OFFICE OF THE IMCAicglr-rinr.org/media/attachments/2018/10/15/imca... · OFFICE OF THE IMCA. 2 ... ICGLR RCM Certification Manual, the IMCA deemed important to conduct such a first

Supply Chain Systems Evaluation: The Democratic Republic of Congo

(DRC)

Critical Assessment of the Tracking Mechanisms deployed on Congolese Supply Chains:

The Case of Société Aurifère du Kivu et du Maniema (SAKIMA)

Author: Dr. Jean Didier Losango Nzinga

Delivered to:

The Executive Secretary of the International Conference on the Great Lakes Region (ICGLR)

& The Government of the Democratic Republic of Congo

International Conference on the Great Lakes Region (ICGRL) 38, Boulevard du Japon

Bujumbura / Burundi

Tel: (257) 22256824/5/7

Web: www.icglr.org

OFFICE OF THE IMCA

http://www.icglr.org/

2

IMCA – Summary of the Report: Supply Chain Systems Tracking Evaluation DRC

Author: Dr Jean Didier Losango Nzinga

Date: 30/05/2017

Disclaimer

This Investigation’s Report is prepared from valuable sources and based on valid data, which the

Independent Mineral Chain auditor (IMCA) believes to be reliable and accurate. The IMCA wishes to

thank those interviewed during the course of this special assignment for their invaluable insights. I am

very grateful to the many interviewees and participants in this investigation. Though access to

informants was initially feared as a primary challenge in my methodology, I was happily surprised by

people’s willingness to give their valuable time and energy. On many occasions, I was impressed with

many individual’s commitments to Responsible Minerals Trade. My wish is that this investigation’s

report contributes, however modestly, to promote Responsible Supply Chains of Minerals from the

Democratic Republic of Congo (DRC).

About the Independent Mineral Chain Auditor

The Independent Mineral Chain Auditor represents a critical component for the functioning and

credibility of the International Conference on the Great Lakes Region (ICGLR) Certificates. The IMCA

is an important guarantee of regional compliance with ICGLR Standards, and of on-going conflict

monitoring and risk assessment. The IMCA represents an ombudsman and “special investigator”

within the Regional Certification Mechanism (RCM) scheme. Among other functions, the IMCA is

required to undertake continuous system-level process conformity and compliance monitoring of the

RCM framework (including all institutional structures relevant to the RCM at both national and

regional levels) as well as perform on-going risk assessments and supply chain monitoring (against the

relevant ICGLR Standards), especially on issues that are not easily captured through the

complementary ICGLR Third Party Audit System. The Independent Mineral Chain Auditor

investigations comply with the Organization for Economic Co-operation and Development (OECD)

Due Diligence Guidelines on independent verification and on-going risk assessment1.

1 Terms of Reference, 2015: Establishment of the Interim Office of the Independent Minerals Chain Auditor within the ICGLR

Regional Certification Mechanism at the International Conference on the Great Lakes Region, p. 1.

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Date: 30/05/2017

SUMMARY OF THE REPORT

This report shares the conclusions of the investigation on the implementation of the Regional

Certification Mechanism (RCM) in the Democratic Republic of the Congo (DRC). These conclusions

have been based on on-site investigations - conducted from March to April 2017 by the Independent

Mineral Chain Auditor (IMCA) - at several representative artisanal mining sites. The objective of this

report is to share the current implementation status, and to draw up a set of best practices to improve

the effectiveness of the Regional Certification Mechanism on a national level.

In other words, the primary motivation of this investigation is to critically assess the extent to which

the selected mining company has implemented the ICGLR RCM and the OECD Due Diligence

Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas. To

do so, the investigation assesses the tracking mechanisms deployed on Congolese Supply Chain

Systems from eight Exploitation Permits. The Exploitation Permits are principally owned by Société

Aurifère du Kivu et du Maniema (SAKIMA), a State-owned mining company located in the Maniema

Province of the Democratic Republic of Congo (See Table 1). In order to draw a country-wide

conclusion on the current Supply Chain Systems, cautions have been taken by the Office of the IMCA

in the selection of this case study company and locations.

The mining company is one of the Congolese’s largest Tin, Tantalite, Tungsten (3Ts) producers and the

majority of minerals produced within the company’s concessions are mainly from artisanal miners. In

addition, the company’s mining operations cover an area of approximately 100,000 km² and comprise

in total 44 Permits of Exploitations: 10 are in North-Kivu, 12 in South-Kivu, and 22 in Maniema.

Reports indicate that an estimated 70% of the total production of minerals within SAKIMA’s

concessions are Cassiterite (Tin), 10% Coltan (Colombo-Tantalite), 10% Wolframite (Tungsten), and

10% other precious metals.2

Lastly, the mining sites under consideration are 100 km North-East of the capital province of Kindu, in

the City of Kalima, also the site of its headquarters. The IMCA argues that a company of such size,

diverse locations, and resources, provides a good opportunity to observe the strengths and weaknesses

of the RCM implementation on a ground level.

Justification for the scope of the investigation

Any evaluation of a system-wide will always rely in some degree on case studies of its implementation.

This evaluation of implementation of the RCM in the Democratic Republic of Congo is no exception.

Its validity derives from a careful, representative selection of the traceability system and mining sites

that were part of the site investigation.

As for the selection of traceability scheme from the plethora of initiatives, it is important to note that

the Congolese’s Government through its Ministry of Mines signed on 17 February 2012 a Memorandum

of Understanding (MoU) with the International Tin Research Institute (ITRI) for a tagging system

ensuring traceability of minerals produced in the country’s mines and processing sites, as well as the

2 ICGLR Third Party Report 2016

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Date: 30/05/2017

establishment of an effective and verifiable traceability system in a timely manner3. In doing so, the

Congolese government has formally adopted the iTSCi, the ITRI Tin Supply Chain Initiative

traceability system.

In addition to that, the main domestication provisions of the Congolese 2002 Mining Code and 2003

Mining Regulations also make it clear that the Democratic Republic of Congo has effectively and

strongly endorsed the ICGLR Regional Certification Mechanism for designated minerals. As such, ITRI

has a strong, legal, mandate in the Democratic Republic of Congo; its introduction is in an advanced

stage; and it is globally recognized – making it a logical choice for studying its implementation. This

was also motivated by an understanding that, the iTSCi scheme is recognized as a scheme for

traceability that is suitable for the use within the framework of the RCM.

Finally, it is important to note that a Member State can have multiple CoC tracking systems in place –

with a varying scope in terms of tracked minerals, geographic area, or part of the supply chain.4 So far,

there has not yet been a comprehensive evaluation of the CoC tracking systems currently in place in the

Democratic Republic of Congo. In order to grant the Congolese government the right to issue ICGLR

certificates that identify a shipment of minerals as complying with the requirements laid out in the

ICGLR RCM Certification Manual, the IMCA deemed important to conduct such a first comprehensive

evaluation of the Supply Chain Systems in place.

Introduction of 3T minerals

In 2010, in an effort to remove the link between minerals and armed conflict, US Congress introduced

legislation (specifically Section 1502 of the Dodd-Frank Act) that required US-based companies to

verify the origins of the minerals used in their products.5 If from the Democratic Republic of Congo or

neighboring countries, the covered companies will need to do Due Diligence to ensure the minerals

have not contributed to conflict (‘conflict minerals’). Minerals within its scope are cassiterite (tin),

coltan (colombo-tantalite), wolframite (tungsten), and gold.6

A key regional player in this effort to curb illegal exploitation is the ICGLR, who have developed an

integrated regional certification mechanism and accompanying standards as one pillar of the

encompassing Regional Initiative against the Illegal Exploitation of Natural Resources (RINR). These

standards are compliant with the OECD Due Diligence Guidelines and thus accommodate the Chain of

Custody tracking schemes companies under the Dodd Frank Act can use to demonstrate Due Diligence.

