2024-02-03 15:49:24
Crédit photo, Simon Dawson/Bloomberg via Getty Images
Article information
- Author, Pamela Amunazo
- Role, BBC Africa
-
an hour ago
Since September, the DRC authorities have been carrying out surveys throughout the country to verify whether the law on subcontracting is respected by foreign investors whose companies are active in Congo.
It is the Regulatory Authority for Subcontracting in the Private Sector (ARSP), to which the Congolese president has entrusted this responsibility.
The first conclusions of these investigations, in a report received by the BBC, reveal that several companies do not respect the Congolese subcontracting law. This law dating from 2017 aims to “make it compulsory to subcontract the ancillary activities of companies such as the transport of products, catering or health care for staff and others and reserve these services for companies with majority Congolese capital.”
“51% of shares in subcontracting companies must be reserved for Congolese, compared to 49% for expatriates, but many escape this law through “fraud” mechanisms, noted Miguel Kashal Katemb director of ARSP in his investigation.
The results of this survey revealed that the country loses 8.5 billion US dollars every year. The authorities of the Democratic Republic of Congo have indicated that they want to capture this lost sum in the subcontracting sector, which they want to make one of the pillars of the country’s economy, still dependent on mines.
Even more, allow the Congolese to access the subcontracting market and the value chain,” he said.
“The money lost constitutes a “loss of profit” due to “fraud” and a system of “nominees” used in the subcontracting sector,” the Director General of the Authority explained to the media. Regulation of Subcontracting in the Private Sector (ARSP), Miguel Kashal Katemb.
Conflict between Chinese and Congolese associates
Two Congolese shareholders of the company Congo Engineering Contracting SAS had accused their Chinese partner, Mr. Fu, of using nominees. This Chinese would have passed off his driver as the 4th partner of the company in order to hide certain operations and manage contracts signed with foreign subcontractors according to the Congolese party.
After investigations, the Arsp revealed that out of an amount of 27 million already paid to the company, only 600,000 Congolese francs, or a little more than 200 US dollars, were transferred to the Congolese party.
Katzako Toussaint, one of the shareholders of Congo Engineering Contracting SAS, deplores this situation: “we, national shareholders, have asked the Chinese to hold a general meeting to talk regarding the financial statements and their allocation. That’s where the problems started, because the Chinese didn’t want to, maybe he wanted to use nominees to say that it’s his company and we’re only Congolese and we mightn’t not have what we want. »
For his part, Ferozi Guillaume, director of inspection and control of the ARSP, told the BBC that this Chinese company was accused of breach of trust, forgery and use of forgery as well as money laundering in a file of nominees.
The case was transferred to Congolese justice. Mr. Fu was detained for around ten days in the central prison of Kinshasa before being released following payment of the transactional fines.
An amicable compromise was finally reached between the two parties. The general director of ARSP served as mediator in the presence of representatives of the Congo Business Federation as well as two companies Teke Fungurume Mining and Kisamfu, which awarded contracts worth more than 60 million US dollars. Mr. Fu agreed to jointly sign a transactional act to put an end to this dispute and restore the Congolese to their rights as provided for by the law on subcontracting.
“These Congolese who were formerly nominal partners, today have just had 51 percent of the shares in a company which has a turnover of 60 million dollars. This is the president’s fight and the materialization of his vision,” said Miguel Kashal following signing this agreement.
Chinese shareholders of a subcontracting company have been caught red-handed. They used their driver as a 4th shareholder by brandishing false documents to cover their operations within the framework of a partnership contract signed with and Kisanfu.
Glencore in the government’s crosshairs
Image caption,
Marie-Chantal Kaninda is the president of Glencore in the DRC
The ARSP continues its control of foreign companies present in the DRC. She held discussions with officials at Glencore, the Swiss commodities trading giant.
Miguel Kashal made an observation according to which the subcontracting markets were closed to Congolese investors, while foreigners shared their profits, sometimes outside the DRC. “We must open this sector to the Congolese”, he said. insisted the director general of the ARSP.
“We are compliant with the law on subcontracting and Glencore employs around 4,000 subcontractors and nearly 7,000 employees in the Democratic Republic of Congo,” responded Marie-Chantal Kaninda, representative of this company, interviewed by the BBC.
Last year, the mining company had “paid more than $1.2 million in taxes, which makes Glencore one of the largest contributors to the public treasury” in the DRC, according to Marie-chantal Kaninda.
Discussions between the two parties continue.
Dissolution of contracts or closures of premises
Image caption,
Nicolas Marques de Barrick and Miguel Kashal Katemb director of ARSP (right)
Threatened with closure because of cases of fraud linked to subcontracting in its subsidiary Kibali Gold Mine in the Democratic Republic of Congo, the South African mining giant Barrick chooses to terminate its contract with a Belgian-Indian subcontracting company with which she has worked for several years.
According to the Congolese authorities, the world number 2 in gold had entrusted 90% of its subcontracting contracts to a company called Trade Corp Freight Forward (TCFF), specialized in the field of transport and supply and partner of Kibali Gold Mine, which in turn demanded commissions from subcontracting Congolese companies.
The general director of ARSP Miguel Kashal confided in an interview with the BBC that Kibali Gold Mine was not only not guilty of subcontracting its activities to companies not eligible for subcontracting, but much more , it recruited a Belgian-Indian company called TCFF which alone manages 90% of the markets.
The case of this firm is only the visible part of the reality on the ground; it might alone generate around 2 billion dollars for the benefit of the DRC’s finances. Millions of dollars thus escaped from the Congolese financial circuit. And for Miguel Katemb Kashal, it’s a hemorrhage that has just been stopped.
After hours of meetings at the ARSP headquarters, the multinational therefore committed to increasing the volume of markets for the benefit of companies with predominantly Congolese capital.
But to separate from his now unwanted service provider, Nicolas Marques, one of Barrick’s senior executives in charge of supply, is asking for a short transition period.
“These are serious facts. We asked the Kibali Gold company to deregister this company and the 90% of Kibali Gold markets which were centralized by this foreign company have today been released for the benefit of Congolese entrepreneurs. This is the fight of the President of the Republic. The TCFF company had already centralized all markets and payments were made abroad; here at the ARSP level, we are going to dissolve the certificate. Which means that this company will no longer be eligible at all across the entire national territory,” the director general of the ARSP told the BBC.
The DRC has just over 15,000 subcontracting companies and the authorities aim to reach the figure of 50 to 60,000 this year.
1706980605
#Subcontracting #DRC #billion #dollars #escaping #Congolese #financial #circuit
