DRC resides at the nexus of the great power competition and the climate crisis. Can the U.S. help secure its future while supporting democratic reforms that help the Congolese people?
Though few may realize it, the Democratic Republic of the Congo (DRC) and its people are deeply connected to America’s early history and eventual status as world super power. A significant percentage of the human slave trade in the 17th and 18th centuries originated from the DRC, as did the rush for rubber and other key minerals that fueled technological innovations in the late 19th and early 20th centuries. The DRC provided uranium that powered the nuclear bombs dropped in World War II, and was the center of Cold War proxy battles that led to the assassination of a key political leader and subsequent installation of a brutal dictator, which the CIA was accused of helping to facilitate. Multiple armed conflicts in Eastern Congo stemmed from a drive for minerals that propelled the electronics revolution of the early 21st century. The Congolese people and the country’s resources have been at the center of all of it. Tens of millions of Congolese lost their lives from the brutality, violence, and conflicts connected to these and other events.
Could this be the time in history when there is a shift from external powers exploiting the Congolese people and the country’s natural wealth, to a more integrated partnership where both countries and peoples benefit?
Now, in the 2020s, we find ourselves here again. Seventy percent of the global reserves of cobalt—a resource necessary for lithium batteries that will power electric cars and other green technologies—are found in the DRC, as are more than 50 percent of Africa’s water reserves, which reside alongside the world’s “second lung” in the Congo Forest Basin and peatlands. It is not hyperbole to say that the climate solutions necessary for America’s future—and much of the world’s—are deeply connected to the DRC.
Navigating Complex Economic and Political Realities
The Biden administration understands that America needs the DRC’s resources. It also understands that its principal economic adversary–China—currently controls a substantial percentage of DRC’s cobalt and critical mineral mining concessions. Yet without state-owned enterprises of its own or the depth of resources the Chinese government brings to the fight, the U.S. needs other angles and approaches to engage in what is quickly becoming a “proxy war” for minerals.
The DRC, it turns out, is also an important African country to promote core U.S. values: democracy, anticorruption, and human rights. As such, the Biden team is prioritizing the intersection of is values, which have struggled to gain ground in the DRC, with the opportunity to improve access to resources.
While the U.S. notably failed to take or coordinate action in the wake of DRC elections in 2011 and 2018 that were neither free nor fair, President Biden welcomed Congolese President Felix Tshisekedi to the December 2021 Summit for Democracy, one of a small number of African leaders to receive such an invitation—this on the heels of Biden sharing a stage with Tshisekedi at the COP26 climate summit. In January 2022, Deputy National Security Advisor Daleep Singh led a delegation to the DRC, followed in March by senior officials at the Treasury and Labor departments, with the Labor visit culminating in a memorandum of understanding focused on promoting labor standards. Along the way, Tshisekedi announced that all contracts signed with Chinese companies in the past would be reviewed, seeming to indicate progress from the engagement, but without necessarily identifying a new baseline for evaluation and renegotiation.
As with the U.S. government, international financial institutions face the dilemma of promoting long-term change and development alongside short-term needs.
Could this be the time in history when there is a shift from external powers exploiting the Congolese people and the country’s natural wealth to a more integrated partnership where both countries and peoples benefit? This is the hope; but warning signs abound that history may repeat itself, and civil society and the Congolese people have significant concerns.
In March 2022, 63 organizations and experts from the DRC and United States signed a joint declaration requesting the United States prioritize support for free and fair elections in 2023. In addition to ensuring that the electoral process throughout the country is conducted fairly, these organizations called on the U.S. to respect the choice of the voters to prioritize democracy and human rights over outside economic interests under the guise of stability, as happened in 2018 when Tshisekedi became president. Similarly, when the Congolese government appeared to take action to remove the influence of Israeli billionaire Dan Gertler—a linchpin of corruption in the DRC—numerous Congolese NGOs and international observers expressed serious reservations that this was just more of the same, given that the deal remains unpublished and reportedly will keep funds flowing to Gertler for years to come.
How can the Biden administration balance the demand for minerals that drive economic growth and advance investment in green energy technology with the rights of the workers digging them amidst the risks of continued corruption and environmental degradation endemic to the country’s history? What is needed to disrupt the status quo, where mineral wealth has been at the core of a violent and kleptocratic system that has come with such dire human costs and an absence of anything resembling true democracy? In the end, will the grand intentions of promoting democracy and anticorruption give way yet again to the entrenched interests? Can all of these priorities be managed together?
