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Micro-level violent conflict is complex, and the triggers of violence are unpredictable. Building on long-seated unresolved grievances coupled with the presence of foreign armed groups in Eastern Congo, the South-Kivu province is facing a barely noticed humanitarian crisis whose understanding can even puzzle a native researcher. In such a context, can a ‘native researcher’ with lenses affected with ‘urban bias’ understand complex contours of micro-level violent conflict?
This blog post tries to raise awareness on complexity of micro-level layers of recurring violent conflict. It builds on Kalyvas’s (2006) understanding of ‘urban bias’[1]. He states that urban bias refers to lack of information on countryside violence but also the tendency to paint gunmen involved in violence as primitive and criminals. Though Kalyvas stresses on reporting and accounting on civil-war violence, this blog post considers that ‘urban bias’ is widely embedded in understanding the local context while little attention is paid to those painted as ‘criminals’.
In March 2019, I visited Minembwe in the South-Kivu province, the Eastern Democratic Republic of Congo (DRC). It was amid tense violent confrontation between opposing local armed groups largely affiliated to ethnic communities in the region. The MaiMai groups are affiliated to Babembe, Banyindu and Bafuliro communities against Gumino, while Twirwaneho are linked to Banyamulenge community. However, local armed groups are currently being supported by foreign groups from Rwanda and Burundi, the two DRC’s neighboring countries. The reasons for my visit to this region were twofold. One, I had to use this opportunity to teach two courses at undergraduate level within Eben-Ezer University of Minembwe. Two, this is a region I had to visit as part of my fieldwork. Although I am a native of this region, however, this time, I came back as a researcher in conflict economics studies.
The background of Eastern Congo violent conflict is complex with different layers. The region I visited has been under regular clashes between communities – due to mutual contestation, confrontation around ‘autochthony’ versus ‘immigrants’, misunderstanding between farmers and cattle herders as well as other dynamic motives. Community clashes have been going on for decades. Recently, Burundian and Rwandan rebels have been involved in clashes that are supported by local groups. Burundian and Rwandan groups are respectively supported by Kigali and Bujumbura with aims of overthrowing regimes in their countries. They are meddling into local problems with an intent of creating an unoccupied space for further military plans.
Subsequent to recent clashes, roughly 150 villages (including my parents’ village) were burnt down between 2018-2019. It has led to approximately 200,000 internally displaced people. Most of these have been concentrated in Minembwe facing high risks of hunger and diseases. Hundreds are estimated to have died during this period. Existing schools and health facilities have been destroyed. Moreover, due to limited access to transport infrastructures and media, the tragedy happening in this region remains unnoticed to a large extent.
Despite efforts deployed by the local opinion leaders, the neighborhood of my village named Kidasi, part of Minembwe region, was attacked on 13th June 2019 due to a shooting of one person; and a revenge that killed tens. Local population have fled towards Minembwe due to an incident that could have been prevented, if there have been a presence of committed security services. Such incidents build on collective sense of victimization and popular prejudice. Nevertheless, a ‘mundane incident’ can spread widely to hundreds of kilometers. Guns are used to settle family issues as was done in my village’s neighborhood wherein driven by hatred and jealousy, one sibling killed another.
However, when visiting my own village during the fieldwork, I appreciated regular dialogue between ethnic communities. For example, the local opinion leaders managed to save the life of a local chief who was arrested by a group of gunmen. The local chief was released following their interventions. During this visit, I managed to learn also from some members of a committee in charge of reconciliation and dialogue. It was impressive to hear testimonies and efforts of ethnic communities regarding their cohabitation. One could hope that this would be a local model of trust among communities.
My impression was that these local initiatives aiming to sustain peace needed some support. I thought my intervention could be oriented in exchanging ideas with primary and secondary school teachers. We discussed possibilities of re-constructing my primary school made up of woods and straws. Due to poverty and inaccessibility in terms of transport infrastructure, the local population cannot afford costs of a decent building. Moreover, parents are also burdened by remunerating schools’ teachers. Children from these schools drop out due to their inability to pay school fees. My discussion with teachers focused mainly on these features of having a school reconstructed and possibilities to support vulnerable parents.