To comply with these requirements, the Congolese Government has, in the past, tried to halt the export

of the conflict minerals through a ban on mineral export from DRC’s Eastern Provinces of North and

South Kivu. The ban lasted from September 2010 to March 2011.7 The UN Group of Experts on the

DRC includes several conclusions on the impacts of this ban on the mining sector in the DRC (Par. 221,

p. 50):8

3 ITRI, formerly International Tin Research Institute, is the membership based organisation funded by major tin producers are

representing the interests of the tin industry supply chain on a global basis (MoU between ITRI & ICGLR, p.2) 4 ICGLR RCM Certification Manual, p. 17 5 Report On The Implementation Of The Recommendation On Due Diligence Guidance For Responsible Supply

Chains Of Minerals From Conflict-Affected And High-Risk Areas [C/Min(2011)12/Final], p. 18 6 Briefing Note on the ICGLR Regional Certification Mechanism, p. 1 7 OECD (2016): p. 17-18 8 UN Group of Experts (2012) Final Report S/2012/843

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Date: 30/05/2017

"For those mining areas in which no tagging or traceability system has been installed, the

following phenomena occur:

(a) Tin, tantalum and tungsten ore production continues in most areas. Most minerals are

either smuggled out or stockpiled. Consequently, there is a large discrepancy between

official exports and production. Smuggling is particularly prevalent in mining areas that

are easily accessible and/or close to the border;

(b) The prices paid for minerals have fallen significantly because of the limited demand for

untagged materials. Other factors, such as fluctuating world market prices, also

contributed to the current low cost of minerals, however;

(c) Whenever alternative minerals, primarily gold or diamonds, are available in the vicinity

of the tin, tantalum and tungsten mine, miners adapt and begin digging for other minerals.

In addition, there is a move from tin ore to both tungsten ore and tantalum ore mining;

(d) Isolated mining communities that previously relied on inbound mineral flights to supply

them with basic commodities suffer from the secondary effect of a shortage of such

products and consequent price increases;

(e) The security situation at tin, tantalum and tungsten mining sites has improved and the

trade in tin, tantalum and tungsten has become a much less important source of financing

for armed groups. Both these changes will reflect positively on the potential for

sustainable socioeconomic development in mining areas.

There are several initiatives building upon the positive and fighting the negative aspects of

mineral exploitation in the DRC, such as those mentioned in the OECD Report on the

Implementation of the Recommendation on Due Diligence (2015). For example, through support

for the ICGLR RINR and its RCM, paragraph 73, p. 23:

“Direct measures include funding in-region capacity development, tool development and technical

co-operation in the implementation of the ICGLR’s Regional Initiative on Natural Resources

(RINR) and its Regional Certification Mechanism. The German Federal Institute for Geosciences

and Natural Resources (BGR) and the Gesellschaft für Internationale Zusammenarbeit (GIZ) were

jointly commissioned by the German Development Cooperation Ministry to implement a support

programme to the ICGLR. The BGR module includes two components, namely introduction of the

Analytical Fingerprint (AFP) method in the Great Lakes Region (Component I) and supporting the

implementation of the Regional Certification Mechanism and the formalization of artisanal and

small-scale mining in Rwanda and Burundi (Component II) within the Regional Initiative against

the Illegal Exploitation of Natural Resources. BGR also set up the Certified Trading Chains (CTC)

scheme, a voluntary minerals traceability system. The European Union is also providing core

funding to the ICGLR Technical Unit on Natural Resources, responsible for the regional

implementation of the Certification Mechanism.”

And through other parties’ initiatives, paragraph 74, p. 23:

“In addition, several other Adherents have implemented or are currently implementing on-the-

ground projects in the African Great Lakes region. For instance, as requested by the Section 1502

of the Dodd-Frank Act, USAID is currently funding the Capacity-Building for Responsible

Minerals Trade (CBRMT) project. The project aims to strengthen the ability of the DRC and

regional institutions to regulate a critical mass of trade in strategic minerals in eastern DRC in

order to transform the region’s mineral wealth into economic growth and development. Likewise,

the Ministry of Foreign Affairs of the Netherlands recently announced it would fund the ITRI Tin

Supply Chain Initiative (iTSCI34) over a three-year period to scale up mineral trade in the African

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Date: 30/05/2017

Great Lakes region. Regional-level engagement on responsible mineral supply chains has proven

to be successful; despite continued political tensions within the Great Lakes region, neighboring

governments have started exchanging information and are collaborating in the implementation of

a regional certification mechanism of the ICGLR.”

Most importantly, on the 29 February 2012, the Democratic Republic of Congo endorsed the

International Conference of the Great Lakes Region Regional Certification Mechanism for designated

minerals - tin, tantalum, and tungsten, the 3Ts.

Traceability initiatives currently being implemented in the DRC

To establish a national system that guarantees that the trade minerals are sourced from a mine compliant

with the RCM, the Congolese government has formally adopted several initiatives to ensure the

traceability of minerals produced in the country’s mines and processing sites. Regarding the designated

minerals 3Ts the International Tin Research Institute’s tin supply chain initiative (iTSCi) is the only

traceability system in place that cover the majority of mining sites.

Furthermore, there has been a dramatic increase in the number of regulations, tools, initiatives and

programs in the Democratic Republic of Congo that actors have adopted to improve the traceability

system, and to address the recurring issues of illegal mineral exploitation. A main feature of all these

traceability systems is “Tagging or Bagging”. At every step of the production chain, tagged bags are

used to identify the mineral’s source and its position in the recorded supply chain. If implemented

correctly, this guarantees that no minerals are removed or added to the bag without being noticed, or

mixed in from Red to Green flagged sites. The following are traceability initiatives currently being

implemented in the Democratic Republic of Congo:

ITRI: the Government of the Democratic Republic of Congo signed a Memorandum of Understanding

(MoU) with the International Tin Research Institute9 for a tagging system ensuring the traceability of

3Ts (tin, tantalum, and tungsten) minerals produced in the Congolese’s mines and processing sites. The

system is an on-the-ground traceability and due diligence method for tracing mineral consignments to

mines of origin through electronic bar-coded tags attached to individual bags of minerals and shipments

(IPIS, 2015, p.16).

ITOA: With respect to the gold production and particularly artisanal gold, the Congolese’s

Government, through its Certification Department, Centre d’ Evaluation, d’ Expertise et de

Certification10, implements the RCM in the country and has set up a traceability initiative called

“Initiative de Traçabilité de l’Or d’ Exploitation Artisanale” aimed to ensure the traceability of artisanal

gold in the country. CEEC uses a bagging system sealed bags (sachets involiables). This initiative is

thought to work when combined with a series of incentives to win the cooperation of the artisanal sector.

9 The international trade body of the Tin industry, initiated the ITRI Tin Supply Chain Initiative (iTSCi) in 2009 to establish

a traceability system for cassiterite. The first phase of the traceability scheme was implemented in July 2009 and established

a requirement for the the provision of official and industry documents as well as written declarations of lack of involvement

of illegal armed groups in the upstream supply chain by all comptoir exporters. The second phase of the initiative aims to

improve traceability from the mine to the comptoir exporters through the use of unique serial numbers on every bag of minerals

produced at mine sites, as well as records of other features of the bags including their weight. (BSR: Conflict Minerals and the

DRC – an Overview, p.14)

Also Available at https:/www.bsr.org/reports/BSR_Conflict_Minerals_and_the_DRC.pdf (last accessed, 11 Januarys 2017) 10 CEEC was established in 2003 as the government authority for the certification for precious and semi-precious minerals, as

well as being the responsible for the implementation of the Kimberley Process Certification Scheme (KPSC), in the DRC. As

the vast majority of minerals which the CEEC evaluates and certifies come from artisanal miners, the CEEC has an important

role to play in production and trade of artisanal mined minerals. (Pact, 2010, p. 36).

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Date: 30/05/2017

11 The process is also supported by the designated minerals certification software (LCMD). This

software designed by the CEEC is currently addressing the management of traceability of industrial

gold. The sealed bags, basic element of this initiative, have different colors and sizes depending on

whether it is for use at the mine site (Model A), the trading center (Model B), the purchase counter

(Model C), or export (Model D). They bear the hallmarks of the Democratic Republic of Congo and

other information necessary for traceability.

GeoTracability: an agreement was also reached between the Congolese’s Government and

GeoTracability in 2014 and the cooperation is still ongoing12. The system relies on a mechanism of

tagging, including barcodes which enable companies to trace minerals in real-time during the whole

supply chain using mobile telephones and GPS. The tagging process can start on any point of the supply

chain, including the mine site.

Unlike ITRI, which handles the traceability of 3Ts, ITOA considers specificities of gold in general and

the artisanal mining sector in particular. In fact, like ITRI whose traceability mechanism is based on

tagging, ITOA traceability is based on bagging using sealed bags or “sachets inviolables” established

throughout the whole supply chain from production site to export.

