Impact of the amendment of the Legal Guarantee of Stability in respect of
Existing Mining Projects in the DRC
By Emery Mukendi Wafwana
The Government of the Democratic Republic of Congo (DRC) commenced the review process in respect of its Act No. 007/2002 of 11 July 2002 on Mining Code (Mining Code) in 2012. The process eventually culminated in the promulgation by the President of the Republic of the act amending the Mining Code (“Amending Act”).
As promulgated, the Amending Act contains provisions which considerably affect the fiscal, customs and exchange regimes of the Mining Code and a number of critical provisions for the protection of existing mining Projects, in particular, Article 276 related to the Guarantee of Stability (“Legal Guarantee of Stability”).
In this analysis, we will first point out the scope of the Legal Guarantee of Stability as provided for by the Mining Code (I) in order to better grasp the impact of this amendment on the existing mining Projects on the date of entry into force of the amending Act (II).
I. SCOPE OF THE LEGAL GUARANTEE OF STABILITY
In order to better understand the scope of the Legal Guarantee of Stability, it is foremost critical to understand its importance (1) and its normative development in the DRC legislative corpus (2) before describing its functioning mechanism (3).
1.Importance of the Legal Guarantee of Stability
The establishment of the Legal Guarantee of Stability in the Mining Code is important for both the Government and promoters of mining projects in the DRC.
It is the bedrock or cornerstone of the national mining policy in that it stimulates the mobilisation of private investment in the mining sector. That is what the legislation explains in affirming that “the Congolese State guarantees to the holders of mining rights the existence of a good investment climate expressed by its firm commitment to the respect of the rights granted by the Code and the fulfilment of its duties subject to such rights”.
The Legal Guarantee of Stability constitutes, for the promoters of mining projects, the pledge of stability for investments forecast, for a given period, in the context of an evolving legislation and regulation which can affect their mining activities. It is therefore on the basis of this guarantee that promoters of mining projects, holders of mining assets and their affiliate companies have, in all confidence, forecasted their investments on a given period of time in various mining projects. They developed, to that effect, their current projects as per legal and financial arrangement which was best suitable to them taking into account the legal provisions in force at the time of their decision to invest and conduct mining activities in the DRC.
All investment forecasts and massive financial commitments with third parties and local communities regarding mining projects are premised on the fiscal, customs, exchange regimes and other guarantees offered by the State as organised under the Mining Code, which was the legislation in force at the point in time of investment.
It is within this context that we shall carry on with our analysis on the scope of the Legal Guarantee of Stability by probing the evolution of its foundations in order to better describe its functioning mechanisms.
2. Normative development of the Legal Guarantee of Stability in the DRC legislative corpus
Historically, the Guarantee of Stability originates from a contractual context in the sense that it is derived from the aggregation of various clauses of stability, commonly known as umbrella clauses, included in various mining contracts at the time. It was hence introduced into the mining code following an agreement reached in 2001 between the Government of the DRC and the holders of mining rights whose research and mining projects were covered by mining agreements negotiated and approved in line with Act No 81-013 of 02 April 1981. These mining agreements contained, for the most part, contractual clauses on the stability, for the duration of the project, tax, customs and exchange benefits and advantages granted by the DRC to these mining projects.
In order to reconcile the Government's new policy aimed at cancelling the conventional mining regime provided for in the 1981 Mining Act and the need to maintain existing mining projects and attract beneficiaries of these mining agreements to adhere to the provisions of the Mining Code, the existing conventional clauses in the mining agreements were used as a basis for the formulation of the Guarantee of Stability organized in the Mining Code and other provisions which consolidate that Guarantee or guarantee of stability. Unlike the stability clauses resulting from an approach of contractualizing the legal norm, the Legal Guarantee of Stability is the result of a process of elevating the contractual norm as a legislative norm.
Furthermore, the Guarantee of Stability has been taken up, enshrined and protected by the Constitution in force in the DRC. The Constitution guarantees the stability of mining projects by securing nationals’ and foreigners’ private investments, especially those in the mining sector. It provides in its Section 36 that: “The State encourages and ensures the security of private investments, national and foreign.” The Constitution did not restrict the scope of the terms “security of investments”. These terms should be construed in their broadest sense possible involving material or physical security and, most importantly, the legal security of investments in such a critical and strategic sector for the country’s economic development.
