Stop Pillage - OSJI/CAP Briefing Report

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    Holding Accountable Those That Fuel War And Conflict

    CConflict Awareness Project Briefing Interim Report by Kathi Lynn Austin NOVEMBER 2013

    Conflict Awareness Project ConflictAwareness.org 1

    The Pillage of Eastern Congo Gold:

    A Case for the Prosecution of Corporate War Crimes

    1. Summary

    Concession Area 40 located in the Ituri District ofthe Democratic Republic of the Congo (DRC),contains one of the nations richest deposits ofgold. Yet, despite the nations vast mineral wealth,people living in the Ituri area are among the mostimpoverished in the country. One reason is clear:foreign individuals and corporate actors havetaken advantage of armed conflict to pillagemillions of dollars worth of gold from ConcessionArea 40s non-renewable reserves. Despite UNsanctions and international law prohibitions, thesecorporate actors have acted with near totalimpunity, perversely incentivizing war, humanrights abuses, and the commission of atrocities.

    This report highlights the results of a nine-year,

    international investigation on the trail of one of themost lucrative, unlawful gold trade pipelinesoriginating from this eastern Congolese goldmining area. The trail covers each step of thesupply chain, beginning with the source in theground in Concession Area 40 in the Ituri region ofthe Democratic Republic of Congo (DRC) andending with its transformation into hard cashprofits and the recording of these receipts on thefinancial ledgers of the British corporatebeneficiaries.

    Spanning Europe, Africa, the U.S. and Middle

    East, the investigation has yielded thousands ofpages of forensic documentation. In addition, theinvestigative trail has included interviews andcorrespondence with dozens of primary actors;hundreds of interviews with secondary actors; on-site observations of artisanal and small-scale goldproduction in the Ituri mining belt; and aneyewitness, in-depth examination of the means bywhich illicit gold is purchased, trafficked,laundered, and marketed bybusinesspersons and

    corporate entities at each phase of the supplychain.

    While a substantial dossier of facts, evidence, andlegal justifications has been prepared for Swiss,UK, and Jersey Channel Islands law enforcementauthorities, this report provides a snapshot of thecase and calls for the prosecution of relevantcorporate actors for the war crime of pillage andrelated financial crimes by any country withappropriate jurisdiction over the matter.

    Though the actual trafficking by these foreigncompanies and businesspersons began as earlyas 1998, this report focuses primarily on theperiod from 2003-2005. Even within this limited

    period, the scale of pillage was immense. Forexample in 2004, $39 million worth of pillagedDRC gold was bought by a single Europeancompany from a single Uganda source.

    1

    Fig 1. Email to Kathi Austin from Julie Easton Detailing Hussar2004 Turnover

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    CONFLICT AWARENESS PROJECT REPORT by Kathi Lynn Austin November 2013

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    For the purposes of this report, the participants inthe illicit gold supply chain examined here arereferred to collectively as The Conflict GoldEnterprise. The key actors named include, among

    others: Uganda Commercial Impex (Uganda); Mr.Neil Jonathan Graff (UK, Israel, South Africa);Hussar Services Limited (UK); Hussar Limited(Jersey Channel Islands); and Argor-Hereaus SA(Switzerland).

    From 1998, continuing periodically to the presentday, armed conflict has raged in the easternregion of the Democratic Republic of the Congo(DRC). Rebel soldiers, illegal armed groups, andinterloping foreign troops have fought to controlthis territory, rich with gold and other minerals.The proceeds from the illegal mining and sale ofthe regions gold have enabled these military

    forces to sustain troops and warfare with thepurchase of weapons, landmines, ammunition,and supplies.

    As a consequence, the ongoing hostilities havedestabilized the entire region, led to widespreadviolations of human rights and internationalhumanitarian law, and resulted in the massiveloss of human life. Foreign businesspersons andfirms contributed to the scale and duration ofthese hostilities by providing an influx of hardcurrency to the warring parties on the ground inexchange for conflict gold and other natural

    resources. In turn, these foreign corporate actorsfunneled these illicitly obtained natural resourcesinto the unregulated global marketplace at hugeprofit.

