Press Release No./Ref. 001/01/TPRDC/2024: ARSP Litigation – Kibali Goldmines

The Coalition “ALL FOR THE DRC” is closely following the dispute between the Regulatory Authority for Subcontracting in the private sector (ARSP) and the Kibali Goldmine company regarding certain subcontracting contracts; it proposes a realistic solution that benefits all parties, and especially genuine Congolese subcontractors, with preference for those from the region, which does not block the operations of this mine on which many Congolese and the economy in the northern part of the country depend.

In his letter N/Ref: ARSP/DG/3506/2023 dated 07/12/2023 to the Managing Director of Kibali Goldmine, concerning the ” NOTIFICATION OF CESSATION OF SUBCONTRACTING CONTRACTS BY INELIGIBLE COMPANIES WITHIN KIBALI GOLDMINE SA” , the Director General of the Regulatory Authority for Subcontracting in the private sector granted him a 30-day period to terminate the contracts of companies such as TRADE FREIGHT FORWARDERS (TCFF), CARGOTRANS, PARAGON, SANDVIK, EPIROC, GCS, HIMA, LAFARGE, KAS, KAF, EUROPE FONDATION, PRIMEFUELS, ORICA, CONGO RIVER, TRAMINCO, COMICO AUTREDO and many others that “supply everyday consumer goods and services requiring no particular expertise and even less that of foreign origin” , in compliance with Law No. 17/001 of February 8, 2017 establishing the rules applicable to subcontracting in the private sector.

The same letter also reminds you that: “Exceptionally, with regard to the company TCFF, due to the illegal practices of undue collection of commissions on the subcontracting markets under its responsibility, the ARSP orders you to remove it from your databases with immediate effect.” For fear of being subjected to the sanctions provided for in Article 28 of the law.

In the second letter from the Director General of the Mining Subcontracting Regulatory Authority N/Ref: ARSP/DG/00097/2024 of 15/01/2024 to the Director General of Kibali Goldmine, concerning the ”NOTIFICATION OF CANCELLATION OF SUBCONTRACTING CONTRACTS SIGNED BETWEEN KIBALI GOLDMINE AND ITS MINING COMPANIES NOT ELIGIBLE FOR SUBCONTRACTING IN DRC” , it is written as follows:
”Given the expiry of the period granted, the ARSP orders you to remove with immediate effect the following companies from your database with the legal consequence of the nullity of any contract signed with them without prejudice to the sanctions provided by law. GECONTRANS, TCL, PARGON, SANDVIK, EPIROC, GCS, HIMA, LAFARGE, KAS, KAF, EUROPE FONDATION, PRIMEFUELS, ORICA, CONGO RIVER, TRAMINCO, COMICO, AUTOREDO.

Regarding the companies: TRACTAFRICA CONGO EQUIPMENT SA, BOART-LONGYEAR SAU, PARAGON SARL, AIR LIQUID SA, KMS SA, their cases are still being processed and will be reviewed during the on-site audit that will be conducted as a continuation of the 2023 audit.

Our Coalition notes that the TCFF company is being singled out by the ARSP because of illegal practices and supports its removal from the Kibali Goldmine database with immediate effect, in compliance with the laws of the country.

However, she is concerned that the ARSP (Regulatory Authority for the Promotion of the Environment) is not proposing a concrete solution regarding the replacement of companies like Orica, Lafarge, GCS, etc., whose services are provided in the mines of Haut-Katanga and Lualaba, as well as in certain provinces where subcontracting laws favoring Congolese nationals are more restrictive than in the Democratic Republic of Congo (DRC). This leaves the door open to the intrusion of officials using companies owned by politically exposed persons (PEPs), which have been denounced for years in Lualaba and Haut-Katanga as a real obstacle to the emergence of the genuine middle class desired by law and by all.

It is also reported that to date, several files of companies with Congolese capital and wholly owned by Congolese citizens have been held up at the ARSP (Regulatory Authority for Public Services) for several months, awaiting Subcontractor Certificates. These certificates are delayed without objective reasons or explanations, thus harming Congolese entrepreneurs and companies, complicating the awarding of contracts by mining companies such as Kibali Goldmine, resulting in lost revenue for the ARSP, and hindering the creation of the middle class envisioned by law and so valued by His Excellency the President of the Republic and Head of State. The ARSP should be facilitating the issuance of Certificates and assisting Congolese companies in obtaining all the necessary documents, as is done elsewhere.

Article 12 of the law on subcontracting in the DRC stipulates: ”Any company established on the national territory has the obligation to publish annually the turnover achieved with subcontractors as well as the list of the latter. Within its structure, it implements a training policy designed to enable Congolese citizens to acquire the technical skills and qualifications necessary to carry out certain activities.

As part of the regularization of the dispute with ARSP, our Coalition therefore requests that Kibali Goldmine take into account the following companies with Congolese capital, owned by Congolese individuals with extensive knowledge of the sector, who are currently working there and have already carried out projects: INTER PRIENTAL BUILDERS (Construction, Transport, Maintenance and Logistics) , ACTION B (Drilling, Transport and Logistics), BSEA (Socioeconomic Studies and Community Development), OGK (Transport, Logistics and Fuel Supply), MUNGU LENI (Transport and Crushing), AMAZONE (Drilling and Transport), MODERNITE (Transport), KJEM (Maintenance and Construction), COMISEMI (Drilling, Logistics and Supply of Mining Equipment), and the MAGOMBO Economic Interest Group. BUSINESS GROUP (Transport and supply of fuel, Gas and heat, UTUTU/GUBS GROUP (Transport, logistics and supply of mining equipment) and others in the region to replace foreign companies not requiring foreign expertise.

