UNIVERSITY OF NAIROBI

INSTITUTE OF DIPLOMACY AND INTERNATIONAL STUDIES

MASTER IN INTERNATIONAL STUDIES

2015-2017

CONFLICT FINANCING AND CIVIL WAR IN AFRICA: CASE STUDY OF

DEMOCRATIC REPUBLIC OF CONGO

SUPERVISOR: DR. PATRICK MALUKI

RESEARCH PROJECT SUBMITTED IN PARTIAL FULFILMENT OF THE

REQUIREMENTS FOR THE MASTERS DEGREE IN INTERNATIONAL STUDIES,

UON, IDIS
 DECLARATION

I, the undersigned, declare that this research project is my original work submitted to the

University of Nairobi and has not been previously submitted in any other university for an

academic award.

Signature.. Date.

Dolly Kinyua

This research project has been presented for examination with my approval at the appointed

supervisor

Signature Date..

Dr. Patrick Maluki

ii
 TABLE OF CONTENTS

DECLARATION ...................................................................................................................... ii

TABLE OF CONTENTS ......................................................................................................... iii

DEDICATION ......................................................................................................................... vi

ACKNOWLEDGEMENT ...................................................................................................... vii

ABSTRACT ........................................................................................................................... viii

CHAPTER ONE ....................................................................................................................... 1

INTRODUCTION AND BACKGROUND TO THE STUDY ................................................ 1

1.0 Introduction ..................................................................................................................... 1

1.1 Introduction and Background of the Study ..................................................................... 1

1.2 Problem Statement .......................................................................................................... 4

1.3 Objectives of The Study.................................................................................................. 6

1.4 Justification of the Study ................................................................................................ 6

1.5 Literature Review.......................................................................................................... 12

1.5.1 Theoretical Perspective on Conflict ....................................................................... 12
1.5.2 Conceptualization of Booty Futures ...................................................................... 14
1.5.3 Growth and Development of Conflict Finance ...................................................... 15
1.5.4 Natural Resources and Conflict in DRC ................................................................ 19
1.5.5 Regulatory Measures in DRC to Curb Conflict Finance ....................................... 23
1.5.6 Summary Gaps Within Literature Review ............................................................. 24

1.6 Theoretical Framework ................................................................................................. 25

1.6.1 Political-Economy Theory ..................................................................................... 25

1.7 Hypotheses .................................................................................................................... 27

1.8 Research Methodology ................................................................................................. 28

1.8.1 Study Design .......................................................................................................... 28
1.8.2 Study Site ............................................................................................................... 29

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 1.8.3 Target Population ................................................................................................... 29
1.8.4 Sampling Frame and Sample Size ......................................................................... 29
1.8.5 Data Collection Methods ....................................................................................... 30
1.8.6 Validity and Reliability .......................................................................................... 30
1.8.7 Data Presentation and Analysis ............................................................................. 30
1.8.8 Ethical Considerations ........................................................................................... 31
1.8.9 Scope and Limitations............................................................................................ 31

1.9 Chapter Outline ............................................................................................................. 33

CHAPTER 2 ........................................................................................................................... 34

AN OVERVIEW OF CONFLICT FINANCING AND CIVIL WARS IN AFRICA ............ 34

2.1 Introduction ................................................................................................................... 34

2.2 General Background of Conflict and Civil Wars in Africa .......................................... 34

2.3 Causes of Conflict and Civil Wars in Africa ................................................................ 36

2.4 Conflict Financing and Civil Wars in Africa ................................................................ 41

2.4.1 Conflict Financing and Civil War in Angola ......................................................... 43
2.4.1 Conflict Financing and Civil War in Liberia ......................................................... 45
2.4.3 Conflict Financing and Civil War in Angola Sierra Leone Civil War .................. 50

3.1 Introduction ................................................................................................................... 57

3.2 State Actors ................................................................................................................... 57

3.2.1 Rwanda Involvement in Conflict Finance ............................................................. 60
3.2.2 Uganda Involvement in Conflict Finance .............................................................. 63
3.2.3 Other state actors.................................................................................................... 64

3.3 Non-State Actors ..................................................................................................... 69

3.3.1 Multinational Corporations (MNC) .................................................................... 69
3.3.2 Coltan distribution .............................................................................................. 73
3.3.3 Reactions from MNCs ....................................................................................... 81

3.4 Non-Governmental Organizations .......................................................................... 84

CHAPTER 4 ........................................................................................................................... 86

iv
ANALYSIS OF CONFLICTS IN DRC AND MITIGATION MEASURES ........................ 86

4.1 Introduction ................................................................................................................... 86

4.2 Regulating Commodity Trade from Conflict Areas ..................................................... 93

4.3 Trade Policies................................................................................................................ 93

4.4 Kimberly Process .......................................................................................................... 94

4.5 Role of Goverments and Good Governance ................................................................. 96

4.6 International and Regional Organizations .................................................................... 99

CHAPTER FIVE .................................................................................................................. 105

SUMMARY, CONCLUSIONS AND RECOMMENDATIONS......................................... 105

5.1 Introduction ................................................................................................................. 105

5.2 Summary ..................................................................................................................... 105

5.3 Conclusion .................................................................................................................. 105

5.4 Recommendations ....................................................................................................... 106

5.4.1 Recommendations to Consumers ......................................................................... 106
5.4.2 Recommendations to UN Mission MONUSCO and other UN Agencies ........... 106
5.4.3 Recommendations to the Government of DRC ................................................ 108
5.4.4 Recommendations to Regional Community and Africa as a whole ................. 109

REFERENCES ..................................................................................................................... 111

APPENDICES ...................................................................................................................... 114

Appendix I: Field Interviews ............................................................................................ 114

Appendix II: Map showing 30 Non-State Armed Groups In Eastern DRC ..................... 115

v
 DEDICATION

This thesis is dedicated to:

My parents Loftin Kinyua Mwirichia and Susan Kageni Njau, my amazing siblings Nicholas

Mugambi and Alexandra Joan Kawira for their unwavering support and encouragement. I also

dedicate this thesis to all the Congolese people who have lived decades of suffering. It is my

prayer that you will soon have peace, stability and a thriving nation.

vi
 ACKNOWLEDGEMENT

The Almighty God has truly seen me through this journey, thank you heavenly father for

providing me this opportunity, resources and unconditional love that has sustained me

throughout this program. To my parents, I am sure that I would not have reached this far if it

were not for your constant prayers, encouragement and support. You pushed me to pursue the

highest level of education and I want to promise you that it does not end here. To my siblings,

I want to say I am entirely grateful for your love and support. I hope that I have laid a strong

foundation for you to emulate and I wish you both success in all that you set out to do.

To my supervisor, Dr. Patrick Maluki. Words cannot express how grateful I am for your

guidance, support and encouragement. I was almost quitting but your wise counsel kept me

going.

To my employer, United Nations Support office for Somalia, thank you for supporting me with

my career development goals.

Lastly to all the respondents that took their time to be interviewed. Thank you for your

invaluable information and guidance the study was ultimately successful due to your insights

and responses.

vii
 ABSTRACT

This thesis examines the role of state and non-state actors in financing the conflict in Africa

and provides an analysis of how actors fund rebels and state officials in a bid to continuously

destabilize the country for their own private commercial gains. Methodologically this thesis

takes a case study approach, studying the Democratic Republic of Congo and the evolution of

the war to its current state. DRC has experienced the worst conflict since World War II and

has been named Africas First World War. The rich mineral resources have been argued to be

the cause of this intractable war as ironic as it may sound. Furthermore DRC hosts the largest

United Nations peace keeping troops, and yet the war seems to only protract even in the fake

face of current peace. This research argues that state heads transnational companies and

intergovernmental organizations have played a role in fueling the conflict so as to reap the

benefits of unregulated mineral trade. The study aims investigate claims that state and non-

state actors directly fuel the war for their own private gain.

viii
 CHAPTER ONE

INTRODUCTION AND BACKGROUND TO THE STUDY

1.0 Introduction

This chapter presents the background of the study, problem statement, the research objectives,

literature review, justification of the study, research hypothesis, the theoretical framework and

finally the chapter outline.

1.1 Introduction and Background of the Study

The study assesses the role of various non-state and state actors in financing conflict and

fueling wars in Africa for their own private gain. Reflecting on Africas experience in conflict

it is unfortunate that many parts of this great continent have suffered persistent violence and

intractable conflicts. Most of these conflicts have deep historical roots dating to colonial times

and many of them became more destructive in the post-Cold War period.1 These conflicts

have caused a flood of researchers seeking to determine and explain the prevalence of conflict

in Africa. The common factor established by researchers is that most of these conflicts have

occurred in areas that are predominantly rich in natural resources. However, the correlation

between natural resource wealth and civil war remains puzzling.2

Logic instructs that the political economy of abundant natural resources should demonstrate

high economic performance, however, this is not the case in Africa. On the contrary, the

economies of many African countries rich in natural resources are poor and have little to show

1
E, Porter. G, Robinson. M, Smyth. A, Schnabel. & E, Osaghae. (2005) Researching conflict in Africa: Insights
and experiences.
2
Michael, L. R. (2005), How Do Natural Resources Influence Civil War? Evidence from Thirteen Cases.

1
for their endowment. The Countries that have been documented to be rich in natural resources

but suffer the resource curse include Angola, Sierra Leone, Liberia, Congo-Brazzaville,

Democratic Republic of Congo, Equatorial Guinea, Central Africa Republic, Libya, Sudan and

South Sudan.3

Since the late 1990s scholars have studied the relationship between natural resource wealth

and civil war. The assumptions and conclusions drawn from many of them are that the struggle

for equal distribution of wealth for the populous of this nations drives the conflict. In recent

studies, however, a new phenomenon had emerged where scholars explored the possibilities

of conflict being fueled and instigated by other actors other than the citizens of that nation.

The Study explores how nonstate and state actors have contributed to conflict by financing

rebel groups and state heads so that they can gain access to the unexploited natural resources.

Some scholars have emerged to link the two by exposing the involvement of non-state actors

in conflict areas through what is now termed as booty futures.4 Ross has described booty

futures as the ability of combatants to raise funds by selling exploitation rights to natural

resources that they hope to capture in battle. His argument brings out what political economy

theorists discuss as conflict financing. It begs the question who are the culprits in natural

resource conflict the buyers of exploitation rights who range from sovereign states,

transnational companies and to some extent international organizations or the sellers; rebel

groups or unstable governments? Perhaps it may not be academically prudent to analyze the

3
William, T. (2007). Governments and Politics in Africa. P.9 the emergence of states failure can be linked to
resource distribution precipitated either by internal or external insurgencies that are fighting for natural resource
control.
4
Ibid.

2
real culprits however it will be important to critically analyze and discuss conflict finance in

relation to this new phenomenon - booty futures.5

Attempting to explore all African nations that have experienced civil war due to the rich

endowment of resources will be too large and broad for constructing any meaningful

discussions or even drawing objective conclusions.6 The study will focus on the Democratic

Republic of Congo (DRC) a nation that has been said to possess every natural mineral in the

periodic table of elements and the most wanted of them are: Coltan, Gold, Cobalt, Tin,

Tungsten, Uranium, Petroleum, Copper and Diamonds. Despite all this wealth, DRCs

resources have been equated to being a curse.

DRC has faced decades of armed conflict its volatility is typical of the large upheavals of weak

governments in Africa; its plight is much like other situations which caused large

humanitarian loss that shocked the international community yet have resulted in little actions.

Due to the chaotic political nature of DRC both the leaders and citizens led by rebels have

opted to liquidate their long-term resources in order to survive in the short term. Multi-national

mining companies and state heads of neighboring nations have decided to capitalize on this

dilemma.

Laurent Desire Kabila ascended to power when he signed a $1 billion contract with the

American Mineral Fields Inc in exchange for diamond purchasing monopoly. After the war,

they also received exploration rights to cobalt, zinc, and copper7 so as to create the world's

5
Louisa, C. (2012), Conflict Minerals in the Congo: Blood Minerals and Africas under reported First World
War. Suffolk University p.3-5
6
C. Ketterling and C. Papademas Capitalizing on chaos. DeBeers and American Mineral Fields Involvement
in the Congo and Suggestions for Regulationp.3
7
E, Porter. G, Robinson. M, Smyth. A, Schnabel. & E, Osaghae. (2005) Researching conflict in Africa: Insights
and experiences

3
largest zinc smelter and build a plant to produce acid for refining. When the deal was

announced the price of AMF stock in Toronto stock exchange rose from $3 to $7 and when

Kabila took power it rose to $10. 8

Rwanda and Uganda were very instrumental in the first war that broke out in 1996 they claimed

to fight for justice but it was evident that their fallout was precipitated by the failure of Kabila

to honor the booty futures agreement after ascending to power.9 To protect himself from his

neighbors Kabila sold future exploitation rights to Zimbabwe, who in turn offered their

support. Zimbabwe gave Kabila 11,000 soldiers when his adversaries launched an attack on

him and immediately after that Zimbabwean businessmen started trooping into the mineral

endowed provinces of DRC.10

1.2 Problem Statement

Conflicts in Africa have been well documented but none poses a significant threat to the

stability of the continent as the Congo war. DRC is strategically located at the center of Africa;

this means that the risk of instability to the rest of Africa is imminent. The Domino effect of

the war would create a serious crisis for Africa that could leave it vulnerable to destruction.

Other than the risk of spillover wars Africa as a whole is losing out on the benefits that can be

gotten from an organized regional integration. DRCs natural resources have the capacity to

make Africa an economic giant. A good example of DRCs ability to empower the rest of

Africa was the attempt by politicians and planners from across the world who have been

8
Edward, G & Materson, T. (2002).
9
Edward, G & Materson, T. (2002). Governance Quality and Governments Commitment. p.45. The Fragile
Peace.y
10
Wennmann, A. (2017). The Political Economy of Conflict Financing, political economy of conflict, conflict
financing, natural resources, and organized arm groups.

4
working together in the last four decades to build one of Africas largest dam the Great Inga

dam. The dam is said to have the capacity of harnessing enough hydroelectric power for the

whole of Africa and even export to the rest of the world. However, due to DRCs continuous

instability, the project has stalled. The above project is just one of many projects that have not

kicked off due to the conflict in DRC. Africa may be losing out on crucial projects but the

citizens of DRC are the biggest losers. According to World Bank, only 11.1% of DRC

population have access to electricity. For a country that has huge potential to harness

hydroelectric power, it is unfortunate that such a small percentage of the population have

access to electricity. This translates to poor economic growth which leads to violence and

eventually full-blown wars that pose a threat to neighboring countries and Africa as a whole.

The aim of this study is to deviate from the norm propagated by different scholars and the

media, that the war in Congo is instigated purely by rebel groups in DRC. The studys objective

is to bring in a new dimension by investigating and analyzing how state and non-state actors

finance the war in Congo by buying future exploitation rights from rebel groups. As stated by

one Congolese national in the documentary The Testimony For Africa to take off it must start

in DRC. As simple as this statement sounds the truth behind it is too colossal to ignore. This

study interrogates the following research questions; What is the History of the war in DRC and

is the presence of mineral resources fueled the conflict in DRC?; Who are the main actors in

the DRC conflict and do they prolong the conflict? ; What are the reasonable possible measures

to end conflict financing in DRC?

5
1.3 Objectives of The Study

Overall Objective

To establish whether the conflict in DRC is financed by state and non-state actors.

Specific Objective

1. To establish the role of the state in DRC war and the use of booty futures as a catalyst

to the conflict.

2. To identify actors who contribute towards conflict finance in DRC and investigate ways

and means in which conflict finance prolongs the war.

3. To assess current and future international policies that can be utilized to leverage DRC

from conflict and mineral exploration.

1.4 Justification of the Study

Natural resource and civil war correlation have encouraged the proliferation of scholarly and

policy studies. The consensus built in the various discussions is that natural resources in

resource-rich countries act as the root of violent conflict. Although these deductions are true

they do not fully expound on all the contributing factors of conflict.

This study seeks to explore other factors that have not been widely discussed both academically

and empirically. However, scholars who have attempted to critically study the relationship of

these conflicts have not explored all possible explanations that explain natural resource

conflict. In this regard, the study seeks to investigate how actors in international relations

finance conflict in DRC fueling the war to ensure instability for their own personal gains.

The concept of booty futures is a new concept to many peace and security scholars. Collier and

Hoeffler have critically analyzed the issue of conflict finance and natural resource exploitation

6
in Africa and have mainly concluded that the reason behind the conflict is greed on resource

allocation mainly headed by rebel groups. Although these arguments are true, little has been

written on the other side of conflict where is it seen as an investment for economic gain.11

Ross, on the other hand, argues that rebel groups are unable to physically loot a countrys

natural resources but the booty futures market allows them to raise startup funds by trading

future rights to exploit there nations resources for financial backing.12 The study appreciates

previous research but it has also noted the gap and thus seeks to widely examine and conduct

relevant research that will critically discuss and analyze the actors involved in buying and

selling of booty futures.

Although the concept of booty futures is fairly new in the academic field, international

organizations have noted the threat posed by natural resource conflict and in 2003. The

Kimberley Process Certification Scheme (KPCS) was built up in to counteract "struggle

jewels" from entering the standard unpleasant precious stone market by United Nations

General Assembly Resolution 55/56 following suggestions of the Fowler Report. The

procedure was set up "to guarantee that jewel buys were not financing viciousness by revolt

developments and their partners trying to undermine honest to goodness governments.

According to international standards, the policy document was above board, but what needs to

be understood is that all solid mineral conflicts have their own dynamism and therefore a

universal approach in most cases cannot resolve all cases conflict minerals.13 KPCS so far has

not been able to serve DRC as a policy that could help curtail the war.

11
Collier, P and Hoeffler, A. (2002). Greed and Grievance in Civil War. p. 1. We have found that greed out
powers grievances.
12
Michael, L. R. (2005), Booty futures. P. 7
13
See. Kimberly Process Certification Scheme. Each country must designate an importing and exporting
authority., establish a system of internal control

7
The Kimberly process is not the only policy that the international community has put in place

to try and curtail the sale of minerals from natural resource conflict. The US Dodd-Frank Act

(Called the Obama law in Congo) enacted in July 2010, imposes a series if duties to mining

companies to ensure they respect conflict minerals that serve to finance conflict the DRC or

adjoining countries. These duties included specific disclosures as regards to mining products

and their production, source and chain of custody, health and safety data and payments made.14

The financial reform bill was aimed at transforming Eastern Congo, which had been labeled

the "rape capital of the world. Its intended purpose was to ensure US companies publicly

disclosed their efforts to ensure that their products were free of "conflict minerals" from DRC.

However, critics from industry experts cautioned that the murky nature of the conflict in DRC

would make it difficult to trace the minerals.15

Another noteworthy worldwide activity is the OECD's Guidelines for Multinational

Enterprises. They cover an extensive variety of ranges, including human rights and the earth,

and expect organizations to add to a nation's financial, social and ecological advance. The

OECD activity tries to manage corporate conduct through governments. To this end, the

following nations must set up a National Contact Point (NCP), which is in charge of advancing

corporate obligation and encouraging commonly concurred answers for issues that emerge

around there. To accomplish these objectives, NCPs are enabled to get protestations about

corporate rowdiness, and subsequently are, in principle, the nearest thing to a genuine

responsibility system for organizations. Be that as it may, the OECD gives individuals total

adaptability in planning their NCP, and most nations have neglected to initiate a successful

14
H. Andre-Dumont (2011) Mining in the Democratic Republic of Congo. McGuire Woods Brussels Belgium
M. Sheridan. Global Policy Forum U.S. Financial Reform Bill also Targets 'Conflict Minerals' from Congo.
15

Washington Post. 21 July 2010

8
protests technique or to guarantee that their NCP has the status or profile important to put

significant weight on corporate performers. The US NCP, for example, is one of many caps

worn by the Office of Investment Affairs. It has no different presence and does not have an

institutional design.

The report discharged by OECD in 2004 demonstrates that administrations have neglected to

research the part of multinational companies in the contention in DRC. In any case, the United

Kingdom has given its NCP the obligation to get and analyze proof and issue open reports on

corporate misconduct. However regardless of the possibility that the NCPs were to understand

their potential, this instrument still depends on the shame of terrible exposure instead of any

legal cure a methodology that lone works when the reputational expenses to the organization

are not exceeded by the material increases from drawing in with states that are rich in minerals

yet poor in human rights administration. For instance, the attention encompassing the UN

reports did little to stop the plundering in DRC: for instance, the report demonstrates that a

British organization Afrimex, had paid cash to a revolutionary gathering in charge of genuine

human rights infringement and consequently, the renegade gathering enabled Afrimex to

separate minerals from mines under its control mines in which constrained work and perilous

conditions were available.

