From 19/12/3022
Par Kiki Kienge La loi Congolaise prévoit dans son article 6 promulgué le 8 février 2017, l’activité de sous-traitance n’est réservée qu’aux entreprises de droit et/ou capitaux congolais promus par…
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DR Congo: Subcontracting, the billion-foreign pool that enriches foreigners and a small elite at the expense of the Congolese?
By Kiki Kienge
The Congolese law provides in its article 6 promulgated on February 8, 2017, the subcontracting activity is reserved only for companies of Congolese law and/or capital promoted by the Congolese to have their head office in the DRC, under the supervision of the subcontracting regulatory authority.
Subcontracting is the act of using a third legal or natural person, performing a task on your behalf. The client is appointed Client and the subcontractor.
"The task that the Client gives to the subcontractor may be an ancillary or related activity that contributes to the realization of the Principal Activity of the Client or part of the Principal Activity of the Client. There are three types of subcontracting: capacity, specialty and market. ”
This law requires that any subcontracting whose market cost is greater than or equal to CDF 100,000,000,000, or whose remuneration does not exceed 40% of the total market value; be the subject of either a call for tenders.
According to Master Dignité Bwiza, a Congolese lawyer specializing in environmental business law, the law aims to;
- Reduce the shortfall recorded by the Congolese public treasury (including taxes, fees and contributions that are not paid in DR Congo by foreign capital/law firms or expatriates; but are repatriated to their respective countries; which could have been paid in DR Congo if subcontracting companies were of Congolese rights/capital).
- Promoting and promoting employment for Congolese: in the face of foreign expertise that is increasingly relocating to DR Congo.
- Protect the Congolese workforce working in subcontracting companies.
- Promote the emergence of Congolese expertise at the provincial and national level;
- Promote and promote the emergence of a Congolese middle class
According to the law, if the contracting authority finds that there is no Congolese rights/capital subcontractor, the contracting authority must inform the local authority of the absence of a Congolese subcontractor and prove the said absence.
"In some cases, the project manager may use a subcontractor of foreign law and capital, or a subcontractor under Congolese law based in a Province other than the one in which the subcontracting activities are carried out. However, it is important to note that this is only applicable for activities whose subcontracting does not exceed six months! If the subcontracting activity exceeds six months, the contracting authority has the obligation to create a company under Congolese law that can provide the service. ”
Subcontracting, as many Congolese do not know, generates billions of US dollars each year, perhaps similar to the mining sector itself, especially in Greater Katanga where there are many mines managed by foreign multinationals.
The mining sector with nearly 25% of gross domestic product (GDP), is the first concerned with this subcontracting law, since a ministerial decree of April 2013 that required mining companies to use only Congolese law and capital subcontracting companies. In reality, its judgments and laws have never been applied, the subcontracting market remains in the hands of foreigners, who often repatriate profits to their country. Even job creation remains at low levels faced with the size of the subcontracting market in DR Congo.
The sectors that concern the subcontracting law range from the supply of materials and products for mining activities, transport, provision of personnel, securing facilities, mineral analysis, logistics and others.
Subcontracting can be classified into two categories, the first mainly held by companies under Congolese law, but with mainly foreign capital where subsidiaries of multinationals have large financial resources and expertise. Leading are Chinese companies, but especially European, American, Australian, Lebanese, South African, Tanzanian, Zimbabwean or Indian. Congolese companies are almost non-existent in this category, with a few exceptions mineral analysis and environmental monitoring laboratories, such as the case of MCK or the Katang businessman, Éric Monga.
What's wrong?
We will see it with a Congolese who has been working in the field for years.
The second requires less capital, there are several Congolese companies, which often focus on the provision of staff, the maintenance of facilities, the maintenance of equipment or guarding.
Some foreign capital subcontracting companies operating in Lualaba:
"Lualaba prospers (Chinese), Best service (Chinese), Luka (Chinese), Dunia (Chinese), Collingo (Chinese) who often work with TFM. In Kamoa there is Katanga Contracting Services (KCS), Teich Man, a subcontractor of South Africans. Majengo a Chinese subcontracting..." Filston W
What would be the difficulties that Congolese face in subcontracting.
