D R Congo: Revisiting the role of Belgian mineral traders in Kivu

Title: D R Congo: Revisiting the role of Belgian
mineral traders in Kivu
Author: R Custers, J Cuvelier,D Verbruggen, Antwerp
Category: Resource Extraction
Date: 5/13/2009
Source: International Peace Information Service
Source Website: http://ipisresearch.be

African Charter Article# 24: All peoples shall have the
right to a general satisfactory environment favorable to their
development.

Summary & Comment: This latest publication by
the International Peace Information Service aims to shed more light on
four Belgian mineral companies operating in the Democratic Republic of
Congo. Two of them, Services and Trading International and Société pour
le Développement et l'Expansion d'Entreprises have never been
scrutinized by the UN or other oraganisations. MUB

---

Culprits or scapegoats: revisiting the role of Belgian mineral
traders in Eastern DRC

http://ipisresearch.be/news.php?id=209

Read the full document at: http://ipisresearch.be/dbpdfs/20090513_IPIS_Culprits_Scapegoats.pdf

Ever since the eruption of the second Congo war in August 1998, the
mining sector in eastern DRC has been under scrutiny of UN Sanctions
Committees, academics, NGOs, and local and international media, who
have been worried and disturbed by the links between natural resource
exploitation and armed conflict in the region. It has been argued that
both state and non-state armed actors are deriving benefit from the
local mining business by levying taxes on mineral exports, by selling
minerals for their own profit, and by trading mining rights for
financial and military support.

The present report aims to clarify the position of Belgian mineral
traders in the area. The purpose of the report is not only to shed more
light on the activities of Trademet and Traxys, the two companies
featuring in the latest UN report, but also to discuss the activities
of two other companies that have received no attention so far, namely Services
and Trading International (STI) and Société pour le
Développement et l'Expansion d'Entreprises ! (SDE).

For more information please see the full article below:

Culprits or scapegoats? Revisiting the role of Belgian mineral
traders in eastern DRC

http://ipisresearch.be/dbpdfs/20090513_IPIS_Culprits_Scapegoats.pdf

Research & Editing:
Raf Custers, Jeroen Cuvelier, Didier Verbruggen

Executive summary

Ever since the eruption of the second Congo war in August 1998, the
mining sector in eastern DRC has been under the scrutiny of UN
Sanctions Committees, academics, NGOs, and local and international
media, who have been worried and disturbed by the links between natural
resource exploitation and armed conflict in the region. Both state and
non-state armed actors are deriving benefit from the local mining
business by levying taxes on mineral exports, by selling minerals for
their own p! rofit, and by trading mining rights for financial and
military support
. The present report aims to clarify the position and responsibility of
Belgian mineral traders in the area. Our purpose is not only to shed
more light on the activities of Trademet and Traxys, the two companies
featuring in the latest UN report, but also to discuss the activities
of two other companies that have received less attention so far, namely
Services and Trading International (STI) and Société pour
le Développement et l'Expansion d'Entreprises (SDE).

In the first part of our report, we offer a description of the
context in which the mineral trade takes place. We discuss the current
state of affairs in the global trade in tin and tantalum, present an
outline of the mineral trade in the Kivu region and give a brief
description of the local security situation. In the second part of our
report, we concentrate on the involvement of Belgian traders in the
mineral business of eastern DRC. Our main intention is to provide the
reader with a profile ! of each of these traders. As far as possible,
we also present some information on the Congolese suppliers of the
Belgian traders.

This paper aims to feed the ongoing debate on the accountability of
commercial stakeholders in eastern DRC and on possible solutions to
break the link between the mineral trade and the financing of armed
actors. IPIS agrees with most observers that a total embargo on mineral
exports from eastern DRC would not only be impracticable, but also
detrimental to the livelihoods of the local population and hence the
security situation in the region. However, this does not imply that
commercial stakeholders are not to be held accountable if their
activities have, directly or indirectly, financed rebel movements. IPIS
also believes that governments of countries where international mineral
traders are established can play an advisory and sensitizing role
vis-à-vis these companies with regard to their liabilities under
international and national ! criminal law when they operate in a
conflict zone such as eastern DRC.

This would also enhance such governments' credibility as
peace-brokers in the region and adjust the persistent perception among
many local stakeholders that foreign business interests are more
valuable than peace. Our research findings show that Traxys and
Trademet in 2007/2008 were by far the most important foreign buyers of
cassiterite and coltan in Goma and Bukavu. One would suspect that,
given their economic prominence and long-standing presence in the
region, they would not only have a privileged knowledge of the local
commodity chain, but also considerable leverage to influence it in a
positive manner. The traders concerned reacted defensively to
accusations laid out in the December 2008 report of the UN Panel
of Experts.

The Panel asserted that, through certain suppliers (comptoirs), they
knowingly purchased minerals from mines controlled by non-state armed
groups such as the FDLR. During our investigation we have unfortunately
not been in a po! sition to confirm or deny such claims through
documented evidence. Nevertheless, we deplore that 13 years after the
start of the first Congo war, such naming and shaming exercises still
seem to be necessary to prompt a more transparent and constructive
engagement on behalf of commercial stakeholders in the region.

Looking forward, however, there are indications that the traders
under scrutiny are willing to contribute in a more pro-active manner to
a sustainable solution to the issue of conflict related minerals. This
creates a window of opportunity for all stakeholders to become involved
in a concerted effort to enhance transparency and accountability in the
mineral sector of the eastern DRC. In our view, a crucial first step
forward is to create a transparent, publicly accessible and regularly
updated database with reliable information on the local commodity
chain. IPIS is currently laying the groundwork of such a database
through a pilot project in the Kivus.!

To further protect the legitimate trade, which, we repeat, is vital
for the socio-economic fabric and security of the region, a credible
traceability system should be devised. While there seems to be a
preparedness among certain local stakeholders to step up due diligence
efforts, even if it involves a third party verification mechanism, one
should realize that in the long term such efforts can only be
successful if they are supported by the Congolese government, MONUC,
multi- and bilateral donors, and the DRC's neighbors. The crux of the
matter is the huge challenge the Congolese authorities face as far as
controlling the eastern part of the country is concerned.

To achieve this, security sector reform and regional political
cooperation of course are key. In the case of the mineral sector,
donors should support a strong deployment of mandated state agencies
such as the CEEC, SAESSCAM, OFIDA and the Mines Administration.