Finally, the Legal Guarantee of Stability was consolidated by the Mining Code itself in its Section 273 which states that “Subject to compliance with the laws and regulations of the DRC, the State guarantees holders of mining and quarry rights: a) compliance with legislation and agreements or conventions signed with partners”.
By this provision, the DRC State ensured that it will comply not only with the laws of the Republic, including the Mining Code, in particular when this Code is amended. This commitment by the State to comply with its commitments expands to mining contracts and to other agreements signed by the state with holders of mining permits and their affiliate companies related to one or several mining projects in the DRC.
Therefore, It follows that any amendment of the Guarantee of stability as well as the implementation of any new provision amending the tax, customs, foreign exchange regimes and those of legal guarantees organised under the Mining Code must be done taking into account all the laws of the country and state contractual commitments to existing mining projects, including the operating mechanism of the Legal Guarantee of Stability as organised by the Mining Code.
3. Operating Mechanism of the Legal Guarantee of Stability
It emerges from Section 276 paragraph 2 that the Legal Guarantee of Stability operates on the basis of two mechanisms: a secure mechanism for the amendment of provisions of the Mining Code (A) and a ten-year intangibility mechanism of the rights attached to or resulting from a prospecting license or exploitation mining rights (B).
A. Secure Mechanism for Amending the Mining Code
The Congolese State guarantees the stability of mining projects by the stability of the Mining Code as regards the amendment of provisions, especially those forming the tax, customs, and exchange regimes applicable to the holders of mining rights, to their affiliated companies and to their subcontractors. Indeed, Paragraph 1 of Section 276 of the Mining Code expressly provides that: “The State guarantees that the provisions of this Code may be amended only if, and only if, this Code is itself subject of a legislative amendment adopted by the Parliament.”
It follows that any indirect amendment of the Mining Code by any law promulgated after the entry into force of the Mining Code cannot change the provisions of the Mining Code including the Legal Guarantee of Stability, the tax, customs, exchange regimes and other State’s guaranties organized under the Mining Code or regulations taken in implementation of the Mining Code. In other words, through this provision, the lawmakers shield the Mining Code from any amendment by any other Act bearing an amendment of the Mining Code. Only provisions of the Mining Code apply to mining activities until they are adjusted or repealed by a subsequent act amending the Mining Code itself.
It further stands out from this provision that only a law passed by the Parliament, comprised of the lower and upper Houses, in line with parliamentary procedure, and promulgated in compliance with the Constitution is allowed to modify the provisions of the Mining Code. Any amendment of the provisions of the Mining Code using Ordinance-Acts by the President of the Republic passed by virtue of an amending act in implementation of the Constitution are inoperative to amend the provisions of the Mining Code.
B. Ten years Intangibility mechanism of rights attached or deriving from mining rights
The second operating mechanism of the Legal Guarantee of Stability provided for by the Mining Code is a ten-year intangibility, on the day of entry into force of the amending Act of the Mining Code, of the rights, advantages and benefits granted to the holders of the mining rights and their affiliates. It should therefore specify the scope of the rights guaranteed (a), determine the beneficiaries of these rights (b) and the effects of the implementation of this guarantee (c).
- Scope of Rights targeted by the Legal Guarantee of Stability
By Section 276 of the Mining Code, the State guaranteed that even if the provisions of the Mining Code are subjected to a legislative amendment adopted by Parliament, the rights attached to or deriving from a mining right, among others, tax, customs and exchange regimes remain acquired and intangible for a period of ten years. This is apparent from the second and last paragraph of Section 276 of the Mining Code which provides:
“The rights attached to or resulting from a prospecting license or mining exploitation right granted and valid on the date of the promulgation of such a legislative amendment as well as the rights attached or resulting from the mining exploitation right granted subsequently under such a prospecting license, including, inter alia, the tax, customs and exchange regimes of this Code, remains acquired and intangible for a period of 10 years from the date of:
(a) the entry into force of the legislative amendment for valid operating mining rights existing on that date;
(b) the granting of the mining exploitation right subsequently granted under a valid Prospecting License existing on the date of entry into force of the legislative amendment.”
