D.R. Congo Improves Some Aspects of Natural Resource Governance, State-Owned Enterprises Still Lag Behind

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Further improvements are essential so that citizens can benefit from growing demand for minerals used in green energy technologies

KINSHASA, 20 August 2020 – The Democratic Republic of Congo (DRC) has made some progress in the governance of its mining and hydrocarbons sectors in the last two years, according to experts at the Natural Resource Governance Institute (NRGI).
 
According to NRGI, resource governance progress in the DRC has resulted in part from the reformed mining code of 2018, which introduced several new requirements on transparency of revenues, operations and management of environmental and social impacts. Greater availability through the Extractive Industry Transparency Initiative (EITI) process of data on revenues and state-owned enterprises, has also improved the country’s results.
 
However, NRGI emphasizes that governance of the mining and hydrocarbons sectors in DRC is still not “satisfactory.” The report’s principal recommendation is that the DRC’s government continue to pursue the reforms to which it has committed in legislation. In particular, this involves the implementation of the revised mining code and hydrocarbons law, to achieve the desired results of these reforms.
 
The analysis comes from NRGI’s interim evaluation of evolutions in DRC’s governance of mineral and hydrocarbon resources during the 2018-2019 period. The evaluation is based on the methodology from the Resource Governance Index (RGI), the latest edition of which NRGI published in 2017. In the new evaluation, DRC’s mining sector gained four points, its score increasing from 33 to 37 points out of 100. The oil sector score increased by 10 points, from 25 to 35 out of 100.
 
The state-owned enterprises subject to the interim evaluation, Générale des Carrières et des Mines (GECAMINES) and Société Nationale des Hydrocarbures (SONAHYDROC), show incrementally improved performance relative to the 2017 RGI. Their scores are boosted by disclosures through the EITI and the regulations introduced through recent legal reforms in the sector. However, GECAMINES and SONAHYDROC achieved overall scores that were “weak” and “poor” respectively.
 
“Transparency – in particular the disclosure of financial statements, and joint venture contracts, and observing public procurement rules for the sale of mining assets and shares – is critical to ensure state-owned enterprises contribute effectively to the efforts of the state,” said Jean Pierre Okenda, NRGI’s DRC country manager.
 
Notable progress has been made in the “value realization” component score of the RGI, which measures the way in which resource exploitation is organized to generate revenue. For both sectors, this score moved into the “satisfactory” band, to 69 out of 100 for mining and 62 out of 100 for hydrocarbons.
 
The mining sector’s “revenue management” score decreased by five points compared to the 2017 edition of the RGI, falling from 35 to 30 out of 100. However, it increased for the hydrocarbons sector, moving from 20 to 32 out of 100.
 
Overall, however, the governance of both sectors has not reached the “satisfactory” performance band. The disparity increases further between laws and their implementation. The gap between the existence of rules and their application is 20 points for the mining sector and 11 points for the hydrocarbons sector, compared to 16 and 6 points respectively in 2017.
 
“Good governance of the mining sector in the DRC is essential not only to ensure that Congolese citizens benefit from the mineral resources, but also to guarantee a responsible global supply chain for renewable energy technologies,” said Evelyne Tsague, co-director for Francophone Africa at NRGI.
 
DRC is among the largest global suppliers of the metals and minerals required for the global transition to renewable energies.
 
The “enabling environment” component has changed since the 2017 RGI, maintaining a score of 12 out of 100. However, there are different trends within this component. Elements where the DRC is making progress reflect improved government effectiveness and the availability of open data. At the same time, scores associated with monitoring corruption, freedom of expression and accountability are declining. Data on the enabling environment refer to the year 2018, during which the DRC experienced instability in its electoral process.
 
For further information about this evaluation, please contact:

Jean Pierre Okenda
DRC Country Manager
Natural Resource Governance Institute
jpokenda@resourcegovernance.org
+243 829781977
 
About the evaluation:

• The interim evaluation of the RGI for DRC in Guinea is available in English at www.resourcegovernance.org/analysis-tools/publications/resource-governance-index-interim-evaluation-drc-congo and in French at www.resourcegovernance.org/analysis-tools/publications/indice-gouvernance-ressources-naturelles-RDC-evaluation-intermediaire. The underlying data and justifications can be accessed at www.resourcegovernanceindex.org/about/interim-updates.
• This interim evaluation has been published only for DRC and its results are not comparable to the scores of other countries included in the previous editions of the Resource Governance Index.
• The Resource Governance Index (RGI) is a global assessment of extractive industry governance in 81 countries, published in 2017. Its results and other information are available at www.resourcegovernanceindex.org. The next edition of the RGI will be published in 2021.