DTI Buries Congo Controversy

In March 2003 our newsletter published the story, “The Lost World War”, examining the appalling situation in the Congo1. Corporate Watch reported allegations made by the United Nations’ Panel of Experts on the Illegal Exploitation of Natural Resources and Other Forms of Wealth of the Democratic Republic of the Congo: allegations that exploitation of the Congo by ‘elite networks’ of warring factions and western business interests was sustaining the ongoing conflict which had already claimed over three million lives. Our article reported in some detail the panel’s allegations against businessman John Bredenkamp, a resident of the UK. Bredenkamp has consistently denied any wrongdoing.

Three months later we received a letter from Maitland & Co, a firm of solicitors acting on behalf of Bredenkamp. They threatened legal action if statements made in the article were not retracted.

After legal discussions we agreed to correct two minor factual errors in the article2. However, we refused to retract the key points in our article as we were simply reporting what the Panel had said.

The Final Report
The publication of the 2002 report caused a furore, naming many parties whose business dealings in the Congo were claimed to be directly or indirectly fuelling the conflict. After receiving complaints from many of the accused, the UN Security Council extended the Panel’s mandate and asked them to try to resolve their disputes with the named parties.

The Panel met with 119 of the parties involved. The outcome was a second ‘Final Report’ in October 2003. That report seems to absolve Bredenkamp and his companies, Tremalt and the Kababankola Mining Company, and many others. Bredenkamp’s Breco Group of companies claims to have been exonerated of all charges.

The Report is highly general in its findings, however, and does not directly mention the previous allegations or give details of the dialogues between the Panel and particular parties. Bredenkamp’s companies fall into ‘Category II’ in the report which means that they “have reached provisional resolutions with the Panel that are dependent on the companies fulfilling commitments on corporate governance... All the matters of substance have been resolved. It is only a matter of going forward with improved controls and procedures”. In order to ensure compliance with improved controls, the Panel asked National Contact Points (NCP) for the OECD’s Guidelines on Multinational Enterprises to monitor these companies. In Bredenkamp’s case monitoring was to be conducted by the UK NCP, a division of the Department of Trade and Industry.

We contacted Bredenkamp’s Breco Group and asked for specific details of how the issues had been resolved and the “commitments on corporate governance” they had made. Breco refused to give details directly, instead Maitland & Co would answer our questions.

Indifference at the DTI
The DTI would not reveal details of the commitments made by Bredenkamp and his companies, citing commercial confidentiality. They suggested that we ask the companies involved and/or the Panel itself.

Disturbingly, the DTI also informed us that they would not be monitoring any of the parties named in the report. This, they said, was not their duty as an NCP. Junior Minister Stephen Timms claimed that “The role of the NCP is to facilitate a dialogue between the two parties with a view to resolving the issues... however, the NCP cannot mediate between the parties as the Expert Panel has disbanded on the expiry of its mandate (31 October).” He also claimed that the Panel supplied insufficient information for the DTI to continue with the case3.
It is untrue to say that NCPs have no investigative function, however. The OECD Guidelines clearly state that NCPS may “pursue enquiries and engage in fact finding activities”4

Lack of transparency
Corporate Watch spoke to Ambassador Kassem, the chairman of the Panel of Experts. Contrary to Stephen Timms’ statement, he said that the DTI had agreed to conduct monitoring of the situation and that the Panel had supplied them with all documentation relating to the case. Indeed the DTI had wanted to be kept informed throughout the process and been in regular contact.

Kassem could not say precisely what commitments had been agreed with Bredenkamp. After meeting with 119 companies and individuals, details of this case had slipped his mind. He did explain how “resolution of all substantive issues” had been achieved, however. Bredenkamp had admitted to certain problems but denied others, and the Panel could not retract some allegations. It was “a point of departure”, Kassem told us. They agreed to disagree on certain points and worked to find a way forward.

We later heard from Maitland & Co, in reply to our questions given to Breco. The information supplied was again of a very general nature and incomplete. What were the matters of substance and how have they been resolved? “All matters of substance were resolved,” they informed us and went on to list ”misconceived allegations” made by the Panel in the 2002 report. What are the commitments on corporate governance? Bredenkamp and his companies have undertaken “to adopt the OECD guidelines for multinational enterprises in respect of the the KMC joint venture,” they told us. They also said that the UK NCP would be monitoring the situation.

NGOs enraged
It is unclear what success the UN Panel’s years of work have had in defusing the conflict and ending the exploitation of the Congo. Progress has been made with many companies and individuals, but in the Bredenkamp case at least, specific details seem to be unavailable and the promised monitoring will not occur.

There were 78 parties with whom the Panel could not reach any resolution, including 38 which have ignored the Panel’s work. The UK government has no plans to monitor any of these parties. Meanwhile conflicts continue in the Congo as opposing factions struggle to gain control over the country’s resources.

The affair has enraged development NGOs who lay the blame on OECD governments. In an open letter signed by seven NGOs5 they suggest that the issue of corporate accountability has been fudged for expediency’s sake. “The final categorisation of companies [is] lacking in rigour,” and “the ‘resolved’ category includes many cases where it is not at all apparent that there has been any resolution,” they write. Furthermore “the credibility of the [OECD] guidelines is seriously damaged”.

Ultimately the affair demonstrates a deep disinterest in corporate behaviour amongst several national governments (the UK and Belgian governments in particular) and a complete lack of transparency. Whilst adoption of higher standards of corporate behaviour must be applauded, voluntary codes of conduct are clearly quite inadequate for dealing with such a crisis.

[1 Corporate Watch Newsletter 13, March/April 2003]
[2 Corporate Watch Newsletter 15, July/August 2003]
[3 Hansard, 18 Nov 2003]
[4 OECD Commentary on Implementation Procedures, Section 1 Procedural Guidelines for NCPs, paragraph 20]
[5 Rights and Accountability in Development, Friends of the Earth USA, German Watch, Association 4D, Brotherhood of St Laurence, 11 11 11, and SOMO]