Exegetically speaking, the targeted rights by the aforementioned provisions are deriving from or attached to mining exploitation rights. These are rights which the law has granted to all holders of mining rights, except those holding quarries rights.
These rights comprise, for the holders of exploitation licenses, small-scale mining operating licenses and tailings exploitation licenses inter alia rights of occupation, construction of infrastructure necessary for mining activities and completion of mining works, rights to benefit from comprehensive tax and customs regime, exchange rate regime provided in the Mining Code as well as the one to benefit from the Legal Guarantee of Stability and from other specific State guarantees for the realization of mining activities. For holders of prospecting license, organised by the Mining Code, these rights mainly comprise the right to carry out prospecting operations and to obtain totally or partially one or more mining exploitation rights and the right to enjoy Legal Guarantee of Stability in the event of amendment of the provisions of the Mining Code and enjoy other legal guarantees from the State.
All these rights stem either from the administrative act of the granting authority, in this instance orders from the Minister of Mines which institute the mining rights, or in case of automatic granting when the granting authority did not issue the administrative acts on time. Thus, after three months of publication of the ministerial order or, in the event of ex officio granting the mining rights, within three months of the ex officio registration or a judgment equating with an ex officio registration, without them being withdrawn by the Minister because of illegality or cancelled by the Council of State for unlawfulness at the behest of the third parties personally concerned, these rights become acquired and intangible. The State can no longer infringe on them, except in the case of expropriation provided for in the law, in particular the Mining Code, with fair and equitable compensation.
At last, it is important to specify that the obligations incumbent on the holders of mining rights are not protected by the Legal Guarantee of Stability insofar as it protects only rights and does not affect obligations. Thus, the amendment of the provisions of the Mining Code on the obligations will come into effect immediately after the date of the entry into force of the Law amending the Mining Code. This could be the case, for example, because of the change in environmental obligations, the modification of the start-up period, the modifications of the safety and hygiene obligations and those related to the planning and use of the mining project's infrastructure, coordination with local authorities, keeping records and reports, inspections, opening and closing of research or operations centres.
- Beneficiaries of Rights Targeted by the Legal Guarantee of Stability
The Mining Code clearly determines the beneficiaries of rights targeted by the Legal Guarantee of Stability.
Firstly, all these rights, advantages or benefits that the legislation recognizes to all the holders of mining rights because of the peculiarity of the mining activities [MISSING]. These are the holders of all mining rights valid at the time of entry into force of the amending law. These rights cannot be cancelled or withdrawn without fair, equitable and prior compensation.
Secondly, the legislation extends these rights, advantages or benefits to affiliates and subcontractors of the holder benefit from the rights targeted by the Guarantee of Stability only with regards to the exhaustive tax and customs regime organized by the Mining Code that applies to them. As the holder of mining rights, affiliates and subcontractors can take advantage of the Guarantee of Stability to claim the benefits of the implementation of the tax and customs regime of the Mining Code.
- Implementation of the Legal Guarantee of Stability
The Legal Guarantee of Stability applies when an amendment to the provisions of the Mining Code occurs, as it is the case of the Amending Act recently promulgated. Holders of valid mining rights are perfectly entitled to take advantage of the Legal Guarantee of Stability to legally secure their mining projects and claim full benefits thereof.
Exercising the right to the benefit of the Legal Guarantee of Stability differs depending on the whether the legal amendment only aims at provisions other than the Legal Guarantee of Stability i.e. those pertaining to the fiscal, customs and exchange regimes or whether it only pertains to the Legal Guarantee of Stability itself or pertains to both.
Firstly, when the amending act of the Mining Code affects the fiscal, customs, exchange regimes and other guarantees without altering the Legal Guarantee for Stability, the new provisions shall be enforced upon holders of exploitation rights and their affiliate companies only 10 years after the entry into force of the Mining Code Amending Act. This period of 10 years is counted, for holders of prospection permits only from the date of the conversion of said exploration licence into an exploitation licence (exploitation licence, small-scale mining licence, tailings exploitation licence).
