Chinese-owned mining company exporting to Dubai gave armed groups AK-47s for access to gold.
LONDON, United Kingdom, July 5, 2016 – Armed groups in Shabunda territory, eastern Democratic Republic of Congo, received gifts of arms and cash from a Chinese mining company and made up to $25,000 per month extorted from local miners during a recent two-year gold boom. In just one year, up to $17 million of gold produced by Kun Hou Mining, the Chinese-owned company, went missing and was likely smuggled out of Congo into international supply chains, Global Witness reveals today(globalwitness.org/river-of-gold-drc).
At the same time, the Congolese state lost out on tax revenues on up to $38 million of artisanal gold produced per year during the gold rush, due to smuggling and misconduct by provincial authorities. The gold rush focused on the Ulindi River reached its peak in 2014 and 2015 and continues to this day. Evidence gathered by Global Witness also shows a provincial authority colluded with armed groups in illegal taxation of miners while another altered official export documents so gold looked as though it was coming from legally-operating mines.
Global Witness’ investigation reveals the extent of the problems in eastern Congo’s artisanal gold sector. Eastern Congo has seen an uptick in gold production in recent years, the revenues from which could have been used to address the region’s desperate poverty but have instead often funded armed groups and corrupt officials. Most of eastern Congo’s artisanal miners – around 80% – work in the gold sector. Recent international reforms have aimed to stop Congo’s mineral wealth funding armed groups. Global Witness warns today that the Congolese government needs to hold companies and government officials involved in such abuses to account in order for these reforms to work.
Armed groups, known as Raia Mutomboki, received at least two AK-47 assault rifles and $4,000 in cash from Kun Hou Mining, which operates mechanised gold dredging machines along the Ulindi River in Shabunda territory, South Kivu province of eastern Congo. In addition, the armed men taxed artisanal miners operating locally-made dredgers extracting gold along the river. Local authorities also collaborated with the Raia Mutomboki, through a tax sharing deal. The taxes collected by authorities appear to have disappeared, depriving Congo of much needed revenue which could be used for health and education.
“There were over 500 cases of malnutrition reported in Shabunda town in 2014 and yet the significant revenues generated by this gold boom benefitted armed men and predatory companies instead of the Congolese people” said Sophia Pickles, Senior Campaigner at Global Witness. “The Congolese government must enforce its own laws to ensure that companies in its gold sector do not produce or trade gold that has funded armed groups. Any company breaking these laws must be held accountable for their actions. Provincial mining authorities that fail to properly govern the minerals sector must also be held liable.”
Global Witness’ research shows that almost half a million dollars’ worth of Kun Hou’s gold was exported to a Dubai company through official channels. The rest of the company’s estimated $17 million of gold production is likely to have been smuggled out of the country.
There were over 500 cases of malnutrition reported in Shabunda town in 2014
Global Witness has also found evidence that mining officials in the provincial capital, Bukavu, deliberately falsified documentation to obscure links to Shabunda. Officials changed the gold’s origin on official export documents to show instead it came from the handful of legally-operating artisanal mines in South Kivu. This pattern has been repeated with other mines in the province. As a result, it is much more difficult for international buyers to be sure that gold has not funded armed groups.
“Provincial authorities overseeing Shabunda’s boom have, by their actions over the past two years, directly undermined international and the national government’s efforts to reform eastern Congo’s artisanal gold trade,” said Pickles. “States have a responsibility to ensure that companies do no harm, including checking supply chains for links to conflict and human rights abuses – Congo and the United Arab Emirates have dramatically failed in this respect.”
Global Witness’s report River of Gold also shows that:
· South Kivu’s provincial government and mining authorities continued to support Kun Hou Mining despite repeated legal violations by the firm and repeated requests from Congo’s national government in Kinshasa to shut down its operations.
· Mining officials in Shabunda town working for SAESSCAM, a governmental body mandated to support artisanal miners, ran an illegal taxation racket in areas where the local dredgers operated, including in collaboration with Raia Mutumboki armed groups.
· Gold from Shabunda’s boom was sold on to a gold trading house in Bukavu that then sold it to their sister company, Alfa Gold Corp DMCC, in Dubai. Neither firm carried out supply chain due diligence to international standards, which would have revealed that the gold had been obtained in direct contravention of Congolese law and UAE Guidelines. Alfa Gold Corp DMCC has a wholly owned UK subsidiary registered in London’s Hatton Garden jewellery area. Alfa Gold in Dubai and London did not respond to request for comment.
