It is absurd that a country with more forests than Brazil, more minerals than Australia, more oil than Norway and more hydro-power potential than Finland can be home to over 52 million people (70 per cent of the population) who live on less than 80 pence a day. The Democratic Republic of Congo is a country with vast natural wealth and it suffers this paradox.
Secretive mining deals left unchecked by the international community are a major factor in the Congolese people’s enduring misery.
Why does this happen? Who is behind it? Why does it matter to the UK and what can we do to stop it? Using evidence gathered from the Congo, and from off shore tax havens, Professor Willy Vangu, intends to explain to the world over the next few weeks the detailed workings behind BVI shell companies.
The failure of the UK and the IMF to enforce existing transparency obligations on the DRC Government is wasting taxpayers’ money and political capital. As a result, the opposition party of the DRC is calling on aid and loans direct to the DRC Government to be cancelled in return for renewed focus on tackling secretive mining deals, which keep the Congolese people poor and make a few within the DRC very wealthy.
In December 2011 a UK Member of Parliament released details of 59 shell companies, mostly registered in the British Virgin Islands and overseen by a Gibraltar trust, that have been involved in purchasing DRC mineral and oil assets. Backed by Global Witness, the MP’s analysis of just four of these transactions — all occurring in the last two years – showed a loss to the Congolese people of over $5.5 billion.
This was supposed to change as part of a 2009 loan from the International Monetary Fund. This $551 million loan was conditional upon the DRC government implementing broad transparency and governance reforms in the mining sector: mining contracts were to be published, along with the details of those individuals who are behind companies that own mineral assets and state assets would be put up for public tender. None of this has happened, and the IMF has turned a blind eye. All four of the transactions resulting in the $5.5 billion loss — 10 times the amount of the IMF loan – occurred after the IMF loan was made. That is, at the time when the IMF was supposed to be closely monitoring the DRC government’s promised reforms.
Cancellation of aid and loans to the DRC Government:
Professor Vangu said recently, “UK Ministers should work to suspend all direct aid and loans to the Congolese government through the IMF and World Bank until it has fully complied with its obligations to the IMF. We are calling on all governments to suspend direct support of the DRC Government, including through futile transparency programmes like PROmines. UK Ministers should also seek guarantees from the DRC that secret sales of state assets to offshore ‘shell’ companies will be properly investigated.”
Furthermore, summon the will to clamp down on matters connected to your jurisdiction. This will be cheaper for the British taxpayer and more beneficial to the Congolese people than continuing to pour aid into an unaccountable government. In short, keep your aid but help end the raid. The significant impact it will make to improve the lives of the Congolese is not to be underestimated.”
Conservative MP and member of the International Development Select Committee, Pauline Latham has called for the suspension of direct loans to the DRC government through the IMF. She has said, “Until the IMF start enforcing the transparency caveats attached to their massive loan to the DRC Government, British taxpayers should stop their support of this regime.” Professor Willy Vangu, International Spokesperson for the UDPS – DRC Opposition Party