Ending corporate impunity: how to really curb the pillaging of natural resources.

• Author: McGregor, Michael A.

When delegates were negotiating the creation of the International Criminal Court, there was debate, among other things, as to who would fall under the jurisdiction of the court. Due to time constraints, negotiators settled on a narrow extension of customary international law and limited the court's jurisdiction to "natural persons" only. This settlement has had an unsettling effect when it comes to "resource conflicts." Some corporations, as legal persons, and their officers have been able to pillage the natural resources from war-torn countries with little to no liability under international criminal law. This Note considers one example of pillaging by both officers and corporations in the Democratic Republic of the Congo. After analyzing this example, this Note proposes amending the International Criminal Court's jurisdiction statute to include corporations. Such an amendment will ensure that both officers and corporations are held liable for violations of international criminal law.

1. INTRODUCTION

   The illicit and illegal exploitation of natural resources is a growing problem that serves to fuel conflict and increasingly involves and harms the security of the civilian population. This has been a hallmark of the conflict in the Democratic Republic of the Congo, but is common to many conflict situations. Individuals and companies take advantage of, maintain and have even initiated armed conflicts in order to plunder destabilized countries to enrich themselves, with devastating consequences for civilian populations.

   --Former U.N. Secretary-General Kofi Anan (1)

   The Democratic Republic of the Congo (DRC) is cursed with some of the richest natural resource concessions in the world. (2) "[It] is awash with gold, diamonds, and metals such as cassiterite and coltan used to weld small pieces together in electronics." (3) These resources have fueled one of the bloodiest and deadliest conflicts in the last sixty years. (4) Foreign armies, rebel forces, and the DRC government have all plundered the DRC's natural resources to further their control over the country's wealth and people. (5) The conflict is responsible for the loss of more than four million lives and the displacement of even more refugees. (6)

   Scholars have detailed the link between natural resources and the exploitation of mineral concessions by soldiers and governments to finance aggressive campaigns against their opponents. (7) Recent literature in this field calls for the International Criminal Court (ICC) to punish the perpetrators of these mass atrocities by charging them with the war crime of pillage under Articles 8(2)(b)(xvi) and 8(2)(e)(v) of the Rome Statute. (8) The perpetrators being targeted include soldiers and political leaders that contribute to the conflicts. However, these calls ignore an important perpetrator of resource-fueled wars. That overlooked group consists of corporations, businesses, and industries that extract, export, and sell the pillaged resources. These actors help create the market for states and armies to move pillaged resources out of the conflict areas. Additionally, they provide billions of dollars to government and rebel groups who use such funding to conduct their crimes. (9)

   While acknowledging that the ICC should pursue resource pillaging as a war crime, this Note argues that prosecuting soldiers and political leaders alone will not eliminate the pillaging of natural resources, as the demand for the minerals and resources will remain. In order to deter resource conflicts, the international community must hold the corporations, businesses, and industries that fund resource conflicts accountable under international criminal law. (10) To facilitate this effort, this Note examines the applicability of the ICC's pillaging statutes to the corporate world. (11)

   Part I of this Note explores the history of the Tenke-Fungurume concessions in the DRC. It shines light on actions of corporations that have pillaged valuable resources from the Congolese people. (12) This pillaging has supplied warring factions with the financial means to carry out war crimes and crimes against humanity. Part II provides a synopsis of the ICC's pillaging statute and the elements of pillage. Part III discusses the current criminal liability under the ICC's statute by examining the statute's principal and aider and abettor provisions and applying the provisions to individuals and corporations accused of pillaging natural resources in the DRC. Part III also demonstrates how the ICC could find individual directors and officers liable for their actions while corporations--as legal persons--enjoy an implicit immunity from prosecution. Finally, Part IV recommends that the international community must change the current shortcomings of the ICC's criminal liability statute to refocus on what actions are punishable instead of who is punishable. This paradigm shift needs to be codified in the ICC's statute by giving the ICC jurisdiction over legal persons as well as natural persons.

