The Democratic Republic of the Congo (DRC) has achieved a high overall score in implementing the 2019 EITI Standard (85.5 points). The overall score reflects an average of the three component scores on Stakeholder engagement, Transparency and Outcomes and impact.
The EITI Board commends the DRC for achieving a very high score on Outcomes and impact (95.5 points). This reflects the DRC’s use of its EITI implementation to generate debate and support reforms in, for example, contract disclosure, subnational payments and quasi-fiscal expenditures despite restrictions linked to the COVID-19 pandemic. The DRC EITI has followed up on recommendations with impetus from the highest levels of government, including the Presidency, which has yielded tangible reforms. The DRC EITI has regularly taken stock of the outcomes and impact of implementation and has adapted outreach activities to the impacts of the COVID-19 pandemic to further generate the use of extractive data and stimulate vibrant public debate. The Board commends all three constituencies for their efforts to improve the accessibility of data disclosed through the EITI on extractive contracts, barter agreements, license allocation and state-owned enterprise (SOE) transactions. There is also evidence of use of EITI data by researchers, and strong cooperation between government institutions such as the Ministry of Hydrocarbons and the MSG. The DRC was awarded 3.5 additional points for the effectiveness and sustainability of EITI implementation.
On Transparency, the DRC reached a moderate score (78 points). The DRC has used its EITI disclosures to make new information on licensing information, barter agreements, SOE financial relations and subnational payments available to the public. Both the mining and petroleum cadastres have been improved since the last Validation in 2019. The Board commends the DRC for the timeliness of its disclosures and for the publication of thematic reports on issues of high public interest such as SOEs, licensing, contract disclosure, beneficial ownership, subnational transfers, mining royalties and barter-type infrastructure provisions of mining agreements. However, new areas of the 2019 EITI Standard such as those related to project level reporting or beneficial ownership are yet to be fully implemented. In many areas, the DRC EITI has gone beyond the mapping of existing disclosures to conduct a diagnostic of current practices, such as disclosing the value of direct subnational payments that should have been transferred to local governments, or the review through an independent study of the infrastructure contract SICOMINES. The DRC EITI regularly meets the robust public demand for EITI data on the country’s extensive and complex mining sector. This creates opportunities for the DRC EITI to expand its coverage of areas of increasing public interest in future, such as the environmental impact of the extractive industries, artisanal mining and local content in the mining sector. The Board encourages the DRC to further expand its use of EITI disclosures to strengthen transparency in the allocation of mining rights, financial relations of SOEs, social and environmental expenditures. The DRC should pursue its efforts to improve transparency around SOEs’ quasi-fiscal expenditures, including SOEs' fiscal advances to the state. The introduction of online reporting and certification systems will help the DRC to increase the reliability of the financial data reported through the EITI and to further improve the timeliness of EITI disclosures.
The DRC achieved a moderate component score also on Stakeholder engagement (82.5 points). Despite the COVID-19 pandemic and some constraints in broader civic space identified in international NGOs’ assessments of the DRC, the three constituencies appear actively engaged in all aspects of EITI implementation, and have been renewing their representation on the MSG. The civil society constituency is very dynamic, drives strong public debate on extractives and regularly engages with stakeholders from various organisations outside of those directly participating in the EITI process. The Validation did not find evidence that broader constraints on civic space have curbed civil society’s engagement in all aspects of the EITI process.
However, the Board expresses strong concern over the impact of criminal prosecutions against whistle-blowers working on extractive issues on the environment for civil society engagement in public debate on natural resource governance. The Board welcomes the high-level commitment of the Government of the DRC to review its judicial system and to consider appropriate reforms, while preserving the independence of the judiciary. The Board further recognises the government’s plans to enact legislation for the protection of human rights defenders and whistle-blowers. The government is urged to publicly explain the circumstances around these prosecutions and ensure that due legal process is followed in such cases. There is scope for the MSG to further strengthen its mechanisms for considering gender balance in the representation of the different constituencies, for strengthening communication with stakeholders beyond the MSG, in particular from industry, and for improving transparency on per diem payment practices. The three constituencies have adapted their communication and coordination methods during the COVID-19 pandemic, allowing them to uphold a high pace and quality of EITI implementation. In the context of broad-based demand and interest for information on the extractive sector, stakeholders engaged in the EITI are considered authoritative sources of information and reliable technical partners for stakeholders including government entities, industry associations and researchers.
