Democratic Republic of the Congo
The Democratic Republic of the Congo (DRC) is the largest country in Sub-Saharan Africa and one of the richest in the world in terms of natural resources. With 80 million hectares (197 million acres) of arable land and 1,100 minerals and precious metals, the DRC has the resources to achieve prosperity for its people. Despite its potential, the DRC often cannot provide adequate food, security, infrastructure, and health care to its estimated 100 million inhabitants, of which 75 percent live on less than two dollars a day.
The ascension of Felix Tshisekedi to the presidency in 2019 and his government’s commitment to attracting international, and particularly U.S. investment, have raised the hopes of the business community for greater openness and transparency. In January 2021, the DRC government (GDRC) became eligible for preferential trade preferences under the Africa Growth and Opportunity Act (AGOA), reflecting progress made on human rights, anti-corruption, and labor. Tshisekedi created a presidential unit to address business climate issues. In late 2020 Tshisekedi ejected former President Joseph Kabila’s party from the ruling coalition and in April 2021 he appointed a new cabinet.
Overall investment is on the rise, fueled by multilateral donor financing and private domestic and international finance. The natural resource sector has historically attracted the most foreign investment and continues to attract investors’ attention as global demand for the DRC’s minerals grows. The primary minerals sector is the country’s main source of revenue, as exports of copper, cobalt, gold, coltan, diamond, tin, and tungsten provide over 95 percent of the DRC’s export revenue. The highly competitive telecommunications industry has also experienced significant investment, as has the energy sector through green sources such as hydroelectric and solar power generation. Several breweries and bottlers, some large construction firms, and limited textiles production are active. Given the vast needs, there are commercial opportunities in aviation, road, rail, border security, water transport, and the ports. The agricultural and forestry sectors present opportunities for sustainable economic diversification in the DRC, and companies are expressing interest in developing carbon credit markets to fund investment.
Overall, businesses in the DRC face numerous challenges, including poor infrastructure, a predatory taxation system, and corruption. The COVID-19 pandemic slowed economic growth and worsened the country’s food security, and the Russia’s attacks on Ukraine have raised global prices on imported foods and gasoline. Armed groups remain active in the eastern part of the country, making for a fragile security situation that negatively affects the business environment. Reform of a non-transparent and often corrupt legal system is underway. While laws protecting investors are in effect, the court system is often very slow to make decisions or follow the law, allowing numerous investment disputes to last for years Concerns over the use of child labor in the artisanal mining of copper and cobalt have served to discourage potential purchasers. USG assistance programs to build capacity for labor inspections and enforcement are helping to address these concerns.
The government’s announced priorities include greater efforts to address corruption, election reform, a review of mining contracts signed under the Kabila regime, and improvements to mining sector revenue collection. The economy experienced increased growth in 2021 based on renewed demand for its minerals.
|TI Corruption Perceptions Index||2021||169 of 180||http://www.transparency.org/research/cpi/overview|
|Global Innovation Index||N/A||N/A||https://www.globalinnovationindex.org/analysis-indicator|
|U.S. FDI in partner country ($M USD, historical stock positions)||2021||$25||https://apps.bea.gov/international/factsheet/|
|World Bank GNI per capita (USD)||2020||$550||https://data.worldbank.org/indicator/NY.GNP.PCAP.CD|
1. Openness To, and Restrictions Upon, Foreign Investment
3. Legal Regime
4. Industrial Policies
5. Protection of Property Rights
6. Financial Sector
8. Responsible Business Conduct
The DRC has not defined Responsible Business Conduct (RBC) for most industries, but the Labor Code includes provisions to protect employees, and there are legal provisions that require companies to protect the environment. The Global Compact Network DRC, a public-private consortium affiliated with the United Nations, encourages companies operating locally to adopt sustainable and socially responsible policies.
The GDRC has taken actions of limited impact to support RBC by encouraging companies to develop and adhere to a code of ethics and respect for labor rights and the environment. However, the DRC does not possess a legal framework to protect the rights of consumers, and there are no existing domestic laws to protect individuals from adverse business impacts.
Reports of children working in the DRC’s artisanal mines has led to international pressure to find ways to ensure the DRC’s minerals supply chain is free of child labor. Concerns over the use of child labor in the artisanal mining of copper and cobalt have led to worries about the use of Congolese resources served to discourage potential purchasers. USG assistance programs to build capacity for labor inspections and enforcement are helping to address these concerns.
Development pressures have resulted in reports of violations of environmental rights. In one case, a prominent local businessman is seeking to develop a dam in a national park in the southeastern province of Haut Katanga. There is a case in eastern DRC of a local developer pressuring an environmental defender to end his activism.
There are no known high-profile and controversial cases of private sector entities having a negative impact on human rights.
With regard to human rights, labor rights, consumer protection, environmental protection, and other laws/regulations designed to protect individuals from the adverse effects of business, the GDRC faces many challenges in enforcing domestic laws effectively and fairly.
The GDRC has no known corporate governance, accounting, or executive compensation standards to protect shareholders.