· Documents show that a French citizen Frank Menard, who worked for Kun Hou Mining, is deeply implicated in the company’s wrongdoing. Raia Mutomboki armed groups wrote to Menard in February 2015 to thank him for the two AK-47 assault rifles and $4,000. Menard also signed an official document confirming the sale of Kun Hou’s gold to Alfa Gold’s Congolese office. Global Witness’ attempts to contact Franck Menard were unsuccessful.
In recent years there have been significant international efforts to tackle the link between violent conflict, human rights abuses and the minerals trade in Congo and elsewhere including international supply chain guidance set out by the Organisation for Economic Cooperation and Development (OECD) five years ago, which has been a legal requirement in Congo since 2012. The US also passed a law and most recently industry supply chain guidelines based on the OECD standard were agreed in China. The Chinese guidelines set a precedent for Chinese companies to recognise and reduce supply chain risks and if adhered to should allow companies sourcing minerals from high-risk areas to do so responsibly.
Kun Hu Mining refused to comment in response to three requests from Global Witness. SAESSCAM have strongly denied that its agents collaborated with armed groups.
Reports on the elections that lead to the fall of Kahinda Otafiire lost his place as an MP aspirant for the General election in 2016. So he will not be the MP for the Ruhinda South-Mitooma District. He lost to another brother on the ballot who actually is in jail! But first I will address the person and few of his previous actions and issues that he has had in recent years in his position as a government official. So that if the public known all of this it’s a miracle that he is still been staying as a MP and representing this area for that long with all this stories. So hopefully the brother who is jailed and Aspirant for Ruhinda South – Mitooma District has more clean hands then Otafiire! Take a look.
Gen. Otafiire said this this summer:
“I have been with President Museveni for more than 40 years and he has not sent me to my voters. How does he start sending you who have spent the shortest time with him?” (…)”You will be saved by your deeds because at the level of primaries, we are all equal and stopping someone from standing would send a bad signal to the people” (…)”Don’t forget that we have competitors in other political parties who are seeing whatever we are doing. Just identify your weaknesses and plan to be stronger rather than blocking other people who want to stand against you” (Zadock, 2015).
A week later he said:
“I don’t think I am stupid as I appear. With all due respect, you’re insulting my intelligence” (…)”I don’t remember writing that letter although it has a signature resembling mine” (…)”I know Kasango as an officer of court. The documents were signed by Justice John Keitirima, whom I know well. I had no reason to doubt” (Walubiri, 2015).
Some cool quotes from the brother:
“Tamale Mirundi should leave issues of the generals to the generals.” Commenting on Tamale’s verbal attack” (…)”I am 85kg, do you think I have become big because of corruption?” (…)”what was a wetland doing in the middle of a city?” questioning the Nakumatt vs Nema saga” (…)”Even Museveni knows I am fire” (…)”I don’t like this nonsense. That is my private life, it has nothing 2 do with my public life as Minister. Whether I am taking my family out or not is none of your business. You fellow can u concentrate on what concerns u and leave Otafiire’s family alone.” In response to Daily Monitor concerning his Christmas plans” (Ortega, 2013).
Nominated as one of the Most Corrupt of Ugandans in 2012 and he was awarded the spot of number 7:
“Taking advantage of his senior position in the elite network that effectively plundered diamonds, coltan, timber and Gold in eastern Congo, Otafiire set up lucrative business enterprises in the neighboring country and refused to pay taxes, as reveals the 2003 final report of the United Nations Panel of Experts on Illegal Exploitation of Natural Resources and Other Forms of Wealth of the Democratic Republic of the Congo:” (…)”Members of the Ugandan network are typically tax exempt. The Panel is in possession of documents showing that the network uses its control over the RCD-K/ML rebel administration to request tax exonerations for imports of high-value commodities. The granting of numerous tax exonerations to UPDF Colonel Otafiire between late 2001 and early 2002 is one of numerous cases. Not only did Colonel Otafiire benefit financially but, eventually, those exonerations forced local competitors out of markets in Bunia and Beni, leaving the petrol trade largely under the control of the network” (…)”Even in his own country, Uganda, Otafiire is routinely accused of abusing power. Fourteen years ago, he was dragged to a parliamentary probe committee for allegedly stealing copper rivets worth billions of shillings from an Asian businessman. In 2007, Kahinda Otafiire abused his office as minister of local government when he fraudulently allocated the Nakawa-Naguru estate redevelopment project to Opec Prime Properties Ltd, according to a 2008 report of the Inspector General of Government” (Sseremba, 2012).
1980s Luweero Triangle tricks:
“Obote put it more succinctly to Andrew Mwenda:” (…)”Maj. Gen. Kahinda Otafiire, for example, revealed that the National Resistance Army rebels used to wear UPC colours and then go into villages in Luwero and kill people in order to make the people think these were actions of the UPC government. Otafiire was boasting of the “tricks” NRA employed to win support in Luwero, but was also revealing the sinister side of Museveni and his insurgents… Each time there was a reported case of mistreatment of civilians by the army, we arrested those responsible and punished them severely” (Kalyegira, 2010).
