Pact & USAID in the DRC Minerals for Development

1. Pact & USAID in the DRCMinerals for Development Simon Richards Senior Advisor, Asia-Eurasia, Corporate Community Engagement, Pact Inc. March 25, 2009

2. 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

3. 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

4. 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

5. 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

6. 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

7. 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

8. 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

9. 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

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

11. GDA Social Development

12. 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

13. GDA Social 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

14. GDA – Human Rights & Security

15. 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

16. 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

17. GDA – Artisanal Mining

18. 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

19. 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

20. 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

21. 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

22. 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

23. Thank you!