EITI DEMARCHE

UNCLAS KINSHASA 000660 SIPDIS SENSITIVE SIPDIS DEPT PASS TO EEB/ESC/IEC MAUEL, EEB/ESC/IEC HAENDLER, AND EEB/ESC/IEC/ENR HAYMOND E.O. 12958: N/A TAGS: ECON EMIN EAID ENRG EPET CG SUBJECT: EITI DEMARCHE REF: A. SECSTATE 75118 ¶B. 05 KINSHASA 880 ¶C. 05 KINSHASA 2070 ¶D. KINSHASA 160 ¶E. KINSHASA 533 ¶1. (U) Post submits the following in response to reftel A, regarding the Extractive Industries Transparency Initiative (EITI). GDRC'S RESPONSE -------------- ¶2. (U) The GDRC has not yet responded to the EITI letter mentioned in reftel A. DFID delivered the letters to DRC officials on June 5. GDRC COMMITMENT AND CAPACITY -------------- ¶3. (SBU) The current government has publicly stated it is committed to increasing transparency in the extractive industries (reftel D),but it has not demonstrated it has the capacity, resources or political will to implement the EITI on its own or in partnership with civil society or industry. In 2005, then-Vice President Jean-Pierre Bemba announced the DRC's participation in the EITI; the Ministry of Plan oversaw the creation of a commission, but plans have not meaningfully advanced further (reftels B and C). In May 2007 the GDRC's Minister of Plan replaced the coordinator of the DRC's EITI commission, which is composed of civil society, GDRC and industry representatives. Several commission members objected to the action, and the U.K. Embassy has informed the GDRC it views this event as a step backwards in implementation of the EITI and general transparency principles. ORGANIZATION OF EXTRACTIVE INDUSTRY -------------- ¶4. (U) The GDRC is in the early stages of reform of the extractive industry sector, which already generates well over one-half of the GDRC export revenue (reftel D) and an increasing amount of investment. The GDRC's control and organization over extractive industries varies widely, depending upon the sector and region of the country. Artisanal mining, the influence of armed elements and lack of government control in some regions are among the factors that reduce the sector's organization. Hundreds of thousands of artisanal miners are estimated to work in the DRC, and in sectors such as diamond mining these diggers produce the majority of the DRC's output. In portions of Eastern Congo, especially Ituri District and the Kivu provinces, the central government has little or limited control over production and export, while armed elements often exercise substantial control. REVENUE REPORTING -------------- ¶5. (U) There are no government or organized industry efforts to report revenues under the EITI. The GDRC is, however, a member in good standing of the Kimberley Process Certification Scheme. Select copper mining companies in the DRC are working with a USG-supported Extractive Industries Alliance program (EIA),discussed below, to support transparency generally. CIVIL SOCIETY CAPACITY -------------- ¶6. (SBU) Civil society's capacity to urge the implementation of the EITI is limited. Both domestic and international NGOs advocate in favor of implementation, but their efforts have minimal impact. (Comment: Some NGOs, including Global Witness and RAID, are perceived as representing increasingly extreme positions on sector reform, undermining their credibility in the donor and GDRC communities. End comment.) Many domestic NGOs lack necessary personnel or financial resources, although a number of interested Congolese NGOs have formed a DRC chapter of the international Publish What you Pay coalition, and in April this group held a seminar. DONOR SUPPORT -------------- ¶7. (SBU) As mentioned in paragraph five, the USG (through USAID Kinshasa),is developing an Extractive Industries Alliance (EIA). Thus far, the USG has committed USD 3.5 million over 28 months for implementation of this Global Development Alliance program. Select mining companies and DFID are also contributing funds. The program's main goals are to collaborate with mining companies to create sustainable social development and a framework of revenue transparency and good governance (reftel E). According to a DFID official, the World Bank (WB) is planning to fund EITI implementation, but has delayed doing so until the GDRC satisfactorily responds to the WB's concerns about the replacement of the commission's coordinator, an action discussed above. MEECE