In addition to these government-supported programs, others provide voluntary standards for responsible

business conduct in variety of areas on the ground. These include:

Certified Trading Chains (CTC): is the Congolese National Certification system aiming at improving

traceability, transparency and production standards in the Artisanal and small-scale Mining sector

working in cooperation with the Federal Institute for Geosciences and Natural Resources (BGR). While

other initiatives on conflict minerals are only centered around limiting heavy human rights violations

and contribution to armed conflicts, CTC also includes working conditions for miners, the role of

security forces on and close to mine sites as well as community development and environmental issues.

CTC is operational in the DRC and was integrated in the national legislation in Ministerial Orders 0057

and 0058, although the application of CTC remains voluntary.

Better Sourcing Program (BSP): an initiative of the private sector launched in 2013 in the DRC. It

aims at providing due diligence assistance especially for artisanal and small-scale mines. Although the

BSP can be used for any mineral commodity, the first pilot phase in Congo included tin, tantalum,

tungsten and gold.

MineralCare: including GoldCare and 3TCare: is a system aiming and identifying and validating

actors, products and operations along the supply chain from the extraction to the final consumer.

Identified and validated actors are certified to be in accordance to norms set in the directives of

MineralCare. These directives include but not limited to the OECD Due Diligence Guidance,

International and regional legislations, and special conditions introduced by international standards as

well as databases and lists of irregular actors and other blacklists. This initiative offers platforms for

11 ITOA’s initiative was officially launched by the Congolese’s government on Thursday, 12 January 2017. Available at:

http://www.radiookapi.net/2017/01/13/actualite/societe/la-rdc-lance-une-initiative-de-controle-de-lexploitation-artisanale-de

(last accessed, 13 January 2017). 12 GeoTraceability is a traceability solution by PricewaterhouseCoopers. The system offers traceability, data collection and

management solutions. Initially developed for the sector of agriculture, it can be adapted to other commodities as well,

including minerals (ICGLR, Draft White Paper on Gold Strategy in the Great Lakes Region 2016, p.19).

http://www.radiookapi.net/2017/01/13/actualite/societe/la-rdc-lance-une-initiative-de-controle-de-lexploitation-artisanale-de

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Date: 30/05/2017

diamonds, gold and 3Ts and a contract with the Congolese’s government for a first pilot phase was

signed in 2015.

Actors in the RCM implementation process

The Congolese Ministry of Mines handles the oversight of the RCM implementation in the country at

the national level. In addition, several government institutions and other actors are involved in this

process at various scales. Key technical services within the mining ministry which have specific

responsibilities in the implementation of the RCM in the Democratic Republic of Congo include:

The Service for Assistance and Organization of Artisanal and Small-scale Mining – Service

d’Assistance et d’Encadrement d’ Artisanal et Small Sacle Mining (SAESSCAM)

The Centre for Evaluation, Expertise and Certification – Centre d’ Evaluation, d’Expertise et

de Certification (CEE)

The Provincial Authority of Mines – Division Provinciale de Mines

The Mining Police – Police de Mines

The high number of institutions and actors involved in the implementation of the RCM at the local level

leads in an environment that is characterized by a significant amount of redundancy and confusion. All

of this adds up to a convoluted process that presents several entry points for corrupt practices to take

place.

Overall Weaknesses and Challenges

The IMCA recognizes that identifying key challenges and weaknesses is a vital part of any evaluation.

This section outlines key challenges and weaknesses faced the issuance of ICGLR Certificate in this

particular context and the potential negative impacts these challenges may have on the global market

acceptance of the ICGLR Certificate - suggesting that a potentially effective way to deal with such

challenges is to improve the management and regulation of the artisanal and small-scale mining sector

in the Democratic Republic of Congo. In order to mitigate these impacts to the implementation of the

RCM’s process, it is necessary for the Congolese’s Government to formulate an appropriate approach

of the formalization of ASM sector in the country – taking into account the re-establishment of the AMS

economy. The obvious challenges to effectively implement the traceability system on the ground are

listed as follow:

The case study company is situated in a remote area or a rural setting that has a history of

mining activities, and where artisanal mining is currently the most significant economic activity

for the local population;

The high number of local government’s institutions and actors involved in the implementation

of the RCM at the local level operates in an environment that is characterized by a significant

amount of redundancy and confusion;

The iSTCi traceability system is completely left to the hands of “predators” (négociants and

encadreurs) and relies entirely on the services provided by SAESSCAM which inadequately

implement the traceability mechanisms on the ground - with a full acknowledgement that this

government institution lacks the capacity and resources to do so. Unfortunately, it was found

that this reality opens space to the practices of mixing minerals from non-validated to validate

mining site;

There are no contracts formalizing the relationship between the case study mining company

and the artisanal miners operating within the company’s concessions;

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Date: 30/05/2017

The iSTCi Mine tags do not include the mine of origin’s code. This prevents processing centers

from detecting inconsistencies between the mine of origin declared as reported in the iTSCi

Logbook and the actual tag number;

Lack of strong Monitoring Committee or Comité de pilotage in each mining sites visited;

Slow process of transmission, scanning and processing of the logbooks which record all

traceability information from the mine of origin to the iTSCi database took several weeks;

Difficult to access the majority of mining sites visited, physical absence of both iTSCi and

SAESSCAM Staffs in the sites and the slow process of validating mining sites indicate that a

large majority of artisanal sites operate outside the legal trade; etc.

The Context of Kalima and SAKIMA

The city of Kalima has a population of 136,652 and is situated in a rural setting that has a history of

mining activities. Artisanal mining is also presumed to be the largest single source of employment in

the area, and experts believe that the number of people seeking to work in the artisanal sector and

therefore within the SAKIMA concessions, particularly in the City of Kalima will grow over the next

few years. As a result, the existing mining activities and the productions of minerals from the company’s

Exploitation Permits or mining sites are primarily of the Artisanal and Small Scale Mining (ASM) with

low levels of mechanisation. Table 1 below presents an overview of the mining sites covered in this

investigation.

Table1: The Exploitation Permits or mining sites covered in the assessment of the company’s supply chain

systems includes:

EXPLOITATION PERMIT: 1

Exploitation

Permit (PE) /

SAKIMA

Name of the

Site

No of

Artisanal

Miners13

No of Women No of Children Distance from

the City

Center

/Kalima

Axe 1: NORD

ULINDI

Validated Mining Sites

1. Bimpombi 206 57 58 34 Km

2.Mukuku 151 41 65 35 Km

3. Kisubili 89 24 32 34 Km

4. Makundju 212 58 61 46 Km

5. Kibila 130 36 53 41 Km

6. Binantwani 94 26 39 51 Km

7. Misoke 150 40 72 49 Km

Non Validated Mining Sites

1. Bwisonga 107 29 25 40 Km

2. Lasonic 95 26 18 40 Km

3. Musala 137 37 56 45 Km

4. Kintolo 121 33 47 35 Km

5. Moga 106 29 69 29 Km

13 Only licensed artisanal miners are accounted in these Tables which were provided by SAESSCA’s

Department in Kalima, on 04th of April 2017.

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Date: 30/05/2017

EXPOLITATION PERMIT: 2

Exploitation

Permit (PE) /

SAKIMA

Name of the

Site

No of

Artisanal

Miners


the City

Center

/Kalima

Axe 2:

LUBILE


1. Kimbala 172 30 40 8 Km

2. Mutopia 201 37 76 34 Km

3. Atondo 44 6 25 38 Km

4. Moka 119 19 39 38 Km

5. Lubile 96 20 45 45 Km

6. Mususano 162 27 72 35 Km


1. Bitumba 124 34 27 43 Km

EXPLOITATION PERMIT: 3

Exploitation

Permit (PE) /

SAKIMA

Name of the Site No of

Artisanal

Miners


the City

Center

/Kalima

Axe 3:

KALIMA

CENTER


1. Kabeya /Sal 78 21 30 5 Km

2. Chantier 12 72 20 27 4 Km

3. Nakenge 50 14 19 4 Km


1. Abuki 35 10 15 6 Km

2. Lipango V/12 68 18 23 15 Km

3. Mindulu 55 15 17 5 Km

4. Kanyambe 47 13 20 12 Km

5. Kibongobongo 79 22 30 12 Km

EXPLOITATION PERMIT : 4

Exploitation

Permit (PE) /

SAKIMA

Name of the

Site

No of

Artisanal

Miners


the City

Center

/Kalima

Axe 4:

