Peace Through Commerce Partnerships As a New Paradigm Reflections From Pact Congo and USAID Working With the Mining Sector in the DRC Christian Roy, Pact Congo Robert La Valli è re, Anvil Mining Ltd. Delivered at University of Notre Dame 13 November 2006

 Huge country, vast resources, history, image  Governance Peace process Election, rule of law, decentralization  Social issues Limited social development, infrastructure, livelihoods Corruption and transparency Conflict, human rights and security  Business and investment framework Country Context Challenges Loom Large

 For civil society (Pact) Community and civil society capacity Limited social investment and policy Extent of social development needs Local, provincial, national, global players  For mining companies (Anvil and others) Commercial framework o History, structure of concessions, competition o Mining code o Global demand Artisan (informal) mining Security  For donors (USAID) Limited leverage for good governance Operational Context Practical Realities

 For Social Development (Pact, civil society, international donors such as USAID) Mining investment catalyzes socio-economic development — reduces dependence, increases independence Strengthen community capacity and economic opportunity Encourage responsible business behavior Improve transparency, rule of law, royalty retrocession  For Business (Anvil, other mining companies) “ Social ” license to operate — manage “ above ground non-technical risk ” Adhere to international mining code Address issues that affect operations Sustain profitable business operations Engaging With Mining Sector Motivations and Objectives

 Good governance Responsible resource exploitation key to DRC ’ s economy and future Control of DRC minerals linked to conflict Significant new international investment Entry points: companies, artisan miners, donors, communities  Companies face significant risks Limited capability managing complex social risks Risk of exacerbating conflict if poorly managed Pressures against transparency and industry reform (i.e., entrenched interests) Unpredictable business environment Why Engage? Partnership Imperative

 Engaging companies and communities Manage Anvil ’ s social investment program Create Trust Fund and help develop foundations with other firms to support development  Engaging bilateral and multilateral agencies Global Development Alliance with USAID DFID support to improve governance UN support of peace process  Engaging government Transparency and development issues Livelihoods  Engaging global standards/practices Voluntary Principles on Security and Human Rights Extractive Industries Transparency Initiative Equator Principles OECD Guidelines UN Global Compact What Are We Doing? Extractive Industries Alliance—Examples

 Sustainable development (3 regions, 57 villages) Community mobilization and governance through infrastructure Agricultural livelihoods and productivity Micro-enterprise and micro-finance with primary focus on women Artisan mining  Governance Mechanism to ensure royalties fund development Third party assessments Protocols to follow Voluntary Principles  Capacity Building Companies: training, recruiting needed expertise, strengthening procedures Civil society: community engagement in decisions and implementation, more options What Are We Doing? At Ground Level

 Reach Limited reach of improved governance Scale of intervention vs. scale of sector  Reputation What is a “ responsible ” mining company? Who do we not work with?  Results Expectations and needs of Congolese Does business-NGO partnership add value? No excuses  Security Security issues loom larger in fragile states Legacy conflicts, regional context  Spoilers Not everyone wants to see this succeed What Is At Stake? “Eyes Wide Open” About Risks

 Commitment to practical implementation OECD Global Compact Equator Principles Voluntary Principles on Security and Human Rights Extractive Industries Transparency Initiative  “ Desk-top ” due diligence to assess reputational risk  Field-based due diligence — on the ground  Ongoing performance reviews Validation of sincerity of purpose Validation of implementation performance Due Diligence An Ongoing Process

 Community improvements Direct benefits from mining in communities Expanded livelihoods and SME development  Sustained investments Mechanism to ensure transparent, collaborative, sustained community investments Royalty revenues support public services and administration (e.g., school, hospitals)  Capability Pact roles sustained over time in community organizations, foundations, and business approaches Practices influence sector more broadly Reduced influence of entrenched interests What Does Success Look Like? Indicators We’re on the Right Path

 Resource context Resources found in difficult places Global demand growing (incentives to find and produce) Gloomy peace prospects if we can ’ t get this right  Limited government capacity Civil society and business bring relevant capabilities and presence to help No single sector can address range of issues  Significance of business activity Scale and scope of reach and influence Skills Why Does This Matter? Local and Global Implications