In 2021, the International Monetary Fund drafted an in-depth report declaring that “despite its vast mineral resources and other riches, the [DRC] fits almost all aspects of state fragility, with a history marked by protracted internal armed conflict and lack of security,” noting that the “DRC experiences high levels of corruption, state capture, and weak governance in most areas of the economy and the society.” Yet the IMF went ahead with a more than $1.7 billion program, necessary for the country’s economic stability but also further entrenching the concerns that its staff raised if safeguards were not enforced. As with the U.S. government, international financial institutions face the dilemma of promoting long-term change and development alongside short-term needs.
Is it possible to uproot the rot and replace it with something new and beneficial on different priorities, in a manner that American and other companies may be willing to risk investment?
Deeply Rooted Corruption
It is essential to first understand the depths of that system and kinds of changes that are required before returning to policy ideas that may contribute to a shift. We share two examples below—although the recent massive “Congo Hold Up” leak reveals dozens more—to help demonstrate the structure of minerals investment, how it works, and importantly, the system the Biden administration must navigate with the Congolese government to reform:
When former president Joseph Kabila took power in 2007, he sought to fulfill a campaign promise to transform the DRC through an infrastructure program that would promote job creation, education, water, electricity, and health. To achieve this, Kabila needed outside investment, and the only lure he had to work with was mineral wealth, particularly cobalt and copper. Over the course of several years and a complex and shifting set of arrangements, Kabila found a partner in various Chinese state-owned entities, with his network receiving millions of dollars in bribery payments along the way via a bank controlled by his brother. Despite the promises, the deal ultimately perpetuated the system of foreign benefit from the Congo’s resources, enrichment of political elites who make the deals, and denial of development to the Congolese people.
Through multiple complex and secretive deals throughout the last twenty years, Israeli mining magnate Dan Gertler has obtained--in many cases illegally according to DRC law--a series of mining concessions across the country for amounts well below what the reserves are worth. Gertler has then sold them for billions in profits that have benefited him and his network, ultimately made possible by Kabila. These deals often involve not just the one-time sale of assets but also ongoing dividends and royalties. Over time, according to two leading NGO observers, these deals could cost the DRC upwards of $3.7 billion. More recently in late February 2022, the Tshisekedi government signed, under non-transparent conditions, an agreement with Gertler to reclaim his mining and oil assets. Although the content is still unpublished almost two months after the signing, indications are that it would allow Gertler to retain ownership of the royalties of three mining projects owned by Swiss mining conglomerate Glencore, amounting to a predation bonus.
Rather than lead to reputational damage or perceived higher risks for investors, demonstrating a commitment to accountability can mark a true change in the investment climate.
Finding a Path Forward
With this level of corruption impeding the Biden administration’s core political and economic aspirations, can there be progress? Is it possible to uproot the rot and replace it with something new and beneficial on different priorities, in a manner that American and other companies may be willing to risk investment? How does the Biden administration choose what to work on first? There are myriad reforms needed, across the entirety of the Congolese system, and they must all be addressed more or less simultaneously. Ultimately, the policy approach should be based on measures that fall within three interlocking steps: accountability for the past that disrupts the entrenched system, structural reform that changes the system, and transparent and consistent implementation and enforcement that demonstrate there is a new system in place and that it will be managed differently.
With respect to accountability, the burden lies with both governments. The U.S. and other partners, like the UK and EU, should impose targeted, network sanctions on a range of actors. These include: individuals and entities in the DRC, including members of Kabila’s network and their companies that are still active and obstructive to potential changes to the status quo, as well as those in the Tshisekedi government and entourage involved in illicit financial transactions, with a continued focus on the Gertler network; Regional and international actors—especially those from Rwanda and Uganda, and from China and the United Arab Emirates respectively—and their financial enablers who took advantage of weak governance and anti-money laundering supervisory structures in the DRC to obtain access to natural resources. Sanctions should also be applied to those stifling reforms or undermining the integrity of oversight and regulatory mechanisms in the DRC’s financial sector and other key systems, including those related to the 2023 elections, such as via corrupt procurement actions. There should also be anti-money laundering investigations of global financial institutions that have routinely processed DRC-related transactions that should have been flagged for enhanced due diligence given the underlying risks.