YUBILI

AVANGA


1. Yubili / Mat - 22 132 15 Km

2. Kangonde 115 31 27 24 Km

3. PX Isonge 120 21 62 33 Km

4. Avanga 114 18 50 36 Km

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Date: 30/05/2017


1. Amekupi 196 24 107 37 Km


Exploitation

Permit (PE) /

SAKIMA

Name of the

Site

No of

Artisanal

Miners


the City

Center

/Kalima

Axe 5: BUNZA

BENGO II


1. Bunza - 27 125 23 Km

2. Bengo II - 31 141 26 Km


Exploitation

Permit (PE) /

SAKIMA

Name of the

Site

No of

Artisanal

Miners


the City

Center

/Kalima

Axe 6:

BATAMBA

MASIMELO


1. Batamba 133 20 56 34Km

2. Masimelo 99 19 30 29 Km

3. Bumba 91 18 27 34 Km


Exploitation

Permit (PE) /

SAKIMA

Name of the Site No of

Artisanal

Miners


the City

Center

/Kalima

Axe 7:

BALENDO

KIMBIAMBIA


1. Kamungini 75 20 20 15 Km

2. Kasela 69 19 18 18 Km

3. Balendo ww 20 71 19 27 18 Km


1. Kalambo 57 16 31 20 Km

2. Baselele 56 16 21 12 Km

3. Kimbiambia 80 22 42 15 Km

ARTISANAL MINING ZONE : 8

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Date: 30/05/2017

Zone

Exploitation

Artisanal /

(ZEA)

Name of the

Site

No of

Artisanal

Miners


the City

Center

/Kalima

Axe 8:

ROUTE

PANGI


1. Lutala 101 28 48 -

2. Kayeye 77 21 37 -

Source: Office of SAESSCAM KALIMA (Kalima, Tuesday 04th April, 2017)

Following the decline in SAKIMA’s production in the 1990s, the sharp drop in employment

opportunities and increased migrant labour within the concessions led to an increase in artisanal mining,

which quickly became the primary means of livelihood in the company’s areas. It is estimated by

SAKIMA that ASM is now practiced by an estimated 90% of the active population that is males between

the age of 15 and 50 years old. As a result, and without a processing plant, the company’s mining

activity is gradually being taken over by artisanal workers using rudimentary methods, such as shovels

and machetes and other general tools. SAKIMA is nonetheless still officially owner of the concession

areas.

In total 45 artisanal mining sites were covered in this investigation (30 validated artisanal mining sites

and 15 non-validated artisanal mining sites), with an estimated number of licensed artisanal miners put

at 5,398 people. This is an occupation pursued primarily by males who comprise 50% of this group and

women and children the other 50%. Few of the adult population within the case study area have informal

employment in the agricultural sector. Most have informal employment in sectors other than agriculture;

these include those operating businesses either related to the informal mining sector or in the provision

of goods and supplies to those residing in the areas. The remainder of the adult population in Kalima

either have other forms of formal employment (including government, church and SAKIMA), studying,

retired (with or without pension), handicapped and unable to work or at home and/or not seeking

employment.

SAKIMA allows both licensed and non-licensed artisanal miners to operate within its concessions and

apart from the company’s subcontractor contracts, there are no contracts formalising the relationship

between SAKIMA and the artisanal miners operating within the Kalima’s mining concessions. As a

result, SAKIMA has limited control over the artisanal mining industry, and the relationship between

the artisanal community and the company is reported to be fragile, uncertain, and characterised by a

lack of trust.

Furthermore, the mineral productions from artisanal are purchased by the company through sub-

contracted trading houses. In other words, the minerals from the entire company’s mining sites are either

directly being exported by SAKIMA or sold to the following exporters or processing companies:

Maniema Mining Company (MMC), Valko Mining Investments Sarl, Clients Britcon Sarl, AMUR Sarl,

Etoile d’Orient Sarl, Metachem, Noble Group Ltd, Smelting and Refining Group Thailande Co. Ltd,

and Kerilee Investments Ltd14. Table 1 below presents the tracking minerals produced with the

company’s mining sites.

14 Mining Investment in areas of conflict: The Case of the Democratic Republic of Congo (DRC). Available at

http://www.ieim.uqam.ca/IMG/pdf/appendix2.pdf (last accessed 19 January 2017)

http://www.ieim.uqam.ca/IMG/pdf/appendix2.pdf

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Date: 30/05/2017

Figure 1: Tracking minerals produced within the Kalima’s mining sites

However, it was reported that the most significant buyers or exporters of the company produced and

processed minerals in Kalima are: Metachem. Amur, Etoile d’Orient and MMC. Table 2 below presents

the company’s mining sites exclusively allowed to supply minerals to the above mentioned exporters

or sub-contracted trading as per the company’s agreements.

Table 2: Exclusive Agreement between SAKIMA and Exporters to purchase from specific mining sites.

MMC15

(Axes: 2, 3,4,5,6,7 &8)

AMUR

(Axes: 1,2,4,&7)

METACHM

(Axes: 1,2,4,&7)

ETOILE D’ORIENT

(Axes: 1,2,4,&7)

1. Kimbala 1. Mutopia 1. Mutopia 1. Mutopia

2. Lubile 2. Atondo 2. Atondo 2. Atondo

3. Kabeya /SAL 3. Moka 3. Moka 3. Moka

4. Chantier 12 4. Mususano 4. Mususano 4. Mususano

5. Bitumba 5. Yubile / MAT 5. Yubile / MAT 5. Yubile / MAT

6. PX Isongo 6. Avanga 6. Avanga 6. Avanga

7. Kangonde 7. Amekupi 7. Amekupi 7. Amekupi

15 Although MMC continues to export minerals from different mining sites located within the company’s concessions, the

IMCA was informed during the filed visit that the contract between MMC and SAKIMA was cancelled on the 9th of February

2017 (interview).

Validated/Non

Validated Mining

Sites

Kalima

Minerals exploited:

Cassitérites

Methods: Non

licensed &

licensed

artisanal

miners

Managed by

SAESSCAM

Traceability System

implemented by

SAESSCAM

Minerals sold by

Négociants

To

SAKIMA

SAKIMA exports

through:

METACHM,

MMC, AMUR &

ETOILE D’

ORIENT

Others are directly sold by

SAKIMA to METACHM, MMC,

AMUR & ETOILE D’ ORIENT

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Date: 30/05/2017

8. Amekupi 8. Kalambo 8. Kalambo 8. Kalambo

9. Bunza 9. Baselele 9. Baselele 9. Baselele

10. Bengo II 10. Kimbiambia 10. Kimbiambia 10. Kimbiambia

11. Batanda 11. Lubile 11. Lubile 11. Lubile

12. Masimelo 12. Bimpombi 12. Bimpombi 12. Bimpombi

13. Bumba 13. Mukuku 13. Mukuku 13. Mukuku

14. Balendo ww20 14. Kisubili 14. Kisubili 14. Kisubili

15. Kamungini 15. Makandju 15. Makandju 15. Makandju

16. Kasela 16. Kibila 16. Kibila 16. Kibila

17. Kalambo 17. Binantwani 17. Binantwani 17. Binantwani

18. Baselele 18. Misoke 18. Misoke 18. Misoke

19. Kimbiambia 19. Bwisonga 19. Bwisonga 19. Bwisonga

20. Lutala 20. Lasonic 20. Lasonic 20. Lasonic

21. Kayeye 22.Musala 22.Musala 22.Musala

23. Kintolo 23. Kintolo 23. Kintolo

24. Moga 24. Moga 24. Moga

Quantity of Cassiterite Per Day

5 000 Kg or 5 Tons 2 000 Kg or 2 Tons 3 000 Kg or 3 Tons 1 000 Kg or 1 Tons

Source: Interview with SAESSCAM & CEEC (Kalima, Friday 7th April, 2017)

RCM criteria & Implementation

The ICGLR Regional Certification Manual defines 9 criteria which adequate chain of custody tracking

systems must comply with. Therefore, the tracking systems or mechanisms deployed on the selected

company’s key operations are assessed against the overall CoC Tracking System requirements listed in

paragraphs 4.6 to 4.14 of the ICGLR Regional Certification Manual.

With regards to these requirements however, this investigation’s report concludes that the course of

action regarding mineral traceability, chain of custody tracking system and most importantly the export

procedure as required by the ICGLR Standards, is currently ineffective and not correctly applied by the

case study company. This is highly regrettable, seeing the significant pressure for responsible sourcing

of minerals from Conflict-Affected and High-Risk Areas, and most particularly, the increased local and

international pressures on 3Ts sourcing practices.