The Board has determined that the DRC will have until a next Validation commencing on 1 January 2025 to carry out corrective actions regarding MSG oversight (Requirement 1.4), contract and license allocation (Requirement 2.2), beneficial ownership (Requirement 2.5), state participation (Requirement 2.6), direct subnational payments (Requirement 4.6), disaggregation (Requirement 4.7), data reliability (Requirement 4.9), distribution of revenues (Requirement 5.1), social and environmental expenditures (Requirement 6.1), SOE quasi-fiscal expenditures (Requirement 6.2). Failure to demonstrate progress on Stakeholder engagement or Transparency in the next Validation may result in temporary suspension in accordance with Article 6 of the EITI Standard. In accordance with the EITI Standard, the DRC EITI MSG may request an extension of this timeframe or request that Validation commences earlier than scheduled.
Corrective actions and strategic recommendations
The EITI Board agreed the following corrective actions to be undertaken by the DRC. Progress in addressing these corrective actions will be assessed in the next Validation commencing on 1 January 2025:
- In accordance with Requirement 1.4a.ii, the MSG and each constituency should ensure that the amendments proposed in the new decree reflect the requirement, in particular regarding consultation with wider constituency, codification of non-trivial deviations from current procedures and gender balance in their representation to progress towards gender parity. The enactment of the amended decree should be followed-up closely in the practice of the MSG’s oversight of the EITI process. A robust mechanism to detect, prevent and address perceived or actual conflicts of interest within the MSG and ensure adherence with the EITI Code of Conduct should help strengthen the MSG’s accountability. The practice of per diem, in addition to the rules, should be regularly disclosed.
- In accordance with Requirement 2.2.a.iv, the DRC should ensure that any future assessment of significant deviations from legal procedures in the mining licensing process includes awards and transfers made by SOEs in the form of farm-outs, transfers or tenders in the period under review, as well as an explanation of the rules determining the type of procedure followed by SOEs in practice. To strengthen implementation, the DRC is encouraged to include mining licensing in its EITI work plan, in order to follow up on the recommendations from its thematic study on licensing.
- In accordance with Requirement 2.5 by January 2022, the DRC should maintain a publicly available register of the beneficial owners of the corporate entities that apply for or hold a participating interest in an exploration or production oil, gas or mining license or contract, including the identities of their beneficial owners, the level of ownership and details about how ownership or control is exerted. Any significant gaps or weaknesses in reporting on beneficial ownership information must be disclosed, including naming any entities that failed to submit all or parts of the beneficial ownership information. Information publicly disclosed about the identity of the beneficial owner should include the name of the beneficial owner, the nationality, and the country of residence, as well as identifying any politically exposed persons. It is also recommended that the national identity number, date of birth, residential or service address, and means of contact are disclosed. The DRC EITI should assess any existing mechanisms for assuring the reliability of beneficial ownership information and agree an approach for extractive companies to assure the accuracy of the beneficial ownership information they provide. To achieve this target, the DRC should request all license holders to disclose beneficial ownership information and require all applicants of extractive licenses to disclose their beneficial owners. The DRC is encouraged to agree priorities for beneficial ownership disclosures and, based on these priorities, plan efforts to obtain this data. For example, the DRC may choose to prioritise disclosures by certain types of companies, companies holding a certain type of license or producing a certain commodity due to risks related to corruption, tax evasion or circumventing provisions for local participation. These priorities should guide outreach efforts to companies and provide them guidance. It is recommended that disclosures are published in open data format, comparable and easy to analyse. The DRC may also wish to expand beneficial ownership disclosures to other segments of the upstream extractive value chain, for instance through collection and disclosure of beneficial ownership information from extractive-sector service providers, to enable monitoring of adherence to local content provisions and to manage corruption and tax evasion risks.