We had a fruitful exchange and looked forward to support the education of the vulnerable. Together, we introduced a request within a local NGO to see their possibility to help building a school. We shared information about channels through which we can involve state authorities. Beyond that, we discussed negative effects of violent confrontation. We had many old and recent references about how violence can hardly spare any of these ethnic communities. Their role as members of the ‘literate’ class was touched.
Though these were likely minor efforts on my side, I was more oriented on normative ideas to find urgent solutions to the challenges presented in these schools. I seem to have concentrated on ‘literate’ class alone and missed to talk to someone who could just shoot (un) intentionally in the air; and will kill all efforts. As a matter of fact, the shooting by unknown assailants of a member of Babembe ethnic community, has drawn wide retaliation by (counter) attacking and ‘revenge’ on Banyamulenge ethnic community. After leaving my village, I was told that I should have met Mutamba[2]. Why? Was the view I had of the local context be interpreted as an ‘urban bias’?
Regardless of Mutamba’s literacy level, his influence relies on manipulating young people to express themselves by ‘shooting bullets in the air’. I am not yet sure if meeting Mutamba (whom I called later on phone) could have prevented my neighborhood to fall into clashes. However, I argue that in such volatile context coupled with collective victimization guns have more power than anything else. As I question Kalyvas (2006), I felt that, meeting teachers was sufficient. However, I certainly had no clue and clear information on Mutamba. I wish that I could have met many of such people if this would have spared this region.
About the author:
Delphin Ntanyoma is a PhD candidate at the ISS. His research falls within Conflict Economics and is part of the Economics of Development & Emerging Markets (EDEM) Program. With a background of Economics and Masters’ of Art in Economics of Development from ISS, the researcher runs an online blog that shares personal views on socio-economic and political landscape of the Democratic Republic of Congo but also that of the African Great Lakes Region. The Eastern Congo Tribune Blog can be found on the following link: www.easterncongotribune.com.
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A new Congolese mining code signed earlier this year is intended to increase the mining sector’s contribution to state revenue, which should in theory lead to improvements in the daily lives of the Congolese. However, if the misappropriation of mining revenue continues under the new code, little is likely to change. State misappropriation of mining revenue, while so often the focus of analysis, is just part of the problem. Tax evasion and avoidance strategies practiced by transnational corporations are of greater importance.
On March 9th, 2018, just two days after a six-hour meeting with some of the world’s most important mining executives, DRC President Joseph Kabila signed into law a new Congolese mining code, updating the 2002 code following years of parliamentary process and debate. Through this new legislation, the Democratic Republic of Congo (DRC) hopes to reap higher benefits from its huge resource wealth. Royalties on copper and cobalt have risen to 3.5 percent, up from 2 percent, and the government’s stake in new mining projects has been set at 10 percent, up from the previous 5 percent. Congolese Parliament also introduced a number of new elements late on in proceedings, most notably a 10 percent royalty tax on “strategic substances”, a 50 percent super-profits tax, and the annulation of a 10-year stability clause to ensure the new provisions come into effect immediately.
The intention behind these changes is that they will increase the mining sector’s contribution to state revenue, which under the Kabila administration to date has been low, and significantly below its potential. Based on data from 2010 and 2011, one study found the Congolese state exerted around a 13 percent tax rate over the sector—well below the 46 percent tax rate considered reasonable for the DRC by the World Bank. Another, more recent study, conducted by the German Society for International Cooperation (GIZ), calculated that between 2011 and 2014, total state revenue collected from the sector amounted to a mere 6 percent of total mining sector revenue across the same period.
Even the former IMF DRC Head of Mission, Norbet Toé, commented that ‘the 2002 mining code is too generous, so much so that the state captures very little in the end’. From this perspective, the new mining code represents a welcome correction, and is part of a current trend across Africa whereby African states are beginning to reassert themselves following generations of World Bank-led neoliberal mining sector restructuring.
Yet while mainstream media coverage has focused on the various tax increases and the resultant stand-off between President Kabila and mining executives, a wider issue has been generally overlooked: that if old problems continue into the new code, the fiscal increases are unlikely to lead to significantly increased state revenue (and therefore, in theory at least, to improvements in the daily lives of Congolese).
