UNITED ARABEMIRATES (UAE)SOUTHSUDANUGANDAKENYADEM. REP.OF THE CONGODEDEBURUNDITANZANIA<strong>All</strong> that <strong>Glitters</strong> is Not Gold: Dubai, Congo and the Illicit Trade of Conflict MineralsSeries Editors: Alan Martin and Bernard TaylorDesign: Marie-Joanne BrissetteISBN: 978-1-897320-29-7© Partnership Africa CanadaMay 2014For permission to reproduce or translate all or parts of this publication, pleasecontact Partnership Africa CanadaPartnership Africa Canada is very grateful for the support for its researchprogramme provided by Irish Aid. However, the ideas, opinions and commentswithin this publication are entirely the responsibility of its authors and do notnecessarily represent or reflect Irish Aid policy.PartnershipAfrica Canada331 Cooper Street, Suite 600Ottawa, Ontario, K2P 0G5CanadaTel: +1-613-237-6768Fax: +1-613-237-6530info@pacweb.orgwww.pacweb.org
<strong>All</strong> that <strong>Glitters</strong> is Not Gold: Dubai, Congo and the Illicit Trade of Conflict Mineralsall that glitters is not gold:Dubai, Congo and the IllicitTrade of Conflict MineralsIntroductionProblems of conflict financing, tax evasion and corruption have tainted the gold anddiamonds trade from the Democratic Republic of Congo (DRC) for more than a decade,scaring off investors and depressing trade throughout the region. Gold is consideredthe most persistent ‘conflict mineral’ today, with more than half of the estimated 800artisanal gold mines in eastern DRC under illegal rebel or army control. 1 Almost the entireproduction of these mines—98% according to the United Nations—is smuggled out ofthe country, implying enormous tax losses to the Congolese fiscus. 2 While the majorityof DRC’s diamonds are produced outside the notorious conflict zones in the east, andcertified as conflict-free though the Kimberley Process (KP), the sector’s contributionto state revenues is hampered due to rampant smuggling and undervaluation. Poorinternal controls in DRC also make it highly vulnerable to smuggled goods from conflictaffected areas, most recently the Central African Republic.This report is a contribution to a growing body of research that seeks to betterunderstand the illicit trade of gold (and to a lesser degree, diamonds) emanating fromthe Democratic Republic of Congo, and the role industry and state actors play (primarilyin neighbouring countries and the United Arab Emirates) in facilitating this illegality.The focus on DRC is not accidental. It is the second biggest diamond producing countryby volume, and has been the site of a corrupt and often violent extraction of valuablenatural resources for over a century. More recently, gold mines in eastern DRC havebeen at the epicentre of a protracted armed conflict that has claimed millions of livesand economically destabilized the Great Lakes region for the last decade. Despitebeing mineral rich, DRC’s underdevelopment is directly linked to a myriad of interrelatedfactors including corruption, armed conflict, political instability, poor domesticenforcement capacity and a lack of fiscal instruments to realize the full potential of itsmineral wealth.But just as important is how sophisticated international smuggling syndicates haveexploited—and in some case encouraged—these vulnerabilities for their benefit. Ourinvestigations explore the illicit trade of these minerals from mine site to leading goldrefiners and diamond trading centres in UAE (Dubai)—and finally for onward travel tothe jewellery factories of India, and beyond.1 “Analysis of the interactive map of artisanal mining areas in Eastern DR Congo”, International Peace Information Service (IPIS),November 20132 Final Report, UN Group of Experts on DRC, S/2014/41, 23 January, 2014, para 171.1
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