There are independent NGOs, human rights organizations, environmental organizations, worker/trade union organizations, and business associations that promote or monitor RBC and report misconduct and violation of good governance practices. They monitor and/or defend RBC and are able to do their work freely.
The DRC has adopted OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Afflicted and High-Risk Areas as defined by the United Nations Group of Experts, as well as various resolutions of the UN Security Council related to business and human rights in the Congolese mining sector. There are also existing domestic measures requiring supply chain due diligence for companies that source minerals that may originate from conflict-affected areas in DRC.
The DRC participates in the Extractive Industries Transparency Initiative (EITI), and the Voluntary Principles on Security and Human Rights. More information is available at . The DRC publishes reports on its revenue from natural resources. There are domestic transparency measures requiring disclosure of payments to governments and of RBC/Business and Human Rights policies or practices. The mining code provides domestic transparency measures requiring the disclosure of payments made to governments, though they appear to be infrequently enforced. PROMINES, a technical parastatal body financed by the GDRC and the World Bank, aims to improve the transparency of the artisanal mining sector. Amnesty International and Pact Inc. have also published reports related to RBC in the DRC mining sector.
The DRC has a private security industry but is not a party to the Montreux Document on Private Military and Security Companies. It does not support the International Code of Conduct or Private Security Service Providers, nor does it participate in the International Code of Conduct for Private Security Service Providers’ Association (ICoCA).
The DRC constitution and legal code include laws intended to fight corruption and bribery by all citizens, including public officials. The Tshisekedi government has used public prosecutions of high-level officials and the creation of an anti-corruption unit (APLC) to improve the DRC’s anti-corruption enforcement. Prosecutions have led to jail terms but often subsequent early releases. The 2021 edition of Transparency International’s Corruption Perceptions Index (CPI) ranked the DRC 169th out of 180 countries, with a score of 19 out of 100, up from 18 out of 100 the previous year.
Anti-corruption laws extend to family members of officials and political parties. In March 2020, President Tshisekedi created the National Agency for the Prevention and Fight Against Corruption (APLC). Currently corruption investigations are ongoing for three Managing Directors of SOEs.
The country has laws or regulations to address conflicts of interest in the awarding of public contracts or procurement. Conflicts of interest committed in the context of a public contract and a delegation of public service are punishable by a fine of USD 12,500 to USD25,000.
The government through regulatory authorities encourages or requires private companies to establish internal codes of conduct that, among other things, prohibit bribery of public officials.
Law 017-2002 of 2002, establishes the code of conduct for public officials, which provides rules of conduct in terms of moral integrity and professional ethics and the fight against corruption in socio-professional environments. Private companies use internal controls, ethics, and compliance programs to detect and prevent bribery of government officials.
The DRC is a signatory to both the UN Convention against Corruption (UNCAC) and the African Union Convention on Preventing and Combating Corruption but has not fully ratified the latter. The DRC is not a signatory to the OECD Convention on Combating Bribery. The DRC ratified a protocol agreement with the Southern African Development Community (SADC) on fighting corruption.
NGOs such as the consortium “The Congo is Not for Sale,” have an important role in revealing corrupt practices, and the law protects NGOs in a whistleblower role. However, in 2021 whistleblowers from Afriland First Bank that alleged to the international NGO Global Witness interaction between sanctioned individual Dan Gertler and the bank were subjected to prosecution and, in a private proceeding, sentenced to death in absentia. Although the government worked with Global Witness to contest the case, it remained unresolved as of early 2022. NGOs report governmental or other hindrance to their efforts to publicize and/or address corruption. The Observatory of Public Expenditure (ODEP), which works with civil society organizations, raises awareness of the social impact of the execution of finance laws in order to improve transparency and accountability in the management of public finances; to participate in the fight against corruption; and to promote citizen involvement in each stage of the budget process.
U.S. firms see corruption and harassment by local security forces as one of the main hurdles to investment in the DRC, particularly in the awarding of concessions, government procurement, and taxation treatment.
10. Political and Security Environment
The DRC has a history of armed group activity, sometimes of a politicized nature and particularly in the east of the country, and of elections-related violence and civil unrest. The 2018 election, which took place after years of delay marked by protests that were in some instances violently repressed, was marred by irregularities, but most citizens accepted the announced result, and the election aftermath was calm. In January 2019, Felix Tshisekedi became President in the DRC’s first peaceful transition of power. Following President Felix Tshisekedi’s establishment of a new political alliance known as the “Sacred Union,” Tshisekedi appointed Jean-Michel Sama Lukonde as Prime Minister in April 2021.
The security situation continues to be a concern and the U.S. Embassy, through its travel advisories ( ), keeps a list of areas where it does not recommend travel by U.S. citizens. The security situation in eastern DRC remains unstable. Some 15-20 significant armed groups are present and inter-communal violence can affect the political, security, and humanitarian situation. Several towns in eastern DRC continue to be reported to be under attack by armed groups or temporarily under their control.
