Pact & USAID in the DRCMinerals for Development

Simon RichardsSenior Advisor, Asia-Eurasia,

Corporate Community Engagement, Pact Inc. March 25, 2009

DRC – Geography • 2,345,410 sq km • ¼ the size of the US • vast central basin is

a low-lying plateau; mountains in east

• agriculture: 3% forest: 60% other: 37%

• 2,800km paved road

DRC - Natural Resources• Cobalt (30% of world),

copper (12% of world), niobium, tantalum, zinc, manganese, tin, uranium, rare minerals

• Gold, silver, diamonds & other gems

• Water (50% of Africa), hydropower (2x Three Gorges Dam)

• Forests (6% of world)• Oil

DRC - Demographics• Population 66.5m • Life expectancy 52 for

men, 56 for women• Infant mortality under

age 5 is 20%• Since 1998, over 4m

‘excess deaths’ (equal to tsunami every 6 months)

• 1.7m IDPs• Over 200 ethnic groups• 70% Christian• 600,000 indigenes

DRC – Politics & Governance • Deadliest conflict since

WWII• UN Peacekeeping force

MONUC• Situation in east highly

unstable • Democratic elections

2006• Constitution adopted

2007 should lead to decentralisation

• Mining & Forestry Codes 2002

DRC – Governance challenges• Lack of government

capacity & resources• Entrenched corruption• Extensive ‘mafia’ &

illegal trade• Repression of political

opponents and outspoken civil society

• Human rights violations by public security • Culture of impunity & legal failure

Pact Congo• Started in 2003 with 2 USAID

funded projects– MALI: agriculture & livelihoods – AMKENI: prevention of

abandonment of children • Increasingly asked to work in

the mining sector, funding from CMM to explore the potential and develop concept

• Developed a Global Development Alliance (GDA) with USAID in 2006

Global Development Alliance• USAID & Pact in partnership with 4 mining

companies: – Anvil Mining– Tenke Fungurume Mining (Freeport McMoRan)– First Quantum Minerals– AngloGold Ashanti

• 3 year alliance with objectives for development & governance

• $1.3m USAID & $8m from mining companies pa

GDA: Extractive Industries Network• Goal of the EIN: to promote sustainable and

equitable social and economic recovery in the Democratic Republic of Congo

• Result 1: Promote efficient, effective and self-sustaining channels for regional social development funding;

• Result 2: Improved socio-economic conditions (livelihoods, health and education) in target communities;

• Result 3: Improved governance of the mining sector in the DRC

The GDA is implemented in 114 villages/towns on four mining concessions in the Provinces of Katanga and Orientale (Ituri District)

GDA Social Development

GDA Social Development • 49 community infrastructure projects completed

(schools, health centres, markets) • Support almost 2,600 farmers, 57 agricultural

associations, 17 seed-multiplication businesses, 2 community grain silos

• Agriculture includes maize, vegetables, cash crops, poultry, fish, fruit and goats

• 65 small and micro business plus two large businesses (gravel cooperative sewing factory)

• Over 2,000 women involved in literacy, savings and small business development

• All villages have democratically elected Community Development Committees

• All projects have minimum 15% community contribution and reimbursement of loans & inputs

• Technical training for teachers, government, community leaders, peer-educators

• Integration of projects into government structures for health, education, water, etc, to ensure sustainability

GDA Social Development

GDA – Human Rights & Security

GDA – Human Rights & Security• Implementation of the Voluntary Principles on

Security & Human Rights• Three key issues: – Risk– Relations with public security – Relations with private secuirty

• Monthly meeting with companies, police, army, UN

• Engagement with provincial & local government

GDA – Human Rights & Security • VPSHR workshops, trainings, scenarios • Human rights materials & induction for

security providers • Community security forums being created• 1,000 people trained in conflict resolution• Partnership with University of Lubumbashi,

local NGOs

GDA – Artisanal Mining

GDA - Artisanal Mining • 90% of minerals of DRC are produced by

artisanal miners• Employs 2,000,000 people• With their dependents, account for livelihood

of 18% of population • Largely illegal, poor health & safety practices,

socially disruptive, environmentally damaging, uses child labour, exploitative, causes and fuels conflicts

GDA Artisanal Mining • Prevention/resolution of

ASM-LSM conflicts• Peaceful closure of

dangerous mine sites • Creation of jobs &

alternatives for artisanal miners

• WORTH for women miners • Research into child mining

& campaign for its eradication

GDA Artisanal Mining • Support to government

service for ASM• Analysis of legal Artisanal

Mining Zones, involvement of the UN agencies

• Engaging other ASM stakeholders

• Development of a national framework for ASM regulation, strengthening and transition

Key lessons – the NGO perspective• Maintain a balanced portfolio – don’t become dependent

on one sector or vulnerable to economic change• Pick sectors that match the NGO’s competencies, seek

partners to complement (spread the risk, lighten the load)• Don’t be afraid to say no. Stick to your principles• Avoid dependence on individual relationships – corporate

staff can open doors but the relationship must be institutionally embedded

• Have a pragmatic understanding of the role of CSR within corporate culture

• Differentiate between social investment and business needs – e.g. Local suppliers should not be subsidised if they are to be genuinely sustainable

Key lessons – the NGO perspective• There is a strategic difference between advisory

services v implementation services – both are needed, but not always by the same NGO

• Most NGOs are in the advocacy space – but companies don’t know how to implement what the advocates say

• Capacity building is essential – for the company, local actors, government. Have a broad partnership

• Be aware of the risk of private sector replacing the host Government – they are a key partner and with them lies sustainability

Thank you!