The UN has recognized the requirement for more noteworthy oversight of multinational

companies and their effect on human rights. In 2005, Professor John Ruggie of the Harvard

Kennedy School was delegated the Special Representative to the UN Secretary-General on

business and human rights. Since his underlying arrangement, Professor Ruggie directed

counsels over the globe, accumulating data on the status of corporate responsibility measures

in different nations and at the transnational level. His outcomes uncovered that there was far

9
reaching disappointment of states to guarantee that companies watch human rights. Obviously,

organizations missed the mark concerning moral benchmarks, states reliably neglected to

consider them responsible, and Ruggie a year ago called for proactive strategy intercessions

by states to control the inclusion of enterprises in strife circumstances. To this end, he has

proposed a tripartite system, incorporating the state's duty to secure against human rights

infringement, the general arrangement of sufficient solutions for casualties of human rights

infringement, and the corporate obligation to regard human rights and work as per social

desires. Ruggie is right now during the time spent operationalizing this tripartite system.

Regardless of whether it will be sufficiently satisfactory to address the complex complexities

raised by transnational corporate unfortunate behavior is yet to be seen. Sadly, despite the fact

that the system may offer answers for end MNC's gross infringement on human rights it may

be past the point of no return for the millions enduring in the DRC.

For the international community, individual states and organizations, the difficulties are

critical. Indeed, even organizations with the best expectations require direction to guarantee

that their cash isn't being channeled into the prolongation of a contention or the propagation of

human rights mishandle. One-sided measures by states must surmount the confinements of

residential law requirement. Responsibility crosswise over outskirts requires collaboration

between both state and non-state actors.16 As realists would put states only serve their own

interests and multinational companies by extension serve the interest of the parent country thus

it would be a challenge to assume that the companies would easily forfeit the benefits gained

noting that there could be bureaucratic pressure from their countries. It could swing the other

way as well if the parent country wishes to maintain good relations with states that the MNC

16
Ibid

10
are doing business and violating human rights, they could call them to book and force them to

respect international law requirements as obligated by their membership.

The resurgence of the conflict in the DRC and the mercilessness created upon regular folks is

an update that multinational organizations can't be permitted to offer help to those that execute

barbarities. They can't be permitted to choose not to see to the effect that they or their backups

who have been propagating a cycle of brutality. The expansion of corporate social duty mottos

and industry self-direction has not been adequate to counteract corporate complicity in

monstrosities in the DRC. Society must demand that corporate responsibility rises above

fringes. Governments must be proactive in observing and reacting to the activities of their

organizations abroad. Something else, organizations will keep on doing business in battle

areas, where they are beyond anyone's ability to see of controllers, with the imperceptible hand

of the market pushing them towards benefits to the detriment of standards.17

The study, therefore, wants to investigate different policies that have been put in place and also

to develop academic policy recommendation that can be used to find solutions that will curb

conflict finance. Wennmann insists that peace and security scholars should do more research

and write more about the concept of booty futures so as offer different scholarly discussions

as opposed to the traditional means of looting and smuggling that everyone knows about. It is

upon that call from Wennmann that the study is based.

17
Ibid

11
1.5 Literature Review

The literature review was structured into five thematic areas; Economic explanations for

conflict, conceptualization of booty futures, growth and development of resource conflict,

natural resource conflict in DRC and regulatory measures in DRC to curb conflict finance.

1.5.1 Theoretical Perspective on Conflict

The term Conflict has been defined by international relations scholars as an actual or perceived

opposition of needs, values, and interests. A realist would argue that conflict is necessary

among actors in politics pursuing power. In Africa, the perceived opposition of needs and

interests have been at the core of explaining the conflict. However, an opposition based on

values has also taken center stage in discussing causes of conflict and civil war. The greed and

grievance arguments have been put forward by scholars to try and explain conflict. "Greed" is

when combatants are motivated by a desire to better their economic situation and perform an

informal cost-benefit analysis in examining if the rewards of joining a rebellion are greater

than not joining. "Grievance" stands for the argument that people rebel over issues of identity,

e.g. ethnicity, religion, social class, etc, rather than economics.18

In the case of Africa greed seems to be the most appropriate argument in explaining the

conflict. The private motivation hypothesis explains how greed acts as a motivating factor in

precipitating war. It argues that people who might have their own private motivation for doing

so as well as loyalty to the group that it is fighting for. Wars confer benefits as well as costs on

some individuals. The private motivation hypothesis has its basis on rational choice economics

arguing that the net economic advantage of the war to some individuals motivates them to

18
https://en.wikipedia.org/wiki/Greed_versus_grievance

12
fight.19 Relating greed hypothesis to booty futures concept, the study analyzes private motives

of state and non-state actors in instigating and sustaining conflict, by buying future exploitation

rights for natural resources in DRC. The result of this is the emergence of a war economy that

requires disability to ensure profits are gained.

Goodhand contends that war economies include the obliteration or circumvention of the formal

economy and the development of casual and bootleg trades, viably obscuring the lines between

the formal, casual and criminal parts and exercises. Loot, predation, blackmail, and consider

viciousness against regular citizens is utilized by soldiers to secure control over lucrative

resources, catch exchange systems, diaspora settlement, and endeavor work.20 To sufficiently

survey the diverse elements of war economies, Jonathan Goodhand proposes an especially

valuable scientific classification of "warrior", "shadow" and "adapting" economies. While

experimentally covering, each of these economies includes a particular arrangement of on-

screen characters, inspirations, and financial exercises that can have subjective diverse

ramifications for strife determination and post-struggle peace-building.21

In this study combatant economies better explain the interactions that directly sustain actual

conflict in DRC. By and large, the battle economy serves to finance the war exertion of these

on-screen characters and in addition to accomplish military goals.22 The favored methods for

asset age incorporate the savage tax assessment of licit and illegal monetary exercises,

blackmail of nearby organizations, the control over the misuse of normal assets, the burden of

19
Duffield, M. (1999) Globalisation and war economies: promoting Order or the Return of History? Fletcher
Forum of World Affairs
20
Goodhand, J. (2004). Afghanistan, in Pugh M and N Cooper, with J, Goodhand (2004).War economies in a
regional context: challenges of Transformation. Boulder: Lynne Rienner publishers.
21
Ibid.
22
Duffield, M. (1999) Globalisation and war economies: promoting Order or the Return of History? Fletcher
Forum of World Affairs 23(2) p.19-36.

13
"traditions" in outskirt zones or setting up barriers and the offer of future asset abuse rights to

Multinational Corporations and other non-state actors.23

1.5.2 Conceptualization of Booty Futures

Michael Ross tops the list of scholars behind the concept of booty futures, he coined the

concept after the Cold War. Ross was trying to find the correlation between natural resources,

civil wars and coup dtats. To enable him to justify the concept of booty futures Ross

developed the use of triangulation through developing several hypotheses and examining

several wars that had happened in countries with rich mineral deposits.24

Ross explains the concept of booty futures in very simple terms, as the right to exploit mineral

resources that the seller has not yet captured. Ross further posits that the strategy of booty

futures is a tool used by the weak against the strong.25 In Sierra Leone, Liberia and Congo

Brazzaville rebel groups sold their rights for future exploitation to foreign firms and

neighboring countries in exchange for proceeds to buy arms to capture resource endowed

regions. In Congo Brazzaville, for instance, President Denis Sassou Nguesso received $150

Million from Elf a French oil company, to enable him to topple over the then President Pascal

Lissouba from power democratically or through an arms struggle, however, the latter saw

Sassou Nguesso into power. Upon Nguessos inauguration, Elf secured itself extraction rights

for the oil fields in Congo Brazzaville. 26

23
Ibid.
24
L. R. Michael (2005), Booty futures. p.4
25
Ibid, p.2
26
L. R Michael (2005), How Do Natural Resources Influence Civil War: Evidence from 13 Cases, Cambridge:
University Press. The payment done to Sossou was to clearly allow elf access to Congolese oil in once he takes
over government.

14
Collier and Hoeffler link the concept of booty future to the narrative of grievances versus greed.

Both scholars allude to the fact that most MNC and rebel groups are driven by greed as opposed

to the grievance, that is because in most cases their primary concern has always been to capture

the well resource endowed regions, their quest for power is to enable them to have control over

the vast mineral regions for financial gains. However, some rebel groups have always had

genuine grievance driven by marginalization.27

Collier and Hoeffler admit that even sovereign states engage themselves in the strategy of

booty futures but it is due to grievance. Collier argues that a good number of states engage in

the strategy mostly when their existence has been threatened by stronger rebel groups and they

must, therefore, seek alternative measures to survive thus resorting to the sale of booty futures.

Collier refers to Sierra Leones case that repulsed a civil war twice. The success to repulse the

war was arrived at after selling booty future rights to Konon diamond fields a South African

Mining company that later supplied the Sierra Leonean government with Mercenaries to

repulse the rebel groups.28

1.5.3 Growth and Development of Conflict Finance

The end of the Cold War in 1989 triggered the growth and development of conflict finance in

natural resource-endowed developing countries. This was due to the reduction of support from

western powers too weak states and guerrilla groupings. The declining support from external

powers meant that weak states and guerrilla groupings had to fend for themselves for their

survival. It is upon that backdrop that developing States and Guerrilla groupings resorted to

27
Collier, P and Hoeffler, A. (2002). Greed and Grievance in Civil War. p. 1. We have found that greed out
powers grievances.
28
Collier, Paul and Ankle. (2002), Greed and Grievance in Civil War. Working Paper CSAE WPS, Oxford:
Centre for the Study of economics.

15
 29
the commercialization of conflict. In Afghanistan, for instance, the American government

was giving the Mujahidin rebel groups $3Billion to sustain it's 200,000 300,000 soldiers, but

the end of cold war marked the end of the support to the Mujahidin rebels they were thus forced

to look for alternative support to finance their course and thus the recourse to annex oil regions

for commercialization purposes.30

The end of the cold war also came with new economic policies through the structural

adjustment programs. SAPs expected African states to liberalize their economies to the outside

world. Liberalization of African economies meant Africa opening her markets to the outside

world for extraction of her primary commodities.31 Liberalization led to competition of control

over the resource-rich regions, scrambling and partitioning provoked conflict that eventually

contributed to conflict finance. For instance in Angola, UNITA rebels charged a landing fee of

$2000 3000$ per plane, in the territory under its control during the period of 1996 1997 of

which the money earned was alleged to have been used to fund the civil war in Angola.32 SAPs

called for open markets and this led to the high demand for Africas natural resources,

competition became intense leading to zoning and the claim for rights over resource endowed

regions by both governments and guerrilla groups. Customers who wanted access to primary

commodities had to, therefore, pass through cartels that had control and rights over the

demarcated resource regions.33

29
Abdullah. I. (1998), Bush Path To Destruction: The Origins and Character of the Revolution United Front. P.
36
30
Choudy. K. (1997). The Price of Wealth: Economies and Institutions in the Middle East. New York: Cornell
University Press.
31
See, World Bank and International Monetary Fund, (1990). Report on Structural Adjustment Policies in
Africa.
32
Enough Project, (2008). Armed Group Profits-3Ts and Gold.
33
See, in particular faced, faced with a Gun, What Can You Do? War and the Militarization of Mining in
Eastern Congo.

16
The concern to address the humanitarian situation during the post-cold war period contributed

to the growth of conflict finance as well. NGOs were taxed before they could offer aid

assistance to casualties. Many times the aid provided was stolen and sold to fund conflicts. It

is therefore evident that through taxation and selling of the aid donations rebel groups were

able to raise finances to steer violence. Pseudo NGOs have also been accused of being used

to smuggle in weaponry to governments and rebel groups, and the same measures used to

smuggle out minerals because non-state actors enjoy leverages from taxation and inspection

by governments and international organizations.34

The absence of good governance and rule of law act as a catalyst for conflict finance.

Maladministration has allowed corruption and embezzlement of resources to persist thus

leading to marginalization and unequal distribution of resources.35 William Tordoff depicts

that most African regimes were unpopular by the end of the cold war and because they were

unwilling to relinquish the power they decided to militarize politics.36 Militarizing politics

meant spending more budgetary allocation to the military of which in most cases a good

number of African governments could not afford them thus opted to conflict finance. Uganda

and Rwanda have been accused of looting mineral deposits from DRC to finance their

military.37

International trade and the high demand for solid minerals in DRC has precipitated conflict

finance and thus a contribution to resource conflict through the supply chain. In as much as

governments issue official extraction rights to MNC, extraction of the minerals has posed a

34
Ibid.
35
Auvinen, J. (1997). Political Conflict in Less Developed Countries. p. 34
36
William. T. (1997), Government and Politics in Africa. P. 177, in 1994 France had an estimate of 8400
troops deployed in Africa to quell coup dtats.
37
Ibid.

17
challenge because the minefields are still under the control of rebel groups. Companies are

therefore forced to re-negotiate with the rebel groups, the negotiation, therefore, establishes a

complex and non-transparent supply chain towards conflict finance.38

The supply chain is complex with various actors drawing payments from the chain, goal posts

get shifted and different mechanisms are deployed to avoid official authorities. However new

demands reemerge from the various actors involved, a good number of them feel short-changed

whereas some fail to fulfill their bargains and with that comes disagreements and the conflict

explodes again.39

The dilemma between militarization of politics and privatization of the state in Africa as noted

by Ali Mazrui, led to the emergence of a new trend of using mercenaries to solve political

problems. Several African countries were reported to have used mercenaries for example in

Sierra Leone a South African company by the name Executive Outcome helped president

Kabbah at the time to regain control of the mineral-rich regions. Within a month of Sierra

Leone's hiring of Executive Outcomes in May 1995, government forces had regained control

of the diamond-rich Kono district, which produced two-thirds of Sierra Leone's diamonds.

However, their involvement did not bring any stability, in fact instability was their function of

continued employment.40

The use of mercenaries was not unique to state heads. Multinational companies operating in

war torn countries do not want to be associated with political conflict especially in their

operating environments. Logically most of this companies have every reason to help end

38
Karlsson, Ida. EU Urged to Ban Conflict Minerals.
39
Ibid.
40
Cilliers J and Cornwell R (1998). Africa- from the privatization of security to privatization of war.
https://issafrica.org/uploads/PEACECHAP11.PD

18
conflicts so as to have a safe environment to operate in however, the reverse is true.

Multinational companies have grabbed the opportunity to exploit the situation as they have

noted that the commercial gain is too huge to resist.41 Due to international pressure companies

rather operate aloof so that they are not directly linked to the conflict and this is how

mercenaries have gained popularity in financing conflict and prolonging it in Africa. In the

subsequent chapters the study will dive into the different companies and their involvement in

financing conflict in Africa focusing on DRC.

1.5.4 Natural Resources and Conflict in DRC

The Democratic Republic of Congo is well endowed with solid minerals and a vast coverage

of forest that is second in the world after the Amazon forest, it is however unfortunate that over

50% of her natural resources are controlled by rebels groups.42 Grant Matterson argues that

mineral resource conflict in DRC was epitomized at the onset of independence. Patrice

Lumumba and Kasavubu Joseph had different ideologies. Lumumba was a nationalist and

believed in socialism, Kasavubu, on the other hand, was a radical secessionist and believed

that DRC had to be partitioned. Kasavubu leadership was driven by a higher appetite to loot

the mineral resources in DRC.43 The difference between Kasavubu and Patrice led into a

constitutional crisis, this was due to Kasavubu dismissing Patrice as the Prime Minister

whereas Patrice rushed into the national assembly to defend his position during the period of

41
ibid
42
Abiodun, A. (2007). Natural Resources and Conflict in Africa: The Tragedy
43
Carpenter, L., & Conrad, J. (2012). Conflict minerals in the Congo: Blood minerals and Africas under-
reported first world war. Suffokl University Working Paper, April 2, 125.

19
constitutional crisis Mobutu being the Chief of Staff of the Armed forces ruled the country for

a period of six months up until the situation was resolved.44

The first conflict in DRC broke out in 1996 which was fronted by Laurent Kabila against

Mobutu Sese Seko, Laurent was successful in ousting the former in as much as their

antagonism was perceived to be more of a political struggle the major underlying issue was

the control of mineral resources. A good number of political analysts argued that Mobutus

ouster was as a resort of regime change that was cutting across Africa to replace dictatorship

with democracy. Well, that might be true but security scholars have emphasized that it was a

struggle to control mineral fields.45

Paul Collier reiterates that Intrastate conflict in DRC is being precipitated by poor governance

and marginalization. Those charged with governing DRC have extracted natural resources to

fulfill their selfish interests leaving out the populace to wallow in abject poverty thus a

precursor to the conflict in DRC.46 Marginalization breeds a mentality of we verse them and

thus a recipe for conflict. Collier further reiterates that when easily extractable mineral

resources are not well managed they become susceptible to looting, where looting cartels and

rebel groups demarcate regions to claim ownership of the resources. The act of demarcation

by cartels eventually breeds rebel groups that resort to conflict.47 Duffield, on the other hand,

attributes natural resource conflict in DRC to warlords. He views a warlord as the leader of an

armed group, who can hold a territory locally and operate financially and politically in the

international system without interference from the state in which he is based. Warlords,

44
Ibid.
45
William, T (1997). Government and Politics in Africa. p. 197
46
Paul. C (1998). On Economic Causes of Civil War, Oxford: Economic Papers.
47
Ibid. p, 563.

20
therefore, have the ability to lead a revolt against the government and extract the minerals for

personal gain and in return buy weaponry to protect themselves.48

External interest, interference, interventions, and Involvement by the nine DRC neighbors have

contributed to both Intra and interstate conflict. DRCs neighbors have constantly argued that

their intervention into the conflict has always been triggered by the influx of refugee into their

countries. Rwanda, for instance, is hosting an approximation of about 70,000 refugees from

the DRC. Their mission, therefore, has always been to stabilize the country so that they avoid

the refugee burden. Paul Collier, however, insists that DRCs neighbors intervene so that they

can profiteer from the conflict.49 Emizet Kisangani insists that whenever neighbors intervene

in DRC they come with their own agenda.50 Uganda for instance intervened in DRC (I) to deny

the Sudanese government an opportunity to destabilize Uganda through the eastern DRC, (ii)

to deny habitation to Ugandan dissident United Democratic Front (UDF) (iii) to ensure that the

rebel dissident in Eastern DRC do not destabilise Uganda, (iv) to protect Ugandas territorial

integrity from invasion by DRC rebels, all that said and done independent reports have linked

Uganda to the looting of minerals in DRC.51

The Lusaka peace accord, for instance, flopped because both Uganda and Rwanda had some

interest in the clause that called for the withdrawal of their troops from DRC. They, therefore,

wanted the Accord to be re-amended to reaffirm their presence in DRC.52 Uganda and Rwanda

48
Duffield, M. (1998). Post Modern Conflict: Warlords, Post Adjustment States and Private Protection,
London: Routledge. The changing nature of the nation state has changed the rule of law.
49
International Conference on the great lakes regions pact on security, stability, and development in the in the
great lakes region. (2006)
50
Emizet, K. (2010). Civil Wars in the DRC. Kansasa State University.
51
Human Rights Watch. (2005). DRC faces continues interference from her neighbors Rwanda and Uganda in
particular.
52
Lusaka Ceasefire Agreement. (1999). A peace agreement between the DRC and the Republic of Rwanda on
the withdrawal of the Rwandan troops from the territory of DRC.

21
have in many at times wanted to dominate the intervention events in DRC. For instance,

Ugandan People Defense Force and Rwandan Patriotic Front, have constantly refused to have

a joint mission team in DRC, they all want to operate independently because of the command

structures.53

Human Rights Watch a leading NGO has consistently insisted that whenever natural resource

conflict in DRC is being discussed or researched about, it should not go without mentioning

the humanitarian situation in DRC. The NGO states that in the year 1996 800,000 persons were

displaced and the subsequent years 1999 2002, 3.3 Million lives were lost, an equivalent of

genocide. Crimes against humanity have been perpetrated ranging from, rape, forceful

eviction, the use of child soldiers and displacement of persons. The listed crimes have been

committed by both the state and rebel groups. Detentions and warrant of arrest issued to the

perpetrators have posed a security challenge to DRC because the indicted persons are very

powerful and influential.54 As NGOs report on the atrocities being committed, it is also

prudent that they look at the source which propels the violence in DRC ensuring it ensues with

no hope of it ending. The responsibility of documenting human rights violations should not

only stop at the perpetrators on the ground, but they should also search deeper. The fact is most

of this atrocities are committed by rebel groups who are funded by known groups to ensure

instability in the areas rich in resources so that they can gain access to them.

53
Edward, G. & Materson, T. (2002). Governance Quality and Government Commitment to the NEPAD.
54
International Criminal Court. (1998). the Rome Statute. Rape, Genocide, Forceful Eviction, all the above are
crimes against humanity.
The Prosecutor V. Bosco Ntanganda, Thomas Lubanga, Germaine Katanga, Mathieu Ngudjolo and Sylvester
Mudacumura.