The foreign terrorist organization-designated ISIS-DRC (aka the Allied Democratic Forces (ADF) rebel group) in eastern DRC is one of the country’s most notorious and intractable armed groups and its members have shown no interest in demobilizing. In May 2021, Tshisekedi declared a “state of siege” – effectively martial law – in North Kivu and Ituri provinces, installing military governors and ramping up Armed Forces of the Democratic Republic of the Congo (FARDC) operations against ISIS-DRC/ADF and other armed groups. The state of siege has been accompanied by problematic human rights practices; the United Nations Stabilization Mission in the Democratic Republic of the Congo (MONUSCO) has documented violations including extrajudicial killings by FARDC and police, while military governments have restricted civil society and political activists and prosecuted some for criticizing the state of siege.
US citizens and interests are not being specifically targeted by armed groups, but anyone can easily fall victim to violence or kidnapping by being in the wrong place at the wrong time. The Armed Conflict Location and Event Dataset tracks political violence in developing countries, including the DRC, . Kivu Security Tracker ( ) is another database for information on attacks in eastern DRC. The Department of State continues to advise U.S. citizen travelers to review the Embassy’s Travel Advisory and country information page ( ) for the latest security information.
11. Labor Policies and Practices
The DRC labor market has a large, low-skilled workforce with high youth unemployment. Women make up 47 percent of the labor force. Expatriates frequently work in jobs requiring technical training in the key mining sector. Approximately 85 percent of the nonagricultural labor force works in the informal sector. About 60 percent of the total labor force works in agriculture.
Informal employment dominates the labor market in the DRC. According to the World Bank, the DRC has one of the highest rates of informal work in the world, with about 80 percent of urban workers engaged in the informal economy. The Congolese trade union confederation estimates that the sector employs 97.5 percent of the country’s workforce. Informal workers in the artisanal mining sector have raised worries about the use of child labor in mining, forcing companies to go through an accreditation system to show they do not use child labor. It takes many forms and is characterized by the non-respect or non-application of labor standards related to minimum wage, working hours, safety and other social standards related to the social health system, retirement, etc. The informal sector’s share of GDP is estimated at nearly 55 percent. The EGI-ODD results show that slightly more than 91 percent of jobs in the non-agricultural sectors are informal, meaning that these workers do not have a contract, receive paid vacations, or family allowances. By gender, 94 percent of women’s jobs in the nonagricultural sector are informal, compared to 87.7 percent for men.
DRC labor law stipulates that for companies with more than 100 employees, ten percent of all employees must be local. If the general manager is a foreigner, his or her deputy or secretary general must be a Congolese national. The government may waive these provisions depending on the sector of activity and available expertise. There are no onerous conditionality, visa, residency, or work permit requirements that impede the mobility of foreign investors and their employees.
The DRC faces a shortage of skilled labor in all sectors. There are few formal vocational training programs, although Article 8 of the labor law requires all employers to provide training to their employees. To address the high unemployment rate, the GDRC has enacted a policy giving Congolese preference in hiring over expatriates. Laws prevent companies from laying off workers in most cases without compensation. These restrictions discouraged hiring and encouraged the use of temporary contracts instead of permanent employment. There is no government safety net to compensate laid-off workers.
There are no labor laws waived in order to attract or retain investment, nor are there additional/different labor law provisions in special economic zones, foreign trade zones, or free ports compared to the general economy. The law grants and guarantees equal treatment to all national and foreign investors.
Congolese law bans collective bargaining in some sectors, particularly by civil servants and public employees, and the law does not provide adequate protection against anti-union discrimination. While the right to strike is recognized, there are provisions which require unions to obtain authorization and to undergo lengthy mandatory arbitration and appeal procedures before going on strike. Unions often strike to obtain wage increases or payment of back wages and seek to make gains through negotiation with employers.
The DRC government has ratified all eight core International Labor Organization (ILO) conventions, but some Congolese laws continue to be inconsistent with the ILO Forced Labor Convention.
No strikes in the past year have posed an investment risk and government’s reaction.
According to some businesses, the government does not effectively enforce relevant employment laws. DRC law prohibits discrimination in employment and occupation based on race, gender, language, or social status. The law does not specifically protect against discrimination based on religion, age, political opinion, national origin, disability, pregnancy, sexual orientation, gender identity, or HIV-positive status. Additionally, no law specifically prohibits discrimination in the employment of career public service members.
Labor law defines different standard workweeks, ranging from 45 to 72 hours, for various jobs, and prescribes rest periods and premium pay for overtime. Employers in both the formal and informal sectors often do not respect these provisions. The law does not prohibit compulsory overtime.
The labor code specifies health and safety standards, but the government does not effectively enforce labor standards in the informal sector, and enforcement is uneven to non-existent in the formal sector. The Ministry of Labor employs 200 labor inspectors, but the Labor Inspector General reports that funding is not enough to facilitate the conduct of efficient labor inspections.
No new labor related laws or regulations have been enacted in the past year, and no bills are pending.
14. Contact for More Information
U.S. Embassy Kinshasa
+243 810 556 0151