Looking at the supply chain as a whole, investigation of the eight Exploitation Permits assessed in

Kalima revealed that the iSTCi’s system is not adequately conceived and implemented for the critical

parts of the chain of custody of the mineral it is deployed on. Difficult access to most of the mining

sites visited, absence of both iTSCi and SAESSCAM staffs at the sites, and the slow process of

validating mining sites mean that a large majority of artisanal sites in Kalima remain outside the legal

trade. The system’s implementation does not cover the entire chain, and leaves a wide-open gap when

it comes to tracking minerals from the point of extraction to the point where they are first weighed,

bagged and tagged. This presents several entry points for corrupt practices to take place.

The MoU signed between the Congolese’s Government and ITRI stipulates in Article 3, p.3: De la mise

en oeuvre du programme iTSCi that:

“ Le programme iTSCi/RDC s’engage à déployer un nombre suffisant d’Experts compatibles

au nombre des sites miniers à couvrir et de les doter des moyens logistiques appropriés pour

la mise en œuvre du système de traçabilité iTSCi. Ces Experts travailleront en étroite

collaboration avec les Agents de l’Administration Provinciale des Mines et de l’Antenne

provinciale du SAESSCAM dont le nombre doit être également compatible au nombre des sites

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Date: 30/05/2017

à couvrir à tous les niveaux de la chaîne d’approvisionnement, de transport et de

commercialisation des minerais stannifères dans les Provinces concernées“

The IMCA found that the iSTCi traceability system in Kalima is completely left to the hands of, and

relies entirely on the services provided by SAESSCAM, who inadequately implement the traceability

mechanisms on the ground - with a full acknowledgement that this government institution lacks the

capacity and resources to do so.

The IMCA acknowledges the ubiquitous challenge of the remote and difficult to reach locations of

mining companies in Kalima. Nevertheless, iTSci and SAESSCAM’s employees were neither present

at different mining sites visited, nor were iSTCi staff deployed throughout the investigated supply

chains. This reality opens space for mixing minerals’ practices from non-validated to validate mining

site - especially taking into consideration the proximity of these two categories of mining sites, and the

fact that artisanal mining is a livelihood for many in the areas. The traceability cannot be guaranteed

and is all but lost in its first stage of the supply chain.

Instead, SAESSCAM’s site managers or encadreurs skip the difficult to reach mining site locations in

favor of those closer to a logistics hub (Kalima Center), thus by selling the iTSCi’s tags to trades or

négociants this situation is creating an emergence of rich elites who in reality are in charge of the

implementation of the iTSCi’s traceability system on the ground. They patrol the city center of Kalima

in search of négociants and traders with minerals, and without knowing the origin of the minerals they

tag and record the minerals on iTSCi logbooks. So implemented, the iSTCi’s traceability system in the

City of Kalima does nothing for the global market call nor for the acceptance of the RCM. What is does

is creating a class of bourgeoisie in Kalima that thrives on the ineffective implementation of the RCM.

To conclude, the current reality is that the ineffectiveness of the implementation of iTSCi’s system in

Kalima makes it very easy for what is illegal to become legal. This ineffectiveness will only be more

pronounced in more remote sites, where a weaker government and the inaccuracy of iTSCi’s traceability

system to oversight the mechanisms bring with it an increased chance of breaches of the ICGLR

Standards.

Evaluation of specific ICGLR guidelines

More specifically on each “ICGLR General Requirements of Chain of Custody Tracking Systems”:

ICGLR Standard 4.6: “The system ensures that mineral consignments only originate from

mine sites defined as Certified according to ICGLR standards”.

Evaluation: The tracking systems employed in the assessed supply chains do not ensure mineral

consignments only originate from ICGLR Certified mine sites. Although, the iSTCi tracking systems

include mine assessments, these are carried out against standards defined by iSTCi and do not fully

address all aspects of the ICGLR mine inspections. More particularly, this investigation report reveals

that the status of 15 mining sites belonging to the company under consideration in this report are

identified Red-Flagged, or not yet validated by the Congolese’s Government. Remarkably, the

unlicensed mine sites are adjacent to the licensed mining sites, adding up to a convoluted process that

presents several entry points for mixing minerals and corrupt practices to take place. Therefore, there

are no procedures in place at mineral buyers to ensure minerals are exclusively sourced from ICGLR

certified mines.

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Date: 30/05/2017

With respect to the 30 validated mining sites however, and also based on the investigation’s field work,

this report reveals that the Congolese’s Government validated/certified or licensed mining sites should

not in reality be Flagged Green’s status - considering the large presence of child labourers. This

argument is also premised on the fact that the widespread use of child labour in mining is unacceptable

to the RCM’s requirements, as well as to OECD Due Diligence Guidance, International and national

legislations. Therefore, the observations described are in direct conflict with the ICGLR Standard 4.6.

Furthermore, the lack of physical presence of both iTSCi and SAESSCAM Staffs on both categories of

mining sites to monitor the supply chains, and record traceability data means that bag and tap operations

take place under no supervision from service provider’s officers, in order to ascertain all minerals

consigned effectively originate from the mine.

Finally, the difficulty to access the majority of “licensed” and non-licensed mining sites coupled with

the lack of supervision of all locations where bagging and tagging of minerals occur as well as the slow

process of validation mining sites, while also taking into consideration the fact that artisanal mining is

a livelihood for many in the areas - mean that a large majority of artisanal sites and the produced or

processed minerals from the company’s concessions under investigation in this report remain outside

the legal trade. As a result, the traceability systems of where the produced and processed minerals

originated from become questionable as the produced and processed minerals within the case study

company’s concessions are completely untraceable. One would conclude that, the ineffectiveness of

iSTCi tracking systems make what is already illegal to look or become legal.

Recommendations: The iSTCi systems deployed on these specific supply chains must whenever

possible refrain from using the entire service of SAESSCAM to fully implement the tracking

mechanisms on the ground. Involving local civil society organisation in partnering with SAESSCAM,

to form teams of iTSCi officers supervising the implementation of the traceability systems, is an option.

This will definitively reduce the risk of breaches of integrity in individual certification and the RCM

Standards as whole therefore, improve the credibility of the ICGLR’s Certificates in the Republic

Democratic of Congo.

In addition and although, the MoU signed between the Congolese’s Government and iTSCi stipulates

in its Article 5, page 5- entitled: De la formation et du transfert des compétences, that:

“Le Programme iTSCi/DRC s’engage à procéder à la formation et au transfert des

compétences des Agents de l’Administration des Mines et du SAESSCAM qui devront

pérenniser l’application du processus de traçabilité à la fin du programme faisant l’objet de

ce Protocole d’Accord”

The Office of the IMCA is of the view that SAESSCAM’s staffs in charge of implementing the

traceability systems in Kalima are not fully aware about the implementation steps of the ICGLR

Regional Certification Mechanism as well as the OECD Due Diligence for Responsible Mineral Supply

Chains. Therefore, iTSCi must work towards strengthening the capacity of both SAESSCAM and

Division of Mines to fully implement the traceability mechanism on the ground and manage the sector.

The Congolese’s Government on the other hand, must whenever possible speed up the process of

validating mining sites and integrally review the validation of the 30 licensed mining sites in Kalima.

Furthermore, it is strongly recommended to the Congolese’s Government to start the process of

identifying and formalising the artisanal and small scale mining sector and zones to ensure access to

them by issuing or granting artisanal cards to the non-licensed miners who are not officially registered

17



Date: 30/05/2017

- while also taking into account the elimination of the use of child labour in the country’s mining sites.

Hiding the numbers of artisanal miners by refusing to provide artisanal cards to the non- licensed miners

can be understood by the Office of the IMCA as a method to avoid clarity on the levels of production

they control.

In addition, mineral buyers such as :Metachem, Amur, Etoile d’ Orient and MMC must establish strong

procedures to ensure mineral consignments only originate from ICGLR Certified mine sites. Where

ICGLR mine inspections are not yet carried out, existing tracking systems should work towards aligning

existing mine assessments with the ICGLR requirements for mine inspections.

Finally, the IMCA’s Office provides a period of six months to the Congolese’s Government to bring

the case study company’s supply chains into ICGLR compliance.

ICGLR Standard 4.7: “The system ensures that mineral consignments from Certified mine

sites are fully traceable through their accompanying documentation from the mine of origin up

to the point of export”.

Evaluation: Although access to the majority of the mining sites visited remains a major constraint, this

investigation reveals that the absence of both iTSCi and SAESSCAM’s officers in the mining sites

(where the minerals first come from), obviously opens room for mix-up with ore batches. This is also

illustrated by the fact that artisanal miners have to carry with them their daily productions from different

mining sites visited up to the city center of Kalima - in search for SAEESCAM’s officers (encadreurs)

– who in practice either sold the iTSCi Mine tags to the négociants or tag the bags without full

acknowledgment from where exactly the minerals come from.