22
1.5.5 Regulatory Measures in DRC to Curb Conflict Finance

To curb booty futures in DRC a multi-disciplinary approach is needed. In as much as the

Kimberly process has been the universal policy document on solid minerals, it has also fallen

short in curbing conflict finance on other solid minerals like coltan, tin, tantalum, and tungsten

used to make electronic materials. The Kimberly certification process was specifically

developed to curb blood diamond and not all solid minerals that contribute to the finance of

conflict. 55

Paul Collier reiterates that to curb conflict finance, the DRC government must undertake key

reforms in its governance structures. It should first ensure that all the mining fields are brought

under state control to provide a revenue base for local and provincial authorities. All

stakeholders and actors in the solid mineral trade must be brought together for a dialogue on

how to reform the trade.56

A transnational mining authority should be established by the international community

alongside the DRC government, the authority should be in charge of certifying traders and

other actors the authority should also be in charge of all mining fields by overseeing the

activities that are being undertaken at a local level and also evaluate the supply chain racket.57

Export policy and incentives must be harmonized at a regional level to eliminate smuggling.

For instance, an exporter will pay a taxation fee of $200 for a barrel of tin ore being exported

from Rwanda to Europe, an exporter in DRC will pay $6,500 for the same barrel to be exported

to Europe. It is such inequality that promotes conflict finance through smuggling, countries

55
See, The Kimberly Certification Process. https://en.wikipedia.org/wiki/kimberly.
56
Collier, P. (2009). Wars, Guns and Votes. Democracy in Dangerous places.
57
http://www.itri.co.uk/POOLED/ARTICLES/BF

23
from the great lake region should, therefore, develop a unifying protocol on natural resources

that bring a regional pact, upon its development the Heads of State should adopt the protocol

and operationalize it at a regional level.58

The various peace accords that were signed under the Unified Transnational Agreement

should be operationalised and adhered to the letter. The four peace agreements are the Lusaka

Ceasefire agreement (1999),59 the Sun City Agreement(2002), the Pretoria Agreement (2002),

and the Luanda Agreement (2002).60 The peace agreements are important because it is only

through them that the Humanitarian situation in DRC can be addressed through supporting

livelihoods. The conflicts in DRC has seen gross violation of human rights. World Bank,

however, insists that the Universal Kimberly Policy certification system has been the best

policy developed by the United Nations despite its shortfall in DRC. However much still needs

to be done to ensure that the underlying issues of natural resource conflict are addressed.

1.5.6 Summary Gaps Within Literature Review

The concept of conflict finance and the phenomena of booty futures is still new to scholars of

international relations. Academic discourse on conflict in Africa has been dominated the

repetition that conflicts are mainly caused by poor governance, mismanagement of resources

and greed. Scholars have intesively researched on this issues and to some extent come to the

conclsion that those are the main factors that instigate conflict in rich natural resource areas.

The study however, during its research concludes that even though the factors mentioned above

are true there is a missing link. The commercialization of war for private gain or conflict

58
Ibid.
59
Among the first peace agreements to be signed it was the first road map towards pacifying DRC.
60
The Lusaka Ceasefire agreement (1999), the Sun City Agreement (2002), the Pretoria Agreement (2002), the
Luanda Agreement (2002), the Unified Transnational Agreement.

24
finance act as the missing link. The media has also been silent about the involvement of state

and non state actors in fueling conflict even though the situation is puzzling.

1.6 Theoretical Framework

The study of international relations involves a wide variety of issues. The conflict has been at

the center stage of those issues as it affects states and how they interact with one another. The

war in DRC showcases the relationship of both state and nonstate actors and how their

relationship has contributed to the never-ending conflict. To critically understand this war there

are a number of theories that could explain its causes however this study focused on Political

Economy theory.

1.6.1 Political-Economy Theory

Political Economy theory suits the study since it is better placed to explain the growing

commercialization of contemporary intrastate conflict that majorly arises from the extraction

of lucrative natural resources for trade purposes, to attract revenue and favors for both

sovereign states and non-state actors.61

Political Economy theory therefore defines and describes how politics and economics have a

deep correlation and interdependence. Economics is the means under which natural resources

are extracted for trade purpose whereas politics, on the other hand, is the ability to determine

who gets to extract the natural resources. Economics therefore at this particular juncture is

forced to highly depend on politics so as to get the authorization and sole right to exploit the

61
Nitzschke, H. (2017), Business and Conflict: An Assesment of Issues and Options, NewYork: Fafo Institute.

25
resources. The latter therefore explains the sole principle of booty futures whereby support is

offered to a weak belligerent to gain future exploitation rights.

Every community has resources and they are always scarce in relation to those who want to

exploit them, resulting in unhealthy competition. Economic entities, therefore, resort to wheel

dealings in exchange for lucrative contracts that can ensure their business entities secure a

monopoly, market protection, friendly regulations and eventually long contracts. To achieve

the latter, economic entities have gone to the extent of weakening unfriendly regimes by

financing and arming non-state actors ranging from opposition leaders to rebel groups with an

agreement that once they ascend to power they would ensure that the economic entities that

offered their support in their endeavour would win unregulated extraction rights.62

From the above statement, it is evident that natural resource trade has greatly contributed to

war economies, The study is perplexed at how economic entities operating from conflict zones

are able to carry on with their trade to the extent of making abnormal profitable returns.

American Minefields an MNC operating from the DRC has been a great example of economic

entities that operate smoothly on war-torn economies.

Micheal Ross refers to political economy as to be the politics of natural resource concession,

whereby multinational companies form collusion with combatants either from the rebel groups

or government in purchase for resource areas that have not been captured. The political

economy theory is better placed to explain the paradox in DRC that despite the country having

the largest number of rebel groups the country hosts the biggest number of foreign extractable

industries 85 to be precise. The study would expect that due to the intense and complicated

62
Ibid.

26
web design of conflict in DRC, economic entities should shy away from the region since in

most cases conflict has always acted as a deterrence to trade. The trend is not only seen in DRC

but also in Cambodia, Liberia, Burma, Sierra Leone, Angola and South Sudan whereby in as

much as the conflict has been intense extractable international trade continues to thrive.

The conflict in DRC has linkages to both politics and trade, First Quantum is a Canadian MNC

that has linkages to the former PM of Canada whom on many occasions has acted as a political

advisor to the DRC government but most of all to the MNC. The stated web can, therefore,

allow the study to conclude that the Canadian politician has been acting as an intermediary

between the MNC and the DRC government.

To conclude with, extractable trade has greatly contributed to the concept of booty futures

through political economy. That explains why UN has on many occasions resorted to issuing

trade sanctions, trade bans and asset freeze to both MNCs and Political elites with the sole

intent of curtailing war economies. If there was no linkage between trade and politics, then

the global institution would not resort to such subjective and punitive restrictions.

1.7 Hypotheses

1. Conflict Finance by Multinational Corporations and state actors sustain conflict in DRC.

2. The DRC conflict is precipitated by poor governance that is still controlled by western

influence.

3. International Interventions to control Conflict Finance can reduce the proliferation of Rebel

groups in DRC.

27
1.8 Research Methodology

1.8.1 Study Design

The research design used in this study was qualitative and quantitative research. According to

Mugenda and Mugenda,Qualitative research is an umbrella term for varous types of

interpretive modes of inquiry commonly used in social sciences. The Studyhas chosen to use

Qualitative means of exploring and understanding individual views in regards to the concept

of booty futures. The qualitative procedure involves assessingpeople's views and attitudes in a

subjective manner to emerging issues. The primary characteristic of qualitative research is that

it is most suitable for small samples, while its results are not quantifiable . Its essential leverage,

which additionally constitutes its fundamental distinction with quantitative research, is that it

offers an entire portrayal and examination of an exploration subject, without constraining the

extent of the examination and the idea of participants responses.

The study is basically going to use direct interviews and also hold focus group discussions.

Direct Interviews entailed the interviewer engaging the respondents directly. After collecting

the data the study going analyzed and interpreted the data. Focus group discussions were held

through a non-probability approach since the concept of booty futures is not largely

understood.

It was essential to pilot test the interview guide. This was done to ensure the flow of questions

and the structure of the questions. This was administered to interviewees who didnt participate

in the actual study. The number of interviews to be tested as 5 percent (2) to ensure a good

base of responses on the questions and act as a confidence tool.

28
1.8.2 Study Site

The study was conducted in DRC where telephone intervieews were used. This was mainly

because DRC is geographically huge and the areas that experience conflict finance have been

proven difficult to access as the country is still underdeveloped. The study will focus on the

main areas of the Eastern part of Congo which is said to host most of the minerals, this areas

are Kivu, Kasai, Katanga, and Kinshasa.

1.8.3 Target Population

Population refers to the entire collection of aset of objects, people, and events or a collection

of all items that we want to make generalizations or conclusions about. The target population

chosen for this study are 385 respondents. 350 Congolese nationals and 35 academic, security

and professional experts who have contributed to bringing peace to DRC.

1.8.4 Sampling Frame and Sample Size

Sampling is a precise method for choosing an representative fragment of the population being

examined, keeping in mind the end goal to explore. The point of inspecting is to have the

capacity to get data from the chosen population, explore and sum up the finding.63 The study

focused on the nonprobability type of sampling where a little attempt was made to generate a

representative sample. By adopting nonprobability means, the researcher used his judgment

and observation to select individuals and organizations that understand the mechanism well.

The respondents, therefore, must have a background knowledge of the mineral resource

63
Validity refers to the issue of whether an indicator or a number of indicators that is devised to gauge a
concept really measures a concept.

29
conflict in DRC and an understanding of the concept of booty future. The study chose to engage

a sample of 20 respondents due to time and logistical constraints.

1.8.5 Data Collection Methods

The Study made use both primary and secondary means of data collection. Primary data was

generated from an original source meaning the data collected will be raw data, from focus

groups discussions and direct interviews. Open-ended interview guide was used to guide the

study during interviews. Secondary data, on the other hand, was collected from existing

sources such as publications, articles, books, and journals.64

1.8.6 Validity and Reliability

The validity and reliability of the data collected can be trusted because the researcher used the

nonprobability method of identifying respondents both at the individual level and

organizational level. Through the use of nonprobability sampling, the researcher targeted

Congolese national living in Kenya mainly working at the DRC Embassy, security experts who

have worked in DRC either in the military or with the United Nations and Organizations that

have conducted remarkable research in the DRC conflict.65

1.8.7 Data Presentation and Analysis

Given the qualitative nature of ethnographic data generated, the study applied an interpretive

method of analysis. This implies a descriptive discussion of the interview data by foremost

trying to understand and contextualize the narrative from the perspective of respondents.

64
Ibid.
65
Ibid.

30
Consequently, existing relevant theories are applied in the discussion and presentation of data,

but ultimately the conclusions reached in the study are based on the researchers informed

reflections and judgment of the study.

1.8.8 Ethical Considerations

The study seeked consent from the respondents and upheld confidentiality and anonymity of

the respondents. Informed Consent: The respondents were provided with a summary of the key

aspects of the interview prior to commencing the interview. The use of fictional names are

used to ensure the opinions of the respondents are not traceable to them. Anonymity:

Respondents are informed before the interview that they would remain anonymous and any

information they give will be confidential and used only for the purpose of this research. 66

In addition the study did not entice or deceive respondents with an aim of luring them to take

part in the study no gifts nor certification will be offered to the participants. Data was not

manipulated to achieve the desired context of the study. Every data collected was treated with

utmost care and respect without any biases.67

1.8.9 Scope and Limitations

The study is going to focus on the commercialization of the conflict in DRC. The areas mostly

affected by this phenomenon are the mineral-rich provinces of DRC. The study further focused

on the inlovememt of both state and non state actors in financing the conflict. The time

provided to conduct the research is limited given that DRC as a country is geographically larger

66
Ruhi, B. and Mike, N. Ethical Issues in Research. London: Mark Allen Publishing. The Integrity of
Researchers is paramount.
67
Ibid. p 5.

31
than the European Union. Due to this factors the study will be conducted from Kenya relying

on both primary and secondary data.

32
1.9 Chapter Outline

Chapter one entails the research proposal giving an Introduction, Background, Research

Problem, Objectives, Research Question, Justification of the Study, Literature Review, Gaps

within Literature Review, Theoretical Framework, Research Methodology and Scope and

Limitation.

Chapter two discussed the history of the war in DRC and the emergence of conflict finance.

Chapter three identified actors who contribute towards conflict finance and how their

involvement prolongs the war.

Chapter four assessed current and future international policies that can be utilized to leverage

DRC from conflict and mineral exploration.

Chapter Five summarizes the study, provides conclusions, and recommendations of the

research.

33
 CHAPTER 2

AN OVERVIEW OF CONFLICT FINANCING AND CIVIL WARS IN AFRICA

2.1 Introduction

Chapter one, which frames the premise of this research, presented the investigation. It

displayed the announcement of the issue, goals, writing audit and a hypothetical system from

which theories of the investigation are inferred. It likewise takes a gander at the exploration

approach. Chapter two gives a general overview of conflict financing and civil wars in Africa.

Conflict financing is a repeating subject in chronicled chip away at furnished clash (Finley

1985, Lachaux 2000, Howard 1976, Kindleberger 1993). Living of the place that is known for

the vanquished or the zone of travel was a fundamental segment to support and supply armed

forces up until the start of the twentieth century (Finley 1985, 176; Howard 1976, 85, 98).

Wellsprings of financing war included goods, reimbursements, taxes, loans, credits, the

decrease of utilization or the devaluation of outside resources (Finley 1985, 55; Tilly 1992, 85;

Kindleberger 1993, 284). In the sixteenth and seventeenth century, another type of Conflict

financing was the debasement of coins (Kindleberger 1993, 28-30).

2.2 General Background of Conflict and Civil Wars in Africa

Ethnic turmoil and strain are pervasive in today 's world. Daily papers and TV are overflowing

with stories about ethnic viciousness among the general population of Africa, the Middle East,

India, China, Srilanka, Ireland, and so on. Numerous different social orders in little threat of

common wars, for example, the United States, Britain, Canada, the majority of the Western

Europe, and Japan are by the by torn by ethnic strife. From various perspectives they are all

the more genuinely partitioned along ethnic lines, set apart by racial, lingual, religious, and

34
national contrasts, than they were an age back. It has been noticed that vicious clashes far and

wide are progressively in view of ethnic divisions. Just a small extent of wars now happen

between states; by far most are considerate wars with ethnic dimensions.

Africa is the most conflict-ridden region of the World and the main locale in which the quantity

of armed conflicts is on the expansion". Once more, in its 2002 Yearbook, SIPRI expressed

that "Africa kept on being the locale with the best number of contentions". These local conflicts

represent a genuine risk to monetary advancement, particularly for these poor African nations.

Exact works have demonstrated that conflicts can tear down levels of monetary improvement

that took a long time to accomplish. Additionally, for quite a while after their end the turn offs

of conflicts keep on limiting monetary development.

Comprising the biggest share of ex-colonial states of the world, Africa is caught up in a range

of intra - to inter-state conflicts. Since independence, around 33% of the nations of Africa have

encountered extensive scale political brutality or war. Be that as it may, not every single

African nation are influenced to a similar degree. In some African nations, an entire age has

never experienced peace since independence and has disguised war as a true-blue piece of life.

For example, inside just four decades time (i.e., between the 1960s and the 1990s), around 80

brutal changes in government in the 48 sub Saharan African nations occurred. For some odd

reason, Africa has seen more than seventy coups in the last quarter of the twentieth Century.

Generally, in a similar period, Africa has endured the best number of armed conflicts on the

planet. registered for 19902001 were internal.

35
2.3 Causes of Conflict and Civil Wars in Africa

A 1998 UN report on account of the Causes of Conflict and the Promotion of Durable Peace

and Sustainable Development in Africa, is helpful for this postulation. The report exuded from

the worry of the international community about the intensity of armed conflict in Africa. In

spite of the fact that the report does not concentrate solely on civil conflict, it gives an

examination of wellsprings of contention in Africa and evaluates the two measurements of

conflict on the continent; internal and external factors. The report allots the fault to both

exogenous and the inside elements that cause conflict in Africa. The report depicts three routes

in which conflict is conflict and managed.

First, there are the root causes such as extreme poverty, gross inequalities and weak state

capacities. The root causes have the potential to lead to conflict when they generate deep To

start with, there are the underlying drivers, for example, "outrageous destitution, net

imbalances and powerless state limits." The main drivers can possibly prompt conflict when

they create profound political, social, monetary and social contrasts. Second, there are

empowering factors which incorporate "exclusionary government strategies, outer help for

abusive administrations, and little arms multiplication". The empowering factors in this way

don't cause conflict in essence, yet "compound the underlying drivers or add to a situation that

encourages equipped conflict. Third, there are mobilizing elements, for example, ethnicity,

religion and financial conditions which are used by people or g to instigate brutal activities."

Thus, the causes, enabling and mobilizing factors are on the whole important to cross examine

while breaking down conflict in Africa.

36
Studies, most strikingly by the Post Conflict Unit at the World Bank, depict wars as driven

basically by financial motivation, especially those conflicts in Africa. Among the Bank's

analytical tools is a data set of conflicts over the period 1960 to 1999 that tries to look at the

danger of civil war. Two lines of thought support this investigation of the connection amongst

war and financial matters: that effortlessly exploitable common assets are utilized to fund civil

wars; and that the propagation of war in certain African nations fills in as an option method for

acquiring wealth. Kieh and Mukenge support the contention that the monetary emergency that

has assail Africa is the aftereffect of the interests of people and outside based multinational

partnerships and business intrigues looking to acquire wealth. They additionally connect these

monetary interests to an entrepreneur framework that is exploitative in nature, without the part

of equivalent dispersion of wealth.

2.4 Relationship Between Conflict Financing and Civil Wars in Africa

There is a solid connection between conflict financing and civil wars in Africa. In connection

to civil wars, the recognizable proof of potential revenue sources is imperative since they can

give the material bases to the association of conflict and consequently encourage civil wars.

Considering economic opportunities in post-conflict zones as potential strategies for conflict

financing or as a financial prize which spurs a few actors to restore armed conflict may

subsequently add to preventing the recurrence of armed conflict and guaranteeing the long haul

practicality of peace building. Among the key strategies for conflict financing are centralized

war economies, struggle products, outer help and resource exchanges from regular people.

Different techniques incorporate the printing and forging of cash, protection rackets, landing

fees, kidnapping and revenue from portfolio investments and true blue business wanders. The

literature will survey different strategy for strife financing in Africa.

37
2.4.1 Conflict Goods and Civil Wars in Africa

With declining help from foreign supporters, rebel groups and governments in Africa have

depended progressively on the commercialization of the assets under their control. Conflict

merchandise are tradable items that start in regions controlled by a sorted out equipped

gathering and that are sold or traded on worldwide markets with the aim to fund the start,

support or propagation of armed conflict (Cooper 2001; Cooper 2002). The civil argument on

'conflict diamonds' conveyed expanding regard for the issue of contention merchandise. The

connection between the abhorrence of war and precious stones as an image of adoration and

time everlasting was taken up in crusades from non-administrative association, for example,

Global Witness (1998, 2000), Amnesty International, or Partnership Africa Canada (Smillie et

al 2000), and was broadly bantered in the print media.various investigative reports by the

United Nations Security Council recorded in awesome detail the connection among diamonds

and the financing of war in Angola, Sierra Leone and the DRC (UNSC, 2000, 2000, 2001).

Nonetheless, diamonds are by a long shot not by any means the only conflict good. The

incomes from oil are a noteworthy source in the conflicts in Sudan, Angola, Algeria, Nigeria

and Morocco (Western Sahara) (Amnesty International 2000, Christian Aid 2001, Cilliers and

Dietrich 2000, Global Witness 1999, Le Billon 2001, ICG 2001, Essential Action and Global

Exchange 2000, Nugent 2001, Afrol News 2002). Timber is an imperative wellspring of

income in Liberia, Cambodia, and for some armed groups in the DRC (Global Witness 2000,

2001a, UNSC 2001). Drugs are key to the wars in Africa (UNDCP 2001a, Economist 2001a,

2001b). Copper, cobalt, gold, coltan, espresso, niobium, and cassiterite are asset which helped

finance various actors in the war in the DRC (UNSC 2001d).

38
Conflict products have moved toward becoming instruments for financing conflict in different

ways. The first is the immediate inclusion of organized armed group in the commercialization

of an assets. This has been the situation in Angola with diamonds and oil. UNITA is said to

have made between USD 3-4 billion in the vicinity of 1992 and 2000. On the opposite side,

the administration was vigorously engaged in the exploitation of petrol in collaboration with

Western petrol companies (Le Billon 2001, 62, 69; Cilliers and Dietrich 2000). In the DRC

different farmed groups have been associated with the exploitation of copper, cobalt,

diamonds, gold, coltan, coffee, timber, niobium and cassiterite (UNSC 2001).

Futures contract is another device to finance conflict through common assets. These purported

booty futures allude to "the deal or exchange of future rights to normal assets that are not

yet under the vender's control assets that the dealer would like to catch in battle" (Ross 2005).