In most cases, foreign governments like the DRC’s, would see U.S. sanctions and accountability measures as problematic. But in this case, if messaged properly and complemented with local actions against Congolese actors and restitution for Congolese victims, these steps can begin to right the exploitive wrongs of the past. Rather than lead to reputational damage or perceived higher risks for investors, demonstrating a commitment to accountability can mark a true change in the investment and business climate, allowing responsible business actors to gain comfort. In terms of structural reforms, the Congolese government must be in the lead, with clear and direct support from the U.S. government that also includes meaningful oversight. In many ways, the infrastructure already exists within the Congolese system; it just needs to be fully resourced and empowered. For example, the DRC’s financial intelligence unit, its principal audit agency, its Mining Ministry, its electoral agency (known as CENI), and its related institutions are badly understaffed and underfunded.
The stakes are high for the Biden administration, and they are even higher for the Tshisekedi government and the Congolese people.
Beyond staffing and resources, there are numerous, significant steps needed to alter the incentive structures of the current system. A few of these include a declaration requirement for owners of now-anonymous entities in mining and other sectors with identifiable links to the DRC; the establishment of a regularly updated, accurate, and comprehensive database of senior-level employees of any government body, including agencies and fully or partially state-owned companies; and mandated due diligence by mining companies when making payments to state-owned companies, their representatives, or state officials, ensuring they are based on clear legal provisions and are paid only to official accounts. All these would help to avoid risks of corruption. Many other initiatives would help advance economic development, labor and environmental standards, and human rights across the mining sector.
Finally, once these changes begin to be introduced, the DRC, U.S., and other partners will need to collaborate to ensure necessary implementation. The U.S. can issue multiagency business advisories, akin to those recently issued for Cambodia and Myanmar to help U.S. financial institutions and other private sector actors navigate the complex business environment in the DRC in a lawful and responsible way. These should be complemented by a system of reporting requirements as a means of a “public conversation” on risks, due diligence, and prioritization by companies when implementing the above-referenced advisories. The DRC must strengthen ongoing enforcement of central bank regulations regarding the financial sector, especially those related to anti-money laundering and the mining sector. These include publishing the recent deal struck with Dan Gertler and, as needed, revising its terms to benefit the Congolese state and people.
Perhaps none of the above will be possible without a free and fair, democratic election. The United States—indeed, all international institutions committed to peace and democracy—must provide the necessary support to civic education and electoral observation and mobilize observers. To the extent any candidate or political party begins to violate principles of free and fair elections, CENI and other Congolese agencies must hold them accountable. The U.S. and international community partners must also take action against candidates violating these principles and ensure that the 2023 election is truly democratic.
The stakes are high for the Biden administration, and they are even higher for the Tshisekedi government and the Congolese people. This will take a whole of government effort in both countries and require trust and risk-taking from all stakeholders, especially given that so many issues need to be on the table together. But opportunities to address one of our most urgent global challenges while also redirecting the course of history do not come often.
Will this be real change, or another case of “rien ne change” where a tragic history repeats itself?
Floribert Anzuluni graduated in political science from the University of Montreal. He has about ten years of experience in the banking sector in the Democratic Republic of Congo (DRC), focusing on Risk Management, with time at Standard Bank, and the pan-African Ecobank where he held the position of head of risk. An entrepreneur, Anzuluni co-founded a the consultancy NYFALM, which provides economic intelligence services, and functions as senior DRC policy advisor for The Sentry, a U.S. investigative and policy organization that seeks to disable multinational predatory networks that benefit from violent conflict, repression, and kleptocracy. Passionate about DRC and Africa, Floribert is one of the co-founders and coordinator of the Congolese citizen movement called FILIMBI.
Brad Brooks-Rubin is senior advisor at The Sentry, an investigative and policy organization that seeks to disable multinational predatory networks that benefit from violent conflict, repression, and kleptocracy. Brad also serves as the strategic advisor & North America engagement lead at the Responsible Jewelry Council. Prior to The Sentry and RJC, Brad held roles at the Gemological Institute of America, the U.S. Department of State (where he focused on the Kimberley Process and conflict minerals), and the Department of the Treasury (as an attorney-adviser concentrated on economic sanctions issues), as well as two law firms.
Cover photo: U.S. President Joe Biden talks with Democratic Republic of the Congo President Felix Tshisekedi at the G20 summit at the La Nuvola in Rome, Italy October 30, 2021. White House photo.