Secondly, when the Legal Guarantee of Stability is affected without the other relevant provisions of the Mining Code being altered, in particular provisions on the fiscal, customs, exchange regimes and other guarantees being altered by the Mining Code Amendment Act, the new provisions amending the Legal Guarantee of Stability shall not be applied to the mining rights still valid only after the ten-year period of intangibility as mentioned above. Such will be the case because the amendment thus targeted is supposed to have been done in compliance with the other legal guarantee of the state which commands the state to comply with its own legislation, including the Mining Code, as provided for by article 273 of the Mining Code quoted above.
Thirdly, when the amending act affects other provisions of the Mining Code, in particular the fiscal, customs, exchange regimes and other guarantees, while also affecting the Legal Guarantee of Stability, it is accepted, given the importance of this guarantee, that the ten-year period for the entry into force of the other provisions of the Mining Code shall commence from the implementation of the new Legal Guarantee of Stability. Such will be the case in the event the stability of other advantages and benefits acquired by the holder derives from the stability of the Legal Guarantee of Stability.
Examining the impacts of the amendment of the Legal Guarantee of Stability requires of us to first determine the objectives and compliance of the review of the Mining Code (1) so as to better analyse the new provisions amending the Legal Guarantee of Stability (2) and highlight the impact of these amendments on the existing mining projects and given the objectives of the review of the Mining Code (3).
1. Objectives, legality, legitimacy and compliance of the Mining Code
A. Objectives of the review of the Mining Code
The Mining Code was promulgated in 2002 in order to meet the needs of relaunching the mining sector, which was dormant. It had put in place legal mechanism that would attract foreign private investments in a sector which was for a long time managed by the state. The preamble of the Mining Code elaborates on that objective in the following crystal-clear terms:
“It stands out form analysing the objectives of all the available data from the balance sheets of the mining activities to date that the legislations promulgated after the independence of the Democratic Republic of Congo i.e. since 1967, did not attract investments, but rather delivered a negative impact on the mining production of the country and on the public finances. Further, the mining, fiscal, customs and exchange regimes that they had provided for were not incentivized (…)
To address this gap, the lawmakers made it a point to put in place a new incentivized legislation comprising objective, fast and transparent procedures for the granting of mining rights or quarries rights, which organises the fiscal, customs and exchange regimes. This is one of raison d’être of the first Code…
However, following the preamble of the Mining Code Amending Act, for the government which drafted the Amendment Act, the implementation of the Mining Code from 2002 to 2014 demonstrates that this Code has effectively relaunched the mining sector not only in terms of several mining companies but also in terms of granted mining and quarries rights and production . However, this relaunch has not yielded substantial revenues to the State for its social and economic development. Neither did it meet the various expectations based on the Mining Code due to the following considerations:
1°. The survival of the contractual regime and common law regime, with negative effects regarding the fiscal and customs regimes as well as the issue of the stability clause for acquired rights for a ten-year period, as from the date of any amendment of the Code;
2°. The insufficiency of the provisions related to the freeze of mineral substances in the perimeters covered by mining and quarries rights;
3°. The modicum shareholding of the State in the issued capital of mining companies;
4°. The weak rates of fixed fees for the registrations of mortgages, long-term lease contracts and conversion;
5°. The extension, without any prior condition, of the privilege regime of the Code to subcontractors and affiliate companies as well as to holders of mining rights in production for many years;
6°. The profits generated by the transfers of mining and quarries assets not being properly factored in;
7°. The issue of excess profits generated by the price of commodities on the rise and their sharing;
8°. The absence of a standard contract, which should be the reference, for the drafting of partnership agreements between state-owned companies in which the state is a majority shareholder;
9°. The absence of standard contract conditions comprising the socio-environmental obligations of mining operators to the local populations; and
10°. The lack of transparency and weak profit derived by the DRC state from the exploitation of mineral substances from the country’s soil and sub-soil.