Contents

1. Introduction 5
2. Context 8
2.1. The global! tin trade 8
2.2 The global tantalum trade 8
2.3 The mineral trade in the Kivu region 9
2.4 The security situation in the Kivu region 9
3. Case studies on Belgian mineral traders 12
3.1 Traxys S.A. 13
3.2 Société pour le Développement et l'Expansion d'Entreprises (SDE) 15

3.3 Trademet S.A. 15
3.4 Services and Trading International (STI) 19
4. Conclusions 20
Annex: Letter FEC-UN 21
***********************

1. Introduction

Ever since the eruption of the second Congo war in August 1998, the
mining sector in eastern DRC has been under scrutiny of UN Sanctions
Committees, academics, NGOs, and local and international media, who are
worried and disturbed by the links between natural resource
exploitation and armed conflict in the region. It is argued that both
state and non-state armed actors are deriving benefit from the local
mining business by levying taxes o! n mineral exports, by selling
minerals for their own profit, and by tr
ading mining rights for financial and military support1. In a recent UN
report, serious allegations are made against Belgian companies involved
in the trading of cassiterite and coltan.

First, it is asserted that, for several years, the Belgian company
Trademet worked with and pre-financed Munsad, a Goma-based comptoir run
by Damien Munyarugerero, who is said to be close to Laurent Nkunda's
CNDP2. Second, it is contended that, in 2007, the Belgian company
Traxys was one of the two only importers of cassiterite and coltan from
Olive, Muyeye, WMC and MDM, 4 Bukavu-based comptoirs suspected of
pre-financing négociants (=middlemen) who are working closely together
with the FDLR3.

The UN Panel of Experts recommends that, on the one hand, member
states work together with local and international NGOs to draw a map of
mineral-rich zones and armed groups in eastern DRC in order to do away
with the uncertainty about the connection between the mineral trade and
the w! ar economy, while, on the other hand, it also urges member
states to take appropriate measures to ensure that exporters and
consumers of Congolese mineral products under their jurisdiction
conduct due diligence on their suppliers4.

As an NGO specialized in research on the exploitation of natural
resources and the financing of conflicts in Central Africa, IPIS wants
to support the efforts of the UN to make the mineral business in
eastern DRC more transparent. Two of our researchers, who are
specialized in the use of maps to analyze and discuss war motives in
conflict areas, are currently in the Kivu region to collect new data on
militarised mining. In addition to this, the present report aims to
help the UN to get a better idea of the position of Belgian mineral
traders in the area.

The purpose of the report is not only to shed more light on the
activities of Trademet and Traxys, the two companies featuring in the
latest UN report (cfr. supra), but also to clar! ify the role of two
other companies that have received no attention so far, namely Services
and Trading International (STI) and Société pour le Développement et
l'Expansion d'Entreprises.

The extensive field experience in the region of our team, and our
local network of contacts and informants allowed us to gather a
considerable amount of information during a relatively short visit to
Goma in October 2008. In the field, we mainly conducted interviews with
business actors and officials from various relevant governmental
agencies. Because of the sensitivity of the issue and a considerable
deal of negative press in the past, commercial stakeholders generally
met us with caution. Repeated contacts, however, in many cases created
a more 'comfortable' environment in which the exchange of information
became smoother. Government agents in DRC in general showed an
immediate willingness to contribute to our research, providing us,
among other things, with statistics of the minerals trade in Goma and
Bukavu.

This left us with the hopef! ul impression that there is a fair
amount of good will locally to sanitize the mining sector. It should be
noted that we made an effort to supplement the information gathered
during our fieldwork with data collected from the Belgian National
Bank, the Belgian State Monitor and the Luxemburg trade register
(register de commerce et des sociétés).

In the first part of our report, we offer a description of the
context in which the mineral trade takes place. We discuss the current
state of affairs in the global trade in tin and tantalum, present an
outline of the mineral trade in the Kivu region and give a brief
description of the local security situation. In the second part of our
report, we concentrate on the involvement of Belgian traders in the
mineral business of eastern DRC. Our main intention is to provide the
reader with a profile of each of these traders. As far as possible, we
also present some information on the Congolese suppliers of the Belgian
traders. !

Our research findings show that Traxys and Trademet in 2007/200
8 were by far the most important foreign buyers of cassiterite and
coltan in Goma and Bukavu. One would suspect that, given their economic
prominence and longstanding presence in the region, they would not only
have a privileged knowledge of the local commodity chain, but also
considerable leverage to influence it in a positive manner. The traders
concerned reacted defensively on accusations laid out in the most
recent report of the UN Panel of Experts.

The Panel asserted that, through certain suppliers (comptoirs), they
knowingly purchased minerals from mines controlled by non-state armed
groups such as the FDLR. During our investigation we have unfortunately
not been in a position to confirm or deny such claims through
documented evidence. Nevertheless, we deplore that 13 years after the
start of the first Congo war, such naming and shaming exercises still
seem to be necessary to prompt a more transparent and constructive
engagement on behalf of commercial stakehold! ers in the region.

The publication of this IPIS report coincides with the decision of
Traxys to stop the purchase of minerals originating from North Kivu,
South Kivu and Maniema. In a letter addressed to the UN Panel of
Experts, dated 24 April 2009, the company's management explained that
the discontinuance of Traxys' activities in eastern DRC was due to
three factors: Traxys' inability to convince the Panel of Experts that
it did not buy minerals from areas occupied by illegal armed groups,
the suggestion of the UN Panel of Experts that stopping the acquisition
of minerals coming from those areas was the only acceptable solution to
the problem, and, finally, the company's repeated but unsuccessful
attempts to collaborate with the UN Panel of Experts in working out a
protocol for the purchase of raw materials from eastern DRC that would
be satisfactory to the United Nations.

Although the authors of the letter regretted that their position in
the local min! eral market would probably be taken by 'entities or
individuals of sma
ller size who are unlikely to share the principles of the international
community in terms of ethics or the quality of counterpart diligence
that Traxys has demonstrated in the past', they nevertheless emphasized
Traxys' continued willingness to contribute to the development of a
system of source verification on Congolese territory5. Traxys' decision
to stop its activities in eastern DRC gives food for thought.

First, there can be no doubt that the news about Traxys' departure
will be a blow to the Congolese buying houses that have been
collaborating with the company, sometimes even for a period of several
years. These comptoirs will have to look for new partnerships with
other international trading companies, a search that is likely to be
rather troublesome given the continued insecurity in the Kivus and the
unfavourable international market conditions at the moment.

Second, a number of well-informed observers of the mining sector in
eastern DRC told IPIS that! there is a risk that Traxys' announcement
may have a domino effect. In other words, that it may push other
traders to follow Traxys' example, for fear that they will incur
reputational damage if they decide to remain active in a known war zone
while one of their main competitors has already left. The same
observers fear that, if such a 'domino scenario' materializes, several
Congolese comptoirs will be forced to shut down their operations,
which, in turn, will have a paralysing effect on artisanal mining
activities throughout the region.