Messy water of 2005:
“Maj. Gen. Kahinda Otafiire, the Minister for Water Lands and Environment, last month fixed the price of water in rural areas at Shs 10 per 20-litre jerry can” (…)”Until last month, prices varied from one area to another, depending on operational costs. Because costs differ, there is fear that a uniform tariff will jeopardise the operations of the water systems and lead to their collapse. This is because the companies can only continue running the water systems if there is a profit to make” (…)”However, Otafiire this week dismissed such fears, saying that the new water tariff aimed to make accessible it to every one. “It was a bad policy. I am the minister and I have changed it,” he said of attempts to develop a business model. “Water is not for commerce. If we can give free medicine, why not free water?” He said only two water schemes with electricity-powered systems would get government grants to subsidise their power expenses” (Kavuma, 2005).
Kenya Probe 2007:
“KENYAN police are investigating a possible link between Maj. Gen. Kahinda Otafiire to a large consignment of sugar currently impounded in Mombasa over tax evasion, but the Local Government minister has denied involvement in the racket” (…)”The huge consignment, worth about Shs 850 million was impounded at Mombasa seaport several months ago after authorities realised its destination papers had been falsified to avoid paying taxes due” (…)”If the racket succeeded, said Port CID Chief Mr John Nyanzwii, then the owners would have evaded the 100 per cent duty paid for imported sugar and the import duty due to the Uganda Revenue Authority. The sugar would have appeared to have originated from Kenya” (…)”Although police authorities in Mombasa had information that the Sugar belonged to Uganda’s local government minister, Maj. Gen. Kahinda Otafiire, he denied the allegations in a phone interview with Daily Monitor last week” (NFV Zone, 2007).
Car Crash in 2008
“THE Minister of Water, Lands and Environment, Maj. Gen. Kahinda Otafiire, crashed his car on Saturday morning and drew a gun at a journalist who came to the accident scene.The incident took place on Kinawataka Road, off the Old Portbell Road at 2:30 a.m. Daily Monitor photo-journalist Mr Mike Odongkara was put at gunpoint by an angry Otafiire and manhandled by policemen who were called to the scene to rescue the minister” (Odangkara, 2008).
Threating to leave NRM in 2010:
“I might have to join another party. I won the elections but my name is not on the list [of party flag bearers released this week]. They are chasing me away. What do you want me to do?” (…)”“If you were in my shoes, what would you do?” (…)”You cannot petition someone who does not want you” (Kiggundu, 2010).
Shell case of 2012:
“Justice and Constitutional Affairs Minister Kahinda Otafiire yesterday failed to show up in court to explain his side of the story in a case in which petroleum giant Shell (U) Ltd sued him over alleged breach of contract“ (…)”Gen. Otafiire, through Benzina (U) Ltd, allegedly negotiated a land lease deal with Shell (U) but later failed to honour it” (…)”The petroleum company now wants a Shs1.2 billion refund for refusal to deliver land to it, which it says resulted in loss of business.” (Wersaka, 2012).
In 2013 Otafiire had issues in the parliament:
“Minister for Justice and Constitutional Affairs has been thrown out of Parliament for Government’s failure to appoint substantive DPP as Cases pile up and suspects spend longer time on remand without trial” (…)”Appearing before the parliamentary budget committee to present the DPP budgetary estimates for this financial year, MPs today ordered Major Gen Kahinda Otafiire out from Parliament accusing government of delaying the appointment of the substantive Director of Public Prosecutions (DPP)” (Investigator, 2013).
Shopping in 2014:
The Minister of Justice was shopping at the Joy Supermarket in Mbuya who is a city suburb on the outskirts of Kampala. After shopping in his trolley he came to the register where he asked the price for each of the picked items in the trolley. The whole shopping spree cost the minister 160, 000 shillings. He started first buy paying it with 50,000 bills. Before picking coins from another pocket there he started to count and used time to make a jam in the star while getting enough coins to pay the balance missing of 10, 000 in small change (Ugandadrone, 2014).
Retired Maj. Gen Kahinda Otafiire storms the tally center in company of security personnel for the Ruhiinda county polls and orders everybody out; and says they must leave everything inside in the hands of one of the security boys; Kahinda Otafiire came along while saying his votes have been rigged. The people and the officials are reportedly refusing to leave the centre.
Gen. Kahinda Otafiire is seriously being given a run for his money according to the pre-liminery report. Capt. Mugabe Dononzio Kahonda is leading with the difference of 4773.Mind you Kahonda did not vote because he is in the prison on allegations that he forged academic documents. Otafiire is also reported to fall behind Hosea Muhanguzi.