    The Conflict Gold Enterprise is one example ofthe illegal mineral supply chains that havedevastated the people and land of the DRC.Acting in concert, a group of foreign individualsand companies based out of Uganda,Switzerland, United Kingdom, and Jersey ChannelIslands systematically acquired conflict gold fromConcession Area 40.

    2 The gold was fed into the

    supply chain by two illegal armed groups, theFront des Nationalistes et Integrationalistes (FNI)and the Force Arme du Peuple Congolais(FAPC), who were at war with the golds lawfulowner, the Government of the DRC. The foreignentities disguised the looted gold as originatingfrom Uganda, monopolized the market, andreceived profits from this exploitation onadvantageous terms in the millions of dollars.

    Foreign corporations rarely are held liable for theirillicit trade in conflict gold or for their role infacilitating resource wars for their own privategain. The body of evidence collected during this

    investigation provides a compelling case for aprecedent-setting prosecution of relevant partiesfor the war crime of pillage.

    The laws of war obligate States with applicablejurisdiction to investigate and prosecute whereappropriate.

    Pillage, which is theft in the context of war, has along pedigree in the annals of armed conflict.While this war crime exists in the landmark 1998Rome Statute of the International Criminal Courtand among many domestic legal systems, no

    corporate actors have been prosecuted since theimmediate post-WWII era.3

    The impact that a precedent-setting case canprovide should not be undervalued. A successfulpillage prosecution against corporate actors wouldserve as a powerful deterrent to modify thebehavior of business firms that, at present, areillicitly trading in conflict commodities. This in turncould help transform the way that armed conflictsare financed and lead to the closure of legalloopholes that have allowed this black markettrade to flourish.

    The timing of this war crimes case could not bemore critical. Recently the International CriminalCourt (ICC) has been under heavy criticism forperceived political bias and the uneven applicationof justice at a global level. African States inparticular have complained that Africansdisproportionately have been the focus of ICCinvestigations and prosecutions;

    4 some African

    States have even threatened to pull out ofparticipation in the ICC and its founding treaty, theRome Statute, which treats pillage as a warcrime.

    5

    Public concern also has been raised that powerfulmembers on the UN Security Council are able toblock referrals of their own citizens andcorporations or those of their allies from beingplaced on targeted UN Sanctions Lists. This wasthe case in regard to some of the key actorsinvolved in The Conflict Gold Enterprise,particularly the entities from Switzerland, the UK,and Jersey Channel Islands.

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    CONFLICT AWARENESS PROJECT REPORT by Kathi Lynn Austin November 2013

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    As a reminder of the ongoing problem of impunity,recent NGO and UN reports have demonstratedthe way in which revenues from conflict gold have

    helped to finance the current military operations ofthe Congolese rebel group M23 and its allies,thereby threatening the long-term stability ofeastern Congo.

    6A report by the Enough Project,

    Striking Gold: How M23 and its Allies areInfiltrating Congo's Gold Trade, illuminates theproblem of repeat offences at the crux of DRCsillicit trade.Foreign gold exporters, refineries, andgold brokers continue to evade accountability.

    The liability of foreign companies andbusinesspersons for the pillage of easternCongos gold is long overdue. Until the scope ofinternational justice is expanded to sufficiently net

    these foreign war profiteers, their role in enablingconflict and aiding and abetting atrocities willcontinue. A war crimes prosecution of corporateactors comprising The Conflict Gold Enterpriseoffers one opportunity to begin to break theimpunity around foreign resource exploitation thathas fueled armed conflict, the devastation ofcommunities, and human suffering in the Congosince the late 1990s.

    2. Background

    2.1 Pillage

    The laws of war, also known as internationalhumanitarian law, have long protected propertyagainst pillage during armed conflict. A briefreview of history since the American Civil Warilluminates this fact.

    A Short History of Pillage7

    The 1863 Lieber Code, which established the lawof war for Union forces in the American Civil War,stated: all pillage or sacking, even after takingplace by main force [were] prohibited under the

    penalty of death, or such other severe punishmentas may seem adequate for the gravity of theoffense.

    In the Hague Regulations of 1907, two provisionscategorically stipulate that the pillage of a town orplace, even when taken by assault, is prohibited,and that pillage is formally forbidden.

    After the end of World War II, the Geneva

    Conventions of 1949 again reaffirmed that pillageis prohibited. These provisions bind all states.

    Codification of pillage as an offense in