Anti-corruption investigators in the Democratic Republic of Congo say they cannot trace more than $70 million that mining companies claim to have paid to the government.

Professor Jeremy Dumba is the Congo coordinator of a global anti-corruption watchdog, the Extractive Industries Transparency Initiative, or EITI.  His team has collected figures on what mining companies say they paid the DRC government, and what the government says it received from those companies.  On Thursday, he announced that he could not make the two sets of figures match.

Dumba said there are a lot of gaps in the figures, and he and his team had not been able to reconcile the payments declared by companies with the state’s receipts.  He said it was very difficult to get figures from the state revenue service that matched what the companies had declared.

Dumba submitted the figures as part of a long-overdue EITI report on Congo.  He said the latest figures collected for the years 2008 and 2009, show mining companies say they paid tax revenues far higher than what the government says it received from them.  In 2008 for example, they declared payments of $121 million, while the government said it received $69 million.  In 2009 the gap was smaller -- $99 million paid, say the companies; $73 million received, says the government.

EITI

The EITI was launched by the British government in 2002 and is supported by the United States and other Western countries. It brings together governments, companies and civil society to try to ensure that taxes from mining, oil and gas are properly accounted for and go to national treasuries. The initiative aims to improve governance in countries that depend on those industries so that the revenues are used to reduce poverty.

The amount of tax that companies say they pay should equal what governments say they receive.  For most other countries applying for EITI membership the amounts are more or less equal.  But figures for Tanzania and Mali also show gaps of tens of millions between payments and receipts.

Congo has applied for membership of the scheme, and President Joseph Kabila has said that his government is committed to it.  But before becoming a full member, the country’s reports on company payments and tax receipts have to be approved by the EITI board.

Unreliable data

Dumba said the figures for the DRC's oil industry add up, but the data has has been able to collect on the mining sector is not reliable.

Another Congolese anti-corruption expert, Jean-Claude Katende, said it was difficult for Congo to provide accurate figures because its mining industry is more complex than the industry in other countries.

"You have countries that have three or four or 10 mining enterprises whereas in the DRC you have more than 200 mining enterprises," Katende noted.  "And to that you should add the petroleum industry and the comptoirs."

Comptoirs are licensed exporters of minerals.

Data

Another problem, Katende said, is that Congo does not have a centralized databank for its mining sector.  But, he said, the government is working with donors on a plan to computerize mining data, which will then be held centrally.

The gap between what mining companies pay and what Congo's government should receive may be far greater than the tens of millions unaccounted for in Dumba’s report.

Mining companies may be hiding some of their income and thus paying less tax than they should. Dumba said he knew of cases where this may have been happening.

He said for example there's the case of a company that exported 400,000 tons of minerals.  They should have paid 2 percent tax on that, but their tax declaration came to much less, indicating that they hadn't declared all their income.

It has also been claimed that in the past few years the government has sold large mining concessions at far less than their market price. British member of parliament Eric Joyce, chairman of the UK Parliament Great Lakes of Africa group, has alleged that in the past four years Congo has lost more than $5.5 billion through the sale by the government of mineral assets at less than their fair market value. He said the sales had been made through offshore companies which had captured the profits.

Transparency

When asked about Joyce’s allegation last year, President Kabila said he was not going to respond to a British MP. He said his commitment to good governance was meant to benefit the Congolese people, not to please foreign politicians.

As evidence of open dealings, Kabila said that his government’s $9 billion mining deal with a Chinese consortium, its biggest deal in the mining sector, was only signed after it was debated and approved by the parliament.