This methodology of raising support has been utilized as a part of the Congo Republic, Sierra

Leone, Angola, the Democratic Republic of Congo, Liberia and Equatorial Guinea. Generally

speaking, booty futures support weaker dissident gatherings to cover their start-up financing

or government powers which are on the verge of defeat. Along these lines, futures contract can

importantly affect the start and propagation of conflict since they immediate revenues in the

midst of edginess (Ross 2005).

2.4.2 External Assistance and Civil Wars In Africa

The majority of the previously mentioned strategies for conflict financing in Africa are

established in the control over an area and are consequently household wellsprings of

financing. Notwithstanding, the vast majority of these local sources can't be marketed without

the association of foreign actors. This partnership depends on business interests, profiteering

39
or political points and is related with governments, Diasporas, helpful associations and outside

organizations. While as a rule Diasporas are a source for good, individuals members from

Diaspora can be an effective power that supports and energizes conflicts at times. Diasporas

regularly sustain a romanticized connection to their nation of inception. The material and

budgetary help of diasporas has a tendency to be all the more ideologically and politically

extraordinary in light of the fact that they don't straightforwardly encounter the impacts of

political shakiness and armed conflict(Collier et al 2003). Cases of such Diasporas incorporate

the Lebanese Diaspora in West Africa which bolstered the Amal Militia in the Lebanese

common war and the Tamil Diaspora in Western Europe and Canada (Angoustures and Pascal

1996, 498-506; Gunaratna 2003).

In any case, the part of diaspora remittances in financing conflict must be qualified. the

disposition of diasporas towards their country contrasts from group to group contingent upon

the conditions under which migration occurred, the relative size of the diaspora, the geographic

focus, its financial status and the citizenship arrangements of the host state. Besides, diaspora

settlements can ambivalently affect opportunity structures relying upon who controls them

(Ballentine 2003).

Humanitarian organizations can likewise add to conflict financing if the conveyance of help is

saddled by those controlling a region or if the merchandise gave are just stolen and after that

re-sold by sorted out outfitted gatherings. In conflict circumstances, philanthropic guide is a

profitable resource. Warlords and those responsible for struggle may utilize helpful guide to

supply their supporters to the detriment of the foe. They may likewise basically take

nourishment help, covers, tents, correspondence gear and autos and utilize it for their military

destinations (Anderson 1999, 39). In view of the control of an area and populaces, sorted out

40
equipped gatherings can produce income by asking for an entrance expense from helpful

associations. Besides, sorted out furnished gatherings may profits by the nearness of

compassionate associations by utilizing philanthropic asylums to build their security, increase

worldwide acknowledgment and encourage access to assets (Rufin 1996, 29). In general,aid

has added to drawing out equipped conflict by enhancing warlords, polarizing existing foes,

contorting nearby economies, and having distributional effects. This prompted a call to

reevaluate the arrangement of help to conflict areas with the minimum conceivable level of

mischief (Anderson 1999).

Organizations infuse outer financing by working together in zones of contentions. This may

incorporate bribing governments or Warlords to abuse assets or access markets. This may

likewise infer paying for security by getting a private military organization or rebel group to

secure a region of misuse. Organizations work in a focused market and the loss of a critical

region of present or future abuse may block their capacity to go into the market after a

contention closes while rivals with less compunctions can enhance their market position. At

the point when De Beers withdrew from Angola in 1999 in dread of a consumer backlash after

the conflict diamond debate, its rival Lev Leviev entered the market. This move gave Lev

Leviev imminent control over Angola's diamond reverses which had been evaluated to be 10%

of diamond reserves and valued at USD 800 million Parker et al 2000; Roche 2001).

2.5 Conflict Financing and Civil Wars in Africa

The dynamic idea of conflict financing has been stressed in the changes of contention

economies after the Cold War from support to self-financing procedures. In any case, the

broadly acknowledged claim that common assets supplanted declining support from Cold War

41
benefactors ought to be qualified in various ways. Support installments amid the Cold War had

a tendency to be an element of Western power governmental issues as opposed to a general

wonder. Western forces were more associated with supporting guerrilla developments in

contrast with the Soviet Union and China (Naylor 2002, 80-81). Additionally, notwithstanding

amid the Cold War, guerrilla bunches could depend to some degree on normal asset extraction

and the tax collection and in addition the operation of financial movement. Illustrations

incorporate guerrilla bunches in Lebanon, the Philippines, Burma, Cambodia and Angola

(Ibid., 58, 65-70; Picard 1996, 76-84; Dietrich 2000c, 276; Le Billon 2001, 6). Besides, it is

misdirecting to expect that outsider help ceased after the Cold War as the common war Bosnia

and Herzegovina shows (Bojicic and Kaldor 1997, 141, 159; Kaldor 1999, 33, 46-48).

On the multilateral level, the issue of natural resources picked up prominence through the

definite reports of the United Nations Security Council Sanctions Monitoring Mechanism on

Angola, the Democratic Republic of the Congo (DRC) and Sierra Leone (UNSC 2003, 2002a,

2002b, 2001a, 2001c, 2001d, 2001e, 2000a, 2000b, 2000c). Especially the part of purported

"conflict diamonds" in the financing of African Conflicts turned into a focal component in

multilateral peace-making techniques. These endeavors finished in a multi-partner activity, the

Kimberley Process. Nongovernmental associations (NGOs) played a main part to make weight

on business and governments by uncovering the connection amongst diamonds and armed

conflict in Angola and Sierra Leone. The NGO battle changed the diamonds industry's

response from denial to engagements and added to a substantially harder treatment of conflict

jewels in the United Nations Security Council. Be that as it may, once the connection was

uncovered, the multi partner coalition which arranged the Kimberley Process Certification

Scheme was predominantly persuaded by business concerns (Smillie 2005).

42
As far as peacemaking, basic voices contended that the Kimberley Process was a piece of

factional way to deal with change the contention progression is the nations worried by

debilitating the weaker and fortify the more grounded combative: the almost exclusive focus

of some policy makers on curtailing the smuggling of diamonds in Sierra Leone and Angola

has allowed attention to be diverted from the fact that demanding such sanctions is an implicit

call for the military defeat of the rebels by the government. As calls for military victory appear

to be politically incorrect in the current age, the vocabulary of victory and defeat has been

transferred to the more neutral and technocratic language of sanctions and restraints on the

trade of natural resources (Herbst 2000).

2.5.1 Conflict Financing and Civil War in Angola

Angola is a nation favored with abundant natural resources. Specifically, the abundance of

high quality oil and diamonds drew the world's most intense foreign companies to its shores,

amid the war and after. Angola is the second biggest producer of oil in sub-Saharan Africa,

after Nigeria and the producer turned into a member of the Organization of Petroleum

Exporting Countries (OPEC) in 2007. The mineral abundance of Angola implied that the

nation was imperative to governments and business organizations alike. Victor Luvhengo

states that, expansive oil multinational companies (MNCs, for example, EXXO Mobil, Royal

Dutch, Sell, Chevron and the British Petroleum, among others worked in Angola from 1955

when oil was found.

Angola has encountered armed conflict since the resistance against colonial Portugal in 1961.

Armed conflict proceeded past freedom in 1975 between the primary fiberation movements

and transformed into a Cold War intermediary struggle of the superpowers, opposing the

43
Movimento Popular de Libertaao de Angola (MPLA) and Unio Nacional Para an

Independncia Total de Angola (UNITA). With the end of the Cold War, there was trust that

Angola would profit by a peace dividend following three many years of armed conflict. Be that

as it may, this expectation was slippery as the threat between the two belligerents and their

mission to control the state, what took after was one more decade of armed conflict. Conflict

recurrence in Angola grievously features the results of restored furnished clash and the failure

of peace processes. The recharging of contention in 1992 cost no less than 300,000 killings

about again the quantity of individuals who lost their lives since 1975 (Hodges 2001, 15). In

this way, rather than benefiting of its economic potentials including oil and precious stones,

prolific horticultural terrains, and rich fish stocks, the general population of Angola were once

more drawn into armed conflict and saw Angola's wealth disperse.

The control over oil resources has been a vital resource for MPLA to fund its operation and

govern Angola. The way that about the majority of Angola's oil stores are seaward has made

oil assets practically identical to a monetary asylum (Le Billon 2005). Oil production and

export could could be detached from assaults amid the civil war; with the exception of in late

1992, when UNITA assault on an on-shore oil establishment (Clarke 2000). This key area may

have given the MPLA the preferred standpoint over UNITA as diamonds were scattered over

a substantial area in focal and North-eastern Angola. While UNITA was at first ready to exploit

diamonds effectively with diamonds diggers and the supposed garimpeiros could even

somewhat move to semi-industrial exploitation in the mid-1990s, not having the capacity to

control the precious diamond against MPLA propels traded off the capacity of UNITA to fund

itself and was the end of UNITA as an organised armed group.

44
Moreover, Luvhengo's research demonstrates that the South African based Debeers diamond

mining organization likewise worked in Angola and in help of the UNITA. A Report of EFF

demonstrates that UNITA was bolstered particularly by the United States, United Kingdom

and France while the administration was upheld by Cuba and the USSR/Russia. Belgium,

South Africa and Germany are additionally refered to among nations that interceded in the war

in help of UNITA. As indicated by the report, access to diamond regions and the deals thereof,

assisted the revolutionary development with attracting foreign governments and business

organizations also. Truth be told what had showed up as conflict of free enterprise and

socialism finished as a conflict for minerals in Angola.

A focal dynamic of conflict in Angola has been credited to the two gatherings having had an

autonomous wellspring of financing through oil and diamonds. Accordingly, activities to end

the contention have been caught in a security situation: "Since the Angolan belligerents have

minimal normal reason or ground whereupon to construct a steady peace, doubt the worldwide

group, and have implies through oil and precious stones to arraign war, the two sides have a

solid motivating force to look for determination through a military thrashing of the other.

Components inside the administration and UNITA may trust that closure the war would be in

their own best advantage, however without a sound outside or joint organization to ensure

recognition once battling stops, the motivating force to hold a remaining war-battling limit is

solid" (Cilliers 2000).

Conflict financing and civil war left most of the Angolan individuals under contemptible

destitution in a place that was known for bounty. When war finished in Angola, no less than

68 percent of the general population lived under the poverty line. The assimilados who were

for the most part connected with MPLA had access to better training, education and wealth of

45
Angola, while the indegenas related with UNITA and who additionally dwarfed the

assimilados were packed in country ranges with little access to education, health facilities and

the wealth of Angola. This added to the compounding of civil war in Angola, as the indegenas

individuals who were for the most part poor proceeded with the battle against the assimilados

commanded government. In this way, amid the war, the lion's share of individuals needed

essential needs and were jobless which no doubt incensed them for the administration couldn't

satisfy their necessities. Truth be told, while Angola gives off an impression of being

advancing in the range administration and keeping in mind that the economy has altogether

developed since the war, the nation is as yet attempting to show commitment to its people.

Angola is still among the the least developed nations in the world and poverty gap is still wide.

2.5.2 Conflict Financing and Civil War in Liberia

The principal settlers of Monrovia, known as Americo-Liberians, who were liberated slaves

from the United States landed in Monrovia in the vicinity of 1829 and 1835. At the point when

the pioneers touched base in Liberia there were at that point indigenous populations, for

example, the Mel speakers (Gola and Kis); Kwa speakers (Basa, Belle, Dei, Grebo, Krahn and

Kru); and Mende speakers (Bandi, Dahn, Kpelle,Loma, Mandingo, Mano and Mande).2 Upon

landing of the Americo-Liberians, the American Colonization Society (ACS) assumed control

over the representing of the domain and utilized the American Constitution to run region. The

Americo-Liberians effectively arranged out of the American domain. Along these lines, in

1847, Liberia was set up as a Republic under the leader of the True Whig Party (TWP) drove

by President J.J. Roberts, an Americo-Liberian. Another Constitution which depended on the

American law was embraced. TWP as a political gathering of the Americo-Liberians would

command Liberian governmental issues until 1980. The time in which the TWP overwhelmed,

46
1847 to 1980, was a period amid which the indigenous individuals of Liberia were persecuted

and separated. Americo-Liberians ran Liberia like a settlement.

Having organized themselves, indigenous people of Liberia began their offensive against the

Americo-Liberian and turned against each other. The 14 year civil war left between 150 000 -

200 000 people, mostly civilians, dead and at least 1 million refugees in neighboring

countries.6 A breakaway movement from NPLF, the Independent Patriotic Front for Liberia

(INPLF), led by Prince Johnson emerged in 1990 and eventually assassinated Samuel Doe in

September 1990. An Interim Government of National Unity (IGNU) led by Dr. Amos Sawyer

was established through negotiations by the Economic Community of West African States

(ECOWAS). A Cease-fire Monitoring Group (ECOMOG) was also established to keep peace

after the death of Doe.

Despite efforts made by ECOWAS and the international community, including an arms

embargo imposed by the Security Council in 1992 and the appointment of a Special

Representative of the Secretary General, violence in Liberia escalated.8 Charles Taylor

eventually won 75 percent of the votes in the 1997 general elections in which 13 parties

participated. Taylors regime, however, became the most brutal in Liberias history. Unable to

tolerate Taylors regime, the people of Liberia led by Liberia United for Reconciliation and

Democracy (LURD), later the Movement for Democracy in Liberia (MODEL), escorted to

armed resistance.

According to Report on the Poverty Eradication Strategy for Liberia, the political power,

infrastructure and basic services were concentrated in Monrovia, and there was marginalization

of youth and women. Mismanagement of national resources was widespread and this situation

contributed to stark inequalities in the distribution of the countrys wealth. The over-

47
concentration of power in the hands of a few bred corruption and decision making was

restricted to the few. Civil society participation was extremely limited which no doubt

undermined good governance. Successive governments however failed to correct the ills of

society and magnified the problems.

Throughout the history of Liberia and up to the end of the civil war, evidence adequately shows

the unbalanced distribution of the countrys diamond wealth. The very poor governance and

undemocratic state of Liberia, greed, and unemployment meant basic needs of the majority

remained unmet by the political leadership. Americano Africanos were wealthy and

dominating decision-making while the majority of the people of Liberia remained under abject

poverty leading to their struggle against the regime of Americano-Afrocanos. As indicated

before, the Doe and Taylor regimes maintained the status quo and continued to deprive the

people of Liberia. The war in Liberia was also a struggle by those who were under abject

poverty. Those desperate for change and those who felt deprived, would find no reason to

preserve the regimes that oppressed them.

The Liberian war demonstrates clear linkages between natural resources and foreign economic

interests. The interests of several countries and nationalities from within and without Africa

are conspicuous in every front. In particular, the United States, Sweden and Lebanese traders

were largely motivated by economic and business interests in rubber and oil ore. According to

Ali and Matthews, at the height of the war, when Taylor controlled the bulk of the country

there was a thriving export trade in diamond, timber, gold and agricultural products, made

possible through a network of foreign firms. They add that, Canadian, British, Japanese and

French companies continued business with Liberia at the height of the civil war. It is important

48
to mention also that Monrovia served as the centre where diamond smugglers met or waited

for the blood diamond emanating from Sierra Leones Revolutionary United Front (RUF).

The international trade centre in Antwerp, Belgium readily accepted RUF diamonds which

were being shipped from Monrovia. These were blood diamonds emanating from Liberias

war-torn neighbor, Sierra Leone. As a result of availability of markets for blood diamonds,

which provided much finance for Taylor to maintain a luxurious and opulent life, it became

crucial for him to cling to power and to control the diamond industry both in Liberia and in

Sierra Leone. It was against this backdrop that Taylor had to maintain ties with and support

the RUFs brutality in Sierra Leone. Sierra Leones RUF no doubt fed Taylors appetite for

diamonds for more than a decade.

Following international pressure to end impunity in Liberia, Charles Taylor eventually gave in

and resigned from his presidential seat in August 2003. At the time of his resignation, Taylor

had also been indicted by the Special Court for Sierra Leone which had been set up by the

Government of Sierra Leone in conjunction with the United Nations. The Special Court was

mandated to bring to trial, the perpetrators of atrocities committed against the people of Sierra

Leone between 1996 and 1999. Taylors resignation gave way to a successful cease fire

agreement.

Thus a Peace Agreement between the Government of Liberia (GOL), The Liberians United for

Reconciliation and Democracy (LURD), The Movement for Democracy in Liberia (MODEL)

and the Political Parties was concluded in August 2003. The agreement was negotiated in

Ghana, as an initiative of the Economic Community for West African States (ECOWAS). The

agreement aimed to amicably settle the crisis which had plundered Liberia for many years.

Specifically, the parties agreed to create a stable political environment and to promote

49
democracy, good governance and the rule of law for sustainable development of the people of

Liberia and most importantly to establish an interim government which will lead in the creation

of conducive environment for elections.

Subsequent to the ceasefire agreement, in September 2003, the United Nations Security

Council established a United Nations Peace Keeping Mission in Liberia (UNMIL) in order to

monitor the implementation of the ceasefire agreement. The agreement and the establishment

of UNMIL paved the way for democratic elections that left current President Ellen Johnson-

Sirleaf at the helm of power in 2005. In 2012, Taylor was slapped with a 50-year jail sentence

specifically for aiding the RUF rebels and the Armed Forces Revolutionary Council in Sierra

Leone.

2.5.3 Conflict Financing and Civil War in Sierra Leone Civil War

Sierra Leone was first established as a settlement for freed slaves in 1787 and became Africas

first model state. In 1896 the country was declared a British protectorate. With a population of

slightly below six million inhabitants dominated by the Temne in the north and the Mende in

the South, Sierra Leone has huge deposits of valuable diamonds and other natural resources

such as gold and timber. The country became independent in April 1961 under its first

President Milton Margia of the Sierra Leone People's Party (SLLP). Various authors on the

subject of the Sierra Leone civil war provide a picture of a successful Sierra Leone in the 1960s.

According to Shola Omotola Sierra Leone had an independent and progressive civil service,

judiciary and the military. Prior to and after independence, roads, clinics and hospitals and new

schools were built. The first ever university in the sub-Saharan region was Forrah Bay located

in Freetown, the capital of Sierra Leone. Ndumbe supports this by stating that until 1970, Sierra

50
Leone had one of the best public-sector structures with professionally trained public sector

employees.

The excessive inequalities in Sierra Leone were a recipe for civil unrest and grievances. The

peasantry class who were most affected by the state of affairs in Sierra Leone found it fit to

join the RUF. And, indeed, the brutality displayed by RUF militants was hugely supported by

the frustrated masses who were poverty stricken and resented successive corrupt regimes. Greg

Campbell, for example, argues that RUF began as a movement of peasants who were obviously

distressed about the inequalities that existed in Sierra Leone at the time. The assertion by

Campbell correlates with the findings of David Keen who argues that social exclusion of

citizens has the potential to negatively impact the values and emotions of populations.

Indeed, Ibrahim Abdullah confirms that RUF recruited from the vulnerable lumpens and

juveniles to whom their bush paths to destruction appeared more appealing. Furthermore,

when Stephens decided to bring the mining industry under one organization and required the

cleanup of smuggling in the mining fields, the miners who in most cases were the youth lost

their wages and began to feel deprived of basic needs poverty. The economy also plummeted

resulting in lower salaries which led the educated, including teachers across the country to

leave the work place and become idle. Quoting Fouke Mpoyo, Conteh-Morgan highlights that

many Sierra Leoneans believe that unemployment caused many hardships that later produced

rebellion and exacerbated it as well, as there was no creation of jobs or economic improvements

during the course of the war; further, there was no food and there was massive unemployment

such that even the educated had no jobs.

Diamonds were discovered in Sierra Leone in 1930 in the Eastern Kono district and by 1970s,

half of the output was exported illegally. The alluvial diamonds of Sierra Leone are on the

51
surface and not entrenched in kimberlite. As such, they are easily accessible without requiring

sophisticated and expensive technology to mine them. It is evident that Stephens had a desire

to control the diamond mining for personal gains and this brought Sierra Leone to its knees.

His creation of a National Diamond Company under his office as Prime Minister and his

entrusting of the company to his trusted friend, Lebanese businessman Jamil Mohammed

complicated matters for the country as the duo pushed for their personal business interests.

Stevens successor Joseph Momoh worsened the situation further as he gave Mohammed even

more powers over the mining sector, a move which indeed undermined the Sierra Leone

people.

It was during this period of excessive corruption and mismanagement in the diamond mining

in Sierra Leone that the people of Sierra Leone ended up in what came to be viewed in many

quarters as the diamond war. The accounts of Davies show that Sierra Leone produced 2

million carats between 1960 and 1970 and that during that time at least half of the diamond

output was exported illegally. Ndumbes work correlates with the findings of Davies,

indicating that by the 1970s, legal trade in diamonds dropped from 2 million carats to 595 000

in 1980 and further dropped to 48 000 carats in 1988.