We are rather sceptical about predictions of a general exodus of
international mineral traders from eastern DRC - even after the
publication of previous reports by the UN and NGOs monitoring the
Congolese mineral business, companies such as Afrimex and Sogem
(Traxys' predecessor) carried on with their activities in the same
manner as before. However, we do believe that there should be more
awareness among policy-makers and internati! onal companies on the
effects of macro-level decisions on the micro-le
vel livelihoods of people in the DRC. One can wonder, for instance,
what will be the reaction of artisanal miners when they hear rumors
about comptoirs planning to shut down their operations as a result of
the withdrawal of a major international mineral trader.

Having said this, IPIS hopes that Traxys' announcement will serve as
a wake-up call to all the stakeholders in the mineral business in
eastern DRC. Finding a long-term and structural solution to the problem
of natural resource exploitation in the war-torn Kivu region is urgent
and should no longer be delayed if the international community is
serious about allowing the Congolese to use their minerals as a source
for development and to establish a stronger connection with the global
economy than is hitherto the case.

Given the large number of human rights abuses in the vicinity of
certain mines and the fact that members of both state and non-state
armed groups continue to illicitly enrich themselves t! hrough the
mineral business, it is absolutely necessary to strengthen the
authority of the state in eastern DRC, to enhance the performance of
the state institutions supervising the mining sector, and, finally, to
create a solid certification and mineral traceability system as well as
a regularly updated database about militarized mining sites to make
sure that 'clean' minerals can be separated from 'dirty' minerals in an
objective manner. Although it is beyond the scope of this report to
present an overview of the gold business in the Kivus, it should be
noted that gold is becoming more and more important and that it is
likely to develop into a far more significant source of revenues for
state and non-state actors than the trade in coltan and cassiterite.
Equally noteworthy is the fact that a substantial part of the minerals
exported by Bukavu-based comptoirs originate from a non-conflict zone
in Northern Katanga.

2. Context

2.1. The global t! in trade

Cassiterite is one of the ores from which tin is made. Tin has
various applications, including solders, stabilizers in PVC, coating of
other metals to prevent corrosion, and production of circuit boards,
dental fillings and fire retardants. As a result of new environmental
regulations in Japan and Western Europe that obliged manufacturers to
use tin instead of lead in solders on printed circuit boards, there was
a significant price increase in the period before the eruption of the
global financial crisis. In the first half of 2004, when consumers
showed an exaggerated response to the threat of a supply shortfall, the
world consumption of tin rose by 14%. At a certain point, tin became
the best performing metal on the London Metal Exchange and, between
August 2002 and May 2004, tin prices tripled, reaching a ten-year high
of US$9.600 per tonne metal in May 20046. In May 2008, prices reached
an absolute peak of US$24.052 per tonne metal, due to a combination of
increased demand worldwide and erratic supply situations in some coun!
tries. Remarkably, the higher tin prices gave rise to openings and
expansions of tin mines and tin smelters in countries such as
Australia, Bolivia, Canada and Thailand7. From May 2008 onwards,
however, a steep decline of the tin price began and early 2009 decline
still has not stopped.

According to the Trading for Peace report, which was published in
2006, the mines of Walikale produced some 10.600 tonnes of cassiterite
and that the estimated cassiterite exports from the DRC amounted to
some 16.870 tonnes8. The US Geological Service is more conservative and
wrote that in 2008 the Democratic Republic of Congo produced 3.000t of
tin. In that same year, the USGS ranking of the world's major tin
producers looked as follows:

China 150.000t

Indonesia 100.000t

Peru 38.000t

Bolivia 16.000t

Brazil 12.000t

Vietnam 3.500t

2.2 The global tantalum trade

From coltan ore, two precious metals can be extracted: on the one
hand,! tantalum, and, on the other hand, colombium or niobium. Tantalum
is u
sed for the production of capacitors that are required for electronic
goods such as personal computers and mobile phones9. Niobium is used in
heat-resistant steel as well as in glass alloys in the construction
industry. In spite of the fact that Australia is currently considered
as the largest coltan producer in the world, it is important to bear in
mind that 80% of the world's coltan reserves probably are situated in
Africa, and, significantly, 80% of these reserves are thought to be
found in the DRC. Due to the growth in the electronics sector after
2000, global consumption of coltan soared within a few months time10.
At the time of writing, it is expected that the global financial crisis
and the ensuing economic slowdown will result in reduced tantalum
material consumption, price and production11. Nevertheless, some
observers believe that the crisis may boost the demand for coltan from
Congo. According to the Australian company Talison, which, on 26
November 2008, announc! ed its decision to suspend tantalum production
at the Wodgina mine, it is likely that the trend to reduce material
costs in the electronic supply chain will encourage demand for
tantalite from Central Africa, where it 'is available at relatively low
prices because it is often mined illegally or without regard and
commitment to health, safety, environment and labour conditions and
frequently transported in contravention of international
regulations.12'

The US Geological Survey reported that the ranking of the world's
major tantalum producers looked as follows in the year 2008:

• Australia 435t
• Brazil 180t
• Ethiopia 77t
• Canada 45t
• Rwanda 42t
• Other1 36t

2.3 The mineral trade in the Kivu region

Most of the coltan and cassiterite originating from the hinterlands
of North and South Kivu, North Katanga13 and Maniema transits through
Goma and Bukavu before being exported to de! stinations outside the
DRC. While the most important coltan mines are situated in the
territoires of Kalehe, Mwenga, Shabunda and Masisi, the most important
cassiterite mine can be found in the territoire of Walikale14. The Kivu
provinces have several border crossings with Uganda (Kasindi, Ishasha,
Bunagana), Rwanda (Goma-Grande Barrière, Bukavu-Cyangugu) and Burundi
(Uvira). It is a well-known fact that, ever since the Mobutu era, the
Congolese state has lost large amounts of revenue from fraudulent
export of primary commodities such as minerals15.

This can be explained by a wide variety of factors, including the
lack of tax harmonization among the different countries in the Great
Lakes region16, the corrupt behaviour of public servants overseeing the
local mineral trade17, the growth and expansion of transborder trading
networks during the war18 and the ease with which goods such as gold
can be secretly transported by individual carriers19. As far as the
official exports of minerals from the Kivu region are concerned, Goma
constituted! the most important exit point for cassiterite and
wolframite in 2008, whereas Bukavu was the most important exit point
for coltan. Exports from Goma, from January to September 2008 (in tons)
(Source: Division des Mines) Cassiterite Coltan Wolframite 10.902,71
31,445 324,42

Exports from Bukavu for the year 2008 (in tons) (Source: Fédération
des Entreprises du Congo, South Kivu)
Cassiterite Coltan Wolframite
5.663, 32 421 73 167,6

2.4 The security situation in the Kivu region

The situation in the Kivu region never really calmed down after the
recent wars in Congo (1996-1997 and 1998-2003). It deteriorated again
in the run-up to the national and provincial elections in 2006. With
the political balance shifting away from the Rassemblement Congolais
pour la Démocratie (RCD-Goma), the former rebel movement propped up by
Rwanda, members of the once marginalized Nande, Hunde and Nyanga groups
started supporting Kabila a! nd competing for positions and economic
privileges.