The best way to take on this challenge and bridge all the gaps is implementing the Mining Code, increasing the level of control for managing the mining domain and balance the fiscal, customs and exchange regimes, in win-win partnership agreements between the state and the mining operators consisted in amending the key provisions of the Mining Code, in particular such provisions as those constituting the fiscal, the customs, exchange regimes and other guarantees, as well as the Legal Guarantee of Stability which stabilise them and stabilise the mining projects. .
B. Legality, Legitimacy and compliance of the revision of the Mining Code
It is clear that the DRC as a State has the normative freedom and the prerogatives to act for the general interest, while being bound by the legal provisions of internal law as well as the principles of international law, whose violation is susceptible to engage the responsibility of the State.
In fact, the Constitution enshrines, to the benefit of the State, the right to exercise its permanent sovereignty on the soil, the sub-soil, the waters, the forests, the fluvial lacustrine and maritime spaces as well as territorial seas and continental plateau on which are found, or in which are hidden mineral deposits.
The State further has the legitimate right to amend the Mining Code so as to comply with the duty that the Constitution imposes upon government authorities to manage the financial resources necessary for the welfare of the population. Article 58 of the Constitution provides that “All Congolese people have the right to enjoy the national resources. The State has the obligation to fairly distribute these resources and guarantee the right to development”. It is therefore totally acceptable that the Government, taking advantage of the high prices of certain metals and forecasting its mining sector in the global perspectives of commodities consumption, should review some provisions of its Mining Code in order to diversify the opportunities, starting from the exploitation of national mineral resources, more financial resources to be fairly distributed to the people and guarantee the right to development.
Exercising this right involves that the State should not only have the right to pass laws that should govern the mining activities country-wide, but also the right to amend at any time these laws in order to achieve the country’s policy objectives. No other person can therefore prevent the review of the Mining Code, including the holders of existing mining rights, or their affiliate companies or subcontractors.
However, any amendment, review or reform of the legal, fiscal, customs, and exchange framework of the Mining Code, the act governing the mining activities, must be conducted in compliance with the same Constitution, duly ratified international treaties, laws of the Republic and contractual commitments made by the State.
Furthermore, even if the alteration, the review or reform of the Mining Code is legal, legitimate and compliant; the State, via its Government, has the obligation to legally safeguard the existing mining investments and protect the rights acquired and guaranteed by third parties during the implementation of the Amendment Act of the Mining Code. In the event of these rights being infringed, the State should take prior measures to ensure fair and equitable compensation as required by the Constitution and the Mining Code.
2. Analysis of the provisions of the Amendment Act for the Mining Code on the Legal Guarantee of Stability
The review of the amending act indicates that the Legal Guarantee of Stability provided to the holders of mining projects was affected by the amendment of paragraph 2 of article 276 of the Mining Code (A) and by the inclusion in the Mining Code of a new article 342 bis (B) that is worth analysing.
A. Amendment of subparagraph 2 of article 276 of the Mining Code
The Amendment Act amended paragraph 2 of article 276 in the following terms:
“The State guarantees to the holder of granted rights under the current law, the legal guarantee of stability on the fiscal, customs and exchange regime which shall remain acquired and intangible for a period of five years, as from the date of:
a) The entry into force of the present Code for valid exploitation mining rights existing at the date;
b) The granting of exploitation mining rights acquired subsequently, by virtue of a valid exploration licence existing at the date of entry into force of this act”.
The review of this provision indicates, first, that by not amending paragraph 1 of article 276 of the Mining Code, the Act amending the Mining Code did not affect the secure mechanism of amending the Mining Code as for the procedure to follow and as for the competent body. In addition, despite the amendment of paragraph 2 of Article 276 of the Mining Code, the Amending Act did not affect the existence in the Mining Code of the secure mechanism of amending the Mining Code as for the procedure to follow and as for the competent body to legislate.