Davies further postulates that the exploitation policies by the successive regimes encouraged

crime the illicit mining and smuggling which resulted in the emergence of desperate miners

known as the san-san boys. Ndumbe expresses similar sentiments to Davies statement that

poor policies led to mismanagement of diamond exploration activities. This no doubt

precipitated the acrimony in the country as a race for access to diamonds by officials, rebel

groups and business people with malice became evident through the 1970s to the early 2000s

when the war ended.

52
There are allegations that the RUF field commander General Mosquito joined the rebellion

expecting to access diamonds.16 To buttress the extent of diamond influence in the countrys

civil war Richards alleges that following the ECOMOG intervention in the civil war in 1998

the three main factions, CDF, AFRC and RUF fought using between 60000 and 80 000

combatants, which according to Richards represented a comparatively large number in view

of the small population of about 4.5 million at the time. While Richards is not explicitly

convinced by assertions of some writers about the tremendous influence of the diamonds in

the civil war in Sierra Leone, his findings are useful as they provide much information on the

role of diamonds in the Sierra Leone civil war. For example he asserts that diamond mining

helped to fund a rapid expansion of the CDF rebel movement which accordingly grew from a

few hundred combatants in 1996 to about 25 000 in 1998.

Both writers provide an indication that RUF illegally exported diamonds worth between $20

60 million per annum, although Richards suggests that the amount is insignificant. It is

necessary to point out that that the assessment of whether or not this amount is significant is

relative and depends on where one stands. For an African movement where there is lack and

famine and deprivation, this no doubt is a significant amount. And, for a rebel who did not

have a salary or was underpaid, being paid for smuggling diamonds would become a necessity.

Davies further confirms that diamonds produced a war prolonging congruence of interests

among the belligerents such that they at times mined peaceably side by side and attacked

civilians with the intent of keeping them away from the lucrative industry.

During the civil war diamonds sold in the black market emanating from RUF made up

approximately ten percent of legitimate diamonds. Though illegitimate, they entered the

market disguised as Liberian and Guinean. To state the obvious, illicit diamonds are cheaper

53
and for both local and foreign businesses this cheaper and lucrative market becomes necessary

for large profits. The corrupt officials, rebels and ordinary business people were all interested

in having a share of the cheaper product which frustrated any hope for peace. Richards informs

of a memo by the first General of the UN Peace Keeping operation in Sierra Leone who wrote

complaining about the conduct of some ECOMOG generals who also had a hand in the illicit

diamond trading and were as such bribed by Sankoh to support his interest in standing for

presidential elections.

The fact that the Memo did not reach the UN and ended only as a draft may not necessarily

mean that it was not true. In the practice of diplomacy the general could have been constrained

by the political consequences of his statements. What is important is that such allegations

reveal the possibilities that peace keepers may at times be not as honest as one may wish,

therefore requiring much scrutiny if indeed civil strife is to be truly ended. We have seen other

forms of abuses by some members of peace-keeping forces in some parts of Africa including

in the DRC.

All these factors plus the instabilities in Sierra Leone made the diamond industry more

lucrative and attracted corrupt officials and rebels as well as foreign firms alike to engage in

the illicit trade. The assertions of both Davies and Richards suggest that without the booming

illegal business in diamonds, the rebel movements would probably have been weaker without

support from those interested in the illicit trafficking of diamonds. Thus the ferocious appetite

for the alluvial diamonds knew no boundaries as those involved would prefer the status quo in

order to benefit from the illicit trade.

The TRC report further asserts that there were unilateral interventions by the governments of

Nigeria, Liberia, Guinea, Burkina Faso, Libya, Ivory Coast and the United Kingdom the former

54
colony which had intervened for various reasons. There were also mercenaries and business

foreign firms that became entangled in the Sierra Leone civil war. At the height of the war

diamond customers in the form of foreign firms such as those from Australia, Switzerland, Tel

Aviv, United States, and Ukraine kept the ar going. The availability of foreign customers who

also bought diamonds in foreign currency was an incentive for a continued war.

The involvement of Charles Taylor of Liberia in the civil war in Sierra Leone deserves mention

when one considers the impact of external involvement in the civil war in Sierra Leone. Charles

Taylor had two primary motives in Sierra Leone, which were to retaliate against the Momoh

regime for supporting the 1990 ECOMOG intervention in Liberia and secondly, indeed, the

desire to obtain diamond resources to finance his insurgency and pay off his supporters against

Liberian President, Samuel Doe. It was actually with the help of Charles Taylor of Liberia that

RUF invaded Sierra Leone and launched attacks against the government. It was through Taylor

that RUF was able to sell its blood diamonds using Liberia as transit country. In turn the profits

provided the RUF with the opportunity to purchase arms and ammunitions on the black market

in Liberia and sustain years of war against Government.

During the Sierra Leone civil war, the controls and regulations for the diamond trade were lax.

The Diamond High Council in Antwerp used to record the origins of diamond imports as the

last country to ship the goods meaning that the RUF diamonds shipped from Monrovia were

falsely identified as originating from Liberia and as such were imported into the legitimate

markets of Antwerp in Belgium, Israel and Ukraine among others. It was this loophole which

ensured profits for Charles Taylor's Liberia and RUF and in this regard prolonged the war.

Campbell argues that the loophole was deliberately crafted for business reasons. In 2000, a

55
Canadian based NGO blamed the Belgian industry for deliberately attracting organized crime

and therefore for complicity in fueling the wars in Africa.

This NGO initiative marked the beginning of an international campaign against blood

diamonds. The campaign led to the creation of the Kimberly Process Certification Scheme a

voluntary process in which rough diamonds are certified to distinguish legal ones from those

that are illicit. As a result of the continued demand for Sierra Leones illicit diamonds in

Antwerp and other countries, in 2000 the United Nations Security Council unanimously

adopted resolution 1306, instituting an 18 months embargo on the trading of Sierra

Leone's rough diamonds and instructed Antwerp to identify legitimate diamonds by the place

where they are mined. The resolution also requested the International Diamond Manufacturers

Association, the World Federation of Diamond Bourses and the Diamond High Council to

improve transparency of international diamond trade.

2.6 Summary

This Chapter elaborated the conceptual framework of the relationship between conflict

financing and civil wars. The chapter relates the material environment to organize armed

conflict and the incentives of using armed force to each other. The material environment is

defined by the availability of revenue sources to pay for the organisation of armed conflict and

the cost to start and maintain armed conflict. In elaborating the material environment, the

Chapter developed a comprehensive approach to conflict financing and a tool to estimate the

cost of conflict. The incentive to using armed force is defined by the expected future benefits

and opportunity costs of using armed force. The consideration of the propensity of conflict

renewal of various actors leads to the high or low risk of conflict recurrence.

56
 CHAPTER THREE

ACTORS WHO CONTRIBUTE TOWARDS CONFLICT FINANCE IN DRC

3.1 Introduction

The natural resource conflict in DRC is a peculiar one since the variables contributing to the

conflict have greatly been believed to be emanating from both internal and external variables

ranging from state to non-state actors. This chapter, therefore, wants to identify the various

variables that contribute to conflict finance in DRC. Focus was emphasised on the political

economy theory to bring out the true reflection and picture of DRCs centralized war

economy.68 Despite the perennial natural resource conflict in DRC, primary commodity export

for minerals has increased. In Colliers words natural resources help to finance conflict and

sometimes even motivate it.

3.2 State Actors

Before the study delves deeper into state actors roles and impacts in conflict finance it is

important to be cognizant of the fact that states can be crucial in organizing and supporting

activities that violate their own laws and international law to fulfill both their economic and

political objectives as highlighted in subsequent paragraphs.69 State criminality can, therefore,

violate domestic, international and human rights law, that can be perpetuated through a

Multilateral basis, Bilateral or even unilateral depending on the states political, economic, and

ideological interest.

68
William, T. (2007). Governments and Politics in Africa. P.9 the emergence of states failure can be linked to
resource distribution precipitated either by internal or external insurgencies that are fighting for natural resource
control.
69
Chambliss, W. (2000). State Crimes of Minerals Congo.

57
According to Micheal Ross, through his empirical findings, there is an indication that between

the years 1989 2004 five African governments used the sale of booty futures when they were

on the verge of losing their sovereignty to insurgents. Further findings indicate that the sale

was conducted amongst sovereign states through the signing of concessions in exchange for

weapons and soldiers.

Mobutus ouster in 1996 provides the best case study of the role of governments in the sale of

booty futures. Laurent Kabila then, a warlord planned to ouster the existing regime and he

sought the support of his neighbors Rwanda and Uganda who became very instrumental in

Mobutus ouster.70 Laurents interaction and call for support from Rwanda and Uganda as a

rebel leader were a clear indication that the two neighbors were keen at destabilizing a

sovereign state, not because of poor relations between the states but because of selfish state

interest to exploit mineral resources.71

As mentioned in the previous chapter according to the representative from the Embassy of

Congo the major rebel groups in Congo, FDLR, MaiMai, and M23 are said to be composed of

Rwandese citizenry since nearly all speak Kinyarwanda, a linguistical dialect that does not

originate from DRC. The former M23 leader Bosco Ntanganda also commonly referred to as

Terminator speaks fluent Kinyarwanda his primordial features also indicate that he is a Tutsi

since he is tall and has a Caucasian look, a common feature among the Rwandese. The big

question is why have this Rwandese rebel groups been able to hold DRC a country bigger than

the European Union hostage for many years in conflict? The arguments are that Kabila whose

70
Edward, G & Materson, T. (2002). Governance Quality and Governments Commitment. p.45. The Fragile
Peace.
71
Wennmann, A. (2017). Political Economy of Conflict Financing, they operate in a structural environment
of weak states, willing collaborators and shadow economies

58
origin is questionable has allowed this rebels to remain powerful enough to cause continuous

instability in DRC by financing and motivating conflict to enable him and his cronies to loot

the vast mineral reserve found in the eastern parts.

President Sassou Nguesso of Congo Brazzaville has made frantic efforts to try and bring

together President Museveni, Kagame and Nkurunziza to deliberate on an amicable solution

to resolve the DRC conflict but his efforts received less attention from his peers. The

International Regional on

Great Lakes Region (ICGLR) and the East African Community (EAC) have also tried to

persuade the three leaders to critically evaluate conflict finance in DRC and abide by the

existing legal frameworks such as the Kimberly process.

Rwanda and Uganda have however defended themselves that their entry into DRC should not

be viewed as an incursion but as an intervention for the restoration of peace and security among

the Congolese, commonly known as the Banyamulenge and Hutu refugees in DRC whom have

constantly had a friction and to sum it all for the better good of the East African Region. The

latter is not the case since, upon their involvement in the conflict, financial institutions like

World Bank and International Monetary Fund re-evaluated these two countries stock

exchange markets and realized that they had grown instead of going under due to their

involvement in the DRC conflict.

59
3.2.1 Rwanda Involvement in Conflict Finance

According to the U.N. expert panel report traders in Rwanda have been funding a rebellion in

the resource-rich area of Eastern Congo so as to profit from tin, tungsten and tantalum which

are smuggled across the border from mines in eastern Democratic Republic of Congo.

The confidential report, added that while Congolese government requirements subjected

exporters to ensure minerals are conflict-free and halted nearly all trade from the countrys

east, smuggling into Rwanda and Burundi had increased. Impoverished Congo sits on large

reserves of gold and the minerals used in electronics production and according to a Chatham

House study an estimated 10 million people are directly or indirectly dependent on the mining

industry.72

M23 rebels commanded by warlord Bosco Ntaganda, wanted by the International Criminal

Court for war crimes, have been fighting government soldiers in eastern Congos North Kivu.

The credibility of the mineral tagging system in place in Rwanda is jeopardized by the

laundering of Congolese minerals, as tags are routinely sold, the report said of the practice to

bag and tag products at the mine to certify their origins was not effective. Several traders

have contributed to finance M23 rebels out of profits resulting from smuggling Congolese

minerals into Rwanda, the report added, adding that Rwandan exports of tantalum and

tungsten had risen in 2012 with increased smuggling out of Congo.73

A recent study by nonprofit rights group the Enough Project, cited that Rwandan government

data, found that from 2010 to 2011 Rwandas mineral exports jumped 62 percent compared

72
https://www.reuters.com/article/us-congo-democratic-rwanda-minerals/exclusive-mineral-traders-in-rwanda-
helping-fund-congo-rebels-u-n-panel-idUSBRE89F1M320121016
73
Ibid

60
with a 22 percent rise in domestic mining production.74 The East African paper reported in

March 2013 that Rwandan export volumes and value from minerals had improved since private

investors bought all the 21 mines in the country, with the last privatization deal sealed in 2007.

Combined, the country produces between 8,000 and 9,000 tonnes of minerals a year, with tin

being the major export mineral. In addition the country earned $136.6 million (over Rwf87

billion) from mineral exports in 2012. However, it targets $409 million (about Rwf261 million)

by 2017.75

This will position Rwandas mineral revenues ahead of tourism, which is currently the leading

foreign exchange earner. Tourism fetched Rwanda $281.8 million (over Rwf180 billion) last

year, accounting for 8.4 per cent of total export earnings.76 The numbers are commendable

especially for a country that has struggled economically, however many have questioned the

origin of the minerals that is growing Rwandas economy at such a high speed. The East

African reports that the Rwandese government have been making efforts to prove to the world

that it also has gold, tin, tantalum and tantalite like the Democratic Republic of Congo (DRC).

Unfortunately, that proof is yet to surface in the meantime it is safe to assume that the country

could be a conduit for smuggled minerals.77

According to the representative from the Embassy of Congo recent intelligence by the

Congoleses government discovered that Rwanda was constructing an airport at the North Kivu

border. In his opinion Rwanda, Uganda and the several multinational companies have colluded

74
Ibid
75
http://www.theeastafrican.co.ke/news/Rwanda-puts-three-mines-on-the-block/2558-1728570-
13gksvyz/index.html
76
http://www.rse.rw/uploaded_reports/Rwanda_Stock_Exchange_final1.pdf
77
Ibid

61
to smuggle minerals from DRC and the airport being built will serve that function.78 The

representative from UNEP added that it was difficult to pin point the multinational companies

working in DRC because the people on the ground are what he termed as shadow companies

who were not registered and to find their origin was a toll order.79 A report by UNEP and

MONUSCO also noted that there were many charter planes coming in and out of DRC and

since charter planes do not have the capacity to fly long distance it was assumed that they

stopped over either Rwanda or Uganda so as to refine the mineral. He further added that it is

in this countries that the mineral is legalized and most international companies use this as a

basis to argue that they do not engage in conflict minerals.

To provide further proof, tantalum is smuggled from Rubaya via Goma and eventually, finds

itself in Rwanda where its then legalized and certified as official Rwandan commodity ready

for foreign exportation. UNEP figures indicate that Rwanda, Burundi, and Uganda receive a

total of 60-71% of DRC mineral. The smuggling is done by small trucks near Goma to

facilitate border crossing at the watch and protection of rebel groups with some corrupt

government officials who authorize the certification. Kenya has also been accused of

smuggling timber which is done via Uganda from the eastern part of DRC along the border

points of Kivu, Kasindi, Mahagi and Bwera regions.80

78
Interview, Embassy of Congo Representative.
79
UNEP Country Representative
80
UNEP-MONUSCO Report April 2015

62
3.2.2 Uganda Involvement in Conflict Finance

Ugandas invasion of DRC dates as far back as 30years ago. In those days Uganda was one of

the poorest countries in Africa today Uganda is slowly growing to be a middle class economy.

It is also believed that Uganda is the number one exporter of Gold from DRC. Uganda and

Rwanda represent realists views of state centrism. They have upheld this theory to its highest

regard and have ensured that they reap maximum benefits despite the plunder they leave

behind.

The representative from Great lakes added that Ugandas involvement in DRC is not only state

based. There are many individuals who have been linked to directly fund rebels in gold rich

areas. General Saleh who is related President Museveni apparently has been linked to massive

mineral exploitation in DRC. In the UN panel of experts report Mr. Salehs name was

mentioned as among the people the panel recommended several restrictions including travel,

freezing of personal assets and use of financial institutions.

It may seem as if there is no light at the end of the tunnel in the case for DRC, but a recent

ruling by the ICJ for Uganda to pay punitive damages for the five-year occupation of its eastern

regions shows that international law is not a toothless dog- assuming that Uganda actually

pays. The UN's highest judicial body ruling that Uganda's 1998-2003 intervention violated

international sovereignty and led crimes against humanity, brought a sense of relief for DRC

even though Uganda expressed dissatisfaction with the ruling. Kampala government officials

claims that it acted in self-defense was dismissed in a sweeping ruling which piled fresh

pressure on President Yoweri Museveni.

63
The court upheld Congo's claim that it had been the victim of unlawful military intervention,

though it did not find a deliberate policy of terror. Kinshasa welcomed the ruling and said it

would seek $6-$10bn (3.4-5.6bn) in compensation, an estimate the court said would be

appropriate. A The Court noted that the UN report in 2001 found that Burundi, Rwanda and

Uganda intervened to secure their borders but later the plunder of resources became a reason

to stay. DRC was very pleased with the ruling and the government stated that it plans to seek

legal redress from Rwanda as well even though the government in Kigali did not recognize the

court.

3.2.3 Other state actors

The UN panel of experts investigations released a list of 11 African States who directly or

indirectly assist in fueling the war in DRC. In the report the panel stated that this countries

allowed for the passage of goods originating in the DRC to other nations without following the

agreed rules. Those that were found to be directly involved in the conflict were, Burundi,

Mozambique, and the Republic of the Congo, South Africa, the United Republic of Tanzania

and Zambia. The Panel submitted questions to all 11 countries and held substantive discussions

with government representatives from five. The Panel enquired about relevant legislation and

investigations into the flow of the commodities, measures taken to curb those flows, other

possible action to be taken and those Governments needs for assistance. Four of the 11

countries the Republic of the Congo, Mozambique, the United Republic of Tanzania and

Zimbabwe declined to respond. The Panel later identified yet another transit point for

Congolese coltan, Nigeria, and requested information about this trade. No response was

received. Virtually none of the countries that responded to the Panels questions had conducted

any investigations or adopted any specific procedures for the identification or inspection of the

64
transiting of commodities from the Democratic Republic of the Congo. The Ugandan

authorities mentioned the impounding of a cargo of smuggled ivory. South African officials

confirmed the seizure of a sizeable clandestine shipment of diamonds from the Democratic

Republic of the Congo, but provided no details. None of the authorities in these countries gave

any indication that Congolese resources traded through their territories should or could be

regarded as conflict goods. Almost none of the countries proposed any meaningful measures

to help curb trade in Congolese commodities that are tainted by criminality and militarization.

Kenya, however, proposed the reopening of the Northern Corridor route, under the Transit

Transport Coordination Authority, with the assistance of the international community.

In addition the panel discovered through reliable sources that gem diamonds from Mbuji Mayi

in the Democratic Republic of the Congo account for much of the phenomenal increase in

diamonds transiting through Dubai in recent years. Exports from the United Arab Emirates to

Antwerp increased to $149.5 million in 2001 from $4.2 million in 1998 according to the

Diamond High Councils statistics. The Panel has been told of chartered flights direct from

Mbuji Mayi to Dubai, and other routes via Dar es Salaam, on which illicit diamond exports

have been carried. Likewise, Dubai has become a transit point for coltan from the Uganda-

controlled area and a portion of the diamonds originating from Kisangani in the Rwanda-

controlled area. The arms and diamond smuggler Victor Bout uses the United Arab Emirates

as his permanent base, with nine of his aircraft stationed at Ras al Khaimah International

Airport.

Zimbabwes deteriorating economy did not stop them from offering assistance to Joseph

Kabila taking into account that war is generally a very expensive affair and only capable

nations have the capacity to offer military assistance to allies. It begs the questions why

65
Zimbabwe saw it fit to engage in a war that did not directly affect them. The only reasonable

explanation for Zimbabwes action was geared towards safeguarding its political economic

interest to try and salvage their economy. Whether the move was successful or not the evident

outcome after the arrival of the troops in DRC was a surge of both potential and influential

businessmen and companies from Zimbabwe.

America took part in the assassination of Patrice Lumumba through its CIA, to install a stooge

who could act as a gatekeeper by protecting Americans interests. Mobutu ascendancy to power

was crafted by the Americans and upon realizing that his regime was collapsing at the end of

the cold war they shifted their allegiance to the apparent heir Joseph Laurent Kabila through

an American company (AMF), both financial and military planes were channeled to Joseph

through AMF. DRC is not the only peculiar case where Americans have been accused of

promoting booty future. In, Afghanistan, Americans are said to have financed the Mujahidin

rebel groups, to a tune of $3 Billion to support the 300,000 militiamen in exchange for oil

rights.81

The Congolese citizens who fall under the state structure have constantly looted and smuggled

minerals to a point of becoming more powerful than the State itself. Looters working in the

mineral fields can be estimated to a population sample of 200,000 300,000. The looter are

however not referred to as looters but small-scale artisans. These small artisans account for

70% of mineral production in the DRC extractive sector.82 Their prowess and power can be

seen when they themselves extort non-governmental organizations, multi-national

81
Chambliss, W. (1993). Making Law: The State, The Law, and Structural Contradictions. Indiana University
Press, Bloomington and Indianapolis.
82
Herman, J. C. (2015). The Mind of the African Strongman: Conversations with Dictators, Statesmen, and
Father Figures. New Academia Publishing.

