Breaking: Canadian Mining Giant Ivanhoe Gamed System in DR Congo

New Investigative Report by The Sentry:

Canadian Mining Giant Ivanhoe “Gamed the System” in DR Congo Dealings

Evidence shows Ivanhoe received unlawful benefits while doing insider deals; In separate case Canadian Police pursue evidence of bribery

December 15, 2022 (Washington, DC and Kinshasa) – While portraying itself as a conscientious steward of the environment and best business practices, Canadian mining giant Ivanhoe Mines appears to have acquired the power to disregard domestic laws and regulations in deals to maintain its mineral exploration projects in the Democratic Republic of Congo (DRC).

A new investigative report by The Sentry, “Gaming the System: How a Canadian Mining Giant Undermined the Law in the DRC,” focuses on Ivanhoe’s control of potentially rich deposits in the Central African Copperbelt. Evidence examined by The Sentry reveals that the multibillion-dollar company, which is led by American-born founder Robert Friedland, arranged to share a potentially lucrative cut of local subsidiaries with a politically connected individual, just as the Congolese government took apparently illegal actions allowing Ivanhoe to maintain exploration licenses. According to The Sentry’s analysis, those licenses by law should have been surrendered by Ivanhoe years ago.

The Sentry’s investigation also spotlights a previously unreported detail in Ivanhoe’s 2021 annual report revealing that the Canadian police carried out a search warrant of the company’s headquarters, citing probable cause that Ivanhoe had broken Canada’s foreign bribery statute between 2014 and 2018.

Douglas Gillison, Senior Investigator at The Sentry, said: “The people of the DRC deserve a government that puts poverty alleviation before the interests of insiders and power brokers. But in this case, the evidence suggests that, with a lot of money at stake, the law didn’t seem to apply to a top operator with high-level connections. At minimum, the facts set out in this report justify deeper investigation into Ivanhoe’s conduct by relevant authorities in multiple jurisdictions.”

Recent media reporting indicates the kind of dealmaking suggested by the facts of The Sentry’s “Gaming the System” report may not have ended with the Kabila era. Hidden camera videos published this September apparently show Vidiye Tshimanga, then a close advisor to DRC President Félix Tshisekedi, claiming to hold 20% of an unidentified Ivanhoe Mines subsidiary and telling unidentified people he believed to be prospective investors that they could pay him off using concealed business arrangements, including channeling payments to political parties by tendering contracts to well-connected service providers, all with the approval of the president.

Tshimanga, who has denied wrongdoing, subsequently resigned and is facing prosecution, claiming he was entrapped by malicious actors operating on false pretenses, and the presidency has said that any advisor found to be in violation of legal or ethical duties would be held to account. Neither Tshimanga nor an attorney representing him responded to questions from The Sentry.

In response to The Sentry’s request for comment about the findings in this report, Ivanhoe Mines said its operations were subject to strict corporate anticorruption policies and internal controls and that any inference of corruption or malfeasance was “simply incorrect.” The company declined to offer detailed responses to most of The Sentry’s questions but said they concerned processes and procedures common to corporations operating across international borders over extended periods of time, adding “there are lawful, commercially reasonable and conventional explanations for these matters.”

Ivanhoe Mines told The Sentry that it is cooperating with Canadian authorities and that materials seized by police last year were currently subject to a review to identify materials protected by legal privilege. The company also said that at this point it has not set aside funds in anticipation of any monetary penalty and had no further comment on the matter.

Selected policy recommendations offered in The Sentry’s report (Read the complete recommendations in the full report):

• Ivanhoe Mines Ltd. should commission an independent and thorough internal investigation of the matters raised in this report, take all necessary measures to come into legal compliance where appropriate, and submit the results to relevant authorities; it should impose appropriate sanctions on any executive or staff member found to be in breach of legal or ethical obligations.
• The Congolese government should investigate the findings presented in this report and, if appropriate, initiate proceedings if Congolese criminal statutes or regulations have been violated.
• The Canadian and US governments should review the findings presented in this report and open investigations into any potential violations of securities laws and criminal statutes.
• Financial institutions should review the transactions and payments executed on behalf of Ivanhoe and other companies mentioned in this report to identify any behavior that could form the basis of a suspicious transaction report to the local financial intelligence unit (FIU).

Read The Sentry’s “Gaming the System” report, including complete policy recommendations: https://thesentry.org/reports/gaming-the-system/

 

For media inquiries or interview requests, please contact: Greg Hittelman, Director of Communications, [email protected]rg

About The Sentry
(Short descriptor for press use: “The Sentry, an investigative organization that tracks corruption”)
The Sentry is an investigative and policy organization that seeks to disable multinational predatory networks that benefit from violent conflict, repression, and kleptocracy. Pull back the curtain on wars, mass atrocities, and other human rights abuses, and you’ll find grand corruption and unchecked greed. These tragedies persist because the perpetrators rarely face meaningful consequences. The Sentry aims to alter the warped incentive structures that continually undermine peace and good governance. Our investigations follow the money as it is laundered from war zones to financial centers around the world. We provide evidence and strategies for governments, banks, and law enforcement to hold the perpetrators and enablers of violence and corruption to account. These efforts provide new leverage for human rights, peace, and anti-corruption efforts.