For their p
art, members of the Tutsi community, who had supported the RCD during
the war, started sympathizing with Laurent Nkunda, who had been
fighting in the military wing of the RCD and in whom they saw an ally
in their struggle to protect their economic assets and to prevent their
enemies from taking revenge on them for the atrocities committed by the
RCD and its allies during the war20. During the election period, the
renegade general Nkunda showed political ambitions and presented
himself as the political protector of all minorities in the region,
although, in reality, his Congrès National pour la Défense du
Peuple (CNDP) only defended the interests of the Tutsi community.

Nkunda said his troops would only integrate into the national army
on the express condition that the FDLR rebels, a politico-military
movement composed of former soldiers of the Forces Armées Rwandaises
(ex-FAR), ex-Interahamwe militiamen and Hutu civilians who fled their
country in the wake of! the invasion of Rwanda by the Rwandan Patriotic
Front in 199421, would be eradicated. Another conditio sine qua non for
the military integration was that the 45.000 Congolese Tutsi living in
refugee camps in Rwanda had to be able to return to the Kivus and
retake their lands. Nkunda suspected all non-Tutsi of being associated
with the FDLR rebels, whom he accused of preparing another genocide
against the Tutsi22.

On 24 November 2006, three days before the announcement of Kabila's
election victory, a Tutsi businessman close to Nkunda was shot dead at
a checkpoint near Sake, a small town some 30 km from Goma. Nkunda took
revenge by seizing Sake, a move that convinced MONUC to use attack
helicopters and infantry against Nkunda's troops. The Sake incident
gave rise to a series of violent confrontations between the FARDC and
Nkunda's army, while it also forced over 100.000 people to flee between
November 2006 and January 200723.

On 31 December 2006 and 4 Janu! ary 2007, secret talks were held
between Laurent Nkunda and John Numbi
, Kabila's air force chief-of-staff, about Nkunda's amnesty and the
modalities of integrating Nkunda's troops into the Congolese national
army. After the two parties had concluded a ceasefire agreement, Nkunda
gave his go-ahead for the integration of the 81st and 83rd brigades
into the FARDC's 110th, 106th and 1st North Kivu reserve brigades24.

However, the agreement between Nkunda and the Kinshasa government
was not well received by several groups of actors: first by local
communities in the Kivus, who had fallen victim to atrocities committed
by Nkunda's troops in the past; then by members of the Bashi business
and civil society lobby from South Kivu, who were displeased at the
preferential treatment given to Tutsi soldiers, by Goma-based Tutsi
businessmen, who accused Nkunda of only taking care of his personal
interests, and, finally, by ordinary citizens in the rest of the DRC,
who did not understand why a wellknown ally of Rwanda was given the
opportunity to stren! gthen his position in North Kivu25, to bring more
Rwandan soldiers into the country and to move the Kivus back into
Kigali's sphere of influence26.

The factor that eventually led to the collapse of the mixage process
was the use of excessive violence by the aforementioned mixed brigades
during attacks on villages controlled by the FDLR between mid-April and
mid-May 2007. In a reaction against these abuses, the Patriotes
Résistants du Congo (PARECO), a newly created anti-Tutsi militia
composed of a Hutu faction and several Mai Mai groups, teamed up with
the FDLR to fight against Nkunda's troops, who, on their turn,
retaliated by burning several villages around Ngungu and Katoyi and
forcing tens of thousands civilians to run for their lives.

Things went from bad to worse after Nkunda used a national
television interview on 5 May 2007 to announce the end of the mixage
process, denouncing the lack of logistical support during the
operations against the FDLR as wel! l as Kinshasa's refusal to legalize
the CNDP, withdraw the arrest warr
ant against him and negotiate on the return of refugees from Rwanda27.

In spite of the conclusion of the Nairobi and Goma agreements of
November 2007 and January 2008 and the establishment of the so-called
Amani programme, intended to create the right conditions for the
restoration of peace and security and for the reconstruction of the
provinces of North and South Kivu28, there was renewed tension in North
Kivu from the middle of 2008 onwards29. In September and October 2008,
Nkunda's CNDP went into the offensive against the FARDC and the
militias supported by the latter, such as the FDLR30. The CNDP started
marching on Goma in late October, but instead of attacking the city, it
declared a ceasefire and asked the Congolese government to engage in
political negotiations. In spite of attempts by the UN and other
external parties to reach a negotiated solution for the problem, the
talks arrived at an impasse by mid-December31.

In January 2009, a dramatic cha! nge occurred in the security
situation in North Kivu. On January 20 the Rwandan army deployed into
Congo's territory but, this time, together with the FARDC, the
Congolese army. The two countries agreed to launch this joint military
operation, called Umoja Wetu, in early December 2008. Preparations were
kept secret. Top politicians in Kinshasa were not informed and the
UN-force MONUC was barred from taking part in the operation. The
claimed purpose was to eliminate the Rwandan Hutu rebel force FDLR in
North Kivu. But Umoja Wetu announced its first victory after only two
days when, on 22 January, renegade general Laurent Nkunda was arrested,
shortly after he had crossed the border with Rwanda.

This arrest was part of a deal between the presidents Kabila of
Congo and Kagame of Rwanda: while Rwanda promised to help Congo with
the elimination of the CNDP leader, Congo pledged to assist Rwanda in
ousting the FDLR from North Kivu32. Following many weeks of fighting,
the Rw! andan troops withdrew from Congolese territory at the end of
February. Despite the fact that thousands of FDLR rebels continued to
roam around in the area, Rwanda's Foreign Minister said that the
majority of the FDLR combatants had been dislodged from North Kivu33.

On 23 March 2009, the Congolese government signed a peace deal with
the CNDP, an agreement that was supposed to lead to the latter's
transformation into a political party. The accord further stipulated
that former CNDP soldiers would be integrated into the Congolese
national army or in a new police force34. It must be noted that the
international community closely followed the evolutions in the Kivus.
Following contacts between a delegation from the Kivu civil society and
Obama's campaigning team in August 2008, the newly elected American
president encouraged Congo and Rwanda to reach an understanding and to
end the instability in Eastern Congo35.