- In accordance with requirement 2.6, DRC should ensure that the details about any loans or loan guarantees to mining, oil and gas companies operating within the country are adequately disclosed, including loan tenor and terms (i.e. repayment schedule and interest rate). To strengthen implementation, the DRC is also encouraged to institutionalise and systematise its review of state participation in the extractive industries, in order to improve understanding of the contributions of SOEs to the country's economy, whether from a financial, economic or social perspective. To strengthen implementation, extractive SOEs are encouraged to regularly publish audited financial statements on their respective websites, to systematically inform the public on the practice of the financial relationship between the State and its companies.
- In accordance with Requirement 6.2, the DRC is required to develop an EITI reporting process for material SOEs’ quasi-fiscal expenditures with a view to achieving a level of transparency commensurate with other payments and revenue streams and should include SOE subsidiaries and joint ventures. These disclosures should cover all material SOEs’ public social expenditures, such as loans and other advance tax payments to the state, undertaken outside of the national government budgetary process.
- In accordance with Requirement 4.7, the DRC should agree a definition of project (license, contract and concession) in line with the EITI Standard and ensure that all financial data in its EITI reporting on government extractive revenues that are levied on a project level are reported at a project level. The DRC should ensure that any substantially interconnected agreements or overarching agreements are publicly identified, and that relevant data for each company is sufficiently linked to individual projects. To further improve on government systems, and their ability to monitor payments on a per-project basis, the MSG is encouraged to engage government agencies responsible for their collection. This could include exploring whether any changes are needed in laws or in statutory instruments and regulations, while ensuring such changes are cost-effective.
- In accordance with Requirement 4.9, the DRC should ensure that financial data disclosed by the government agencies are subject to robust quality assurances that ensure that financial data in the DRC’s EITI Reports is sourced from sources subject to regular audit in line with international standards.
- In accordance with Requirement 5.1, the DRC should ensure that the management of any extractive revenues that are not recorded in the national budget are specifically described, if possible with reference to publicly available financial reports. The DRC should ensure its EITI reporting publicly clarify the management of extractive revenues not recorded in the national budget. The DRC should ensure that both the companies and the central bank or any other entity in charge of managing extractive revenues not recorded in the national budget consistently disclose disaggregated data on the management of these funds, with reference to publicly accessible financial reports where applicable. The DRC is urged to follow up with relevant judicial authorities to investigate allegations of irregularities in the management of extractive revenues not recorded in the national budget, such as the mining royalties transferred to the Future Generation Mining Fund (FOMIN).
- In accordance with Requirement 4.6, the DRC should ensure that all companies, all provincial revenue directorates, as well as decentralised government agencies (ETDs), disclose subnational extractive revenues, to levels of reliability as per Requirement 4.9. The DRC should ensure that the legal framework for different sub-national payment streams is publicly described in the context of each province to ensure comprehensiveness of disclosures, including for specific mining royalty allocation agreements between decentralised government agencies (ETDs) and provinces and between different ETDs. Reconciliation of revenues at the subnational level would only be feasible with the knowledge of the actual beneficiaries, in order to foster accountability for the management of extractive revenues by its beneficial owners. Payments should be reported by company, by actual recipient entity and by project where appropriate.
- In accordance with Requirement 6.1, the DRC should ensure public disclosure of material social expenditures by companies that are mandated by law, including by the terms of a community development agreements that are required by law, or the contract with the government that governs the extractive investment. Where the beneficiary of the mandated social expenditure is a third party, i.e., not a government agency, it is required that the name and function of the beneficiary be disclosed. Where extractive companies’ payments to government are related to the environment and considered material, these should be comprehensively disclosed in accordance with Requirement 6.1.b. Where the DRC EITI agrees that discretionary social and environmental expenditures and transfers are material, it is encouraged to develop a reporting process with a view to achieving transparency commensurate with the disclosure of other payments and revenues.
