20 11 13 A murky deal for the Congo as oil exploration threatens corruption and environmental damage – and London-based Soco International is first in the queue
As
peace looks within reach in the Democratic Republic of Congo, Western agencies
including the IMF and Unesco fear the government there is about to push through
new laws that will leave the famously corruption-prone country open to
industrial-scale bribery and environmental damage in its potentially vast oil
industry.
Concerns
are rising that the proposed Oil Code will allow for a British company to begin
exploring for oil in the Virunga national park, immortalised by the film
Gorillas in the Mist. While the UK Foreign Office opposes any such activity, it
is powerless to intervene.
The
resource-rich DRC, already notorious for corruption in the way officials award
lucrative mining contracts to foreign companies, has not yet had its potentially
large oil reserves widely explored.
But
Western oil companies led by London-based Soco International are keen to push
into the country and start drilling.
The
Congolese government is formulating a legal framework to govern the industry but
its proposed Oil Code fails to insist on full, open tender processes for
exploration licences as recommended by the UN, World Bank and other bodies.
Without such transparency, it is feared corruption will flourish as it has in
its many minerals contracts, costing hundreds of millions of dollars in lost
revenue for a country with the lowest per capital GDP in the world, and where
seven million children do not go to school. A recent report by Kofi Annan’s
Africa Progress Panel claimed five mining deals in the DRC alone were sold to
Western firms for $1.36bn less than they worth, short-changing the country’s
people.
Meanwhile,
the draft code is also widely criticised for failing to safeguard the country’s
Unesco-protected world heritage sites.
Unesco,
the World Wildlife Fund, the British government, the European Union and the IMF
all expressed their concerns about the planned bill earlier in the autumn,
hoping to bring some influence to bear.
But
revisions which emerged in recent days have merely served to make the code
worse, critics say, adding a new clause effectively giving the state oil
company, Cohydro, the right to operate “to the exclusion of oil regulation” – in
other words, critics say, outside the new law.
This
week sees a host of international bodies, industry figures and NGOs gather in
the capital Kinshasa to discuss with ministers a similar code being drawn up for
the mining industry. There has been no such open debate on the Oil Code, adding
to concerns that the government is trying to rush it through the back door in
order to speed up oil exploration projects.
The
IMF and Unesco both told The Independent they were formulating responses
to the disappointing new draft of the oil bill, while Britain’s Foreign Office
said it was discussing the issue with its European Union partners in Kinshasa.
The World Bank is also believed to have expressed concern.
The
IMF’s Congo representative, Oscar Melhado, while saying the DRC’s oil riches
could prove to be a route out of poverty for the country, argues that the draft
law falls short of the need for transparency to ensure a fair share of oil
revenues go to the Congolese people.
“It
is important not to make the same mistakes made with the mining sector,” he
said.
Guy
Debonnet, chief of the special projects unit at Unesco’s Natural Heritage Centre
added: “We are definitely worried. This code would make it easy for the council
[of DRC ministers] to allow oil exploration in national parks and five world
heritage centres. We have expressed concern to the DRC on this issue and
explicitly asked it to reconsider… It is particularly concerning that the latest
version of the code has made it even worse than before.”
The
Congolese Hydrocarbons Minister, Crispin Atama Tabe, has refuted such concerns,
claiming the proposed legislation will prevent corruption and ensure
transparency in future oil dealings, saying: “In our code we’ve integrated the
principle of the tender for all hydrocarbons rights purchases.” He added: “The
ministry will also open a website, so that all the different contracts will be
immediately and systematically published.”
However,
a spokesman for anti-corruption group Global Witness disputes this: “So far,
Congo’s oil riches have done little for the Congolese people. Time is running
out to amend deeply flawed legislation that could lock in corruption for years
to come,” he said. “MPs in Congo now have the chance to pass a transparent law
that could yield vital revenue for the state. But if they don’t act fast, they
risk institutionalising the secret deal-making that will enrich elites, bleed
the economy and harm the environment.
The
DRC has been racked by rebellion in recent years, often over the control of
resources (AFP)
“The
end of the M23 rebellion could be an opportunity to break the cycle of
resource-fuelled violence in the country’s east.”
London-headquartered
Soco has been awarded the rights to explore for oil within the Virunga national
park, the home of the rare mountain gorillas.
The
park is a Unesco world heritage site and the British government, along with
other countries and organisations like the World Bank and European Union, is
opposed to any oil exploration there. French oil giant Total recently said it
would not take up its licence to explore in the park due to the environmental
sensitivities, as did Britain’s Dominion Petroleum. But Soco presses on despite
widespread opposition.
Earlier
this month, senior UK Foreign Office official Matt Baugh met representatives of
Soco in London to stress in no uncertain terms the British government’s
opposition to oil exploration in the park.
Soco,
through its public relations representative, Bell Pottinger Sans Frontiers,
pointed out that, while it was currently planning a one-month seismic study on
Lake Edward, no drilling has been planned. It said it is conducting
environmental studies prior to exploration operations, which “reflects the
responsible and sensitive approach that Soco has adopted on these issues”. Its
exploration license is not located near the mountain gorillas, it said, adding:
“This is a region that has been the subject of conflict and violence for over 30
years and is in much need of economic stimulus. The park is on Unesco’s watch
list for being below the standard expected by a world heritage
site.”