Furthermore, the former US Assistant Secretary Herman Cohen and the
French president Sarkozy both proposed to solve th! e issue of resource
exploitation in eastern DRC by creating an economic common market
encompassing Congo, Rwanda, Burundi, Kenya, Tanzania and Uganda, a
proposal that was almost unanimously rejected by the Congolese media
because it was believed to create the risk of confirming the dominance
of Rwanda-backed economic operators in the Kivus36.

3. Case studies on Belgian mineral traders

Judging by statistics from the Division Provinciale des Mines
(Provincial Mining Division) in Goma, Belgian companies were the
biggest buyers of cassiterite and wolframite in 2007 and during the
first three quarters of 2008. Moreover, they also ranked second in the
list of foreign coltan buyers, leaving the first position to companies
from Hong Kong37. Two Belgian traders are dominant in Goma and Bukavu.
These are Traxys Belgium and Trademet. They are or were partly supplied
by two other Belgian traders: Traxys by SDE and Trademet by STI. In the
following se! ctions, we will not only provide the reader with general
background in
formation about the Belgian traders but we will also discuss their
collaboration with a number of Congolese comptoirs in Goma and Bukavu.

These are buying houses that operate at the interface between the
local and the international mineral business. What makes these
comptoirs interesting to investigate is that they act as intermediaries
between, on the one hand, Congolese négociants who enter the mines to
do business with the diggers, and, on the other hand, international
traders who sell the minerals to processing plants in different parts
of the world. Thanks to their intermediate position between the local
level and the international level, the comptoirs have the advantage of
being well informed about the latest developments on the global
commodity market as well as about the political and economic situation
in North and South Kivu.

Previous IPIS research has shown that there have been cases of
comptoirs that were directly or indirectly controlled by armed g! roups
hoping to establish a direct link with the global economy . Therefore,
it is of vital importance to gather information about who runs the
comptoirs and where they buy their minerals. The reader will notice
that we will not discuss all the comptoirs the Belgian traders have
been collaborating with, but that we will focus on those players who
have been willing to talk to us during our field trip to the DRC.

3.1 Traxys S.A.

Traxys is the first company on which IPIS has gathered information
in the context of this research project38. According to the information
presented on its website, Traxys was created in 2003, following the
merger of Sogem and Considar. While Sogem was previously owned by
Umicore, serving as a marketing, distribution and trading group
involved in base metals and concentrates and focusing on Europe, Africa
and Asia, Considar used to be a division of Arcelor, serving the steel
industry through the sourcing of ferro-al! loys and other specialty
metals and focusing primarily on the North Am
erican market. In 2006, two private equity firms, Pegasus Capital
Advisors and Kelso & Company, sponsored a buy-out whereby both
Arcelor and Umicore sold a majority stake in Traxys to the management
of Traxys.

After this operation, the names of Sogem and Considar were formally
replaced with that of Traxys39. Traxys' main activities in cassiterite
and tantalite in the DRC are situated in Goma and Bukavu. The following
table, which is based on data from the Division des Mines, gives an
overview of the available data on Traxys' mineral purchases in the two
provincial capitals in the past two years:

Gemico

Gemico Sprl was created by Aaron Shabani Asumani and Donald R.
Bernard in January 2006. While Asumani is a businessman from the
Maniema province who was among the founders of Jean-Pierre Bemba's
Mouvement de Libération du Congo40, Bernard is a retired commander of
the US Navy Submarine Service, a professor of international law and! an
attorney. He combines the chairmanship of Gémico with the chairmanship
of the American company Glacial Energy LLC, while living and working
both in Montana and the DRC41.

In 2006, Gemico signed leasing contracts with the Congolese mining
parastatal Société Aurifère du Kivu Maniema (SAKIMA) to develop 6
mining concessions in exchange for a monthly rent of US$7.500 for each
concession42, though it was not very clear what status SAKIMA had at
that moment43. In the Maniema province, near the town of Punia, these
agreements gave rise to a conflict with local artisanal miners, who
were forbidden to mine and to trade cassiterite by the local
authorities. According to the miners, the authorities took the decision
at the instigation of Gemico44. In order to calm things down, Gemico
announced investments worth US$ 2,5 million in the fields of
agriculture, road construction and healthcare in May 200745.

During a telephone interview with IPIS, Asumani said that h! is
involvement in the MLC had been very limited, as he had already lef
t the movement two months after joining it. With regard to his
collaboration with the American businessman Bernard, he explained that
the two of them had met in the US a long time ago and that they had
developed a strong business relationship ever since. According to his
own account, Asumani was the one who convinced Bernard to become active
in the mineral business in Eastern DRC.

As far as Gemico's dispute with the artisanal miners in Maniema is
concerned, Asumani stated that the latter had been working in the
SAKIMA concession illegally. He maintained that Gemico's efforts to
remove them from the concession in a peaceful manner had been
complicated by what he described as the rabble-rousing of comptoirs run
by Rwandan and Ugandan businessmen. Apparently, these businessmen had
stirred up the diggers against Gemico, because they did not like the
idea that they would no longer be able to buy minerals coming from that
particular concession. Notwithstanding the dispute w! ith the diggers,

Gemico still decided to offer some of them a permanent contract. The
company maintained that, due to the global financial crisis, it was
recently forced to send 500 of its 1000 employees on technical
unemployment and that it was hoping to take them back on board once the
economic climate starts to improve. Asumani said he was glad that his
company operated in a non conflict zone in Maniema and he showed
satisfaction with the security work carried out by the FARDC and the
Congolese national police force46.

MDM

MDM is the second comptoir Traxys has collaborated with. MDM is an
acronym for Mudekereza-Defays-Minerais. The company is run by the
Congolese entrepreneur Namegabe Mudekereza and the Belgian businessman
Michel Defays. In addition to being active in the mineral business,
Mudekereza also exports agricultural products and manages a number of
quinine plantations in the regions of Kalehe, Walungu and Kabare47.
Hav! ing been accused of buying minerals from FDLR-controlled mines48
in th
e latest UN report, Namegabe Mudekereza wrote a letter to the
Secretary-General of the United Nations on 24 December 2008, signing in
his capacity as the president of the provincial council of the Fédération
des Entreprises du Congo (FEC) in South Kivu (see annex).

In the letter, he stated that the members of the FEC division under
his direction had already held several meetings to discuss the issue of
artisanal mining. According to Mudekereza, they had tried to increase
the transparency concerning the origin of the minerals, as requested by
Dinesh Mahtani, a member of the UN Group of Experts, during a meeting
on 31 July 2008. Given these efforts, he found it hard to understand
why the Bukavu-based comptoirs were still being criticized in the UN
report. In order to show that he was still prepared to make a positive
contribution to the debate about the resource problem in eastern DRC,
he finished his letter with an enumeration of a number of proposals,
put for! ward by members of the FEC division in South Kivu49. WMC

The World Mining Company (WMC), the third comptoir that used to
supply cassiterite to Traxys, has been accused in the latest UN report
of pre-financing négociants who are working together with the FDLR50.
The company is managed by Edouard Kitambala51 and is one of the main
buyers of cassiterite in the town of Numbi, situated in the territoire
Kalehe in South Kivu. What makes the latter acquisitions problematic,
according to the UN Panel of Experts, is the fact that most of the
minerals coming into Numbi originate from FDLR- and PARECO-controlled
mines in the area52.