What happen all along the transportation routes from different mining sites to the city center is

questionable; the motive of négociants for buying these products is not well-known to the local

authorities, and to whom these négociants sold their products is also not well-known. This practice

leads to a situation whereby minerals produced may end up to the hands of predators or rebel groups

neighbouring the case study company’s concessions. This finding is also in direct conflict with the

Article 1 of the MoU signed between ITRI and the Congolese’s Government, which stipulates on page

2 that:

“Le présent Protocol d’Accord a pour objet la mise en œuvre du programme iTSCi lequel est

un système international qui combine la traçabilité des minerais au moyen de l’étiquetage des

lots des minerais et la diligence raisonnable de l’OCDE, depuis la mine jusqu’au point

d’exportation en Républiques Démocratique du Congo, par le biais des Négociants

internationaux jusqu’aux fonderies. ”

Although it has been agreed on the MoU signed between the Congolese’s Government and ITRI that

storage of tags and logbook shall be jointly managed by ITRI and SAESSCAM staffs, this practice does

not appear to be implemented in all supply chains investigated as part of this assessment. The system is

completely left to the management of only SAESSCAM’s Staffs who carried with them the iTSCi’s

tags and logbooks in their personal bags in search of Négociants patrolling the City Centre of Kalima.

The iSTCi’s tags and logbook are also reported to be taken home by the SAESSCAM’s Staffs,

particularly encadreurs at the end of the day. This practice is also completely in direct conflict with the

Article 3 of the MoU signed between ITRI and the Congolese’s Government, which stipulates on

paragraph 3, page 3 that:

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Date: 30/05/2017

“Ces Experts (iTSCi Staff) travailleront en étroite collaboration avec les Agents de

l’Administration Provincial des Mines et de l’Antenne provincial du SAESSCAM dont le

nombre doit être également compatible au nombre des sites à couvrir à tous les niveaux de la

chaine d’approvisionnement, de transport et de commercialisation des minerais stannifères

dans les Provinces concernées “

Besides, the iSTCi Mine tags do not include the mine of origin’s code. This prevents processing centres

from detecting inconsistencies between the mine of origin declared as reported in the iTSCi logbook

and the actual tag number. Therefore, the tracking systems and minerals buyers and processors in the

assessed mineral supply chains cannot effectively ensure mineral consignments from ICGLR certified

mines are maintained segregated from non-ICGLR certified mines and this is in direct conflict with

both the ICGLR Standard 4.7 and the Article 3 of the MoU signed between ITRI and the Congolese’s

Government, which stipulates on paragraph 4 pages 3-4 that:

“Pour garantir le suivi et l’exécution du Protocole sur terrain, les Autorités Provinciales et

locales, en collaboration avec le Comité de gestion du Programme ITRI/DRC, mettront en

place, dans les 15 jours à compter du démarrage du Programme dans une Province ou site

donné, un Comité de pilotage au niveau de chaque Province et des comités de suivi au niveau

de chaque site. ”

However, iSTCi’s tagging system which ensures the traceability of minerals produced in the

Congolese’s mines and processing sites has been operational for almost five years, yet the system has

not established a strong Monitoring Committee or Comité de pilotage in each mining sites visited.

Finally, the IMCA witnessed at the processing centres in Kalima – where also the case study company’s

Exploitation Head Office is established - a team of CEEC’s Officers filled the iTSCi’s logbook for a

suspended exporting company – MMC. The logbook was being completed a month later following the

suspension of the exporting company on the 9th of February 2017 for sourcing minerals within the

company’s mining sites.

The questions raised by the IMCA at this time were as follow: Where the recorded minerals on the

iTSCi logbook come from and why after only a month following the suspension of the exporting

company does CEEC continue to deliberately and inappropriately deliver ICGLR Certificate to the

MMC? This pointed to the fact that the transmission, scanning and processing of the logbooks recording

all traceability information from the mine of origin to the iTSCi/ITRI database took several weeks. In

this case, by the time an incident is detected through analysis of the logbook, the related minerals have

already moved down the supply chain.

Recommendations: Difficulty to access mining sites should not be presented as an excuse; therefore

iSTCi/ITRI as per the MoU signed with the Congolese’s Government - must be physically present and

visible at different mining sites visited as well as increase the number of officers to allow for

comprehensive coverage of all the required mining sites in Kalima.

In addition, the operational policy between iTSCi/ITRI and SAESSCAM on procedures for the

safekeeping and storing of mine and négociant tags and logbooks, which certify the origin of the

minerals down the chain of custody, must be completely reviewed. Therefore, the storage of tags must

be jointly managed between SAESSCAM and iTSCi/ITRI staffs – not by SAESCAM only.

SAESSCAM’s Staff (encadreurs) must also refrain to carry with them the iTSCi’s tags at homes and

in search of Négociants as it was witnessed.

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Date: 30/05/2017

Therefore, standard operating procedures for the safekeeping of iTSCi tags and logbooks and their

integrity must be developed and enforced by only iTSCi/ITRI Officers. In so doing, the officers must

record tracking information on electronic devices rather than paper logbooks, thus enhancing the

reliability or accuracy of data and timeliness of transmission of records. This will allow for a prompter

reaction in case of incident.

ICGLR Standard 4.8: “The system ensures that the mineral consignments from Certified mine

sites are fully physically separated from mineral consignments from other sites, from the mine

site to the point of export. Mineral consignments from different Certified mine site may be

physically mixed provided the relative proportions of minerals from different certified mines of

origin remain traceable”.

Evaluation: Absence of physical presence of both iTSCi and SAESSCAM officers at the majority of

the mining sites visited –mostly, due to inaccessibility and the far distance from the mining sites to the

city Centre; coupled with the several shortcomings in the storage and tagging processes identified by

the IMCA during the field work – (most notably the observation that minerals are stored in unknown

and un-verified depots), and the fact that there are significant delays in recording data on the iSTCi’s

Logbook.

These constraints make it clear that the current iSTCi’s system employed in Kalima has not yet been

implemented to a degree that mixing of minerals can be prevented. This argument is also premised by

the fact that artisanal miners in the investigation areas are required to travel long distance from mining

sites to the City Centre of Kalima with their consignments to search for SAESSCAM’s encadreurs for

tagging to take place. Thus, this contravenes the requirement of the consignment being segregated from

the mining site to the point of export.

Finally, and based on the fact that minerals produced from a non-certified mining site are also tagged

and bagged together with minerals produced from certified mining sites only at the City Centre of

Kalima,- the tracking systems and mineral buyers and processors cannot ensure that mineral

consignments from certified mines are maintained segregated from non-certified mines.

Recommendations: It is recommended for the ICGLR Secretariat to publish all lists of existing

Member States’ mine assessments that are recognized as fully equivalent to the ICGLR mine

certifications in areas where no mine inspections have yet been carried out. Consignments from mines

inspected under a mechanism recognized as equivalent to being ICGLR certified should be maintained

segregated from mineral consignments originating in other mine sites.

The ICGLR’s Secretariat must also improve the coordination between all actors, including the

Congolese’s state services involved in the implementation of the RCM Standards at the local level.

Whenever possible, iTSCi must disseminate, efficiently implement and ensure observance of the

ICGLR’s RCM requirements concerning the different traceability implantation steps to SAESSCAM’s

officers. Therefore, provide technical training and support to the local government institutions in charge

of the implementation process.

The Congolese’s Government through its Ministry of Mines should whenever possible clarify and

improve relation between the State Owned Enterprise (SAKAMA) and their Joint Ventures partners

(Exporting companies) and artisanal miners.

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Date: 30/05/2017

ICGLR Standard 4.9: “The system ensures that the supply chain of mineral consignments is

conflict free. For the purpose of the ICGLR Tracking and Certification Scheme, ‘conflict free’

means that none of the actors in the mineral chain contribute at any time, through the

extraction, transport, trade, handling or export of minerals, to any direct or indirect support to

non-state armed groups or public or private security forces engaged in illegal activity and/or

serious human rights abuse. Direct or indirect support” to non-state armed groups or public

or private security forces through the extraction, transport, trade, handling or export of

minerals includes, but is not limited to, procuring minerals from, making payments to or

otherwise providing logistical assistance or equipment to non-state armed groups or public or

private security forces or their affiliates who:”

4.9.1 “illegally control mine sites or otherwise control transportation routes, points

where minerals are traded and upstream actors in the supply chain; and/or”

4.9.2 “illegally tax or extort money or minerals at points of access to mine sites, along

transportation routes or at points where minerals are traded; and/or”

4.9.3 “illegally tax or extort money or mineral shares from mine site owners, mine site

operators, intermediaries, traders, export companies, or any other actors in the

upstream chain of custody”.