66
corporations and even peacekeeping missions. If an entity evades their taxation rackets they

therefore resort to kidnappings and later on demand for ransom payments as a form of

taxation.83

Amnesty International and Human Rights Watch reports indicate that a big number of foreign

workers have ended up into captivity through kidnappings. It is important to be cognizant of

the fact that the first step to form a militia group has always been through individual looting

that snowballs into a group that controls a certain mine filed which later culminates into a full-

blown militia. Economists would argue that whenever a population is untaxed and unregulated

they, therefore, become stronger than the government because they accumulate more resources

than the government. The Zairenization program proved how citizens can become more

powerful and influential than the state that was due to the fact that Mobutu through cronyism

allowed his loyalists to loot and acquire more minerals for themselves.84

The act of sovereign states destabilizing other constitutionally instituted sovereign states for

self-gain is not only limited to DRC it also happened in Liberia in 1989 when Charles Taylor

led a battalion of 100 soldiers from Cote D ivoire to Liberia to conduct a coup de tat an act that

went against the countrys constitutional provision and Organization of African Union. Cote

D ivoire was not the only country that facilitated Taylors quest to overthrow Samuel Doe but

Burkina Faso and Libya too. Libya through its then leader Muammar Gaddafi offered Charles

Taylor military training for his troops.

83
Ibid.
84
Amnesty International and Human Rights Watch, (2003). Reports on DRC.

67
The three countries assistance to Taylor was not precipitated by their love for him and the hate

for his country, but it was mainly trivialized by their interest to loot the natural resources in

Liberia, mainly diamonds, and gold. Taylors unsuccessful attempt to ouster Doe worsened the

situation because instead of creating a regime change it plunged the country into a full-blown

armed conflict. The political instability made it hard for the government to take control over

the endowed resources areas, leaving most of its resources susceptible to looting, Taylor

himself earned a whopping $75 million dollars annually emanating from the mining sector.85

Emizet Kisangani insists that whenever neighbors intervene in DRC they come with their own

agenda.86 A good example of this statement was when state actors under the umbrella body of

ECOMOG who had been sent to pacify the conflict in Liberia opted to resort to looting upon

realizing Liberias rich unexploited natural minerals while in the line of duty. Nigeria a

hegemon in ECOWAS had the privilege of sending the largest peacekeeping troops to Liberia,

but instead of doing what they were sent to do which was help bring peace to Liberia they

instead used their military prowess as a looting conduit. Nigeria didnt stop at looting but went

further to collect taxation from timber and rubber export. Kenya has also been accused of going

against their intended mandate in Somalia through AMISOM where they have been accused

of taking taxation from charcoal that was being exported and imported by Somali militia along

Kismayo seaport. That is normally done under the watch of military elites at the behest of

political elites.87

85
Kimber lite Process Certification Scheme. Each country must designate an importing and exporting
authority., establish a system of internal control
86
Emizet, K. (2010). Civil Wars in the DRC. Kansasa State University.
87
International Jurist Black & White Report.

68
The examples mentioned above explicitly prove the involvement of state actors in defending

illegal actions that their men in boots and berets do. Multi-lateral agreements have turned out

to be associations of convenience to fulfill Political and Economic Interests.88 The study can

establish that peacekeeping missions indeed form part of the spoilers in well-endowed war-

torn countries, since they benefit a lot from the conflict and also help to secure the interest of

their state. This further explains why a big number of peacekeeping troops are always sluggish

when it comes to withdrawing their troops from the mission, Rwanda and Uganda were not

ready to withdraw their troops from DRC even after several peace accords had been signed the

same for Uganda and Kenya in Somali. The accrued benefit that they get from the mission

cannot be underestimated!

3.3 Non-State Actors

Non-State actors are all organizations, networks, associations that participate in the

international affairs and have sufficient power to cause shifts or change in international

relations even though they do not belong to any established state institution.

3.3.1 Multinational Corporations (MNC)

MNC are business entities that operate in more than one state. They usually have a parent

company stationed in one state and subsidiaries spread in different states. They have also been

referred to as transnational corporations although many academic authors have opted to use

multinational corporations. In traditional international law MNCs had no obligations but

rights, this meant that in practice MNCs were only subjected to domestic laws in which they

88
UN Charter

69
operate under but not internationally bound. This then explains why it has been difficult to

hold MNCs accountable for any actions that may contravene internationally, more so in

countries that do not have stable governments to ensure enforceability.

Political economists and security experts would write off DRC as an investment hub because

its environment is not conducive for business however that has not been the case since DRC is

second to South Africa when it comes to hosting the biggest number of MNCs. The questions

that the study would, therefore, beg to ask; how are businesses thriving in such an unconducive

environment? Could it be that they are part of the conflict? Those are some of the few questions

that the following paragraphs attempts to address.89

There is no doubt that commerce and conflict have a correlation, hence the terminology war

economies. Investigations by Global Witness have indicated that MNCs have the biggest

networks in conflict finance, that is why Global report have recommended in their reports that

the fastest way to end the conflict in resource-endowed countries is by introducing trade

embargoes on certain natural resource commodities. In DRC for instance, 85 companies were

listed as being in contravention of the Multinational Enterprise Guidelines, this was due to

their illegal resource exploitation. Most of these countries were found to be originating from

Belgium, USA, Britain, Zimbabwe, Rwanda, Uganda, and Israel.

The study has realized that it would be wrong to pass a blanket assumption that all MNCs in

DRC are guilty of perpetuating conflict finance. According to an interview with a

representative from the embassy of DRC, there are several MNCs in DRC who conduct

business legally and there those MNCS that conduct illegal business. Those conducting legal

89
Kramer, R. (1982). Corporate Crime: An Organizational Perspective. Pp. 75-94. In Wickman and Tom
Daily Eds. White Collar and Economic Crime. Lexington, KY: Lexington Books

70
business, however, have found themselves through unintended purposes contributing to

conflict finance through the complex financial web. Their role in fuelling the conflict is

unintended, unintentional and indirect. However, those conducting illegal business fuel

conflict deliberately to profiteer from trade. Rebels and middlemen play the role of security

forces in the commercial web. The war is the most conducive atmosphere to conduct business

simply because domestic laws are difficult to enforce and thus basic legal requirements like

taxation, payment of legal requirements and others are not utilized. Worst still MNCs also

enjoy the use of unregulated labor force making it easier and profitable for them to run their

businesses without any accountability.90

Conflict finance between MNC, governments, and rebel groups are in many at times forged

through concession rights, royalties and bonuses that are later used to oppress opposition,

minority groups and ultimately counterinsurgencies. For instance, the U.S.-based mining firm

American Mineral Fields reportedly signed contracts with the Alliance des Forces

Dmocratiques movement of then-rebel leader Laurent Desire Kabila over mines that the

AFDL captured on its way to overthrowing the Mobutu regime in Kinshasa.91

According to the UN report, Illegal exploitation of the mineral and forest resources of the

Democratic Republic of the Congo is taking place at an alarming rate in two phases; mass-

scale looting and the systematic exploitation of natural resources. Corporations from around

the world have sought to profit from exploiting DRCs natural resources on the cheap

particularly coltan, a mineral used to produce cell phones, laptops and video game consoles.92

90
Ibid.
91
Collier, P and Hoeffler, A. (2002). Greed and Grievance in Civil War. p. 1. We have found that greed out
powers grievances.
92
https://www.justice.gov/sites/default/files/eoir/legacy/2014/02/25/Congo.pdf

71
The report also indicates that a number of companies were created to facilitate illegal activities

in the Democratic Republic of the Congo. Others have existed in the region for decades and

joined the bandwagon to pursue the obvious financial windfalls involved in the exploitation of

the country. On the Ugandan, MLC and RCD-ML side, rebel leaders and/or Ugandan military

officials created new companies and businesses using prte-noms. Most, if not all, of these

companies are privately owned by individuals or a group of individuals.93

Among the companies mentioned by the report that are involved in the illicit acquisition of

natural resources in the Democratic Republic of the Congo, Trinity and Victoria seem to be

the most interesting given their modus operandi, activities and respective shareholders.

Victoria Group is chaired by Mr. Khalil and its headquarters is in Kampala. According to

reliable sources, Mr. Khalil deals directly with Mrs. Akandwanaho on diamond issues. Mr.

Khalil has two collaborators in the Democratic Republic of the Congo, based in Kisangani and

Gbadolite. Both are said to be from Lebanon, they are Mohammed Gassan and Mr. Talal.

During its visit to Gbadolite, the Panel received confirmation of the presence of one of them

and his leading role in the purchase of diamonds in the region. A reliable source told members

of the Panel that the Victoria Group belongs jointly to Muhoozi Kainerugabe, son of President

Museveni, and Jovia and Khaleb Akandwanaho. Victoria Group is involved in trading

diamonds, gold and coffee. The Group purchases these mineral and agricultural products in

Isiro, Bunia, Bumba, Bondo, Buta and Kisangani. The company paid taxes to MLC, but failed

to do so with RCD-ML. When counterfeit currencies (Congolese francs and United States

dollars) were found in areas where the company buys the natural resources, fingers were

93
UNEP, MONUSCO and SESG Report 2001.

72
pointed at the Victoria Group. Other sources have also confirmed to the Panel the involvement

of the Victoria Group in the making of counterfeit currency.94

Trinity is an equally interesting case. Ateenyi Tibasima, second Vice-President of RCD-ML

and now the Commissaire gnral adjoint of FLC, was the manager of the company. According

to reliable sources, Trinity is a fictitious company and a conglomerate of various businesses

owned by Salim Saleh and his wife. Its primary purpose was to facilitate their business

activities in Orientale Province. To this end, Mr. Tibasima granted a tax holiday to all Trinity

activities in the areas controlled by Uganda and administered by RCD-ML in November 1999.

Trinity has imported various goods and merchandise and has taken from Orientale Province

gold, coffee and timber without paying any tax. Different individuals, Ugandans as well as

Congolese, have taken the opportunity created by the confusion over Trinity to export from

the Democratic Republic of the Congo (on behalf of Trinity) various natural resources, also

without paying taxes.95

3.3.2 Coltan distribution

One of the most sought after mineral in DRC currently is Coltan. According to research firm

Roskill Information Services DRC has the world's fourth-largest coltan reserve in the world.

Its scientific name is Columbite-tantalite. Once refined, coltan can be used to produce highly

heat-resistant metal powder called tantalum. It sells for $100 a pound, and it's becoming

increasingly vital to modern life. For the high-tech industry, tantalum is magic dust, a key

94
Ibid
95
Ibid

73
component in everything from mobile phones made by Nokia (NOK) and Ericsson and

computer chips from Intel (INTC) to Sony (SNE) stereos and VCRs.

Not surprisingly, selling coltan is not illegal. Most of the worldwide tantalum supply valued at

as much as $6 billion a year comes from legitimate mining operations in Australia, Canada and

Brazil. But as demand for tantalum took off with the boom of high-tech products in recent

years, a new and more sinister market began flourishing in DRC.

These companies deny any knowledge that tantalum originating in the Congo is used in their

products. That's not surprising, considering how murky the supply chain out of the Congo is

and how complicated the global trade in tantalum gets. The reality is that there's little way to

prove that the tantalum used in our cell phones and laptops is or is not from the Congo. Still, 8

percent of the tantalum ore imported into the United States in 1999 came from the Congo, and

that doesn't count the ore U.S. companies imported from Rwanda and Uganda that may have

originated in neighboring Congo.

The UN report also highlighted that the demand in for the highly prized coltan has enormous

impacts. According to the report, given the substantial increase in the price of coltan between

late 1999 and late 2000, a period during which the world supply was decreasing while the

demand was increasing, and a kilo of coltan of average grade was estimated at $200. According

to the estimates of professionals, the Rwandan army through Rwanda Metals was exporting at

least 100 tons per month. The Panel estimates that the Rwandan army could have made $20

million per month, simply by selling the coltan that, on average, intermediaries buy from the

small dealers at about $10 per kg. This is substantial enough to finance the war. Here lies the

vicious circle of the war. Coltan has permitted the Rwandan army to sustain its presence in the

Democratic Republic of the Congo. The army has provided protection and security to the

74
individuals and companies extracting the mineral. These have made money which is shared

with the army, which in turn continues to provide the enabling environment to continue the

exploitation.96

The report also found that Rwandan, Ugandan and Burundian rebels had looted and smuggled

thousands of tons of coltan from the Congo into their countries to export to the global market,

using the profits to finance their militias. Indeed, the official statistics provided by these

countries' governments which many human-rights observers believe hide large amounts of

black-market trading - show that Uganda and Rwanda dramatically increased the export of

coltan following their occupation of northeastern Congo. For example, Uganda reported 2.5

tons of coltan exports a year before the conflict broke out in 1997. In 1999, the volume

exploded to nearly 70 tons. Uganda, Rwanda and Burundi have issued protests to the United

Nations over the report, claiming it to be inaccurate and unfounded.97

In 2003, a follow-up report was made in which it was mentioned that, in 1999 and 2000 a sharp

increase in the world prices of tantalum occurred, leading to a large increase in coltan

production in eastern Democratic Republic of Congo. Part of that new production involved

rebel groups and unscrupulous business people forcing farmers and their families to leave their

land, or chasing people off land where coltan was found and forcing them to work in artisanal

mines. As a result, the widespread destruction of agriculture and devastating social effects

occurred, which in a number of instances where akin to slavery.98

96
Batware B. 2011. The role of multinational corporations in the Democratic Republic of Congo. MA Peace
and Conflict Studies | EPU.
97
Ibid
98
Ibid

75
In 2008, the UN issued another report in which it was revealed that coltan and other minerals

continue to be taken out of the DRC while more money was brought in. The report mentions

that in fact, last years foreign direct investment into the DRC was the highest in the history of

U.N. records on trade and investment. This is particularly important because this money

contributes to the conflict by providing financial support to groups involved in it. Among these

groups are the Forces Democratiques de Liberation du Rwanda (FDLR) and the Coalition of

Congolese Patriotic Resistance (PARECO), who have been accused of abducting children to

use as soldiers and of raping and killing civilians.99

When they carry out their business, multinational corporations that profit most from the

conflicts often times hide behind a carefully constructed shield of ignorance, arguing that they

are not aware of the provenance of the minerals that they purchase. However, these claims of

ignorance are disingenuous at best: the latest UN report indicates that companies are carefully

avoiding any investigations that might reveal the truth; further, corporate management refuses

to perform sufficient due diligence regarding their suppliers, thus failing to meet minimum

standards of ethical business conduct. Companies are certainly not going beyond this basic

standard by taking steps to ensure that they are not purchasing conflict minerals. Instead, they

continue to exploit Congos mineral wealth with insouciance.100

To assess the supply chain of some minerals in DRC the study came across a report of how

Coltan is expolited from the mine to the end user. According to the UN panel of experts report

Coltan has been exploited extensively in Orientale Province by various armed groups under

the protection of UPDF. A number of coltan operations, especially under the supervision of

99
Ibid
100
Ibid

76
UPDF Colonels Muzora and Burundi, have been coordinated under the front company Trinity

Investment, where UPDF Major General Kazini is the principal figure. 101 Armed groups

frequently identified with militias under the command of UPDF officers manage sites in remote

locations where diggers pay a daily fee to exploit an area. Valentina Piskunova who, together

with her husband Anatoly Piskunov, represents and operates the company LA CONMET from

its base in Kampala. During discussions with the Panel, Ms. Piskunova explained that, because

of the collapsed international coltan market, prices for the mineral in the eastern Democratic

Republic of the Congo had dropped dramatically. However, Ms. Piskunova told the Panel that

the continuing international interest in coltan from the Democratic Republic of the Congo is

due to the very low labour costs for extracting the mineral. Therefore, the company continued

to buy coltan from its office at Butembo in the Democratic Republic of the Congo. She said

that their purchase price for coltan with a 30 per cent tantalum content was $10 per kilogram.

The same coltan was then sold for $17 per kilogram.102

Ms. Piskunova went on to tell the Panel that the companys coltan was transported by road

across the border between the Democratic Republic of the Congo and Uganda at Kasindi to

Entebbe International Airport, where it was then transported by Boeing 707, via Sharjah,

United Arab Emirates, at a cost of $140,000 per flight, to Ulba, Kazakhstan, for processing. In

addition to the profit made on the sales of coltan, LA CONMET also experienced savings by

being granted full exoneration for all activities involving exploitation for the territory of

Beni-Lubero (Democratic Republic of the Congo), including freedom from paying fiscal and

customs duties. The networks are all well coordinated and at times due to the high risk of

101
Letter dated 8 October 2002 from the Chairman of the Panel of Experts on the Illegal Exploitation of Natural
Resources and Other Forms of Wealth of the Democratic Republic of the Congo addressed to the Secretary-
General
102
Ibid

77
conducting business the company stated that they had to pay rebels to ensure safe

transportation of the minerals.103 This example is only one of many webs in DRC that shows

how Multinational companies finance conflict and eventually prolong it in DRC.104

In certain circumstances, financial conflict is directly paid as bribes to either rebel groups, or

even opposition officials to destabilize the government in power. These financial transactions

later have a direct impact on the citizenry and rebel groups through the trickle-down effect. In

the event that these MNC avoid direct transactions with rebel groups, the latter has always then

resorted to kidnappings upon which ransoms are paid to facilitate conflict finance.

Baron Corporation a Canadian Multi-National Corporation has been accused of financing

conflict in DRC during their operations by having to pay security fee to the rebel groups for

protection and exploitation rights. A good number of MNCs have gone as far as contracting

private military, militia and rebel groups to offer security in their areas of exploitation. Security

therefore forms a very lucrative business for the rebel groups to generate conflict finance.105

De beers activities in DRC has resulted to numerous scandals that have put them on the

frontline of DRCs conflict. The lastest trend in the African continent of using mercenary

companies to quell wars and bring peace has seen many companies run from the normal use of

rebels to contracting private companies. De beers has been linked to one of the leading Private

Military Companies (PMCs) in the industry. Their activites in DRC have led to investigations

of their controversial military actions and mining activities which called for restrictions to be

taken against them by the South African government.106 The Company has also been linked to

103
Ibid
104
Ibid
105
Garrett, N. & Mitchell, (2009). Trading Conflict for Development. P.6.
106
Ibid

78
the former military president of Sierra Leone, Valentine Strasser, who allegedly awarded

diamond licenses to EO for fighting the rebels and brining him to power.107 African states and

even NGOs are increasingly using the services of mercenaries as they have been believed to

bring some form of normalcy in active combat zones. Cirtiques on the hand negate this notion

and argue that the use of mercenaries has only activated a boom in the business of war.108 In

addition, mercenaries have been accused by the international community for going against

human rights but because they are private companies it has been difficult to pin them down.109

International trade and the high demand for solid minerals in DRC has precipitated conflict

finance and thus a contribution to resource conflict through the supply chain web. In as much

as the government has always issued official extraction rights to MNC, extraction of the

minerals has posed a challenge because the minefields are still under the control of warlords.

Companies are therefore forced to re-negotiate with the rebel groups, the negotiation, therefore,

establishes a complex and non-transparent supply chain.110

The supply chain is complex with various actors drawing payments from the chain, goal posts

get shifted and different mechanisms are deployed to avoid official authorities. However new

demands reemerge from the various actors involved, a good number of them feel short-changed

whereas some fail to fulfill their bargains and with that comes disagreements and the conflict

explodes again.

Illicit finance being generated from a natural resource in DRC can be capped at US$ 1.25

billion per year out of that generated amount 10 30% of it goes to conflict finance which is

107
Pech K. Executive Outcomes A Corporate Conquest.
108
Ibid
109
Ibid
110
Karlsson, Ida. EU Urged to Ban Conflict Minerals.

79
about US$ 72 - 426 million per annum. To further break it down, each commodity attracts the

following resources; gold US$40 120, Timber US$ 16 48, Charcoal US$ 12 35 Million,

3T Mineral 7.5 22.6 Million, Diamond US$ 16 48 Million, Local Taxation US$ 14 .3 28

Million. The figures, therefore, give an indication that war in itself is a self-sustaining economy

as President Paul Kagame once reiterated and that is why MNC are thriving in DRC.111

UNEP findings indicate that conflict finance being generated from DRC is sustaining over 25

rebel groups, whereas other sources indicate that its sustaining more than 49 rebel groups

within the country. The rebel groups are playing a checkmate game to prevent one another

from playing a dominant role in the trade, the weaker rebel groups have their own survival

strategies and criminal networks, forming part of a transnationally organized crime web.

