Happy clean Anvil is out of this blacklist

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    UN names miners in billion dollar Congo scams

    NEW YORK -- The United Nations Security Council has recommended financial restrictions be imposed against 29 companies active in the Democratic Republic of Congo. In addition, the report fingers dozens of other public and private companies for violating commercial guidelines in relation to Congo dealings.
    The sanctions are being proposed by the UN to curb “illegal exploitation of raw materials” in the war ravaged country by “criminal organizations and persons”. The DRC has become a cookie jar for the brave with seven regional countries involved in the civil war which has mostly to do with the spoils accruing to mining concession holders, both legal and illegal.

    The UN report says the stripping of the DRC is being orchestrated by three circles of influence involving Zimbabwe, Uganda and private individuals trying to get their hands on diamonds, cobalt, copper, germanium. The UN Panel believes more than $ 5 billion of assets have been transferred from the State mining sector to private companies in the past three years without any public treasury benefit.

    Even as foreign troops prepare to withdraw, the Zimbabwean Defense Force has created holding companies to front its activities and is also installing a private security force to protect its booty. In addition to key Zimbabwean politicians and career soldiers, several Europeans have been connected to including Ukrainian diamond and weapons dealer Leonid Minim and Belgian national George Forrest who is described as having the “most wide-ranging private mining portfolio in the DRC”.

    Other privateers making a good buck are Zimbabwean arms merchant John Bredenkamp and a Mr. Al-Shanfari. . Billy Rautenbach, another Zimbabwean citizen who went on the lam from South Africa after his empire there collapsed following a series of police raids, stands in line for copper, cobalt and uranium deposits after losing his position as chief executive of Gécamines, the DRC state mining company, in March 2000.

    The Panel recommends that the accused companies and individuals be allowed a “grace period” of 4-5 months wherein they would have to prove that they had stopped all “exploitation”. Failing that, the targets will be subject to Security Council sanctions including: (a) Travel bans on selected individuals identified by the Panel; (b) Freezing of the personal assets of persons involved in illegal exploitation; (c) Barring selected companies and individuals from accessing banking facilities and other financial institutions and from receiving funding or establishing a partnership or other commercial relations with international financial institutions.

    However, the list of companies is restricted only to those at the source of the exploitation with no punishments proposed for companies further up the chain. That makes the threat toothless. Nevertheless, it is a slap in the face for some companies that have been patting themselves on the back for good corporate governance. South African companies in particular have yet another image problem to deal with.

    Public companies mentioned in case studies

    First Quantum Minerals [Toronto: FM]
    FQM is accused of offering bribes to secure concessions: “In its attempts to buy rights to the Kolwezi Tailings, First Quantum Minerals offered a down payment to the State of $100 million, cash payments and shares held in trust for Government officials. The FQM share offer to those officials was premised on a sharp rise in its share price once it was announced that it had secured some of the most valuable mineral concessions in the DRC”

    Kinross Gold [Toronto: K]
    Forrest is alleged to have “thwarted Kinross Gold’s [KCG] attempt to invest $1 billion in copper and cobalt operations… [Kinross] returned to the Democratic Republic of the Congo late in 2001 as part of Kinross-Forrest Ltd., a company registered in the British Virgin Islands.”

    Several of Forrest’s companies have been targeted for sanctions and he faces a personal travel ban.

    Bayer AG – H.C. Starck [New York: BAY]
    “H. C. Starck (a Bayer subsidiary) purchases about 15% of Eagle Wings coltan. H. C. Starck has denied on numerous occasions obtaining coltan originating from Central Africa. The Panel possesses documents showing the contrary.

    First Quantum and Kinross did not return calls for comment at the time of publication.

    Companies facing financial restrictions Individuals facing a travel ban and financial restrictions Companies in violation of OECD Guidelines for Multinationals

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