Evaluation: Although, no presence or armed groups was witnessed at any location pertaining to the

investigated supply chains, it is important to note that the roadblocks erected at the national road leading

to the City of Kalima from Kindu present opportunities for certain elements of FARDC to unduly

benefit and profit from company’s mineral traffics.

In other words, the power of the case study company and its partners (exporting companies) is illustrated

by the decision to erect barriers on the national road from Kindu to Kalima to control all the ore

transporting vehicles that use this route. The team that supervises each barrier consists of mine and state

policemen – suggesting that these roadblocks have the approval of the local government’s authorities.

Being underpaid or not paid at all, the police elements have low morale and, seeking to survive, prey

on the communities surrounding the company’s concessions, particularly artisanal miners and Moto

bicyclers. They perform roadside controls in order to check transports’ required documentation and to

levy illegal taxes.

Finally, it was witnessed that ordinary police and intelligence officers are often permanently present at

the company’s processing mining plant. The involvement of the Congolese’s policemen and

intelligence officers through the transport, trade, handling and export of minerals of the assessed supply

chains is in direct conflict with the ICGLR Standard 4.9. In other words, the state policemen interference

caused by the presence of criminal networks within the FARDC compromises the classification of the

mineral as conflict free.

Recommendations: It is strongly recommended by the case study company and the local authorities to

remove all the roadblocks leading to Kalima from Kindu – which are being used for “tracasseries”;

pretty corruption and extortion. In addition, all police and intelligence officers should be posted outside

the company’s premises.

ICGLR Standard 4.10: “The system ensures that all the tracking data from the mineral chain

and the Chain of Custody tracking system, including the disaggregated lot or shipment tracking

data (i.e. the data for each individual lot or shipment), and the input and output data of

individual chain operators are transmitted to the ICGLR Secretariat on a monthly basis, or

more frequently. The data from the Chain of Custody system shall be transmitted to the ICGLR

Secretariat in full, in its unprocessed state. The data shall not be redacted, aggregated,

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Date: 30/05/2017

grouped, or otherwise processed in any way that might serve to hide, disguise, obscure or

otherwise impede the ability of the ICGLR Secretariat to have full access to every particular of

every parcel, lot or shipment of Designated Minerals.

Evaluation: Although, the MoU signed between the iTSCi and ICGLR Secretariat stipulates on point

f) of page 7, under Article 5 entitled: Anticipated Activities of the Parties that:

“ITRI will whenever possible provide information on the database system and data

management software utilized by the iTSCi project in DRC, and advising on possible

developments for a regional mechanism” (Addendum 3)

So far, no copy of each iTSCi Logbook which is communicated to the Congolese’s Ministry of Mines

is shared with the ICGLR Secretariat. This is also premised on the fact that the MoU signed between

the iTSCi and ICGLR Secretariat stipulates on point c) of page 6, stipulates that:

“Data arising from the iTSCI traceability system will be available to the ICGLR once a

confidentiality agreement regarding level of publication of data has been reached.”

In contrast, and in order to reassure international buyers and consumers, as well as international

organizations and regulating government-authorities in third-party countries, that appropriate measures

have been applied by the case study’s exporting companies. Only two Due Diligence Reports from

Metachem et Amur premised on gaining improved image and reputation were communicated by the

exporting companies to the ICGLR’s Secretariat. Though, these reports are found to be completely

telling different histories from what the outcomes of this investigation evidenced.

Recommendations: The Congolese’s Ministry of Mines, through its technical services, must urgently

develop a data-reporting system for operators to communicate the required data in the desired and

disaggregated formats to be shared with the ICGLR Secretariat. iTSCi data and reports should be made

available, however it was reported that because of the lack of confidentiality agreement between the

ICGLR’s Secretariat and iTSCi – this information/data could not be provided. It is of utmost important

that the ICGLR’s Secretariat sets up such an agreement as soon as possible to alleviate this constraint.

iTSCi must improve the implementation of its traceability system in a such a way to ensure mineral

traceability from exporter back to the mine sites is effective and strongly maintain and share the chain

of custody data with the ICGLR Secretariat.

iTSCI must also improve the implantation of its traceability system from exporters to international

traders and smelters by establishing and sharing with the ICGLR Secretariat - document requirements

for export shipments including writing declarations confirming the absence of child labour in mining

and the lack of involvement of illegal armed groups in the upstream supply chains.

Finally, the ICGLR’s Secretariat and Partners should provide administrative and financial supports to

the Office of the IMCA in order to continuously monitor the full mineral chain for discrepancies and

anomalies arising from data collected in any systems.

ICGLR Standard 4.11: “The system is transparent in its documentation and decision making

structures. The existence and status of all participants in the ICGLR Mineral Tracking and

Certification System (including but not limited to mine operators, traders, processors,

comptoirs and smelters) shall be publicly disclosed, along with any ICGLR administrative

reports or audits pertaining to that status. The decisions of the ICGLR Secretariat and

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Date: 30/05/2017

Committees must be publicly disclosed, along with the underlying documentation supporting

those decisions”.

Evaluation: The Congolese’s technical services using the iTSCi tracking system have formal

agreements with ITRI regarding the governance of the scheme, and the destination and use of data

collected by the system. But in order to successfully improve the global market acceptance of the RCM,

the IMCA’s Office is of the view that the content of these agreements need to be revised in some

instance to address for example : the issues of monopoly of ITRI/iTSCi in mineral traceability in the

Democratic Republic of Congo; the high costs and time applied to mineral exporting companies to

comply with the RCM’s requirements and the different levy rates imposed by the ITRI’s traceability/due

diligence service in Congo.

Recommendations: It is advised to the Congolese’s Government to look into other possibilities of

having more options for traceability/due diligence services providers for purposes of competition that

may lead to innovation and cost reduction. In addition, the Congolese’s Government whenever possible,

should promote local expertise in due diligence service provision and auditing.

Furthermore, it is recommended to the ICGLR’s Secretariat to negotiate with the existing and current

traceability provider (ITRI) the harmonisation of levy applied in different parts of the Democratic

Republic of Congo. In addition, the Due Diligence and Supply Chain processes must only be monitored

by ICGLR’s Secretariat; therefore the ICGLR must be seen as the only body capable to oversight the

implementation of the RCM’s elements and play an overarching role in monitoring the implementation

of Due Diligence processes in the Congolese mineral sector.

iTSCi system whenever possible should develop an appropriate data protection system, engage with

companies will use the system to ensure data protection, and communicate the list of the persons

authorised to access data through the subscriber authentication procedure to its and to the ICGLR.

Finally, mining and exporting companies should not be required to only use iTSCi system. They must

have the choice to implement others existing alternative traceability systems in the Republic Democratic

of Congo.

ICGLR Standard 4.12: “The system has to be open to inspection to independent audits by Third

Party Auditors accredited by the ICGLR Audit Committee”. ICGLR Standard 4.13: “The

system has to submit to independent audits by the ICGLR Independent Mineral Chain Auditor”.

Evaluation: It is important to note that all key informants interviewed in the course of this investigation

were cooperatives and the Office of the IMCA is very grateful to the many interviewees and participants

in this special assignment. At the local investigation areas however, and in many occasions the IMCA

was escorted by SAESSCAM’s officers and monitored by intelligence agents. In addition, the IMCA

was accompanied by the company’s Director of Exploitation during any activities on company property.

This limits the freedom of movement for the IMCA and is not necessary from an informative gathering

perspective. However, the difficulty to access key informants deemed of interest and to discuss with

them privately is due to fear with respondents on repercussions if they reflect negatively on aspects of

a mining company’s operation.

Finally, key stakeholders including the local authorities were aware of the IMCA’s presence in Kalima

– therefore, they have managed to evacuate in advance artisanal miners, more particularly children and

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Date: 30/05/2017

women from different mining sites. To overcome this situation, the IMCA’s changed the sequence of

mining sites to be investigated and purposely changed the order of mining sites to be visited - at the

surprise of all actors.

Recommendation: The case study company and exporting companies should allow auditors the need

for free movements; therefor enjoy private space to conduct their investigation and interviews. This will

create opportunity for the participants to air their opinions, ideas, perceptions and concerns freely. It is

therefore recommended that the Investigator should be provided with a private room to consult with

interviewees, without interference from Company’s representatives.

Whenever possible, the IMCA should be accompanied by one company representative only, any

additional questions that cannot be answered can be asked later during follow-up meetings with other

relevant stakeholders.

ICGLR Standard 4.14: “The system shall prove that it has a governance and risk management

system installed that protects it from any form of misuse and fraud”.

Evaluation: The assessed system currently operating is one which has no traceability tracking

mechanisms in place and the system is completely vulnerable to fraud and lack of transparency, due to

minerals from non-certified sites being mixed with minerals from certified mining sites; the lack thereof

of traceability service providers and officers to monitor the tagging and bagging processes.

Recommendations: Throughout the writing of this investigation report, it has become clear that the

role of the IMCA as an Independent Mineral Chain Auditor, as a final check and driver of continuous

improvement, is crucial to the traceability mechanism processes. Without this investigation done by the

IMCA, it is likely that the findings resulted from this report would not have been uncovered, threatening

the long-term credibility and workability of the RCM. The recommendation to the ICGLR and Partners

is therefore to continue supporting the IMCA’s Office in this role, and to expand the IMCA’s Office

capacity as the numbers of Independent Investigations will increase in the near future.

Summary Compliance Table

The Supply Chain System Evaluation, and by extension the mining company, under consideration in

this report was critically assessed according to the company’s levels of conformance processes and

practices, company management systems and commitments for responsible sourcing, and conflict-free

sourcing of minerals. In each of the ICGLR Standards above mentioned in terms of the ICGLR

Certificate Manuel requirements for Chain of Custody tracking systems, the judgments of the

Independent Mineral Chain Auditor in assessing compliancy for the mining company were evaluated

in terms of the company’s management systems, practices and policies. In so doing, the IMCA’s Supply

Chain Evaluation Report checked whether or not Société Aurifère du Kivu et du Maniema with

operations in the City of Kalima provided sufficient evidence for its sourcing of minerals.

This investigation’s report concludes that the course of action regarding mineral traceability, chain of

custody tracking system, and most importantly the export procedure as required by the ICGLR

Standards is not correctly applied by Société Minière du Kivu et du Maniema operating in the

Democratic Republic of Congo, despite the significant pressure for responsible sourcing of minerals

from Conflict-Affected and High-Risk Areas, and most particularly, the increased local and

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Date: 30/05/2017

international pressures on 3Ts sourcing practices. To sum up, the Supply Chain Systems deployed on

Société Minière du Kivu et du Maniema revealed that all the systems above mentioned are not

adequately conceived for the parts of the chain of custody of mineral they are deployed on.

The following Table 3 provides a “flag-system” summing up compliance of the relevant aspects of each

of the Supply Chain Systems deployed on Société Aurifère du Kivu et du Maniema, against the ICGLR

RCM Standards.

Table 3: Definition of compliance qualifiers in the summary compliance table (Table 4)

Compliant The Supply Chain System and its implementation are

adequate for the standard’s purpose.

Partially Compliant The Supply Chain System should be adjusted, or reinforced

for full compliance with the standard.

Non-Compliant The Supply Chain System is not compliant with the standard.

ICGLR Standard Supply Chain Systems: Société Aurifère du Kivu et du Maniema

ICGLR Standard 4.6

ICGLR Standard 4.7

ICGLR Standard 4.8

ICGLR Standard 4.9

ICGLR Standard 4.10

ICGLR Standard 4.11

ICGLR Standard 4.12

ICGLR Standard 4.13

ICGLR Standard 4.14

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Date: 30/05/2017

Table 4 Summary of the Company’s Supply Chain System Evaluation 2017

ICGLR’S ELEMENTS EVALUATION Compliant Partially

compliant

Not

Compliant

Standard 4.6: Mineral consignments only originate from

certified mine sites.

The tracking systems employed in the assessed supply chains do not ensure

mineral consignments only originate from ICGLR Certified mine sites

IMCA’s Recommendations The iSTCi systems deployed on these specific supply chains should whenever possible refrain from using the entire service

of SAESSCAM to fully implement the tracking mechanisms on the ground. Involving local civil society organisation in

partnering with SAESSCAM, to form teams of iTSCi officers supervising the implementation of the traceability systems, is

an option.

Standard 4.7: Mineral consignments are traceable

through their documentation along the chain of custody.

This investigation reveals that the absence of both iTSCi and SAESSCAM’s

officers in the mining sites (where the minerals first come from), obviously

opens room for mix-up with ore batches.

IMCA’s Recommendations Difficulty to access mining sites should not be presented as an excuse; therefore iSTCi as per the MoU signed with the

Congolese’s Government - must be physically present and visible at different mining sites visited as well as increase the

number of officers to allow for comprehensive coverage of all the required mining sites in Kalima.

Standard 4.8: Consignments from certified sites are

segregated from consignments from non-certified sites.

The issues or constraints revealed d in this report make it clear that the current

iSTCi’s system employed in Kalima has not yet been implemented to a degree

that mixing of minerals can be prevented.

IMCA’s Recommendations iTSCi must disseminate, efficiently implement and ensure observance of the ICGLR’s RCM requirements concerning the

different traceability implantation steps to SAESSCAM’s officers. Therefore, provide technical training and support to the

local government institutions in charge of the implementation process.

Standard 4.9: The mineral supply chain is conflict-free Although, no presence or armed groups was witnessed at any location pertaining

to the investigated supply chains; it is important to note that the roadblocks

erected at the national road leading to the City of Kalima from Kindu present

opportunities for certain elements of FARDC to unduly benefit and profit from

company’s mineral traffics.

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Date: 30/05/2017

IMCA’s Recommendations It is strongly recommended by the case study company and the local authorities to remove all the roadblocks leading to

Kalima from Kindu – which are being used for “tracasseries”; pretty corruption and extortion.

Standard 4.10: Disaggregated traceability data is

communicated to the ICGLR Secretariat.

No copy of each iTSCi Logbook which is communicated to the Congolese’s

Ministry of Mines is shared with the ICGLR Secretariat.

IMCA’s Recommendations The Congolese’s Ministry of Mines through its technical services must urgently develop a data-reporting system for operators

to communicate the required data in the desired and disaggregated formats to be shared with the ICGLR Secretariat. iTSCi

data and reports should be made available, however the lack of confidentiality agreement between the ICGLR’s Secretariat

and iTSCi – this information/data could not be provided. It is of utmost important that the ICGLR’s Secretariat sets up such

an agreement as soon as possible to alleviate this constraint.

Standard 4.11: The system is transparent in its

documentation and decision making structures.

The content of the agreements between iTSCi and the Congolese’s Government

needs to be revised in some instance to address for example: the issues of

monopoly of ITRI/iTSCi in mineral traceability in the Democratic Republic of

Congo; the high costs and time applied to mineral exporting companies to

comply with the RCM’s requirements and the different levy rates imposed by

the ITRI’s traceability/due diligence service in Congo.

IMCA’s Recommendations It is advised to the Congolese’s Government to look into other possibilities of having more options for traceability /due

diligence services providers for purposes of competition that may lead to innovation and cost reduction. In addition, the

Congolese’s Government whenever possible, should promote local expertise in due diligence service provision and auditing.

Standard 4.12 & 4.13: The system is open and submits to

independent audits.

The difficulty to access key informants deemed of interest and to discuss with

them privately is due to fear with respondents on repercussions if they reflect

negatively on aspects of a mining company’s operation.

IMCA’s Recommendations The case study company and exporting companies should allow auditors the need for free movements; therefor enjoy private

space to conduct their investigation and interviews. This will create opportunity for the participants to air their opinions,

ideas, perceptions and concerns freely.

Standard 4.14: The system has a governance and risk

management system protecting it from misuse and fraud

The assessed system currently operating is one which has no traceability

tracking mechanisms in place and the system is completely vulnerable to fraud

and lack of transparency, due to minerals from non-certified sites being mixed

with minerals from certified mining sites; the lack thereof of traceability service

providers and officers to monitor the tagging and bagging processes.

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Date: 30/05/2017

IMCA’s Recommendations The recommendation to the ICGLR and Partners is to continue supporting the IMCA’s Office in this role, and to expand the

IMCA’s Office capacity as the numbers of Independent Investigations will increases in the near future.

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Date: 30/05/2017

OFFICE OF THE IMCAicglr-rinr.org/media/attachments/2018/10/15/imca... · OFFICE OF THE IMCA. 2 ... ICGLR RCM Certification Manual, the IMCA deemed important to conduct such a first

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