One reason for this is the Congolese state’s misappropriation of mining revenue intended for the treasury. This has been demonstrated by a near constant flow of academic and advocacy reports over the last several years (see here, here and here for some of the most recent), which rarely fail to generate international headlines and spark public and media debate in the DRC. The popularity of these reports has its roots in the ideological primacy of “bad governance” (African governance, that is) as the prime causal explanation for the failure of the DRC to benefit from its resource wealth.
To be sure, state misappropriation of mining revenue has been a serious problem under the Kabila administration, and it is correct that the government be held accountable for its actions when they work directly against the interests of the Congolese people. However, as research by Stefan Marysse and Claudine Tshimanga (2014: 155) has noted, this is not the “most important black hole” when it comes to low state revenues in the DRC. The quantitatively bigger problem, they concluded, is corporate tax evasion and avoidance practiced by transnational corporations (TNCs).
Based on an analysis of mining company financial reports, Marysse and Tshimanga (Ibid.) found “international companies in joint ventures with Gécamines try to pay the least possible, resorting to juridical-accounting techniques…to shift their profits to countries where they pay less tax”. This is achieved primarily by transfer pricing, whereby through intra-company trade (trade between two or more companies within the same legal entity) TNCs artificially manipulate the real prices of goods and services entering and leaving a country to shift their profits to low-tax or no-tax jurisdictions.
A transnational could, for example, set up a subsidiary in the DRC that extracts copper and then sells it at a loss to a subsidiary in Switzerland. This subsidiary could then sell it on for a profit. The balance sheet of the transnational that owns both these subsidiaries would much look the same, but the Congolese company would record major losses, while the Swiss one would enjoy big profits.
This is, in fact, exactly what research indicates is happening. The result is that TNC subsidiaries in the DRC invariably run at a loss and therefore do not pay Congolese profit tax. For example, a 2014 study of Swiss-based Glencore found its Congolese subsidiary Kamoto Copper Company (KCC) to run at a loss of hundreds of millions of dollars per year from 2009 to 2013. Over the same timeframe, its Canadian-registered subsidiary Katanga Mining Limited ran at a net profit of $401 million over the same period. This resulted in a loss of revenue to the Congolese state of $153.7 million. Recent KCC financials demonstrate gross debt of $8.9 billion and a capital deficit of $3.9 billion.
Five mining company case studies conducted by Congolese civil society organisations between 2015 and 2017 came to the same conclusion. They found that ‘profit tax payments to the Congolese state are minimized by mining companies, and thus…this very important flow often remains hypothetical, or even almost zero’ (The Carter Centre 2017: 4). As MP Alain Lubamba reflected recently, ‘there is this contradiction that emerges each time…when the miners declare losses [in the DRC] when their mother company is only enjoying success’.
Given these practices, an improved fiscal regime and better state management of government revenue will do little to address the state’s low capture of mining revenue as ultimately, you cannot tax losses. The profit tax and the much-discussed new super-profits tax—by far the most important fiscal measures of the new code—are rendered impotent.
A first step to addressing this problem in the DRC must be to push subsidiary financial reports into the public domain, in the same way that TNCs registered on the New York or Toronto stock exchanges must publish their financial reports. This would bolster domestic and international efforts to address the issue. Currently, subsidiary financials are jealously guarded by both companies and government officials, and with good reason. Once made public, the game will be up, and TNC misappropriation of government revenue might begin to spark a similar level of debate as we currently see in the DRC around state misappropriation. Indeed, whisper it quietly, it might even come to be seen as of greater importance.
The article was originally published on African Arguments. You can read the original here
Picture credit: Julien Harneis
About the author:
Ben Radley is a PhD student at the International Institute of Social Studies in The Hague. His research interests centre on the political economy of transnationals and development in low–income African countries, with a focus on the DRC. He’s a Leverhulme Trust grantee, and an affiliated member of the Centre of Expertise for Mining Governance at the Catholic University of Bukavu in the DRC.