According to Master Guy Mukonki, who has been working for years in the subcontracting sector in Lualaba with the company MMK and now in Haut-Katanga, the difficulties are more financial and expertise;
- "Many Congolese companies do not often respect contracts, which gives foreign multinationals the legitimacy to avoid Congolese in subcontracting. Unfortunately, the subcontracting law has only analyzed the two hypotheses; the existence or absence of subcontractors, but less the lack of compliance with contracts that must be managed legally, which is more complicated. First, for some time now, contract givers, i.e. the services of multinationals supposed to be recruited through tenders and approved, have themselves created companies. They allocate the markets to each other, giving commissions and favors to a certain elite.
- Second, there is the lack of support for financial institutions or the conditions for granting financing (mortgages, interest rates, repayment deadlines). Third, there is competition from foreign companies generally the subsidiaries of the same multinationals, contractors. In many companies, for example in Lualaba, the exclusivity of subcontracts is practically reserved for Chinese companies.
- There are two or three parameters to explain this; On the one hand, we have Congolese who are at the bottom of the scale, in terms of financing and works, to whom we are awarded a contract, for example US$2 million. With a profit of 30% in the contract, having no insurance fund. The instinct to appear often takes over; They prefer to take credits with their contracts to buy a beautiful house and beautiful vehicles, things that have nothing to do with their work. In the end, they are unable to respect their contract and multinationals rely on this to defend their choices over foreign companies than Congolese. On the training of Congolese, our technical schools such as Mutoshi, Salama and others speaking of Greater Katanga have already lost much of their notoriety. For example, foreign companies bring back so-called welding experts to have the largest contracts in the field. What is DR Congo doing for the training of our fellow citizens? Imagine that subcontracting produced US$1 billion annually and that only 75% of this amount remains in the DRC, this would have a very large impact on the purchasing power of the Congolese. An advantage for the Congolese state coffers and the social of the population. This money could be invested in other sectors such as livestock farming, agriculture for example. In reality, the subcontracting law is not as bad, but it is not accompanied as it should be. There are no commercial banks with Congolese capital that support financing the Congolese projects, the majority its Kenyan, Nigerian, Lebanese. Unfortunately, they do not marry the vision of Congolese entrepreneurs. In particular, Congolese must learn the culture of the sacrifice of entrepreneurship before enjoying the benefits of their work. We have institutions like the FEC, with valiant Congolese people like Eddy Monga or John Kanyoni, who through conferences and conferences are able to help Congolese entrepreneurs in a good vision of entrepreneurship. We must fight this culture of the ease we have, we need sacrifices to achieve a result. We can criticize foreigners, but they only take advantage of our weaknesses, the most important thing is the awareness of the Congolese. Let's admit that we make a law that requires that every foreign entrepreneur must have a partnership of 50% of the Congolese, it would be a plus for the Congolese, but we also need an investment in the training of executives and workers and financial support. ”
Another problem encountered in the application of the subcontracting law, the uncertainty about the existence of the updated directory of all natural and legal persons under Congolese law and capital working in each sector. But the directory is not available, even the list of companies authorized to subcontract (REA) and the company rating list, which should serve as a reference for project owners, remains almost empty so far.
In reality, this void of the directory that we recall goes against the law, only encourages project owners to circumvent the subcontracting law. Because in the absence of a Congolese subcontractor, the contracting authority may use a subcontractor of law and foreign capital, or a subcontractor of Congolese law based in a province in addition to that of subcontracting activities.
Many project owners rely on the lack of technical expertise or experience, often the lack of professional insurance that would cover the damage in the event of a problem in the subcontractor's service, skills and qualifications, to avoid Congolese law companies or capital.
The solution in this case would be that the law requires co-contracting (co-contracting is the fact that a contracting authority takes two subcontractors to perform the same subcontracting task together) between a subcontractor of law or foreign capital and a subcontractor of Congolese law or capital. Co-contracting would be a solution for Congolese companies, because it would allow Congolese to be trained and Congolese companies to form a financial basis for future calls for tenders.
Otherwise, the prime contractor must create a society under Congolese law, which is financially more expensive and would take too long.
In particular, it would be necessary to have a patriotic awareness, for all Congolese subcontractors and citizens to denounce or request the cancellation of subcontracting contracts signed in violation of the subcontracting law. Limit the repatriation of assets abroad in cases of co-contracting.
For this we would need courage and patriotism on our part.
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