The Democratic Republic of Congo (DRC) mining review was "far from a model of transparency", and could be negatively impacted upon by budgetary issues, and a lack of standardisation, London-based business risk consultancy Control Risk said on Tuesday.
Associate director for the Middle East and Africa Allison Taylor provided some insight into DRC's mining review at a Risk Map 2008 presentation, in Johannesburg.
The review has been spearheaded by the commission, established by representatives from each of the government's key ministries, and divided into subcommittees. The final decision regarding the termination or renegotiation of contracts is to be made President Joseph Kabila and Parliament.
However, Taylor said that there budgetary issues, specifically of committee members not being paid - which opened the door to potential bribery and corruption.
The commission has also been criticised for treating mining companies differently and a lack of standardisation in its implementation of the review process.
Taylor commented that the review had been "far from a model of transparency".
"If this review is botched, another generation of investors will steer clear of the DRC," she commented.
Taylor noted that there were many issues of concern and that the DRC was a prime example of a location with political risk, however, she added that it was highly unlikely that there would be any major cancellations of mining contracts and investors would continue "to take the plunge" in the country.
Taylor said that a leaked report, which alleged that 24 contracts should be terminated and the remainder renegotiated, was an attempt by certain members of the licence review commission to demonstrate their independence.
She acknowledges that it did accurately reflect the views of some, even though the president and the Ministry of Mines did not support it.
Taylor noted some of the problems with the contracts included that they were drawn up during a period of civil war and political turmoil, the proportion of revenue taken by the DRC government, and that many mining companies did not know how they were granted licences in the first place.
She said that many companies, even international mining houses, were granted licences in the late 1990s and early 2000s or bought mining rights from other companies so there was potentially a great deal of either corruption or legacy issues that needed to be addressed in reviewing the mining contracts.
With regard to the long-term view for the country, and whether mining could be proactively used as a tool for socioeconomic development, head of desk (Africa) Christopher Melville said the development of the mining sector in the DRC was very important, but that it would take a long time before this happened.
He added that corruption in the country was unlikely to diminish unless the government and President Kabila were faced with an international challenge.
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