In addition to buying cassiterite in the controversial town of
Numbi, WMC is also purchasing cassiterite in the town of Lemera, where
FDLR soldiers operating in the Itombwe region are allegedly selling
their cassiterite, gold and coltan53. Apparently communication within
different UN bodies is not always effective. In December 2008, the !
same month that the UN Group of Experts accused his company of buying
minerals originating from FDLR-controlled mines54, Edouard Kitambala
was paid an amount of $42.000 for real estate services by MONUC. On the
website of the UN procurement division, which gives an overview of the
purchase order awards for field missions in 2008, the payment to
Kitambala is listed under the reference number 9KIN-200133.

Without elaborating on the details of the contract, Kitambala
confirmed that he had concluded an agreement with MONUC for the letting
of a building. He preferred not to comment on the UN report published
in December 2008 and told IPIS that everything he had to say on the
matter was discussed in the letter by Namegabe Mudekereza, the
president of the FEC division of South Kivu (cfr. supra).

3.2 Société pour le Développement et l'Expansion
d'Entreprises (SDE)

The second company of which we examined the activities, is the Société
pour le Développement et l'Expansion d'Entreprises (SDE). IPIS was
! told by SDE's manager, Mr. Edwin Raes, that SDE delivers all the
cassiterite it buys in Goma to Traxys. SDE is part of the Elwyn
Blattner Group Int. (GBE), a conglomerate of 20 companies in the DRC.
Its administrators are James and Elwyn Blattner55, two American-Italian
businessmen with addresses in Kinshasa56. Apart from serving as a
Brussels-based logistic centre that supplies the other GBE-companies
with spare parts, chemicals and other necessities, SDE also markets the
minerals from the Goma-based comptoir Sodexmines, which has Lebanese
management57.

The close collaboration between SDE and Sodexmines can be explained
by the fact that GBE - to which SDE belongs - has a 50% stake in
Sodexmines 58. With regard to the subject of this paper, it is
interesting to note that Sodexmines, which buys minerals in North Kivu
and Maniema and has its own concessions in Katanga (Malemba Nkulu), is
the most important cassiterite comptoir in Goma. While, in 2007, it
bought 2.974 t! ons of cassiterite, in 2008, it purchased 2.731 tons of
the same miner
al.

When asked for a reaction to Traxys' decision to put a stop to its
activities in Eastern DRC, Raes said that it would be difficult for him
and his Congolese partners to continue on their own. He was worried
that, due to the global financial and economic crisis, Sodexmines would
have a hard time finding new buyers for its minerals. On a more general
note, he regretted that the withdrawal of companies such as Traxys was
likely to have a negative effect on the ongoing efforts of the
Congolese authorities and the international community to make the
mineral business more transparent. In his view, some of the Chinese and
South African companies that were about to become active on the local
mineral market were far less concerned about human rights and
transparency issues than companies such as Traxys and SDE.

Finally, Raes informed IPIS that his company had obtained a licence
for the exploration of a concession in Northern Katanga, with the idea
of selling Ka! tangese cassiterite in the near future59.

3.3 Trademet S.A.

Trademet, the third Belgian company examined by IPIS, was
established in 1989, has its registered address in Grez- Doiceau (about
30 kilometres from Brussels) and employs only two people60. Since 1991,
the company has been a member of the Minor Metals Trade Association
(MMTA), an organization founded in 1973 and claiming to be the world's
largest association concerned with minor metals61. According to the
information on the MMTA website, Trademet mainly trades in tantalite
and cassiterite, though it also deals in noble alloys and minor metals.
From a geographical point of view, the company operates worldwide, but
it has specific interests in Africa, the Far East and Europe62.

Freddy Muylaert, the founder of Trademet, told IPIS that he first
cooperated with the Braine L'Alleud-based mineral trader Sudamin before
he moved on to develop his own business, which started its act! ivities
in Burundi. During the early years of its existence, Trademet chiefly
occupied itself with the wholesale trade in non-ferrous scrap as well
as with the distribution of non-ferrous metals in Europe, including
lead, calcium, antimony, arsenic, selenium, bismuth, tellurium and
alloys63. In the DRC, Trademet's initial focus was on coltan. It was
not until 7 or 8 years ago that it switched its attention to
cassiterite. Most of Trademet's minerals are shipped to customers in
Malaysia, Thailand and China. Muylaert's British correspondent is
Michael Winterton, with whom he has a long-standing working
relationship64.

The following table gives an overview of the comptoirs Trademet has
been collaborating with in 2007 and in the first three quarters of
200865:

Munsad

The first Congolese comptoir selling minerals to Trademet is Munsad.
While, on 19 May 1999, it was registered in the trade register of the
tribunal de grande instance in Goma, on 18 December 2004, it was
enrolled at the national level66. Dami! en Munyarugerero, the
businessman in charge of Munsad, was involved in various economic
activities before entering the mineral business. Apart from selling
fresh meat along the Masisi-Goma-Kinshasa axis and being involved in
air transport through the company Kivu Air Transport sprl, he traded in
petrol products, lubricants and second-hand clothing through the
company Azimut sprl 67.

In 2008, Munsad in Goma exported 3 shipments of coltan (totalling 13
tons) and 234 tons of cassiterite. According to the Munsad management,
the cassiterite came from Kindu, Punia and Kalima in the Maniema
Province, from Manono in Katanga and to a lesser extent from Walikale.
It was supplied from Maniema by two (groups of) négociants: 'Les
Katentula' for Maniema and Mbusa-Makalikali for Manono and Walikale.
For each of them, Munsad pays US$500 a year for a middleman card (carte
de négociant). The coltan originates from Bibatama in Masisi, where
Munsad buys its coltan from Muneza Nkundiye a! nd Karemera Kabatsi.
Once again, Munsad paid for their Cartes de Négoc
iant. The coltan export licence was issued on 23 June 2008.