Secondly, the Amending Act has removed the terms “The rights attached to or deriving from an exploration licence or exploitation mining licence granted and valid at the date of promulgation of such a legislative amendment, as well as the rights attached to or deriving from the mining exploitation licence granted previously by virtue of such exploitation licence” contained in paragraph 2 of article 276 of the Mining Code and replaced them by the terms “the holder of granted rights”. Besides, this removal has significantly reduced the scope of rights covered under the Legal Guarantee of Stability by limiting it only to the fiscal, customs and exchange regimes. This means that the provisions of the Mining Code amended by the Amendment Act, including provisions related to the guarantee of stability and other state guarantees, provisions constituting the mining regime and all other relevant provisions pertaining to the stability of the mining project, are not stabilised. As a result, the beneficiaries of the Legal Guarantee of Stability cannot claim this guarantee anymore once the amendments of the reviewed Mining Code become effective.
Thirdly, contrary to the original language of paragraph 2 of this article 276 of the Mining Code, the Amendment Act mentions the holders of granted rights without giving any specifics as to whether holders of mining titles are indeed concerned. This omission extends the scope of beneficiaries of the guarantee of stability to all holders of rights as organised by the Mining Code. This includes holders of quarries rights, holders of mineral substances processing units, and even holders of artisanal exploitation zone rights. As a result, the term “holder” should be construed in its ordinary meaning rather than as defined in article 1 paragraph 53. This approach of the legislator creates a contradiction in the objectives of the revision of the Mining Code in that it formally restricts the benefit of the Legal Guarantee of Stability to the tax, customs and exchange regime while at the same time expand the space for holders of rights by the fact of omission.
Fourth, the Amending Act shortens the duration of intangibility of the rights concerned from 10 years down to 5. This reduction requires precisions regarding the beneficiaries and the date of exercising the Legal Guarantee of Stability.
Regarding the beneficiaries of this guarantee, the Amendment Act specifies that the new duration of five years for the intangibility of the Legal Guarantee of Stability applies to rights, more specifically the mining rights granted under the Code. It follows that the 10-year period of intangibility of rights acquired and guaranteed by the Legal Guarantee of Stability pertains to prospective mining rights which will be granted after 9 March 2018, while those granted before that date shall remain subjected to the principle of 10-year intangibility of the rights acquired and granted under the guarantee.
By this provision, the Congolese State complied with original provision of paragraph 2 of article 276 of the Mining Code. The new period of five years for exercising the acquired and guaranteed rights under the Legal Guarantee of Stability shall apply upon entry into force i.e. on 09 March 2018 and shall continue all the way to 08 March 2028 for holders of exploitation mining rights. For holders of exploration licences that are valid, the duration shall run up to about 09 March 2018 i.e. the date of its conversion into an exploitation mining right.
Regarding the date of exercising the acquired and guaranteed rights under the Legal Guarantee of Stability, the Amendment Act specifies that the starting point of the five years starts, with regard to mining exploitation rights, from the date of the entry into force of “this Code”.
But the expression “this Code” is unfortunate and contains the seeds of conflict.
As a matter of fact, these terms cannot at all refer to the Mining Code because the Code had already entered into effect on 11th July 2002. The opposition apprehension would imply that the Amendment Act should be backdated to that date. Yet, the legislator neither intended it to be so nor expressed it. In this case, there will not be any stability for exploitation mining rights in that the 5-year period has already lapsed. Further, this interpretation of these terms would enshrine a breach by the State of the provisions of the State’s own Mining Code of which it guaranteed compliance.
Since the legislature itself states in a clear and unambiguous manner that "the State assures the owner of the rights granted under this Act the guarantee of stability" thus reduced, it can only be mining rights granted after 9th March 2018. This guarantee does not apply to the holders of mining rights granted before and in force on that date. Also, after having clearly identified the beneficiaries of the Stability Guaranty thus reformulated, the terms "this Code" cannot in any way refer to the Mining Code. That would be contradictory. They cover, according to the contextual heading of the article concerned, the amending Act.
It is critical that these terms be clarified in the review of the Mining Regulations because the mining regulations are meant to supplement and lay down implementation measures for the Mining Code by virtue of articles 326 and 334 of the Mining Code.
B. Inclusion of a new article 342 bis
The amendment act has included a new article 342 bis which affects the Legal Guarantee of Stability granted by the State under the Mining Code. The article reads as thus:
“Article 342 bis: Legal Guarantee of Stability
The provisions of this Code shall be applicable with immediate effect to all the holders of valid mining rights as from the time of the entry into force of the Code.