2. CORPORATE PILLAGING AT THE TENKE-FUNGURUME CONCESSIONS

   The Tenke-Fungurume concessions, situated in the Katanga Province of southern DRC, is home to "one of the largest, highest-grade, undeveloped copper/cobalt concessions in the world today." (13) Once production begins, the annual yield of the mine is estimated to be two-hundred and fifty million pounds of London Grade A copper and eighteen million pounds of cobalt, with the initial project continuing for forty years. (14) Production is slated to begin in 2009. (15)

   The history of the Tenke-Fungurume concessions, once operated by the state-owned mining company La Generale des Carrieres et des Mines (Gecamines), reveals corporate participation in the pillaging of the DRC's natural resources. In the early 1990s, under President Mobutu Sese Seko, the Congolese government began privatizing the DRC's mining industry. (16) In 1994, then Prime Minister Kengo Wa Dondo, a strong ally to President Seko, forced privatizations of the DRC's mining industry, and compelled Gecamines to release management and mining rights to joint ventures and private companies. (17) In November 1996, Gecamines entered into an agreement with Lundin Holdings S.A. (Lundin Holdings) and obtained a forty-five percent stake in the new Tenke Fungurume Mining Company (TFM), the other fifty-five percent belonging to Lundin Holdings. (18)

   At the time of the 1996 contract, total revenue produced by the two concessions after twenty-seven years of operation was estimated at twenty-six billion dollars. (19) Lundin Group, the parent company of Lundin Holdings, negotiated the 1996 contract knowing that negotiators for Gecamines had little to no experience with similar joint ventures and capitalized on that inexperience. (20) Specifically, in his book No Guts, No Glory, Lundin Group founder Adolf Lundin confessed that in order to get the deal, he offered President Seko a future campaign contribution and paid fifteen DRC negotiators one-thousand dollars each to show up and vote for the contract. (21)

   In 1997, an uprising forced President Seko from power. (22) The leader of the rebel movement, Laurent-Desire Kabila, became President. (23) Lundin Holdings quickly confirmed the Gecamines contract with Kabila's government and paid an initial fee. (24) However, the confirmation of the Gecamines contract with Kabila's government was not Lundin Holding's first encounter with Kabila. Evidence demonstrates that Lundin Holdings established a relationship with the Alliance des Forces Democratiques de Liberation (AFDL), Kabila's rebel army, prior to the AFDL's ascension to power. (25) These contacts were made despite international condemnation of the slaughtering of civilians and other crimes against humanity and war crimes by members of the AFDL, members of the Forces Armees Zairoises (FAZ) that supported President Seko, and members of the Forces Armies Rwandaises (ex-FAR). (26)

   Corruption also characterized the Gecamines contract's confirmation. Later reports established that up to half of the initial fifty million dollar payment Lundin Holdings made to Kabila's government funneled into a private company, Comiex, Inc., which was partially owned by President Kabila. (27)

   Operations at the mines never commenced and in 1999 Lundin Holdings declared a force majeure under the contract provisions. (28) That declaration was later widely discredited as meritless. (29) Further, despite the alleged force majeure still occurring, Lundin Holdings actively sought out industrial partners for the concessions. (30) In 2000, the 1996 deal between Lundin Holdings and Gecamines once again came under international scrutiny. In a U.N. sponsored report, a Panel of Experts determined that Lundin, along with eighty-four other companies, had violated the Organization for Economic Co-operation and Development (OECD) Guidelines for Multinational Corporations in relation to Lundin's mining activities. (31) The DRC's Lutundula Commission, created under the transition government to review over sixty mining contracts, called for a renegotiation or nullification of the Lundin Holdings/Gecamines contracts citing fraud, bribery, deception, and possible illegal profiteering during the contract process. (32)

   In 2002, Phelps Dodge, a major U.S. corporation, exercised an option where it acquired a seventy percent stake in Lundin Holdings. (33) Prior to exercising the option, Phelps Dodge demanded the contract with Gecamines be re-negotiated, dropping the production output from one-hundred thousand tonnes of copper and eight-thousand, six-hundred tonnes of cobalt annually to thirty thousand tonnes of copper and two-thousand, eight-hundred tonnes of cobalt annually, as well as reducing the initial fee from two-hundred, fifty million dollars to fifty million dollars. (34) Phelps Dodge and Gecamines renegotiated the Lundin Holdings/Gecamines contract and the parties split the ownership of the Tenke Fungurume...