The DRC is encouraged to consider the following recommendations to strengthen EITI implementation:
Outcomes and impact
- To strengthen implementation, the DRC is encouraged to consider efforts to link the annual EITI work plan to a monitoring framework. The DRC EITI is encouraged to explore innovative approaches to extending EITI implementation to inform public debate about natural resource governance and encourage high standards of transparency and accountability in public life, government operations and in business.
- To strengthen implementation, the DRC is encouraged to ensure that all data in its EITI reporting is systematically published in open data format. The DRC is encouraged to make systematically disclosed data machine readable and inter-operable, and to code or tag EITI disclosures and other data files so that the information can be compared with other publicly available data.
- To strengthen implementation, the DRC may wish to consider ways of more regularly reporting to the public on progress in following up on recommendations from past EITI Reports and Validation, with a view to strengthening the EITI’s accountability as a mechanism to support reforms.
- To strengthen implementation, the DRC is encouraged to ensure that its review of outcomes and impact of the EITI process is publicly disclosed on an annual basis. The DRC EITI is encouraged to document how it has taken gender considerations and inclusiveness into account.
- To strengthen implementation, the government is encouraged to sustain its technical and financial support for EITI implementation, with a view to institutionalising EITI implementation into government systems.
- To strengthen implementation, the industry constituency is encouraged to continue its technical support for all aspects of the EITI process, including in the technical aspects of EITI disclosures and in strengthening extractive companies’ systematic disclosures of data required by the EITI Standard.
- To strengthen implementation, the government of the DRC is urged to explain the judicial process related to whistle-blowers sentenced in absentia for their allegations of corruption in extractive projects and ensure that due legal process is followed in future prosecutions. The DRC is encouraged to pursue the enactenaction of legislation for the protection of human rights defenders and whistle-blowers.The MSG is encouraged to regularly monitor developments regarding civil society’s ability to engage in all aspects of the EITI process and to organise awareness-raising sessions on the EITI protocol: Participation of civil society, with participation from the three constituencies. The government should ensure that there are no legal, regulatory or administrative constraints on civil society’s public expression on natural resource governance issues, including in their use of EITI disclosures to raise concerns over extractive industry governance. The government, in collaboration with the MSG, is encouraged to document the measures it undertakes to remove any obstacles to civil society participation in the EITI, should these arise in future. In accordance with the EITI protocol: Participation of civil society, civil society MSG members are encouraged to formalize a reporting mechanism for civil society members on and off the MSG to report any case of restriction that could constitute a breach of the protocol, to be then brought to the attention of the MSG. The MSG is expected to document how it addresses these concerns on a regular basis.
- To strengthen implementation, the DRC is encouraged to ensure that there is systematic disclosure of significant exploration activities in the extractive sector of the country.
- To strengthen implementation, the DRC may wish to ensure regular publications of estimates of informal extractive activities (including for GDP) on government portals, similarly to the production estimates published by the Ministry of Mines and Geology.
- To strengthen implementation and increase public access to extractive contracts, the DRC is encouraged to establish centralised and regularly updated databases of published contracts and licences in the mining, oil and gas sectors, for example on the websites of the relevant government entities. The DRC may wish to strengthen its use of the EITI process to assess the effectiveness of the system for publishing extractive contracts and licences.
- In accordance with Requirement 6.4, the DRC is encouraged to strengthen its use of EITI reporting to disclose the relevant legal provisions and administrative rules related to environmental management and monitoring of extractive projects, as well as review actual practices related to environmental management and administrative enforcement mechanisms.