In the event of a legislative amendment within five years of the entry into force of this Code, the holders of mining rights referred to in the preceding paragraph shall benefit from the Legal Guarantee of Stability of the fiscal, customs and change regimes of this Code”.
Several considerations can be deduced from an objective reading of this new provision.
Firstly, all the provisions of the amendment Act, in particular paragraph 2 of article 276 and article 342 bis newly included, are applicable with immediate effect. This implies, from legal perspective, which the provisions of this Amendment Act apply to mining rights as from 9 March 2018 and to their effects for the future.
During the implementation of this provision, care should be taken to consider that the expression “with immediate effect” results in the removal of the initial Legal Guarantee of Stability and which was offered by the State in the original context of paragraph 2 of the Mining Code. It is worth mentioning that the immediate application of the provisions of the amendment Act does not mean at all any back-dated application of the new amending provisions of the Mining Code of 11 January 2002, which was the date of the entry into force of the Mining Code which instituted, for the first time, the Guarantee of Stability. This rather contains the idea of a non-delayed application of these new provisions. It does not repeal the effects of the Legal Guarantee of Stability provided by the original provisions of the Code; but it rather provides the opportunity form the implementation of this Guarantee. It cannot, without breaching the legal commitments made by the State, including the commitment to comply with its own legislation inter alia the Mining Code, to compromise acquired rights. This could be regarded as an indirect expropriation.
With regards to the immediate application of the amending Act, based on general principles of law as a source of administrative law, recourse to Article 2 of the French Civil Code of 2018 shows us that "the law provides only for the future; it has no retroactive effect”. It follows that a law is without application to legal situations whose effects have been previously consumed pursuant to a previous law. The new law provides for the future. It will govern the legal situations that arose after its implementation.
The general principle of non-retroactivity of the laws is of public order and may be raised by the judge of its own motion. However, having only the value of an ordinary law, the legislator can derogate from it. In this case, for the new law to apply to situations and legal relationships established or formed before its promulgation, its retroactivity must be expressly decided by the legislator. There can be no tacit retroactivity even if the law would interest the public order. Furthermore, such a law, which would express the will of the legislator to govern the effects of pre-existing legal situations, must not make it possible to disregard rights previously acquired.
Secondly, reviewing the terms of the new provision included in the Mining Code further reveals that the new provisions apply not only to the holders of mining rights exclusively governed by the Mining Code as well as to holders of mining rights whose mining projects are governed, regarding the fiscal customs, and exchange regimes by the mining agreement and other partnership agreements with the State applicable to their projects. It follows that all these holders of mining rights will be deprived of the guarantee of stability and shall carry out their projects under the new provisions. This automatic extension of the reduction of the guarantee of stability could offend clauses of stability provided in the conventions which, in general, falls under the mutus consensus of the contracting parties in accordance with article 33 of the Congolese Civil Code Book III. In all cases, the use of the terms reproduced above will be for the future because of the non-retroactivity of the amending Act.
2. Effects of the amendments on the objectives of the review of the Mining Code
The effects of the amendment of the Legal Guarantee of Stability can be analysed in terms of the objectives of the government for reviewing the Mining Code A) or in terms of the existing mining projects (B).
A. Effects of the amendments on the objectives of the Mining Code
Banking on the immediate application of the amendment Act, the Government plans to generate as fast as possible the revenues by collecting various taxes and levies, and in particular the mining revenues, in the sense that such revenues are due, according to the amendment Act, upon the exit of the marketable products from the extraction site or from the processing plants for exportation. Further, the base of this taxation on the mining products is calculated on the basis of the gross commercial value while these rates were considerably modified.
Although this is a commendable objective, especially in a context of high commodities prices for certain minerals, the State and its tax administration cannot impose upon the beneficiaries of the Legal Guarantee of Stability, especially those holding exploitation mining rights still valid, the collection of taxes, namely the mining tax on a base, rate and timing laid down by the amendment Act. All fiscal and customs taxes shall comply with the provisions of the previous Mining Code related to the fiscal and customs regimes, in line with the original provisions of the Mining Code, all the way to 8 March 2028; which corresponds to the 10-year benefit of the Legal Guarantee of Stability.
