basis.

Obligation to publish the agreement and its annexes

The CNPAV notes the persistence of the differences resulting from the inaccurate understanding, by the members of the Negotiating Committee of the agreement, of the requirements of transparency in the extractive sector and of the legal and regulatory provisions concerning the obligation to disclose the signed agreement. and all its annexes.

The CNPAV recalls that the confidentiality clause mentioned in this agreement is null and void in Congolese positive law in the extractive sector. Indeed, the law on the general regime of hydrocarbons,2 the mining code3 and the requirements of the

These organizations are ODEP, RECIC, Afrewatch, UNIS, Resource Matters, LUCHA and Filimbi. Following the differences of opinion on the agreement, ODEP and RECIC wished to leave the coalition. This statement comes from the remaining 14 members of the coalition.

Standard of the Extractive Industries Transparency Initiative (EITI)4 enshrine the transparency of any contract relating to natural resources and its annexes. These transparency and disclosure requirements apply to this agreement which concerns the transfer of ownership of mining and petroleum assets and regulates the distribution of certain revenues related to these assets. Transparency requirements also extend to license acquisition and disposal procedures.

The CNPAV further recalls that several similar settlements signed by the DRC and mining operators have been fully published by previous governments. This is, for example, the agreement for the amicable settlement of disputes signed between the DRC and the Banro Corporation Group of April 2002, or the agreement for the amicable settlement of disputes between the DRC , First Quantum Minerals and ENRC of March 1, 2012 relating to releases from KMT, Frontier and Comisa.

The CNPAV recalls that any refusal to publish this agreement and its annexes within the legal deadlines of 60 days constitutes an infringement of obstruction of transparency punishable by article 311 ter of the mining code. It also goes against the declarations of President Félix Tshisekedi related to his policy of good governance and to the commitments of the government within the framework of its program with the International Monetary Fund.5

From the foregoing, the CNPAV calls on the Congolese State, through the President of the Republic and the Prime Minister, to have this agreement and all its annexes published by the Ministries of Mines and Hydrocarbons in accordance with the principle of good governance, the legal provisions in the DRC and the requirements of the EITI regarding the disclosure of contracts and transactions related to extractive resources.

Content of the agreement

DRC’s commitment to assist Mr. Gertler in the lifting of sanctions

CNPAV notes with amazement the inclusion in the agreement of a clause obliging the DRC government to defend the agreement with the media, NGOs and the American administration in order to obtain the lifting of the American sanctions targeted against Mr. Gertler and its affiliates.

This commitment, almost immoral, made by the DRC is totally incomprehensible and unacceptable, especially since it risks causing the use of other important financial resources of the Congolese taxpayer through lobbying actions with the American administration.

Value of recovered assets and compensation to be paid by the DRC

The CNPAV welcomes the action and commitment of the Congolese State to begin the process of recovering the mining and oil assets sold off, while recalling that this must be done with a view to preserving the interests of the DRC.

The CNPAV notes that according to the presidency, the value of the oil and mining assets announced recovered would represent approximately 2.5 billion US dollars. This figure would be based on an evaluation carried out by a Canadian firm not otherwise identified and whose copy was not presented. The CNPAV recalls that the exploration work carried out on the ground was weak and that Mr. Gertler himself was unable to resell his oil blocks. Thus, the CNPAV requests that the details of the Canadian valuation be shared to ensure that there has not been an overestimation of the value of the recovered assets.

CNPAV notes that the Congolese State has undertaken to pay 240 million euros to compensate for the investments that Mr. Dan Gertler would have made on all the mining and oil assets recovered by the DRC. This sum will be due even if the Congo is unable to resell the assets. The CNPAV notes that this represents a risk of the country’s indebtedness.

