ENRC under fire over Congo mines

Criticism by RAID and African Progress Panel

Richard Lee's picture

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Strategic communications for WWF

May 13th, 2013

The multinational mining company, Eurasian Natural Resources Corp (ENRC), is back in the news – and the firing line – once again due to its controversial investments in the Democratic Republic of Congo (DRC).

Just days after the influential criticised some of its major deals in Congo, a human rights organisation has launched a legal complaint in relation to two of its mining concessions in the DRC.

Lodged by the UK-based (RAID), the complaint has been brought under the OECD Guidelines for Multinational Enterprises and concerns the impoverished population of Kisankala and Lenge villages, which are located on two -controlled mining concessions – Swanmines and Comide – in the Congolese province of Katanga.

The only clean water system in Kisankala has been in disrepair for over 10 months, following a clash between local security guards and artisanal miners based at Kisankala. “This is an urgent and pressing matter, which is causing ongoing hardship to the population of the village,” said Tricia Feeney, RAID’s Executive Director, who visited Kisankala in March 2013.

RAID is calling on the UK National Contact Point to assess whether there have been any breaches of the principles and standards under the OECD Guidelines, in particular the recommendations to companies to respect the human rights of those affected by their activities.

“Apart from the Kisankala water supply, the other objective of the complaint is to address underlying problems such as the claims concerning resettlement and compensation, the alleged absence of environmental and social monitoring, particularly for Lenge village, and the alleged behaviour of private security guards,” said barrister Tom Bradford of Russell-Cooke LLP, which is acting for RAID.

Meanwhile, ENRC has also had to defend itself against criticism of some of its deals in a report issued last week by the Africa Progress Panel, which is led by former UN Secretary-General Kofi Annan. The panel’s report claims that the DRC lost out on about US$1.4 billion in revenue by selling undervalued copper and cobalt deposits now controlled by ENRC and Glencore Xstrata Plc.

"Privatization of the DRC's minerals sector has been plagued by a culture of secrecy, informal deals and allegations of corruption," claimed the report. "The complex structures of interlocking offshore companies, commercial secrecy on the part of major mining companies, and limited reporting by state companies and government agencies to the DRC's legislators creates what amounts to a secret world – a world in which vast fortunes appear to be accumulated at the expense of the DRC's people."

In an e-mailed statement to Bloomberg, ENRC argued that all its acquisitions since its 2007 initial public offering "followed appropriate regulatory and board best practice and were cleared by a committee of non-executive directors, led by our former Executive Chairman Mehmet Dalman, alongside the professional advisers whose approvals for these transactions is mandatory."

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