- To strengthen implementation, the Ministry of Hydrocarbons is encouraged to update its online register of petroleum licences, in particular any changes in the status of the licences - for example, cancellation or transfer. The Ministry of Hydrocarbons could include the geographical coordinates, dates of application and commodities covered by each mining title in the online register. To promote understanding of the information contained in the online register, the Ministry of Hydrocarbons is encouraged to include the names of petroleum licence holders and/or operators. The Ministry of Mines is encouraged to publish all mining licence data in an open format to facilitate research and analysis.
- To strengthen implementation and monitoring of in-kind payments, the DRC is encouraged to develop a reporting framework to disclose future in-kind payments from all mining, oil and gas projects giving rise to in-kind revenues to the state once they enter production phase.
- To strengthen implementation, the DRC is encouraged to ensure that the value of oil and gas production is systematically disclosed in a similar way to current practice in the mining sector.
- To strengthen implementation, DRC is encouraged to disclose through the publications of the Ministry of Hydrocarbons export volumes and values for the oil and gas sector, in a similar fashion than the EITI disclosures on its open data portal.
- To strengthen implementation, the DRC could expand its use of EITI disclosures to facilitate access to the audited financial statements of extractive companies operating in the country. The DRC is also encouraged to consider ways of building on its "flexible” EITI reporting to pilot alternative ways of ensuring comprehensive and reliable disclosures of government revenues from the extractive industries.
- To strengthen implementation, the DRC could explore ways of strengthening systematic disclosures of information related to barter-type infrastructure arrangements such as the SICOMINES agreement. The DRC may wish to expand its use of EITI disclosures to improve transparency in the tax exemptions related to the SICOMINES agreement.
- To strengthen implementation, the DRC is encouraged to publicly disclose timely information on expenditures funded by extractives revenues. The DRC, and in particular the Ministry of Budget, is encouraged to publicly disclose information about budget assumptions and projected production, commodity prices and revenue forecasts for the extractive industries.
- To strengthen the implementation, the DRC is encouraged to develop a systematic mechanism for timely disclosure by provincial and decentralised authorities of subnational transfers of extractive revenues in accordance with Requirement 5.2. The government and development partners are encouraged to continue and strengthen support to the financial management capacities of provincial and decentralised authorities, as well as to relevant civil society and media initiatives, to promote accountability in the management of extractive revenues transferred to the provinces.
The government and the MSG are encouraged to consider these recommendations, and to document the MSG’s responses to these recommendations in the next annual review of outcomes and impact of EITI implementation.
On 16 October 2019, the Board agreed that the Democratic Republic of the Congo had made meaningful progress overall in implementing the 2016 EITI Standard. The next Validation of DRC was scheduled to commence on 16 April 2021. Due to the transition to the revised Validation model, the Board rescheduled the Validation to commence on 1 January 2022.
The DRC EITI collated documentation for Validation using the Board-agreed data collection templates on Stakeholder engagement, Transparency and Outcomes and impact. The files are available on the DRC EITI website. The International Secretariat’s Validation team prepared an initial assessment following the Validation procedure and Validation Guide. In accordance with the Validation procedure, a public call for stakeholder views on EITI implementation was open from 15 November 2021 to 1 January 2022. Virtual stakeholder consultations were undertaken from 1 to 28 February 2022. The draft assessment was shared with the MSG for feedback on 22 May 2022, and MSG comments were received on 22 June 2022, after which the assessment was finalised for the Validation Committee’s review.
In accordance with Article 4.c of Section 4 of the 2019 EITI Standard, the overall assessment consists of component scores on Stakeholder engagement, Transparency and Outcomes and impact, as well as an overall numerical score. The component score represents an average of the points awarded for each applicable requirement. The points awarded on the effectiveness and sustainability indicators are added to the component score on Outcomes and impact. The overall score is the average of the three component scores.
Assessment of EITI requirements
- Not met
- Partly met
- Mostly met
- Fully met
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The three components of Validation each receive a score out of 100, as follows:
Outcomes and impact
95.5 Very high