Some scholars have argued the need and demand for minerals that are used for high tech

devices and luxury items like gold helps in fueling the conflict. In addition to fueling the

conflict ending it is an even bigger challenge but not an impossible one. Several people have

gone out to investigate the involvement of Multinational corporations in fueling the conflict in

DRC. So far, high-tech companies have been reluctant to acknowledge they may be using

materials originating from DRC however, they could do little to prove that they do not. The

following are examples of reactions of corporations on the issue.112

111
UNEP, (2015). Report on Illegal Exploitation of Natural Resource In DRC: Benefiting Organized Criminals
in DRC.
112
Batware B. 2011. The role of multinational corporations in the Democratic Republic of Congo. MA Peace
and Conflict Studies | EPU.

80
3.3.3 Reactions from MNCs

"We first heard about this in April and immediately asked our suppliers if they used tantalum

from the Congo," said Outi Mikkonen, communications manager for environmental affairs at

Nokia. "All you can do is ask and if they say no, we believe it." And so it continues down the

line. Tantalum capacitor makers place their faith in their suppliers. One of Nokia's main

suppliers, for example, is Kemet of Greenville, S.C., the world's largest tantalum capacitor

maker. "We have gone back to our suppliers to ascertain that the material we are buying is not

obtained illegally from the Congo," says Harris Crowley Jr., a senior VP.113

But tantalum suppliers can offer little assurance to capacitor manufacturers that their product

doesn't come courtesy of the Congo rebels. "I'm not in favor of killing gorillas," says Dick

Rosen, CEO of AVX, a tantalum capacitor maker in Myrtle Beach, S.C. But "we don't have an

idea where the metal comes from. There's no way to tell. I don't know how to control it," he

says.114

Epcos, a tantalum capacitor manufacturer in Munich supplying the mobile phone industry, is

also quick to place the responsibility on its suppliers - which include Cabot and H.C. Starck,

as well as smaller processors in Europe and Japan. Heinz Kahlert, a spokesman for Epcos,

pointed to a press release issued by H.C. Starck that states "we only purchase raw materials

from established trading companies that have worked in various African countries for a long

time and are headquartered in Europe or the United States." The press release goes on to claim:

113
Ibid
114
Ibid

81
"These trading companies have confirmed that H.C. Starck is not being supplied with material

from the crisis areas of central Africa."115

At some point though, the wall of plausible deniability starts to break down. While H.C. Starck

is adamant it is not being supplied with black-market coltan, one of its own suppliers, U.K.-

based trading company A&M Minerals and Metals, is less sure. A&M works mostly with

Nigerian and Bolivian miners, but also buys up to 3 tons of tantalum-bearing ore a month from

Uganda. "I couldn't tell you 100 percent that this material from Uganda didn't come from the

Congo," says managing director James McCombie. "It could have been smuggled across the

border." The company works with peasant producers and local traders, and McCombie admits

that "once you get to that level, it is very difficult to check the provenance. It would be silly of

us to try to pretend that we know the origin of every pound of coltan we get in our hands."116

Then there's Brussels-based Sogem, another international trading company that sells the

unrefined coltan it buys in the Congo and Rwanda to processing companies in the United

States, Europe and Asia. It offers only a vague reassurance about the origins of the ore it resells.

"We have been told that our money goes directly to the population," says Sogem spokeswoman

Moniek Delvou. Sogem doesn't deal with rebel-backed traders and monopolies in the region,

Delvou says. But she declines to name the mines and local trading companies that supply

Sogem and admits she isn't 100 percent sure of the original source. "How can you be 100

percent sure of anything in life?" she asked.117

115
Ibid
116
Ibid
117
Ibid

82
Ericsson says it requires its suppliers to comply with company environmental, ethical and

human-rights policies. "We are putting demands in place and will follow it up," says Mats

Pellback-Scharp, environmental manager of consumer products. Meanwhile, Kemet says it

will start requiring ore suppliers to certify that their tantalum does not come from the Congo,

Rwanda, Burundi or Uganda. "If everybody takes a stance, maybe it will dry up," says Kemet's

Crowley.118

For its part, Intel has begun a review to determine the source of the tantalum it uses. "We'd like

to be able to know the answer," says spokesman Chuck Mulloy. Compaq has issued a statement

saying it "condemns the reported activities of illegal miners in the Democratic Republic of

Congo." But, as spokesman Arch Currid says, "Most of the components that we get from third-

party providers, so where they get their raw goods is hard to determine." Hewlett-Packard

officials also denounce the situation in the Congo and say the company intends to work with

the Electronic Industries Alliance to ensure no tainted tantalum ends up in HP products.119

Despite suggestions from different NGOs such as Global witness that mobile companies

should at least publish their supply chains on their websites, companies such as Nokia have

refused saying that there many other things to consider when one is taking these kind of actions.

They worry more about their competitors and their profits than the impacts their business is

having on human life in DRC. When asked what should be told to the children of DRC who

hope that western companies will hear their crying and take measures, one Nokia

representative said that they should have hope, there is hope in the future. One can only

118
Ibid
119
Ibid

83
wonder, what has been done since it has been known in 2001 that these companies are using

minerals coming from the DRC which are contributing to the continuation of war.120

3.4 Non-Governmental Organizations

NGO are the main structures of the society and they exist outside the government and public

administration, they, however, form part of the economy whereas their real establishment is

for non-profit making. This sector is sometimes referred to as the third sector in reference to

the private sector and the public sector. NGOs are mandated to ensure that the society is

civilized and everything operates under the rule of law.

The concern by non-governmental organizations to address the humanitarian situation in DRC

has partly contributed to the growth of conflict finance. Non-Governmental Organizations and

Faith-Based Organizations operating within the war-torn regions like Kivu, and Katanga have

been forced to pay taxes so that their aid can get to the intended victims. The taxation that they,

therefore, pay largely contributes to conflict finance.

Non-governmental actors just like MNC have been forced to hire rebel groups and militia

groupings to offer security to either their staff or the aid on transit, if that is not done then they

have been forced to indirectly pay for that by remitting ransom to their staff who have either

been abducted or kidnapped. By paying the ransom then the non-governmental sector

indirectly contributes to the conflict finance. According to global witness reports, militia and

rebel groups are not only limited to taxing and kidnapping members of the third sector but go

as far as stealing the aid and donations that they have been provided for, with the sole intention

120
Ibid

84
of selling them to outsource for more funding that goes into conflict finance. 121 Through

taxation and selling of the aid donations, rebel groups, therefore, raise finance.

NGOs have also been accused of misusing their diplomatic immunities and leverages to

smuggle in weaponry and smuggling out minerals to governments and rebel groups through

the immunity that they enjoy hence directly contributing to conflict finance. When the DRC

peace accord was about to be signed 300 NGOs based in DRC petitioned the special envoys

not to sign the peace agreement. That gives a clear indication that these non-state actors had a

hidden interest and therefore their actions allow the study to profile them as spoilers to the

conflict. The donor funding that they receive is highly dependent on the conflict. (British

Global Witness publication a rough trade) 122

121
See, Human Rights Watch, (2009) Soldiers who Rape, and Commanders who condone.
122
See, British Global Witness Publication on Rough Trade.

85
 CHAPTER 4

ANALYSIS OF CONFLICTS FINANCING IN DRC AND MITIGATION

MEASURES

4.1 Introduction

4.2 Analysis of Conflicts Financing in DRC

Statistics indicate that most of the war-torn African countries are rich in mineral resources and

the assumption is that minerals are a precursor to State failure and subsequent conflicts. David

Easton reiterates that the state finds itself in these compromising scenarios because its for her

to determine who gets what, how and when, when it comes to resource distribution. DRC is

richly endowed with mineral resources and the countries development highly depends on how

well the extraction of these resources is governed. Natural resources in themselves are neither

a blessing nor a curse. What highly matters is how well the extraction is governed.

Policymakers and researchers have made much of the specter that in DRC its all about resource

curse and not a blessing.

More into the resource curse narrative is that DRCs natural resource conflict can be linked

and attributed to colonial legacy, where the Belgians colonized DRC with the sole intent of

looting the natural resources, the administrative and governance structures that were placed by

the Belgians and subsequently inherited by the post-colonial regimes maintained the status quo

of looting thus depriving the masses. The Belgians demarcated DRC regions in terms of

resource endowment. Belgium has maintained a strong tie with DRC regimes to maintain the

colonial legacy of looting the natural resources. Between the year 2001 and 2002, all the

86
leading 40 MNC trading on the diamond in DRC were Belgian companies a monopoly that

they're enjoyed due to their colonial legacy that King Leopold had established.123

Several litrature have declared the Democratic Republic of Congo (DRC) as one of the worlds

richest territorial states in regards to its natural resources. Scholars state that DRC possess

literelly every mineral in the periodic table. The main resources that have caused DRC to face

decades of war include copper, cobalt, zinc, diamonds, oil, timber, uranium, tantalum,

columbium, gold and tin. The sheer volume of natural resource abundance should, at least in

theory, provide the state with enormous revenues for redistribution among its citizens. Yet,

almost 60 percent of its 80 plus million people live on less than $1.25 a day.

At present, cassiterite ore (which is refined to produce tin) is the leading mineral in terms of

dollar value contributing to armed groups in the DRC. The country is the worlds sixth leading

producer of tin, although estimates of total production vary. The Enough Project calculates that

the eastern DRC produces over 24,000 metric tons of tin, or 6-8% of global production. This

likely contributed about $115 million to armed groups in 2008.66 Over half of this material

comes from the Bisie mine in North Kivu, which has changed hands among armed groups

several times and is currently controlled by a unit of former CNDP rebels now integrated into

the Congolese army. Although coltan ore (refined to produce tantalum) is not as significant as

cassiterite in its financial contributions to the conflict in the DRC, it was the first conflict metal

from the DRC to be the subject of global concern in the early 2000s, as the price for the mineral

spiked in conjunction with growing demand from the electronics industry. The DRC is one of

the leading producers of this material, estimated by one source at 155 metric tons (tantalum

123
Ibid. P, 45.

87
equivalent) annually, or 15-20% of global production (in contrast, nominal U.S. Geological

Survey (USGS) figures estimate 100 metric tons of production in 2009 and 8.6% of the global

total indicating some of the variability in statistics related to these minerals)68. This may have

provided armed groups with about $12 million in 2008.

Resources have been used to fuel conflict and not to get people out of poverty. In 2007, the

Human Development Index ranked the country at 168 positions out of a total of 177 countries.

The unstable situation has provided a fertile ground to the stakeholders to exploit the natural

wealth of DRC with impunity. As Reyntjens wrote, Entrepreneurs of insecurity are engaged

in extractive activities that would be impossible in a stable state environment. The

criminalization context in which these activities occur offers avenues for considerable factional

and personal enrichment through the trafficking of arms, illegal drugs, toxic products, mineral

resources and dirty money.

Poverty is not the only problem facing the population of the DRC which enhances conflict

financing. The state has been faced constant conflict and immense suffering since colonial

times. It has resulted to the death of at least 4 million people and causing massive declines in

economic growth which contributes to political instability. The Human Development Report

(HDR) of 2011 has ranked the DRC in the bottom of the table. Out of 187 countries the DRC

currently occupies the 187th seat in the Human Development Index (HDI). As the HDI is

based on criteria such as health, education, level of freedom, gender equality, poverty, political

participation, economic growth and environmental development, the DRC scores an all-time

low in almost every single category.

Armed groups sustaining themselves through profits from illegal exploited natural resources

have created regional insecurity complex. For instance, the Allied Democratic Forces (ADF),

88
a rebel group from Uganda operating in the DRC, has been linked to illegal taxation of gold

and timber and the Democratic Forces for the Liberation of Rwanda (Forces Dmocratiques

de Librationdu Rwanda, FDLR) has been implicated in trade in minerals, timber, and

charcoal, as well as cannabis production. Criminal elements within the Congolese Army

(Forces Armes de la Rpublique Dmocratique du Congo, FARDC) have also been implicated

in illegal taxation and exploitation, notably during the six-month eastern DRC mining

suspension from March to September 2010.

The demand in global markets is also a perpetuating factor. The minerals tin ore and coltan are

important components of cell phones, computers, and other electronic devices, and the DRC

is a primary global source. This demand encourages regional smuggling as a means for

individuals and collectives to illegally profit from natural resources. Illegally armed groups are

reported to control access to mines in remote areas where they subject civilians to gross human

rights abuses and displacement. Apart from the regional aspect of illegal trafficking of these

minerals to finance armed group activities and the criminal profit motive, minerals are also

used in lieu of hard currency for trading to fund conflict. This includes the supply of arms.53

In the final report of the United Nations Group of Experts on the DRC, it was concluded that

the involvement of the military and armed groups in illegal mineral trade was by way of

taxation, protection, commercial control and coercive control. Taxation involves levying

illegal taxes on mining activities and unrelated commercial activities in the area. Protection is

requested of military and armed groups to provide security forming activities and to prevent

looting. For commercial reasons, the military use illegal revenue to engage in mineral trade.

Military and armed groups gain control through seizing productive pits and periodically

pillaging minerals. The involvement of the military in the illegal exploitation and trade in

89
natural resources has compromised their mandate to provide civilian protection. In reference

to these criminal elements in the army, it was observed that deployment of these criminal

networks is increasingly driven by the desire to control natural resources. Illegally armed

groups form a vital component of the natural resources/conflict nexus. Their role in

regionalizing insecurity is partly financed by illegal exploitation and trade in natural resources.

This underlines the importance of adopting a regional perspective with regard to natural

resources and conflict in DRC.

4.3 Mitigation Measures in Conflict In DRC

A dozen major peace agreements, negotiations, and reconciliation initiatives, often brokered

with help from the international community, have been the primary vehicles employed to

resolve conflict in DRC in the Great Lakes region. Most of these accords, however, have

addressed only some of the causes and consequences of the conflict and, at times, neglected its

principal drivers which are equivalent in medical fields of curing the symptoms and not causes

of the diseases. The measures in most cases are employed only when the conflict is full blown

and this has led to partial conflict resolution in the DRC. The International Conference on the

Great Lakes Region (ICGLR) has to date been the largest peace initiative. Convened by UN

Resolution 1291 in 2000 and held under the auspices of the African Union and UN with support

from international donors, it brought 18 countries to the negotiating table of which were

directly involved in the conflict. After 6 years of political negotiations, the conference gave

rise to the Pact on Security, Stability, and Development in the Great Lakes Region, signed in

December 2006 by heads of state from Angola, Burundi, the Central African Republic, the

DRC, Kenya, the Republic of Congo, Rwanda, Sudan, Tanzania, Uganda, and Zambia.

90
The pact entered into force in June 2008 after it was ratified by eight signatories. An ICGLR

Secretariat was established in Bujumbura to implement the pacts 10 protocols, including

regional non-aggression and mutual defense, good governance, and reconstruction and

development. Only limited progress toward these objectives has been realized to date,

however. A key contribution of the ICGLR has been that it took into account the economic

dimensions and motivations of the conflict in the eastern DRC. Specifically, it launched a

Regional Initiative on Natural Resources to certify, formalize, and track the minerals trade so

as to eliminate trafficking and the role of armed groups. Pilot schemes in Rwanda and South

Kivu have shown some progress.

The ICGLRs main shortcoming has been that it did not address the massive human rights

violations committed by various state actors that intervened in the DRC that have now been

well documented through UN reports. As a consequence, these actors have had little incentive

to end their reliance on short-term military responses and proxy militias to meet their

immediate security and economic interests. The Tripartite Plus Commission was a U.S.

initiative launched in 2004 dealing mainly with the FDLR presence in the DRC. This initiative

culminated in a joint communiqu on November 9, 2007, committing the DRC and Rwandan

governments to a common approach to address the threat posed to their common security and

stability by the ex-FAR/Interahamwe. The Nairobi communiqu fulfilled a fundamental aim

of the Rwandan Defence Forces (RDF) to more aggressively target the ex-FAR remnants that

comprise the FDLR. The FARDC-RDF collaboration has been very unpopular in the eastern

DRC, even though many in the region dread the FDLR.

91
4.3.1 Goma Conference

The Goma peace conference has been the only one initiated by the DRC government. From

January 624, 2008, the conference brought together 1,500 delegates from all communities

and social strata in North and South Kivu. Its general objective was to rally stakeholders and

involve them in the restoration of peace in the area. Delegates ultimately signed an

Actedengagementto cease hostilities. By giving all communities and most armed groups a

voice, the Goma conference represented a significant step forward in understanding the conflict

from local perspectives. And a high priority for these communities was to prevent those guilty

of committing massacres, sexual violence, or inciting ethnic hatred from holding positions of

responsibility, particularly in the security services. After the conference, the involvement of

traditional village chiefs and other community leaders facilitated the disarmament or

integration of 22 armed groups into the national army indicating a strong desire at the local

level to end the fighting.

92
4.3.2 Regulating Commodity Trade from Conflict Areas

Specialized industry organizations such as the Tantalum Niobium International Study Centre,

the International Gold Council and the International Coffee Federation could be requested, in

cooperation with the United Nations Conference on Trade and Development, to monitor trade

in commodities from conflict areas. This would result in a reliable body of data that includes

information relating to the evacuation of commodities, transit routes through neighbouring

countries and information on end-users and their operations.124 The data produced could be the

basis of industry policing of those individuals, companies and financial institutions that trade

in commodities from conflict areas. The data could also serve in the event that a moratorium

is called for on the illegal trade in commodities originating in the Democratic Republic of the

Congo, such as coltan.125

4.3.3 Trade Policies

Export policy and incentives must be harmonized at a regional level to eliminate smuggling.

For instance, an exporter will pay a taxation fee of $200 for a barrel of tin ore being exported

from Rwanda to Europe, the same exporter in DRC will pay $6,500 for the same barrel to be

exported to Europe. It is such inequalities that promote conflict finance through smuggling,

countries from the great lake region should, therefore, develop a unifying protocol on natural

resources that bring in a regional pact, upon its development the regional Heads of State should

adopt the protocol and operationalize it at a regional level.126

124
Letter dated 8 October 2002 from the Chairman of the Panel of Experts on the Illegal Exploitation of Natural
Resources and Other Forms of Wealth of the Democratic Republic of the Congo addressed to the Secretary-
General
125
Ibid
126
Ibid.

93
A transnational mining authority should be established by the international community

alongside the DRC government, the authority should be in charge of certifying traders and

other actors. The authority should also be in charge of all mining fields by overseeing the

activities that are being undertaken at a local level and also evaluate the supply chain racket.127

The Kimberly process, for instance, was meant to prevent the sale of a blood diamond, the

policy has been a success in Liberia due to its non-tariff barrier component. The process lays

emphasis on the certification of the minerals so as to be able to determine the origin of the

mineral. The process emphasized on a quota system whereby a number of minerals being

exported must declare their origin and sources determined.128

4.3.4 Kimberly Process

To curb booty futures in DRC a multi-disciplinary approach is needed. In as much as the

Kimberly process has been the universal policy document on solid minerals, it has fallen short

in curbing resource finance on other solid minerals like coltan, tin, tantalum, and tungsten used

to make electronic materials. The Kimberly certification process was specifically developed to

curb blood diamond and not all solid minerals that contribute to the finance of conflict.129

World Bank, however, insists that the Universal Kimberly Policy certification system has been

the best policy to be ever developed by the United Nations despite its shortfall in DRC. They,

however, argue that the Kimberly certification process has enabled DRC to regain 70% of its

lost extractive sector, they argument that most of the minerals being smuggled to the

neighboring countries are always certified. And therefore its operationalization should be

127
http://www.itri.co.uk/POOLED/ARTICLES/BF
128
The Kimberly process, made sure that all the diamond being sold in the global market must be accompanied
by a certificate of origin to ensure that its not blood diamond
129
See, The Kimberly Certification Process. https://en.wikipedia.org/wiki/kimberly.

94
emphasized to ensure that lootable minerals do not find their way into the black markets.

Sanctions on individuals and MNC that have been found to smuggle materials should also be

highly emphasized.130

The Kimberly process, therefore, reaffirms the studies justification that the Fragile States

should not be allowed to liberalize their economies fully, some form of protectionism must be

exhibited and emphasized. 131 In as much as full protectionism is not the route to go, the study,

therefore, advises that neoliberalism is adopted in DRC. Neoliberalism is better placed because

it talks about the institutionalization of mineral fields and the establishment of private

enterprise through a

proper regulatory mechanism where the government can be able to generate revenue and

promote equitable resource distribution.132

Chile for instance after the dictatorial rule of Augusto Pinochet adopted neoliberalism at the

expense of liberalism, today Chile has a stable economy. The shift from industrial mining to

small-scale mining by DRC has denied the central government revenue and resources to work

on its capabilities. Institutionalised Industrial mining should be the route to go by because it

can be monitored and controlled whereas small-scale mining breeds cartels which eventually

build up into rebel groups that take control over minefields, that was the case with ADFL.

