The Collective of Movements, Leaders of Youth and Young Women’s Organizations is demanding the termination of the commercial agreement between the General Cobalt Company (EGC) and the commodity trader Trafigura Pte Ltd. It was through a correspondence addressed to the Prime Minister, Sama Lukonde, reached POLITICO.CD, this Thursday, August 04, 2022.
“In our first letter of June 10, 2022, we showed that the contract between EGC and Trafigura appears to violate Congolese competition law aimed at preventing corruption. If that’s not enough to convince you to withdraw this lucrative deal from Trafigura, below we provide evidence that this company’s history shows that it does not meet the stringent EGC requirements as stipulated in the standards. of supply responsible for the EGC”, can we discover from this correspondence.
And to continue: “On three counts – corruption, complicity in war crimes and non-payment of government taxes – we are concerned that the evidence suggests that Trafigura may have already breached the standard. For these reasons, the EGC agreement should be torn up”.
In addition, this collective of citizen movements informs that in November 2020, Trafigura had signed a contract with the public mining company Gécamines to market the cobalt of artisanal production. Under the terms of the agreement, he explains, Trafigura will be able to buy 50% of artisanal cobalt production in the DRC. “EGC, which was created by two mining decrees issued in 2019 to buy, process and sell artisanal cobalt, retains the right to market the remaining 50% to buyers other than Trafigura”, he contextualizes.
In March 2021, the collective says, the EGC released its “Responsible Sourcing Standards,” a document that sets out its strict requirements for all business partners intending to purchase artisanal cobalt.
“As a lead partner in the EGC, with access to 50% of artisanal cobalt mined across the country, we would expect Trafigura to demonstrate a strong track record of compliance with each of these criteria. But as dismantled below, Trafigura has been repeatedly accused of failing to live up to the most basic requirements,” he says.
Trafigura violates Article 11 of the OECD Annex
The group further claimed that Trafigura is accused of breaching Article 11 of Annex II of the OECD Guidance which states: “We will not offer, promise or give bribes and we will resist solicitations of bribes. »
Among the examples mentioned in this correspondence, this collective cited in particular the allegations of corruption that Trafigura is facing in Jamaica, where an investigation is underway into allegations that Trafigura paid bribes totaling $ 31 million to the People’s National Party.
The group also referred to allegations, first emerging in a 2005 Global Witness report, that Trafigura paid $472 million in bribes to oil company chief Denis Gokana. public of Congo-Brazzaville.
“Before the signing of the EGC agreement, there were already clear doubts about Trafigura’s commitment to fight corruption, as stipulated in Article 11 of Annex II of the OECD Guidance. Therefore, we are of the view that there were, and remain, reasonable grounds to disqualify the company under the EGC’s Responsible Sourcing Standard.
Additionally, he also pointed to allegations that Trafigura had been complicit in war crimes as a reason for disqualifying her from the EGC.
“If the corruption allegations were not enough to disqualify Trafigura from the EGC agreement, there are also questions about the company’s commitment to respect another article of the OECD Guidance” adds the collective. Importantly, he points to article 1 v) of annex II of the guide, which states: “When sourcing from or operating in conflict-affected or high-risk areas, we will not tolerate or take advantage of , aid, assist or facilitate in any way the commission of war crimes, or other gross violations of international humanitarian law, crimes against humanity or genocide”.
The group cited reports that Trafigura continued to sell Russian oil after President Vladimir Putin launched his invasion of Ukraine, “at pre-war levels, while competitors cut deliveries”. . The letter also refers to claims made by Oleg Ustenko, chief economic adviser to Ukrainian President Volodymyr Zelensky, who said: “If you decide to put your shareholders and the fossil fuel industry first in continuing to trade in Russian fuel, you will be complicit in the war crimes committed in Ukraine by Putin’s forces”.
“Trafigura has now agreed to stop buying oil from Russian state-owned Rosneft. However, it only did so after considerable political and media pressure raising reasonable concerns about Trafigura’s commitment to avoid profiting from war crimes. As such, we question whether the company can be trusted to adhere to this key principle of the OECD Guidance,” these movements asserted.
The collective also expressed concern that Trafigura has a history of non-payment of taxes, an obligation according to the OECD guidance, in particular Article 13 of Annex II, which states: “We ensure that governments are paid all duties, taxes and royalties relating to the extraction, trade, processing, transport and export of minerals from conflict-affected and high-risk areas. »
The correspondence cited the example of Nigeria, where the government reportedly claims Trafigura owes taxes for handling 12.5 million metric tons of crude oil. According to the Federal Tax Collection Service in Abuja, he continued, the commodity trader failed to file a tax return.
In the conclusion of said correspondence, the group said: “At the launch of the EGC in 2019, the organization was hailed as the solution to years of dangerous artisanal mining that has only served to enrich unscrupulous multinational conglomerates and impoverish ordinary Congolese.
“However, we are concerned that by choosing Trafigura as a business partner, the EGC will not solve any of these problems,” the group said.
“This letter has shown that there is ample evidence to suggest that Trafigura is unable to comply with the requirements set out in the EGC Responsible Sourcing Standard. As such, now is the time to terminate the agreement and start afresh for the good of artisanal mining in the DRC and for the good of the people of the DRC,” the collective concluded.