DRC demands 16,000 million euros from China after denouncing breaches of infrastructure agreement

China denounces that the investigation of the State Financial Auditor acts outside its competence and announces response measures

17 (EUROPA PRESS)

The Financial Auditor of the State of the Democratic Republic of the Congo (DRC) has demanded 16,000 million euros from China after denouncing breaches, by the Government of Beijing, of the infrastructure agreement in exchange for the exploitation of Congolese minerals signed by both countries in 2008.

The deal specifically required Chinese state-owned companies Sinohydro Corp (Engineering) and China Railway Group Limited (Railways) to build roads and hospitals in exchange for a 68% stake in Sicomines, a cobalt-copper joint venture with the Congolese state mining company, Gecamines.

The report presented by the Auditor estimates that the country has not received adequate compensation from China for the exploitation of its copper and cobalt reserves. According to the document, collected by Bloomberg, the Chinese partners have disbursed only about 820 million euros in infrastructure financing during the last 14 years in works that “for the most part, have not had a visible impact on the population.”

The report understands that Chinese investment in infrastructure should be “at least 18.8 billion euros” given the value of the mineral deposits extracted in relation to an agreement whose initial figures were around 2.8 billion euros.

The auditor takes the opportunity to accuse Chinese companies of bad financial practices such as the execution of a price collapse contrary to competitive practices (or “dumping”) and recommends fines of almost 100 million euros for skipping the capital controls of the authorities congolese

The Auditor does not have the legal capacity to impose its recommendations, but the conclusions of the report could prompt the Congolese government to renegotiate an agreement conceived at the time as an urgent need to reactivate the economy of the African country after years of conflict.

In this sense, and in a response statement, Sicomines questions “both the competence of the Auditor” for these cases “and the procedure followed” in an investigation that, in the opinion of the company, supposes a “violation of their rights”, picks up on his Twitter account.

The report “ignores the mechanism put in place by the DRC through the Collaboration Agreement and the rights granted to Sicomines, and in particular their right to be attended” in this procedure, “ultimately damaging the interests of the country and the people Congolese”.

Thus, Sicomines will begin an evaluation procedure with a view to undertaking “actions to take to protect their rights” before recalling that the DRC “is a State of law where the right to defense is enshrined and guaranteed by the Constitution.

“In particular, the security of private assets, national or foreign, is guaranteed in the DRC and the commitments made with respect to investors cannot be circumvented,” he concluded.

The outgoing Chinese ambassador to the country, Zhu Jing, last month defended the work of companies in the African country. According to his estimates, since the implementation of the agreement they have been involved in commercial practices worth almost 10,000 million euros and created more than 11,000 jobs, according to statements to Bloomberg.