According to Munyarugerero, Munsad was instrumental in the creation
of COOPERAMMA (Coopérative des Exploitants Artisanaux Miniers de
Masisi), a cooperative society of artisanal miners recognized by the
authorities of North Kivu68. This cooperative signed an agreement on 3
September 2005 with Bazinga Kabano and Hitimana Gabyura Pierre to
exploit the Bibatama D3-concession. Munyarugerero says that his
négociants Muneza and Karemera are members of COOPERAMMA too. He denies
having been supplied with minerals by Bayose Senkoke and Mboni
Habarugira, two people given permission by the CNDP to exploit part of
an adjacent concession at Bibatama, according to the UN Panel of
Experts.

Furthermore, Munyarugerero strongly denies having friendly links with
the CNDP or its leader Laurent Nkunda. "How", asked Munyarugerero when
meeting with one of the authors of this report, "can I be friends with
those who have des! troyed my milk- and cheese-factory?" 69 One source
maintained that the information about Munsad's alleged links with the
CNDP in the latest UN report came from one of the parties involved in a
series of land disputes in Masisi. A first element that should be
subjected to further investigation is the fact that the concession
exploited by Munsad's cooperative society COOPERAMMA is adjacent to a
concession that has been the object of litigation between, on the one
hand, Edouard Mwangachuchu, and, on the other hand, Mboni Habarugira
and Bayose Senkoko (cfr. supra)70.

Senator Mwangachuchu71, who was born and raised in Masisi, left
North Kivu in 1995, after having fallen victim to anti- Tutsi violence
encouraged by the Mobutu regime. Together with his wife and his six
children, he was granted political asylum in the US in 1996. Two years
later, during a return visit to his home region, he noticed that his
cattle farm had been destroyed, but that it was still possible ! to
capitalize on the land, which appeared to be rich in coltan. Teamin
g up with Robert Sussman, a former Baltimore-based physician whom he
had met in a hotel in Goma in 1998, he started trading minerals through
his company MHI (Mwangachuchu Hizi International)72.

In 2001, Mwangachuchu started an argument with Bayose Senkoko over
the Mataba Hill, a very small but mineral-rich piece of land in Masisi.
Three years earlier, on 29 May 1998, Senkoko had bought a plot at
Mataba Hill measuring 5 by 12 metres from Seburo Basharira for $200. On
5 May 2001, Senkoko sold a piece of this land, measuring 6 by 8 metres,
to Mbonigaba Buhoro. However, around the same time, the mining
department of the RCD-Goma rebel movement delivered a coltan mining
permit to Mwangachuchu, allowing him to exploit an area of 5 square
kilometres called Bisunzu- Bibatama, which included the Mataba Hill.

When Mwangachuchu paid 40.000$ to Basharira to compensate him for
the loss of Mataba Hill, the latter was taken to court by Senkoko and
Buhoro, who accused him of h! aving sold the same land twice: first to
them and then to Mwangachuchu's company MHI. As the court ruled in
favour of Senkoko and Buhoro, Seburo was forced to pay them damages,
while Mwangachuchu's MHI was ordered to stop mining at Mataba Hill.
Yet, even after the Supreme Court rejected an appeal against this
decision launched by Seburo, Mwangachuchu continued his mining
operations73.

The second element that should be taken into account when one
assesses Munyarugerero's alleged connections to the CNDP, is that, just
like Mwangachuchu, he is trying hard to win back land he lost during
the eruptions of anti-Tutsi violence in 1995, a pursuit that has made
him a lot of enemies. Munyarugerero insists that, before the riots of
1995, his father owned substantial pieces of land in the territory of
Masisi, which he used for large-scale cattle breeding. He also
maintains that his father's entire stock was destroyed 'as a result of
the armed conflicts in the region'74. Whi! le IPIS was unable to verify
Munyarugerero's claims about the pre-1995 period, it did obtain a
number of documents about his landownership in the period after 2004.

According to these documents, Munyarugerero bought three concessions
in Masisi in 2004 and 2005: Rushengo (+/- 250 hectare) for an amount of
75.000$, Kaniro (+/- 105 hectare) for an amount of 31.500$ and Shungwe
(+/-180 hectare) for an amount of 54.000$, which together make up the
Ferme Agropastorale de Kabati 75. The person selling the three
concessions to Munyarugerero was Pierre Pay-Pay wa Syakassighe, a
prominent and well-known politician from North Kivu76. Pay-Pay's
political career started in the 1980s, when he twice led the department
of national economy, industry and external trade and once the
'département de portefeuille'. When Laurent-Désiré Kabila seized power
in May 1997, he went into exile in Belgium.

In April 2003, he was appointed as the high representative of the
political opposition in the follow-up committee dealing with the Global
and Inclusive Agr! eement on transition in the DRC, and in July 2003,
he became a member of parliament as a representative of the unarmed
political opposition. Having created, at the end of 2005, a political
platform called Codeco (Coalition des démocrates congolais), he ran as
a candidate in the presidential elections of 200677. In order to
understand the animosity about Munyarugerero's land acquisitions, one
has to take into account that Masisi has been faced with local
struggles for land for a very long time. Due to its location at the
fertile highlands of North Kivu, the territory is potentially one of
the richest and most productive parts of Central Africa.

Apart from the fact that it offers the possibility of harvesting
three times a year, the region also harbours vast water, food and
energy supplies and it presents the right conditions for cattle
ranching. During the years of Mobutu's patrimonial rule, a new class of
'rural capitalists' came into existence, which had disastrous !
consequences for large parts of the rural population in Masisi, who lo
st their parcels. From 1993 onwards, Masisi has witnessed eruptions of
ethnic violence as well as an upsurge of militia activities, leading to
massive displacement and the interruption of agricultural activities78.

Finally, it is important to mention that Munyarugerero has business
interests in Rwanda as well. Apart from owning a buying house for
minerals and a refinery in Kigali, he also has a cassiterite mine in
the Kayunza district and coltan mines in the districts of Gakenke and
Muhanga. Amur Trademet's second supplier is the Goma-based comptoir
Amur, which was created in 2004 and officially registered in 200679.
Trademet helped Amur to start its activities two or three years ago by
selling it second-hand equipment originating from Asia80. Amur's
memorandum of association, which was drawn up on 3 February 2006,
mentions the names of two founding members: Antoine Rutera Muhindagiga
and Amani Bahali.

IPIS has been able to establish that Muhindagiga hails! from the
isle of Idjwi in Lake Kivu, where he is said to be involved in the
exploitation of one of the local mines81. As far as Amani Bahali is
concerned, IPIS was told that he is the 12-year old son of a man named
Bahali Mirindi. Bahali Mirindi is the younger brother of Janvier
Kamwanya Bora Uzima, a former officer of the Forces Armées Zairoises,
the national army under the Mobutu regime (see box).

