81296598-Responsible Sourcing in the Artisanal Cobalt Sector in the DRC

The mining sector is central to the economy of the Democratic Republic of Congo (DRC). In 2018, 28.7% of the country's gross domestic product, 98% of its exports and 36.7% of its government revenues were generated by mining. However, the population does not adequately benefit from this wealth, e.g., through local value addition or public spending. Within global value chains, the country is an important supplier of raw materials such as copper and cobalt, as well as tantalum, tin, tungsten, and gold, which are strategic for the energy transition. Neither industrial nor artisanal mining in the DRC is managed sustainably in terms of the three dimensions of sustainability (economic, environmental, and social), so mining is associated with risks to social development, health, and the environment. Within the Congolese economy, the mining sector is hardly integrated into the local economy. The enclave nature of mining means that the sector's potential for improving incomes and employment is not realised. The same applies to the collection of taxes from the mining sector. The mining sector cannot develop its potential for sustainable local development and employment because it is not sufficiently aligned with sustainability criteria. The overall objective of the project "Integrated Economic Development in the Mining Sector II" is to improve environmental, social, and economic sustainability in and around the mining sector in the provinces of Haut Katanga and Lualaba. Therefore, it works in four areas of intervention with the following aims for each output: Output 1, Transparency and Participation aims to improve the capacity of relevant actors to implement policies that promote social, economic, and environmental sustainability in the mining sector. Support for civil society engagement will build on existing multi-stakeholder partnerships (Investissements Durables au Katanga/Kivu - IDAK/IDAKI, Extractives Industries Transparency Initiative) and the competitive grant initiative for civil society organisations established under the previous project. The supported organisations expose abuses, collect information, make it available to the public and engage in dialogue with government and company representatives. At the local level, they fight corruption by promoting better governance and strengthening civil society oversight. Selected NGOs and international academic institutions will be supported to build partnerships with international partners and to jointly produce and disseminate information on the mining sector, including benchmarking the social and environmental performance of mining companies. The project's civil society partner organisations will also act as intermediaries to educate grassroots groups and individuals in mining communities about their rights and guide them in improving living conditions in their respective communities. Output 2, Sustainability in Artisanal Mining, aims to create more sustainable income opportunities for artisanal miners, either through the introduction of production standards in artisanal mining or through alternative income opportunities outside of mining. Through the provision of vocational education and training, business start-up and basic financial training, residents of mining communities will be supported to pursue professional or entrepreneurial activities outside of artisanal mining. In order to promote the active participation of women, the project designs the timing and rhythm of the training activities in such a way that participation does not conflict with the pursuit of reproductive and other activities such as field work. In addition to the training approach, civil society organisations will be supported to regularly monitor and systematically document the human rights and environmental situation in small-scale mining using a digital application. Output 3, Strengthening Micro, Small and Medium Enterprises (MSMEs) and Promoting Vocational Training, aims to ensure that trainees and those interested in self-employment have access to improved, market-driven training opportunities. This is expected to improve their access to business opportunities in and around the mining sector. The training and support services for MSMEs and trainees provided under Output 3 will be developed in collaboration with the private sector. This approach will ensure that the offer meets the real needs of companies operating in the DRC as future clients and customers of MSMEs. The support offered under Output 3 will include business development services, such as advice on business plans and access to finance, as well as networking with potential clients. Special attention will be given to women entrepreneurs who wish to transform their existing activities into formal enterprises. Chambers and (mining) companies will be sensitised to the importance and benefits of improving women's access to the formal mining sector. In cooperation with training institutions and partners from the private sector, short-term training with a high practical content, mentoring, internships, and job fairs will be organised. Output 4, Strengthening domestic revenues, aims to mobilise resources from the mining sector by strengthening the capacity of the relevant tax and revenue authorities and their staff. Under Output 4, the relevant organisational units will receive targeted advice on how to consider the technical specificities of mining and how to conduct tax audits of mining companies. Selected staff will receive further training. These activities will be linked to capacity building within the fiscal and budgetary authorities to estimate expected long-term tax revenues. Networking between mining authorities and financial and tax authorities will improve data exchange and thus prevent misreporting of quantities as part of tax avoidance strategies.