The Republic of the Congo, (“The Congo «) is an African country, located in Central Africa. It is member of different regional organizations such as CEMAC1 , CEEAC2 and APPA3 . Its economy is dominated by the oil sector, which represents more than 60 % of the country’s PIB, despite numerous efforts to diversify the country’s sources of income. Twenty years after the enforcement of the hydrocarbons code4 ; it was time for the government, following the assessment of the code thereof, to set up a new legal framework in line with the practice laid down in the production sharing contracts (“CPP”) and to line up with the innovations of legislations in this field within the region. It is in this context, at the cabinet meeting held on 25-March-2015 that the Congolese Minister of Hydrocarbons submitted to the aforesaid cabinet a Bill on Hydrocarbons Code (“Bill”). On the regional level, the Bill herein passed at the cabinet meeting “draws comprehensively inspiration from the legal and tax frameworks in force in the country-members of the (APPA), and which has profound vocation to improve the Congolese legislation in this field5 . Key innovations It emerges that the Bill which, generally, retakes main provisions of the hydrocarbons code in force, provides however some innovations not the least, in this instance: 1. Granting on exclusive basis to the National Oil Company of Congo («SNPC»), mining titles. Unlike the hydrocarbons code in force, the Bill provides for the exclusivity for granting hydrocarbons mining titles to the SNPC, with possibility of partnership with national or foreign partners. Thus, any company aiming to undertake activities for search or exploitation of 1 Economic and Monetary Community of Central Africa 2 Economic Community of Central African States 3 Association of African Petroleum Producers. 4 Law No. 24-94 of 23 August 1994 on hydrocarbons code. 5 Ministry of Communication, responsible for relations with Parliament, report of the Cabinet of Wednesday, March 25, 2015, Brazzaville March 25, 2015, p. 3-4. hydrocarbons should contact SNPC to obtain the title or to partner with SNPC in order to conduct activities for search or exploitation. 2. Reinforcement of penalties in the event of noncompliance with legal and contractual provisions by oil companies. The objective targeted in the reinforcement is to urge companies that are in the search and exploitation of hydrocarbons to strictly comply with legal provisions enacted, meaning nothing will ever be like before. 3. Setting up of a unique tax and customs regime. This regime, single and unique, will be applicable to all oil companies. 4. Fixing of minimum share of the “Oil Benefit” of the State to 35%. While the hydrocarbons Code in force refers to CPP for the fixing of the percentage of “Oil Benefit” on behalf of the State, the Bill provides for a minimum threshold of 35% of «Oil Benefit». Therefore, it is agreed that the “Oil Benefit” on behalf of the State will be 35% or more, it will depend on negotiations to be conducted prior to the signing of CPP by the parties. 5. Permanent prohibition of gas flaring in the Congo. The Bill prohibits strictly to flare excess fuel gas combined with oil, which releases itself into the atmosphere. 6. Establishment of a minimum participation of 15% for national private companies in the CPP. For the sake of promoting the emergence of the middle class, the Bill calls for companies’ signatories of the CPP; that a minimum quota of 15% be reserved or allocated to private national companies. This will, not only create jobs, but ensure that a portion of income remain in Congo. 7. Establishment of a national fund for prevention of environmental risks. This fund should be able to deal with emergencies related to serious accidents or industrial disasters caused by activities relating to the exploration and exploitation of hydrocarbons. The Emery Mukendi Wafwana & Associates African-International Law Firm April 09, 2015 Congo : The Bill on hydrocarbons Code passed by the cabinet Antoine Luntadila Kibanga * Antoine Luntadila K. Contacts BRAZZAVILLE Avenue Amilcar Cabral 7ème étage Tour Nabemba Suites 7.19 – 7.20 B.P. : 633 - Brazzaville T. : (+242) 053 55 0888 firstname.lastname@example.org NEW YORK 370 Lexington Ave. 10th Floor, Suite 1001 New York, NY 10017 T : (+1) 212-922-0040 F : (+1) 212-954-5431 email@example.com KINSHASA Blv 30 juin/Batetela Av. Crown Tower, 7ème Niveau, Suite 701-702 Kinshasa/Gombe B.P. 14379 Kin I R.D.Congo T : (+243) 99-99 15247 (+243) 15-12-4738 F : (+1) 646-786-4680 firstname.lastname@example.org JOHANNESBURG 89 Bute Lane, Ground Floor, North-Wing Sandton/Johannesburg South Africa P.O. Box 650 840 Benmore 2010 Sandton/Johannesburg South Africa T : (+27) 11-78-35-750 F : (+27) 11-78-32-717 email@example.com www.cabemery.org * Author Admitted to the Bar of Matadi (2004). Mr. Antoine Luntadila Kibanga is an associate and joined the law firm Emery Mukendi Wafwana & Associés in 2008. His areas of practice include commercial law, corporate law, labor and security law, transportation law (land, sea and lake), insurance law, civil law, mining and hydrocarbon law, customs law, OHADA law and litigation. Mr. Antoine Luntadila Kibanga holds his law degree in economic and social law from the University of Kinshasa since 2003. He speaks French, Lingala, Kikongo, English, Portuguese and Swahili. DISCLAIMER: Any information contained in the present document is only for informational purposes and may not be considered as legal opinion. To receive proper advices on the matters discussed in the present document, please contact our lawyers at www.cabemery.org environmental issues ranged themselves in the first position in the national and international scene. The Congo has ratified several international treaties, conventions, covenants, etc. relating to the protection of the environment, most of which are subsequent to the promulgation of the hydrocarbons Code in force. Thus, for the sake of development in harmony with the oil business requirements and international standards in this field, the Bill provides for the establishment of a national fund for prevention of environmental risks. Legislative adoption process and promulgation of the law on new hydrocarbons code Article 118 paragraph 2 of the Constitution provides that “the Bills, as considered in cabinet meeting following a view from the Supreme Court, are brought in to one or the other House”6 . 6 Gazette, Special Edition I, February 2002, p. 15. Therefore, after the adoption by the cabinet, the Bill will be brought in to one of the Parliament Houses7 . The task will be for honorable Members of Parliament and Senators to adopt the text in the terms proposed or in different terms by bringing in the changes they deem necessary. Finally, in accordance with Article 83 paragraph 2 of the Constitution, the President of the Republic shall promulgate the law passed by both Houses within twenty days of the transmission that will be made by the office of the National Assembly. 7 Namely the National Assembly or the Senate.