BOX: THE EVENTFUL CAREER OF BORA UZIMA

Janvier Kamwanya Bora Uzima, who is a Havu from Idjwi, was born in
Bukavu on 15 December 195882. He was an officer in Mobutu's Division
Spéciale Présidentielle and was trained in intelligence work. According
to a report by the Congolese NGO Observatoire Gouvernance-Transparence,
published in September 2003, Bora Uzima Kamwanya supplied military
intelligence to Anselme Masasu Nindaga, the special advisor in charge
of security issues with Kabila's rebel movement AFDL. After Kabila's
take-over, Kamwanya was granted the posi! tion of majorcommandant. In
1999-2000 he got into trouble because of h
is supposed links with the RCD-leaders Joseph Mudumbi and Bizima
Karaha.

On 16 January 2001, when president Laurent-Désiré Kabila was
assassinated, Bora Uzima was suspected of having co-masterminded the
murder. In an interview with IPIS, he defended himself saying that he
left Congo in December 2000, asking for asylum in Congo Brazzaville but
moving on to Nigeria to do business there. On 20 January 2001 however,
four days after the assassination, while travelling from Nigeria to
Kenya, he was arrested on board of a Cameroun Airlines airplane during
a stop in Kinshasa, for his alleged involvement in the assassination of
Kabila 83. He escaped in the night between 27 and 28 February 2001.

Subsequently, he went to Bukavu, where he started recruiting troops
among former members of Mudundu 40 and Kabila's child soldiers84.
Having joined the military structure of RCD-Goma, he was put forward as
a candidate for the position of commander of one of the newly created
mili! tary regions in August 2003. After he had moved to Kisangani, he
got into trouble with the RCD-faction led by Azarias Ruberwa,.
According to Bora Uzima, the real reason behind this disagreement was
that Ruberwa's faction was disturbed by the fact that he was "cleaning
up the mess the RCD had left behind in Kisangani". At the end of August
2003, Bora Uzima launched an armed rebellion in Kisangani, before
fleeing to Goma.

In November 2003, he was accused of being in charge of a rebel camp
in Mumosho (close to Bukavu), in cooperation with governor Ciribanya85.
Bora Uzima denies these accusations and maintains that he received
orders from both general Nyabolwa and general Mbusa Mabe, when they
were commanding the 10th Military Region in Bukavu. End box

According to his own account, Bora Uzima created a company called
FAKAM in 1991 while he was in the army 86. FAKAM - an acronym derived
from Famille Kamanyula (= the name of Bora Uzima's grandfather) - owned
tw! o coldstorage rooms in Kinshasa, where it worked together with the
Org
aman-group, which is specialized in the food import business. In 1993,
FAKAM opened the first modern petrol station in Goma. Since the company
had a hard time obtaining a licence for the export of minerals from
Congolese territory87, Bora Uzima decided to export his minerals -
mainly cassiterite originating from Walikale - under the licence of
Amur, the company co-founded by the eldest son of his younger brother
(cfr. supra).

Freddy Muylaert told IPIS that he had met with Bora Uzima and that the
latter was clearly not hiding for the Congolese authorities, since he
regularly travelled to Belgium where he had a permanent residence88.
Bora Uzima was demobilized as a Brigade General from the national army
in May 2005 and pretends that due to his good relations with the
national parliament, the senate and the presidency, he managed to make
a positive contribution to the restoration of peace in eastern DRC89.
For his part, Amur's Muhindagiga refused to answer our question! s
concerning Bora Uzima90.

3.4 Services and Trading International (STI)

The last Belgian company investigated by IPIS is Services and
Trading International (STI), which supplied minerals from Kivu to
Trademet. STI is based in the Belgian city of Antwerp (Berchem) and
trades in coffee and minerals. According to its annual report of 2007,
the company has two administrators: on the one hand, Patrick Serruys,
who holds the position of executive administrator, and, on the other
hand, the company Sicaz, which has been assigned the position of
administrator. IPIS has been able to establish that, in 2007, STI
bought 25 tons of cassiterite from the small Hill Side comptoir in
Goma.

Apart from that particular transaction, however, there are no
indications that STI has made additional acquisitions of minerals in
the Kivu region. Its name does not feature in the statistics made
available to IPIS by the Division des Mines in Goma. Furthermore, ! Mr.
Serruys maintains that STI has suspended its minerals buying activ
ities in Goma since 10 July 2008, due to renewed fighting in North Kivu
and to a strike among the comptoirs in North Kivu91.

4. Conclusions

In this report we examined the activities of Belgian traders buying
minerals in North and South Kivu. The companies Traxys and Trademet
bought roughly 60% of all cassiterite and an even bigger volume of all
wolframite exported from North and South Kivu in 2007 and 2008. Over
the last years they have been privileged business partners of the main
and most influential comptoirs, namely Sodexmines (through SDE), Amur
and Munsad in Goma and MDM, WMC, Olive and Panju in Bukavu. This would
lead one to suspect that the traders concerned not only have a
privileged knowledge of the local commodity chain, but also
considerable leverage to influence it in a positive manner.

However, in the latest report of the UN Panel of Experts published
in December 2008, it was asserted that, through certain suppliers (c!
omptoirs), they knowingly purchased minerals from mines controlled by
non-state armed groups such as the FDLR. During our investigation we
confronted the traders with these accusations and received a defensive
reply. Unfortunately, in the course of our research we have not been
able to gather documented evidence confirming or denying the Panel's
allegations. Nevertheless, we regret that 13 years after the start of
the first Congo war, such naming and shaming exercises still appear to
be necessary to prompt a more transparent and constructive engagement
on behalf of commercial stakeholders in the region.

Looking forward there are indications that the traders under
scrutiny are willing to contribute in a more pro-active manner to a
sustainable solution to the issue of conflict related minerals. This
creates a window of opportunity for all stakeholders to become involved
in a concerted effort to enhance transparency and accountability in the
mineral sector of the e! astern DRC. In our view, a crucial first step
forward is to create a t
ransparent, publicly accessible and regularly updated database with
reliable information on the local commodity chain. IPIS is currently
laying the groundwork of such a database through a pilot project in the
Kivus.

To further protect the legitimate trade, which, we repeat, is vital
for the socioeconomic fabric and security of the region, a credible
traceability system should be devised. While there seems to be a
preparedness among certain local stakeholders to step up due diligence
efforts, even if it involves a third party verification mechanism, one
should realize that in the long term such efforts can only be
successful if they are supported by the Congolese government, MONUC,
multi- and bilateral donors, and the DRC's neighbors. The crux of the
matter is the huge challenge the Congolese authorities face as far as
controlling the eastern part of the country is concerned.

To achieve this, security sector reform and regional political
cooperation of course ar! e key. In the case of the mineral sector,
donors should support a strong deployment of mandated state agencies
such as the CEEC, SAESSCAM, OFIDA and the Mines Administration.