Small-scale mining develops extraction rights to small cartels that eventually form militia

groups, by having extraction rights to the small-scale miners, cartels and middlemen acquire

full control of the minefields thus in a position to generate conflict finance. As Collier

130
Ibid
131
Establish a system of internal control. Enact appropriate and regulations to implement and enforce
certification.
132
Patricia, C. & Andrea, R (2014). Rwanda INC: How a Devastated Nation Became an Economic Model For
The Developing World.

95
reiterates, easily extractable alluvial solid minerals attract booty future agreements. 133 Collier

further reiterates that when easily extractable mineral resources are not well managed, they

then become susceptible to looting, with looting cartels and rebel groups demarcate resource

endowed regions, to later claim ownership over the resources. The act of demarcation by cartels

eventually breeds rebel groups that resort to conflict.134

The UN panel of experts provide the following recommendation in regards to the use of the

Kimberly process to curb conflict finance in DRC. Member States where trade in rough

diamonds and other raw minerals is being carried out should join the Kimberley Process.

Universal participation will make the Kimberley Process a more effective instrument.

Countries with rich in natural resources should apply internal controls from extraction to

exportation.135 Consideration should be given to establishing a set of internationally agreed

upon standards for this process. A specialized enforcement organization within each member

country needs to be formed that has the authority, knowledge and specialized training

necessary to ensure the effectiveness of the Kimberley Process. A permanently staffed

secretariat should be created with the responsibility of coordinating the implementation of the

Kimberley Process.

4.3.5 Role of Goverments and Good Governance

Economist Intelligence Unit asserted that the current economic and political challenges facing

DRC were as a result of the collapse of the Zairean State. The unconstitutional change of

government through foreign support gave rise to ethnic groups that are at war with each other,

133
Ibid.
134
Ibid. p, 563.
135
Ibid

96
it also presented a mutiny within the military, that later gave rise to a private militia, rebel, and

mercenary groupings. The acquisition of power by Laurent Kabila introduced dictatorial

tendencies, corruption, nepotism and the use of military elite to capture state resources.

Paul Collier reiterates that to curb finance conflict and booty futures, the DRC government

must, therefore, undertake key reforms in its governance structures. It should first ensure that

all the mining fields are brought under state control to provide a revenue base for local and

provincial authorities. All stakeholders and actors in the solid mineral trade must be brought

together for a dialogue on how to reform and review the trade sector.136

The various peace accords that were signed under the Unified Transnational Agreement

should be operationalized and adhered to the letter. The four peace agreements are the Lusaka

Ceasefire agreement (1999),137 the Sun City Agreement(2002), the Pretoria Agreement (2002),

and the Luanda Agreement (2002).138 Actualising the peace agreements in totality is very

important since it is the only avenue to address the Humanitarian situation in DRC. The study

acknowledges that

livelihoods in DRC must be taken care of, since the conflict has seen gross violation of human

rights, women and children raped, some being turned into soldiers at a tender age, abduction

of people, displacement of persons resorting to internally displaced persons, the refugee crisis

bulging, actually the natural resource conflict in DRC has contravened the Rome statute of

1998.139

136
Collier, P. (2009). Wars, Guns and Votes. Democracy in Dangerous places.
137
Among the first peace agreements to be signed it was the first road map towards pacifying DRC.
138
See, the Lusaka Ceasefire agreement (1999), the Sun City Agreement (2002), the Pretoria Agreement (2002),
the Luanda Agreement (2002), the Unified Transnational Agreement.
139
International, C. C. (1998). The Rome Statute.

97
Cohen J Herman a political and security expert, views DRC as a failed state for its inability to

manage the rich mineral provinces. Lack of a powerful central government to control the

mineral endowed provinces provokes the profiling of DRC as a failed state. Determining,

whether a state is failed, has always been considered to be a political term. But Ross brings a

few pointers that may justify the statement (i) The central government of DRC in many at times

has lost control over her endowed territories to rebel groups which is not expected of a stable

state but is the case for DRC (ii) the central government in order squash local rebels has always

resorted for external support not limited to military and financial support. A well-established

government should have the capability to squash any internal rebellion, if that cannot happen

then the profiling of a failed state, deems fit.140

Poor governance contributes to conflict finance there are countries in Europe like Australia

and the United Arab Emirates which are well endowed with natural resources but are not facing

any natural resource conflict, proper governance systems must be therefore adopted.141

Marginalization breeds a mentality of we verse them and thus a recipe to recruit rebel groups.

The government in place should, therefore, ensure that there is equitable resource distribution.

However much still needs to be done to ensure that the underlying issues of natural resource

conflict are addressed, it is so unfortunate that DRC is almost slipping back into anarchy due

to an unconstitutional regime. The incumbent wants to seek a third term, despite the populace

unwillingness.142

140
Herman, J. C. (2015). The Mind of the African Strongman: Conversations with Dictators, Statesmen, and
Father Figures. New Academia Publishing.
141
World .B. International M. F. and African, D.B. (2000), Can Africa Claim the 21 st Century.
142
Paul. C (1998). On Economic Causes of Civil War, Oxford: Economic Papers.

98
The Governments of the countries where the individuals, companies and financial institutions

that are systematically and actively involved in these activities are based should assume their

share of the responsibility. The Governments have the power to regulate and sanction those

individuals and entities. They could adapt their national legislation as needed to effectively

investigate and prosecute the illegal traffickers. In addition, the OECD Guidelines offer a

mechanism for bringing violations of them by business enterprises to the attention of home

Governments, that is, Governments of the countries where the enterprises are registered.

Governments with jurisdiction over these enterprises are complicit themselves when they do

not take remedial measure.143

4.3.6 International and Regional Organizations

The Southern African Development Community shared the view of some end-user States that

existing certificates of origin were adequate for demonstrating that products had been legally

produced and acquired. Customs intelligence and investigative capability for combating

smuggling are still being developed within SADC.144 Issues of capacity-building and

information sharing within the region will have to be addressed as this process advances. The

World Customs Organization has established a network of Regional Intelligence Liaison

Offices, each assigned to a number of countries, to facilitate the exchange of information and

cooperation within a region. The Democratic Republic of the Congo and many francophone

countries in the surrounding region are attached to the Liaison Office at Douala, Cameroon.

WCO observed that the use of the Liaison Office and the WCO Internet-based Customs

143
Letter dated 8 October 2002 from the Chairman of the Panel of Experts on the Illegal Exploitation of Natural
Resources and Other Forms of Wealth of the Democratic Republic of the Congo addressed to the Secretary-
General
144
Ibid

99
Enforcement Network by the Douala regions members was quite low. It stressed that curbing

fraudulent trade in commodities transiting through a region depends on effective

communication between the countries concerned.145 With regard to trade flows, the World

Trade Organization have stated that the two provisions of the 1994 GATT, a component of the

WTO treaty, authorize members to take measures that otherwise would be inconsistent with

GATT/WTO rules.146 These rules generally prohibit trade restrictions and discrimination.

Articles XXI (c) and XX describe situations and policy aims permitting exceptional measures.

The former, the security exception provision, refers to exceptions related to a State fulfilling

its obligations under the Charter of the United Nations. This might serve as justification for

Members taking action in compliance with a Security Council resolution on maintaining peace.

The Economic Commission for Africa concurred with Belgium that smart sanctions should

be part of the solution to ending the illegal trade. It added that the Governments of the countries

involved should also be held accountable for the illegal activities of individuals and/or

companies as well as banks that are operating in their country since they have the power to

regulate them.147

In an effort to determine what measures might be taken at the end of the commercial chain to

control the trade in resources of the Democratic Republic of the Congo and sever its links to

the armed conflict, the UN Panel of experts surveyed 17 end-user countries in Asia, Europe,

the Middle East and North America. Many of these countries serve as secondary transit points

and processing centres as well as major consumer markets.148 They included Belgium, China,

145
Ibid
146
Letter dated 8 October 2002 from the Chairman of the Panel of Experts on the Illegal Exploitation of Natural
Resources and Other Forms of Wealth of the Democratic Republic of the Congo addressed to the Secretary-
General
147
Ibid
148
Ibid

100
France, Germany, India, Israel, Japan, Kazakhstan, Lebanon, Malaysia, the Netherlands, the

Russian Federation, Switzerland, Thailand, the United Arab Emirates, the United Kingdom

and the United States. Several European Union members, including France and the

Netherlands, observed that any measures affecting trade flows would have to be taken within

the framework of the European Union and its trade regulations. Belgium and the United

Kingdom stressed that the burden of ensuring transparency in commercial and financial flows

or supply chains should be borne primarily by private companies and should be based on either

voluntary measures or the OECD Guidelines for Multinational Enterprises.149 Germany echoed

this, saying that it had appealed to German companies to adhere to those guidelines as well as

the principles of the European Union Commissions Green Paper on Social Responsibility and

the United Nations Global Compact in their business activities in the region. Germany also

encouraged the Panel to continue its efforts to increase the transparency of the commercial

chains for the natural resources of the Democratic Republic of the Congo, especially by

intensifying its dialogue with private companies. Only Belgium suggested the possibility of

imposing targeted sanctions against businesses or individuals profiting from the trade in

conflict goods. The Netherlands expressed the view that the verification of commodities would

be less difficult and costly if carried out at the beginning of the commercial chain.

Belgium, Germany and the United States also highlighted the re-establishment of the States

authority throughout the territory of the Democratic Republic of the Congo as essential to

combating the illicit exploitation, and the need for capacity-building to help achieve this.

Similarly, Lebanon said that the customs administration of the Democratic Republic of the

149
Ibid

101
Congo should be reinforced so that it could more effectively control borders, monitor trade

flows and prevent smuggling.150

Although the international community has made efforts to try and stop conflict finance in DRC,

there is a huge concern that the efforts being made are not adequate and there seems to be some

reluctance in helping the Congolese people. Oxfam criticized the international community in

their 2000 report for ignoring the DRC. When comparing with the response in Kosovo, they

pointed out that in 1999, donor governments gave just $8 per person in the DRC, while

providing $207 per person in response to the UN appeal for the former Yugoslavia. While it is

clear that both regions have significant needs, there is little commitment to universal

entitlement to humanitarian assistance.151

Oxfam also noted that the international community is essentially ignoring what has been

deemed Africas first world war. The DRC remains a forgotten emergency. Falling outside of

the media spotlight, and experiencing persistent shortfalls in pledged humanitarian aid, the

population of the DRC has been largely abandoned to struggle for their own survival. It begs

the question whether there is hope for DRC to end the conflict?

In conclusion, DRCs abundant mineral and fuel resources can be an asset in the quest for

inclusive and sustainable development, but researchers and policy experts have come to

recognize that governance is crucial in determining whether resources are a blessing or a curse.

Research into the resource curse initially had a narrow economic focus, but now natural

resources are seen to be linked to broader challenges like consolidating democracy, achieving

accountable and transparent governance and averting violent conflict. Initiatives like the Africa

150
Ibid
151
Oxfam report 2001

102
Mining vision show that regional organizations and policy experts are paying increasing

attention to extractive issues. They portray Africas extractives industries as, at best, lucrative

enclaves that historically have done little to promote industrialization and reduce poverty,

while imposing heavy social and environmental costs. The history, they argue, can be turned

around through an overhaul of the policy framework for resource extraction.152

4.3.7 Develop political space as alternative to military operations.

Ever since the 2007 Nairobi communiqu, military responses to the conflict have been

prioritized at the expense of other approaches. The results have been very mixed. Groups

targeted in sweeps often relocate until operations end, then return and attack civilians whom

they accuse of helping state authorities. Military operations against non-state armed groups

may be necessary, but they should be combined with initiatives that offer an alternative and a

future to certain members of these groups, especially those not guilty of war crimes. There is

reason to believe that combatants can be persuaded to step down. The Goma conference

rekindled some confidence among militia groups on away forward. Likewise, during previous

negotiations, the FDLR agreed to denounce the use of force, condemn genocide ideology,

cooperate with the international tribunal on the genocide, and transform itself into a political

party in Rwanda. Offering members of militias reasonable and secure opportunities in their

home countries should be a key aspect in peace efforts. Fostering protection of political rights

and civil liberties, moreover, will undermine the claims of exclusion and persecution that

militias such as the FDLR use to recruit among exile communities.

152
Ibid

103
4.3 Summary

In conclusion the prospects for peace in the DRC will fundamentally depend on the

development of an inclusive approach that combines the security and economic interests of the

various local and regional actors in the in the region. If communities in DRC are given equal

chances in accessing benefits emanating from mineral resources and also given opportunities

in the national government ultimately peace will return to the country and the Great Lakes

region as a whole.

104
 CHAPTER FIVE

SUMMARY, CONCLUSIONS AND RECOMMENDATIONS

5.1 Introduction

5.2 Summary

The overriding purpose of this study was to investigate the role of state and non state actors in

fueling conflict in DRC. The Study relied on secondary data and interviews held with

individuals who have vast knowledge of the conflict in DRC. Noting the uniqueness of the

study, finding reliable and available data was difficult especially in the case of idenifying

multinational companies directly fueling the conflict. This was because many companies

involved in the racket do not directly operate in DRC but use shadow companies to do the dirty

work for them. Nevetheless the study was able to draw useful conclusions in support of the

research problem.

5.3 Conclusion

The rampant exploitation of resources in DRC has only been in favor of outsiders and a few

greedy Congolese. Asian and Western companies have had continued booming businesses in

their various industries from techonology to mining at the detriment of Congolese nationals

who many of them do not get to enjoy the high tech innovations that are released each year.

It is eveident from the protracted conflict cycle and insecurity in eastern DRC that the conflict

is increasingly dominated by economic interests rather than political motivations. The sheer

scale of the smuggling and the fact that armed groups receive only a small fraction of these

profits suggests that a largescale transnational organized criminal networks plays a role in

105
keeping armed groups active. As established by the study this done to deliberately create an

unstable environment that ensures illegal expolitation of natural resources.

Based on the research and findings the study affirms its initial hypothesis that DRC conflict

has been instigated and fueled by external forces who are bent on ensuring that DRC remains

unstable to enable the looting and smuggling to continue. The basic tenets of ending conflict

finance in DRC requires the full participation of all stakeholders.

5.4 Recommendations

5.4.1 Recommendations to Consumers

The fight against conflict finance in DRC must be a collective one. The consumers of high tech

devices and luxury products have a responsbility towards demanding for conflict free products.

By pressuring companies to remove conflict financed products from there supply chains and

demanding for higher standards of products which have been vetted to ensure no invlovement

in conflict finance. This will certainly help remove fuel from the fire by ensuring that

companies are held accountbale for the products they produce and in turn reduce the need to

pay rebels or sign concession rights for future expolitation. It is up to the consumers to put a

lot of pressure on multinational corporations because they are not willing to lose the high

profits they gain from DRC minerals. The study calls for consumers to take a lead and create

a movement that will call for action against conflict mineral products and take a stand or a knee

and not purchase any products that have not been certified to be free from conflict minerals.

5.4.2 Recommendations to UN Mission MONUSCO and other UN Agencies

The study further recommends that MONUSCO should work hand in hand with the

106
government of DRC to establish an effective government that is able to enforce the rule of law.

MONUSCO through its different task forces should support national authorities to be able to

take control of areas that are dominated and controlled by rebels. In addition the mission

together with the international community should continue to advocate for legal and fiscal

reforms, including on excessive and illegal taxation.

Other UN bodies like UNCTAD and UNDP should also play an active role in working towards

ensuring the illegal trade in DRC is stopped and help DRC formulate policies that would help

legalize trade and ensure its done effectively such that it benfits the Congolese people.

In addtion UN agencies should increase their capacity building efforts to ensure previous and

current development projects have been enforced and implemented. Literacy levels in DRC

are at low and agencies like UNICEF and UNESCO with the concerted efforts from the DRC

government should do their level best to ensure education is available for all Congolese

nationals young and old. This will increase the level of civil education among DRC nationals

and eventually see the population have the ability to fight for their rights and work together as

a nation to develop the country.

107
5.4.3 Recommendations to the Government of DRC

The government of DRC faces many challenges but it is the most important actor in ending the

conflict and utilizing its resources for the benefit of its people. The initial challenge is the issue

of identity. According to several media reports and also from the interviews that the study

undertook, argues that the conflict Eastern DRC is not instigated by DRC nationals but by

Rwandeses and Ugandan rebels. Rumour has it that even Joseph Kabila is not of congoleses

decent. This issues threaten the ability of the president to bring the congoleses people together

as one nation. To ascertain this claims would be a toll order however the government should

make all efforts to reduce the ethnic tension. This can be done by assertivley work with

Rwanda and Uganda to remove all the rebels in hiding and call for reparation of each countrys

nationals by securing a safe return.

The other major issue is the control of the mine areas. The government has been accused of

being too weak in taking control of the mine areas. This has allowed rebels groups to dominate

several areas in Eastern DRC and because the military is shrouded in corruption very little has

be done. The governemnt requires to take aggressive measures and put in place policies and

laws that will provide the military will power to actively support the government and protect

the country. The President need to realign his priorities and firmly work together with other

leaders to put in place proper mechanisms for fighting corruption, ensure there is tranparency

and accountabilty which provides for prosecution of culprits. Reorganize and strengthen his

legislative, judicial and executive arms of government to ensure that they uphold the rule of

law.

The DRC government need to restrategize its diplomatic relations with its neighbours. Perharps

108
it is time that hard powere is used to achieve the desired goal. Multilateral talks need to held

with the regional community to discuss ways that they could work together to build DRC in a

way that all parties gain. The African Union should also put pressure on Rwanda and Uganda

to obey thre peace accords and pay all punitive damages as instructed the international criminal

court.

It is evident that the international community looks at DRC as a gem and possibly they cannot

continue to grow their multinational companies without DRCs resources. In the regard DRC

government needs to first invetigate all countries looting minerals and accuse at the ICC. They

should also pay punitive damages for all the harm caused and Belgium should be first on the

list. Once that is done then they should establish talks to discuss ways in which business will

be condcuted in fair and just manner assuming that the government would have done its in

house cleaning and ensured that their were policies and laws in place that governed mineral

trade.

5.4.4 Recommendations to Regional Community and Africa as a whole

The regional community needs to make a more deliberate efforts to help DRC end the conflict

and retain peace. Heads of state should call for immediate removal of all Rwandese and

Ugandan soldiers in DRC. Sanctions should be placed on whichever government that refuses

to withdraw its troops. The government should also provide amnesty to all Rwandese and

Ugandan rebels that may be hiding in DRC. In addition the regional community needs to

cooperate and fight transanational crime at the international and regional level. Strong policies

should be put in place to ensure multinational coperations engaged in illegal trade are barred

from accessing any minerals from DRC. Policies that will encourage regional trade

109
development should be enforced. All African nations are called to come together plan and

agree on ways to utilize DRC minerals for the betterment of Congolese nationals and Africa

as whole. African states should mobilize ways to add value to the raw minerals in DRC so as

to ensure they get maximum benefits.

110
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UN Expert Panel Report 2001
http://www.un.org/News/dh/latest/drcongo.htm
Oxfam report 2001 (No End in Sight)
http://reliefweb.int/sites/reliefweb.int/files/resources/07A3557E6BBE629E85256AA10
076E770-oxfam_drc_06aug.pdf
Amnesty International report 2001 (Conflict: Our Brothers Who Help to Kill Us)
http://www.amnesty.org/en/library/asset/AFR62/010/2003/en/89773b34-d70a-11dd-
b0cc-1f0860013475/afr620102003en.pdf
Human Rights report 2011: http://daccess-dds-
ny.un.org/doc/UNDOC/GEN/G11/116/56/PDF/G1111656.pdf?OpenElement
Human Rights report 2008:
http://www.ohchr.org/Documents/Countries/ZR/DRC_MAPPING_REPORT_FINAL_E
N.pdf
Blood in the mobile: Frank Piasecki Poulsen http://bloodinthemobile.org/the-film/video-blog/

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APPENDICES

Appendix I: Field Interviews

Field interview (2017) with Congolese Minister at the Embassy of DRC

Field Interview (2017) with Ambassdor Jean Pierre Ossey of the Republic of Congo
Brazaville
Field Interview (2017) with Director of Political Affairs, Office of the Special Envoy of the
Secretary General for the Great Lakes Region
Field Interview with (2017) with Deputy Special Representative og the Secretary General of
the United Nations for the Somali Mission
Field Interview (2017) with Political Affairs Officer, United Nations Organization
Stabilization Mission in the Democratic Republic of Congo (MONUSCO)
Field Interview (2017) with Director, United Nations Enviromental Program
Field Interview (2017) with Congolese Business man, Living and working in Kenya
Field Interview (2017) with Congolese UN staff member, working in Mogadishu
Telephone Interview (2017) with Congolese national residing in Goma
Telephone Interview (2017) with Congolese national residing in Paris
Focus group discussion with (2017) ten Congolese nationals and Kenyans at the United states
International University.

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Appendix II: Map showing 30 Non-State Armed Groups In Eastern DRC

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Appendix III: Map Showing the Smuggling Routes by Transnational Organized Crime
From Eastern DRC to Criminal Groups, Companies or Individuals in Uganda,
Rwanda And Burundi

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