At the height of the commodity boom in 2007, when the DRC began implementing the EITI, decades of conflict, political instability, corruption, looting and mineral smuggling had decimated the mining sector, which used to be DRC’s engine of growth, and left the government with large liabilities for its state-owned enterprises (SOEs) that had become practically insolvent. Despite the country’s vast natural resources, 63% of the 75 million Congolese citizens were living below the poverty line of less than one dollar per day in 2012, according to the World Bank.

In this context, the government of the DRC committed to implement the EITI to attract foreign direct investment to revive the mining sector and ensure that revenues are well managed for the benefit of all citizens. EITI Reports have covered ten financial years (2007-2017). Revenues collected in the mining sector surpassed that of the oil and gas sector in 2010, when 63% of the USD 875 million came from mining companies. In 2017, the sector generated USD 1,68 billion, accounting for 17,40% of GDP, 55,16% of total government revenues, 99,3% of total exports and a quarter of total employment. 

The DRC EITI has adopted innovative approaches to beneficial ownership, expanding EITI reporting to the artisanal and small-scale mining sector, and automating online reporting by companies and government entities. EITI reporting has also allowed to shed light on key thematic issues, such as licensing and infrastructure provisions put in place by the SICOMINES project. In 2018, DRC EITI published a standalone report on state-owned entreprises based on a review of the nine SOEs' financial statements, providing information on revenues collected by these entities. The DRC EITI adopted the Board approved measures related to flexible reporting for its upcoming 2018-2020 EITI Report. 

DRC EITI and stakeholders engaged in the process were instrumental in including provisions related to transparency in the revised Mining Code, published in March 2018. Routine disclosures through government systems are improving, especially in the mining sector. The Ministry of Mines website provides links to over 180 contracts, as well as detailed production and export data for 2011-2019. The Ministry of Finance publishes monthly revenues collected by the government from the exploitation of natural resources.  

The 2015 EITI Report showed that more than half of the privately held mining companies disclosed their beneficial owners. Information was not disclosed for three companies operating in the oil and gas sector, including PERENCO, the country’s largest tax payer of that sector. The disclosures often include details about the identity of the owners, such as the date of birth or residential address. Previous reports have revealed beneficial owners that were both politically exposed persons and owners whose birth date is more recent than the year covered by the EITI Report. 2016 data is available on the DRC EITI online data portal. 

The evaluation report from DRC's participation in the 2015 beneficial ownership pilot notes that the major challenge in obtaining beneficial ownership disclosures was the lack of legal requirements for extractive companies to report their beneficial owners. According to the report, “the absence of a law on the beneficial ownership contributed to suspicion amongst the companies, who questioned the concept of beneficial ownership and the relevance of beneficial ownership disclosures. Despite the tremendous efforts undertaken by the MSG and the secretariat to improve the perception of the concept of beneficial ownership, some companies preferring to limit their disclosures to the legal owners, which, according to them, is what they are required to disclose in accordance with Congolese law and company Statutes". 

The 2018 Mining Code and its implementing decree introduced provisions related to the disclosure of beneficial owners by mining companies. Local EITI stakeholders worked together to propose a draft decree to further strengthen the legal basis provided by these revisions, including setting the framework for disclosures in the mining, oil and gas, and forestry sectors. 

Natural resources

DRC is the world's largest producer of cobalt, which is used in the production of batteries for cell phones and other consumer electronics. The country holds more than half of the world’s cobalt reserves according to the US Geological Survey. In addition to cobalt, DRC produces large quantities of copper, diamonds, gold, oil, tin, tantalum, tungsten and zinc. 

Source: Production figures are from the 2015 DRC EITI Report. Identified reserves are from the U.S. Geological Survey, Mineral Commodity Summaries, January 2018.

The main government entities that collect revenues are the DGI, the DGDA and the DGRAD. Substantial revenues are also collected by SOEs and at the local level by the authorities of the Haut-Kantaga and Lualaba provinces. The 2016 EITI Reconciliation Report showed that USD 756 million or 67% of total revenues generated by the sector were transferred to the Treasury. The remaining 33% were withheld by SOEs and tax collecting agencies. 

The 2018 Mining Code (Article 242) stipulates that shares of mining royalties (“redevances minières”) are to be paid directly by mining companies as follows:

• 25% to the provincial authorities;
• 15% to the decentralised territorial entity which hosts the extractive project;
• 10% to the Mining Fund for future generations; and
• 50% to the central government.

Between 2016 and 2018, DRC EITI had taken steps to clarify whether the revenue sharing formula under the previous Mining Code had been applied in practice. The findings showed that revenues had never been disbursed by the central government to the local level in accordance with the regulatory framework. With support from civil society organisations, the 2018 Mining Code subsequently introduced direct payments by mining companies to local authorities from July 2018 onwards.

Increasing transparency and public debate around local revenue allocation and management is one of the DRC EITI’s thematic priorities. An upcoming study will assess whether amounts were effectively paid in the period 2018-2020 and look at how these revenues are managed locally. The DRC EITI website presents detailed data by company and, where available, by province.