It should be noted that the economic and financial environment in which Kibali Goldmine operates is totally dependent on foreign countries and that all the major companies and banks have followed Kibali Goldmine.

Thus, since 2015, and well before the 2017 subcontracting law, this mining company had been using local transport companies (owning 15 40-ton dump trucks, 3 loaders, 2 tanker trucks, and 2 graders) to transport ore from the Mengu mine to the processing plant (approximately a distance of 12.5 km), but without success (see the copy of the document attached at the end). This failure forced the company to resort to foreign companies with the support of their countries’ financial institutions, unlike companies in the DRC. Kibali Goldmine, under Managing Directors Louis Watum and Cyrille Mutombo, also helped Congolese citizens in the region to establish and develop subcontracting and service companies, which have since become large businesses. This is the case of Uélé Motors or the company IOB of Mr Samuel Feni, which is in transfer of competence with the company KMS and which is already carrying out major works in the mine, as part of the implementation of the philosophy of the boss of Randgold and then Barrick, Mr Mark Bristow, of entrusting all work to nationals in all the countries where they operate.

Article 6 of the law on subcontracting stipulates: “Subcontracting activity is reserved for companies with Congolese capital promoted by Congolese citizens, regardless of their legal form, whose registered office is located on the national territory. However, when there is an unavailability or inaccessibility of the expertise mentioned in the paragraph above, and provided that proof is furnished to the competent authority, the main contractor may resort to any other company governed by Congolese law or to a foreign company, provided that the activity does not exceed six months; otherwise, it shall create a company governed by Congolese law. The sectoral Minister or the local authority shall be informed beforehand.”

Taking into account the realities in the mines of Haut-Katanga and Lualaba, where almost all the major mining subcontractors are foreign companies or a few Congolese companies owned by expatriates and not majority controlled by Congolese as real owners (catering, transport of ores and other supplies, supply of fuels and electricity apart from SNEL, management of explosives and maintenance of underground mines, provision of internet, financial and banking services, import-export operations, travel facilities, etc.), it is known to all that the ARSP and the mining companies have not worked on the transfer of skills and technology from which the mining sector suffers today and which makes it difficult to strictly and totally apply the law on subcontracting in this sector. This reality argues in favor of a strict and regulated moratorium granted to all mining companies to work with the ARSP (Regulatory Authority for the Protection of Mining Sectors), the government, the Chamber of Mines, the FEC (Federation of Congolese Enterprises), and civil society on the sectors and subcontractors covered by Article 6 of the law.

The 30-day deadline for changing subcontractors given to an automated underground mine like Kibali Goldmine, operating in a nearly landlocked area with few facilities, seems unrealistic in light of the aforementioned article, especially given that it is common knowledge that the major service providers and contractors in the mines of southern Katanga are expatriates.

The Coalition “ALL FOR THE DRC” reminds defaulting companies and the ARSP that the law provides for very specific penalties in Congolese francs, and not in tax francs, which must be respected and paid to the Public Treasury if necessary.

The “ALL FOR THE DRC” coalition encourages local entrepreneurs working with Kibali Goldmine to organize themselves into Economic Interest Groups (EIGs) to enable them to build up substantial guarantees and capital in order to secure and bid on major contracts. The coalition requests that the ARSP (Regulatory Authority for Public Services) promptly issue them subcontracting certificates or attestations.

Article 28 stipulates: “Any main contractor who subcontracts with a company in violation of Article 6 of this law shall be punished by a fine of 50,000,000 to 150,000,000 Congolese francs. Furthermore, an administrative measure of temporary closure of the company shall be taken, as appropriate, by the Ministers responsible for the Economy, Industry, and Small and Medium-Sized Enterprises, the Provincial Governor, or the local administrative authority for a period not exceeding six months.” Any subcontracting agreement concluded in violation of Article 6 of this law is null and void.

Article 29 states: “Any party to a subcontracting agreement in violation of Article 23, paragraph 2 of this law is punishable by a fine of 10,000,000 to 50,000,000 Congolese francs.”

“ALL FOR THE DRC” reminds everyone (ARSP and the private sector) that the subcontracting law was enacted to protect workers in subcontracting companies, create jobs for Congolese nationals, and broaden the tax base for the benefit of the public treasury. It was not designed to benefit politically exposed persons (PEPs), foreigners, or, above all, to create ” Black Diamonds” at the expense of the Congolese middle class.

Therefore, in light of the aforementioned elements, TOUS POUR LA RDC recommends:

1. Granting a grace period not exceeding 6 months to Kibali Goldmine and these foreign-owned companies for a transfer of skills to Congolese companies, also taking into account all the legal and socio-economic implications and parameters;

2. Compliance with mine standards of the sample of Congolese companies already present on the Kibali Goldmine mining site;

3. The elimination of all expatriates in the selection process, especially in the decision-making process for awarding contracts for mines in the DRC, including Kibali Goldmine;

3. ALL FOR THE DRC proposes sincere and objective discussions with ARSP and Kibali Goldmine on this matter;

4. The establishment of a committee to monitor the recommendations, composed of ARSP, Kibali, FEC and civil society.

Done at Doko-Kinshasa-Lubumbashi-Watsa, on January 29, 2024.

Media Contacts :

-Thank God Thuambe, Recoren NGO, (+243817417307)

(Network of Environmentalists and Communicators on Natural Resources)

-EMMANUEL ARAMA, Promoter of CANAL UELE FM&TV Press House, (+243821909882)

-ERNEST MPARARO, LICOCO, (+243816049837)

-FRANCK FWAMBA, CORAC and RND ASBL, (+243810348785)

Addresses: