The Extractive Industries Transparency Initiative suspended the Democratic Republic of Congo’s membership for a year and threatened to delist the country unless it improves reporting of mining and oil revenue.
The Oslo-based initiative that tries to improve governance of natural-resource industries barred Congo for failing to meet all of the group’s disclosure requirements, according to a statement published on its website today. The EITI board made the decision even after Congo made “significant progress” in the most-recent EITI report, which covers 2010, it said.
“The quality of EITI reports did not yet meet all requirements in the EITI standard, particularly requirements for full disclosure and assurance of the reliability of the figures,” according to the statement.
Companies including Freeport-McMoRan Copper & Gold Inc. (FCX) and Glencore International Plc (GLEN) helped make Congo the world’s largest producer of cobalt and the eighth-biggest producer of copper last year, according to the U.S. Geological Survey. The Central African country produces about 25,000 barrels of oil per day and companies such as Total SA and Soco International Plc (SIA) are exploring for more.
The World Bank’s 2013 report on the ease of doing business around the world ranked Congo 181 out of 185 economies surveyed. Last year, the International Monetary Fund canceled its loan program with Congo after the government failed to disclose details of mining deals.
Former U.K. Primer Minister Tony Blair announced the creation of EITI in 2002 as a way of improving oversight of companies and countries engaged in mining, oil and gas extraction. Participating countries are required to regularly publish company payments and revenue generated from the industries. Thirty-seven countries have agreed to implement EITI’s standard, according to its website.
Congo published three reports covering 2008 through 2010. The 2010 report, which runs to more than 120 pages, says the country generated more than $1 billion in taxes and payments from extractive industries.
While the country has a burgeoning mining industry and economic growth estimated at 7.2 percent in 2012, the United Nations ranks Congo the least-developed country in the world along with Niger out of 187 countries surveyed.
“The DRC still receives shockingly little for its mineral resources,” EITI board Chairwoman Clare Short said in the statement. “It is not surprising that there are great challenges for the DRC to produce reliable and comprehensive EITI reports, but it is making progress and generating important debate.”
The 2010 report shows that one of Congo’s tax agencies failed to pay $88 million to the Treasury, the country’s EITI coordinator, Mack Dumba Jeremy, said April 18. Congo’s EITI executive committee may consider taking the agency to court if it can’t account for the money, he said.
Dumba didn’t immediately respond to an e-mailed request for comment today.
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