Kahinda Otafiire lost to Rtd. Cap. Kahoonda in Ruhiinda County while he is still incarcerated in prison.
Reasons for the fall of Otafiire:
“Gen. Kahinda lost because of his rejection for Mitooma not become a district. This resulted into the district chairman Benon Karyaija who is very popular to part ways with him and become arch enemies. The former Mitooma district NRM chairman Tito Nsigireho, district speaker silver Tumukuratire, finance secretary Bamusiime Muhwezi have all been against Otafiire since 2010 when they defeated him and Mitoma was granted district status from Bushenyi district. Still in Mitooma district, Thomas Tayebwa won in Ruhinda North with over 80%. He was contesting against one Musinguzi. Ruhinda North is a new constituency that was curved of Ruhinda this year” (Muhwezi, 2015).
If this wasn’t interesting then I don’t know; we can see that with the fix of somebody else as flag-bearer in the district, especially since the district was split of the districts in the area. Also with losing the loyalty of patrons in the area, that cost him a lot of votes. So I am sure that Mr. Otafiire can become Minister Without Portefolio or something in the 10th Parliament. Now we have seen that the future handpicked loyalist of the Party, not because the locals in Ruhinda want him anymore. Peace.
NFVZone – ‘Kenya Police Probe Otafiire Over Sugar’ (20.11.2007) link: http://www.nfvzone.com/news/2007/11/20/3108994.htm
Kalyegira, Timothy – ‘Rwanda: How RPF and NRA perfected the human atrocities to blame it on Hutus’ (18.03.2010) link: http://rwandarwabanyarwanda.over-blog.com/article-rwanda-how-rpf-and-nra-perfected-the-human-atrocities-to-blame-it-on-hutus-46935719.html
Kavuma, Richard M – ‘Otafiire upsets water experts’ (25.08.2005) link: http://www.worldwatercouncil.org/fileadmin/wwc/Sections_for/Journalists/Water_Media_Program/wmp_resources_kavuma_25.08.05.pdf
Kiggundu, Edris – ‘Gen.Otafiire threatens to quit NRM’ (23.10.2010) link: http://www.observer.ug/component/content/article?id=10614:genotafiire-threatens-to-quit-nrm
Muhwezi, Wilber – ‘PRISONER CAPT. KAHONDA DEFEATS GEN.KAHINDA OTAFIIRE’ (27.10.2015) link: http://mknewslink.com/prisoner-capt-kahonda-defeats-gen-kahinda-otafiire/
Investigator – ‘Otafiire thrown out of parliament over DPP’s appointment’ (08.08.2013) link: http://news.ugo.ug/otafiire-thrown-out-of-parliament-over-dpps-appointment/
Odongkara, Mike – ‘Otafiire crashes car, pulls gun at journalist‘ (08.05.2008) link: http://mikeodongkara.blogspot.no/2008/05/otafiire-crashes-car-pulls-gun-at.html
Ortega, Ian – ‘Kahinda Otafiire Quotes (Compilation)’ (31.07.2013) link: http://bigeye.ug/kahinda-otafiire-quotes-compilation/
Sseremba, Yahya – ‘10 Most Corrupt Ugandans’ (19.04.2012) link: http://campusjournal.ug/index.php/special-report/investigation/471-10-most-corrupt-ugandans
Ugandadrone – ‘Kahinda Otafiire causes jam in a supermarket counting coins’ (15.12.2014) link: http://ugandadrone.com/kahinda-otafiire-causes-jam-in-a-supermarket-counting-coins/
Zadock, Amanyisa – ‘Stop deceiving voters, Otafiire tells aspirants’ (05.06.2015) link: http://www.monitor.co.ug/News/National/Stop-deceiving-voters-Otafiire-tells-aspirants/-/688334/2740506/-/ure9e3/-/index.html
Walubiri, Moses – ‘I am not as stupid as I appear – Otafiire’ (14.06.2015) link: http://www.newvision.co.ug/news/670963-i-am-not-as-stupid-as-i-appear-otafiire.html
Wersaka, Anthony – ‘Otafiire shuns Shell case mediation’ (18.05.2012) link: http://www.kigalikonnect.com/article/otafiire-shuns-shell-case-mediation.html
There are some rumors, one quoted by the General Sejusa Tinyefunza:
“Sam Mugumya is in a Police Safe House in Muyenga ready to be transferred to Kisoro-DRC border this night in collaboration with Paddy Ankunda Red kipande militants to cause problems for DRC with second invasion in the name of perpetual infiltrated bandit-ism rebellion of self-regime styled in the name of survival”.