Cablegate: Miminco Investment Dispute Still Simmers

VZCZCXRO3569
OO RUEHBZ RUEHDU RUEHGI RUEHJO RUEHMR RUEHRN
DE RUEHKI #0022/01 0081522
ZNR UUUUU ZZH
O R 081522Z JAN 10
FM AMEMBASSY KINSHASA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 0017
INFO RWANDA COLLECTIVE
SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE
RHEFDIA/DIA WASHINGTON DC
RHMFISS/HQ USAFRICOM STUTTGART GE
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEAIIA/CIA WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC

UNCLAS SECTION 01 OF 02 KINSHASA 000022

SENSITIVE
SIPDIS
PASS TO DEPT OF COMMERCE WASHDC (MARIA RIVERO AND KEVIN BOYD)
PASS TO DEPARTMENT OF TREASURY WASHINGTON DC/OFAC
DEPT FOR EEB/FO (JOAN WADELTON)
DEPT FOR EEB/OFD/OIA (BRAD STILWELL)

E.O. 12958: N/A
TAGS: ECON EFIN EINV KJUS KTFN CG
SUBJECT: MIMINCO INVESTMENT DISPUTE STILL SIMMERS

1. (SBU) Summary: MIMINCO local representative Joseph Kabwika
reported to Econoff on January 6 that no progress has been made on
either GDRC payment of a USD 13 million ICSID settlement to MIMINCO
or the expropriation of MIMINCO from its headquarters building in
Kinshasa. He requested immediate Embassy assistance in the matter.
End summary.

Background

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2. (SBU) The Mineral Mining Company (MIMINCO) is a mining company
owned by U.S. citizens but registered only in the DRC (ref A). In
February 1999, GDRC officials and soldiers seized MIMINCO's diamond
mine located in Diboko, in the Tshikapa Territory in Western Kasai
province, confiscating all diamonds, communications equipment and
administrative documents at the mine, and jailed the local manager.
Separately, MIMINCO reported that the DRC Office of Illegally
Acquired Properties (OMBA) attempted to seize MIMINCO's
headquarters located on 144 June 30 Street, Parcel No. 2047 in
Kinshasa, claiming that the company had illegally purchased the
property from an uncle of former President Mobutu. The seizure of
the headquarters was reversed in May 2008 after the U.S. Embassy
intervened, but MIMINCO was evicted again in July 2008 by the same
court that had reversed the seizure. After unsuccessfully
resolving the diamond mine seizure dispute with the GDRC, MIMINCO
filed a claim with the World Bank's International Center for the
Settlement of Investment Disputes (ICSID) in Washington per Article
VII-4 of the U.S.-Congo Bilateral Investment Treaty. The ICSID in
Paris found in favor of MIMINCO in April 2005. In March 2005,
MIMINCO reported that two private companies forcibly took over its
concession and that DRC military personnel were guarding the
property. In November 2005, MIMINCO and several GDRC Ministers
jointly executed an agreement to reduce the award to USD 13
million, but no progress toward payment has occurred. In July
2007, the Litho family (related to Mobutu) used the backing of a
court order to forcibly occupy MIMINCO's offices in Kinshasa.
Although the court ordered the property to be returned to MIMINCO,
the interlopers refused to vacate the office. The Embassy sent
diplomatic notes to the Ministry of Foreign Affairs to inform them
of the situation and to request action in August 2007, January
2008, and April 2008, but received no official response. MIMINCO
was able to move back into their office in May 2008, but the office
was subsequently expropriated again in July 2008. MIMINCO informed
the Embassy in April 2009 that a DRC court had decided in MIMINCO's
favor on the return of the confiscated property.

Still no room in the inn

------------------------

3. (SBU) On January 6, MIMINCO supervisor Joseph Kabwiika Mwanza
provided updates on their investment dispute case to Econoff.
Kabwika stated that the last time MIMINCO employees were physically
present in their HQ building was December 31, 2007. The building
is allegedly occupied illegally by a Mr. Didier Kinuani, who is
involved in the diamond business, and who is supported by an Indian
merchant, M. Rizwana Dahhani. Around four people are currently
occupying the building. Kabwika showed Econoff a copy of a ruling
from a Kinshasa court, the Tribunal de la Paix de Kinshasa/Gombe
dated April 8, 2009 (in French- Document No.
RP.18695/19914/19978/VI), which ruled in MIMINCO's favor and
recognized MIMINCO as the sole owner of the building. However,
MIMINCO has not been able to move back into their building. On
October 5, 2009, the President of MIMENCO, Dr. Ilunga Jean Mukendi,
sent a memo to the Procureur General of the GDRC for
Kinshasa/Gombe, urging him to enforce the court's ruling (also in
French). Unfortunately, MIMINCO has not received a reply back from
the Procureur General. Kabwika has requested that the Ambassador
and/or Embassy pressure the GDRC to enforce the court's ruling and

KINSHASA 00000022 002 OF 002

ensure the MIMINCO can settle back into its HQ building, hopefully
in the month of January 2010.

Payment still not received

--------------------------

5. (SBU) Kabwika said that the GDRC tried making a first payment
in the amount of USD 1.3 million on November 24, 2009. (Note: He
gave Econoff a copy of the bank transfer receipt. End note.) He
noted that the Central Bank (BCC) asked Raw Bank to transfer the
money to the United States. Raw Bank subsequently transferred the
money first to a Lebanese bank, Habib Bank, who in turn tried
transferring the money to Bank of America. According to Kabwika,
Bank of America refused to accept the cash transfer because "it was
a large amount of money coming from an Arab Bank and that they were
not permitted to accept such transactions." The USD 1.3 million is
currently deposited in an account at Raw Bank. Hence, MIMINCO has
not, yet, received the payment. Kabwika added that a repayment
schedule is contingent on successful transfer of the first payment.
He stated that the GDRC would only invite MIMINCO to renegotiate a
payment schedule once the first transfer has been successfully
completed. Kabwika has requested that the US Embassy convince Bank
of America that it is alright to accept this large payment from an
"Arab bank" and that there would be no legal complications.

6. (U) Copies of documents concerning the case are available upon
request to the Embassy.

7. (SBU) Comment: The MIMINCO business dispute with the GDRC has
been going on for 11 years, with no clear resolution in sight.
Details of the case have been cited in the DRC's 2009 Report on
Investment Disputes and Expropriations (ref A). Post has even
demarched the GDRC several times, but to no avail. Post notes that
Bank of America does not have offices in Kinshasa. End comment.
GARVELINK

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