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In October 2002, a United Nations Panel of Experts accused 85 OECD-based companies of violating the Guidelines for their direct or indirect roles in the illegal exploitation of natural resources in the Democratic Republic of Congo (DRC). According to the Panel, “some of Gecamines’ best cobalt producing areas were transferred to a joint venture between Mr. Rautenbach’s Ridgepoint Overseas Developments Ltd. and the Central Mining Group, a Congolese company, controlled by Pierre-Victor Mpoyo, then Minister of State”.
Mr. Rautenbach was appointed Chairman of Gecamines (the state-owned mining company) in November 1998, but was removed from his post in March 1999 following an audit by Ernst & Young. At the time Mr. Rautenbach was both Managing Director of Gecamines and of the joint venture, “a blatant conflict of interest”. The Panel alleges that Mr. Rautenbach was appointed by President Kabila to head Gecamines, because of his close ties to the ruling ZANU-PF party in Zimbabwe.
In 2000, the DRC Government withdrew Mr. Rautenbach’s mining concessions reportedly after he had failed to pay the Government’s share of the profits from the joint venture. President Kabila allegedly accused him of transferring profits to a shell company, as well as stockpiling cobalt in South Africa. Mr. Rautenbach has resumed his cobalt mining activities in Katanga.
The case against Ridgepoint has been blocked by the UK NCP. The UK NCP claimed the case was resolved by the UN Panel and could not be reopened. Due to the NCP’s inaction, RAID withdrew the complaint.
OECD Watch case story page: http://oecdwatch.org/cases/Case_44-en