Uncompensated Past Losses and Unrecovered Permits

The CNPAV notes with amazement that the agreement does not include any compensation for the enormous previous losses and damages suffered by the DRC as a result of the acts of corruption for which Mr. Dan Gertler was sanctioned. As a reminder, the CNPAV estimated its losses at nearly 2 billion US dollars.6

In addition, one of the clauses presented during the round table stipulates that the DRC undertakes not to become a civil party in international proceedings to seek compensation for these past losses. This approach of trivializing and legitimizing serious past economic crimes constitutes dangerous case law that risks hampering the process of renegotiating contracts of the same type, because other corruptors and economic criminals could take advantage of it.

The CNPAV also notes that the agreement presented concerns only part of the mining permits held by Mr. Gertler, to the exclusion of many others, in particular the permits held by the company Orama in the manganese sector.7 It There is also no clarity on the fate of the copper-cobalt discharge permits held by the company Evelyne Investment8 and by the company Interactive Energy,9 two companies whose ultimate beneficiaries remain unknown, but which could have links with Ventora. Thus, we consider that there is no certainty that the Congo has recovered  all  of Mr. Gertler’s oil and mining assets, as affirmed by the Commission of negotiators for this agreement.

Royalties from KCC, Metalkol and Mutanda which will continue to benefit Dan Gertler

CNPAV criticizes the fact that the agreement confirms Mr. Gertler’s right to pursue the full collection of royalties from these three mining projects (Mutanda, Metalkol and KCC) until the end of the exploitation of these mines. The CNPAV recalls that according to its analyses,10 these royalties were acquired illegally and should go to the State and Gécamines. The CNPAV castigates this attempt to legitimize and legalize the fraudulent acquisition of mining and oil assets, including the privatization of royalties from Mutanda, Metalkol and a majority of KCC.

The presidency explained that Gécamines would receive compensation of  249 million euros  as the overpayment by Mr. Dan Gertler of royalties from KCC.

According to the calculations of the CNPAV, these royalties are however worth 1.085 billion dollars in absolute figures, and 380 million in net present value.11 Thus, the compensation offered seems below the value of the asset.

Even more worrying, it is likely that Gécamines will never receive this money. Indeed, Gécamines had received a loan from Mr. Dan Gertler in the amount of  191 million euros ,12 which would have contributed to the financing of the 2018 electoral process.  This amount will be deducted from the compensation for royalties from KCC, bringing the compensation for Gécamines to  58 million euros . It will also be necessary to deduct the compensation of 240 million euros for the “investments” of Mr. Gertler in the oil blocks and the mining permits.

Preliminary conclusion based on the information presented

CNPAV notes with amazement that all things considered, it is  the DRC that will pay 189 million euros to Dan Gertler, rather than the reverse . The DRC must pay this amount  one year after the signing of the agreement, regardless of whether or not the recovered assets are sold. In addition, Gertler will continue to receive mining royalties from KCC, Mutanda and Metalkol, estimated to total $1.7 billion in absolute figures over the next 20 years.

In contrast, the gains for the DRC are thrown into the future—in the hypothetical sale of the recovered assets, without compensation for the huge past losses suffered by the Congolese people in dealings with Mr. Dan Gertler.

From the foregoing, the CNPAV notes that in view of the information at its disposal, the agreement signed between the DRC and the businessman Dan Gertler is totally unbalanced and benefits more to Mr. Dan Gertler and his network, and this, to the detriment of Congolese citizens.

The CNPAV announces that it will soon make available to the government and national and international opinion the problematic and detailed technical elements on the said agreement.

Outlook

CNPAV informs the public that it will maintain its citizen campaign with a view to obtaining the publication of the agreement and all its annexes, and (ii) the full and effective recovery of all the mining and oil assets fraudulently acquired by Dan Gertler and its entire network, in particular royalties from the KCC, Metalkol and MUMI projects;

The CNPAV says it is willing to maintain constructive exchanges with the DRC authorities with a view to the total and transparent recovery of the assets sold off to the detriment of the Congolese population. In this respect, the CNPAV will submit to the Congolese government the additional list of assets held by Dan Gertler’s network as well as all other useful information;

The CNPAV is committed to promoting citizen control over the use of assets that will be formally recovered.