In the Democratic Republic of Congo (DRC), a stringent battle against companies flouting subcontracting regulations is underway. The Regulatory Authority for Subcontracting announced on Monday, March 11th, that the Russian conglomerate Kazakh Erg, operating copper mines, has been targeted. Several of its contracts have been reassigned to Congolese firms.
In the DRC, subcontracting legislation permits only companies with majority Congolese ownership, yet many circumvent this law through fraudulent means. This was notably the case with the Russian group Kazakh ERG, operating four copper and cobalt mines in southeastern Congo. Their nine purported subcontracting entities were exposed by Congolese authorities, leading to their expulsion from the subcontracting market.
These contracts will now be assumed by firms controlled by Congolese entities. Miguel Katemb Kashal, Director General of the Regulatory Authority for Subcontracting (ARSP), stated during a press conference in Kinshasa on Monday, March 11th: “In reality, these nine subcontracting companies, owned by Russian shareholders of the ERG group, which operate in four mines in the DRC, collectively held contracts worth hundreds of millions of dollars. 98% of the contracts belonged to these companies.”
“This action has not been restricted to the Russian group Kazakh ERG alone; we have also taken similar steps with the Canadian Barrick and the Chinese Sicomines… Therefore, we are enforcing compliance with subcontracting laws across all companies, intending to ensure adherence to subcontracting regulations,” he continued.
The rigorous enforcement of subcontracting laws underscores the commitment of Congolese authorities to uphold regulatory frameworks, ensuring fair participation and economic development for Congolese-owned enterprises.