It is therefore critical, for the sake of State credibility and most importantly for the sake of good governance, that the Government of the Republic should live up to its legal commitments, comply with the legal guarantee of stability and the commitment to respect its own laws. Consequently, it will also be legally unjustified for the State and its fiscal administrations to arm-twist investors, using for instance blockade of exportations, so as to secure payment of taxes as per the new provisions of the amendment Act. Such practices could result in compensation procedures, including the refund of excess taxes and the conviction leading to payment of compensatory fines for harms caused.
Therefore, unless the beneficiaries of the Legal Guarantee of Stability under the new amendment Act voluntarily submit to the provisions of the new Act by expressly relinquishing their benefit of the legal guarantee of stability, either fully or partially, it would be difficult, if not impossible, for the state to achieve the objectives of the review of the Mining Code over the next ten years.
B. Effects of the amendments on the mining projects governed by the Mining Code
The Amendment Act maintained the secure mechanism for the operationalisation of the Legal Guarantee of Stability. It however reduced the scope and duration of this guarantee in that it should henceforth be applied only on subsequent amendments touching only provisions related to the fiscal, customs and change regimes and for period of 5 years as opposed to the period of 10 years as from the entry into force of the coming legislative amendments. As the immediacy of the enforcement of the Amendment Act does not equate with its implementation being backdated to 11 July 2002, especially because the lawmakers did not explicitly stipulate it in the Act. This Act is legislating for the future and does not harm acquired and guaranteed rights. This clarification deserves to be clearly outlined in the Mining Regulations.
As a result, holders of mining titles governed by the Mining Code will have no reason to challenge the Amendment Act and seek for its amendment. The Amendment in actuality does not, by virtue of its promulgation and entry into force alone, harm their acquired and guaranteed rights.
They will nevertheless need to remain careful regarding the process of drafting implementation norms to ensure clarity is obtained on ambiguous and confusing terms in the effective implementation of the Act.
They should bear in mind that at the time of implementing effectively the provisions of the amending Act and revised mining regulations, they should exercise their rights to the Legal Guarantee of Stability by enjoying the initial provisions of the Mining Code all the way up to 09 March 2028. Yet, the level of enjoyment will differ from one project to another. The beneficiaries whose projects are at production phase will enjoy the full 10-year benefit. Those whose projects are at development stage and construction stage shall partially enjoy the benefits.
We noted during our analysis that the amending Act significantly affected the Legal Guarantee of Stability, the bedrock of the national mining policy and the incentive, safety and stability factor for mining projects.
We have noted that the amendment of the Mining Code, especially the Stability Guarantee, is legal, legitimate and consistent, as we have demonstrated above. It is part of the exercise by the State of the attributes of sovereignty and, for the governors, the fulfilment of their constitutional obligations.
We have noted that the amending Act provides for the future, it does not act retroactively and should not, when it is actually implemented, infringe the rights acquired and guaranteed granted by the State to the beneficiaries of the Legal Guarantee of Stability.
The Amendment Act maintained the secure mechanism for the operationalisation of the Legal Guarantee of Stability. It, however, reduced the scope and duration of this guarantee in that it should henceforth be applied only on subsequent amendments touching on provisions related to the tax, customs and exchange regimes and for period of 5 years as opposed to the period of 10 years as from the entry into force of the coming legislative amendments. As immediate enforcement of the amending Act does not imply the implementation being backdated to 11th July 2002, especially because the legislator did not explicitly stipulate it in the Act, the amending Act provides for the future and does not harm acquired rights and legally guaranteed by the State.
Thenceforth, it is clear that the amending Act cannot be regarded as a prejudice to the interests of the beneficiaries of the Guarantee of Stability for the mere fact of its promulgation and publication, as long as it has not been applied effectively. In this case, beneficiaries of the Legal Guarantee of Stability cannot be legally justified to request for any compensation only if at the time of implementing the amending Act, public services, administrations and civil servants tasked with implementing the Act refuse to grant them the full benefit of this guarantee, especially regarding not only its scope but also its period of intangibility. Consequently, any litigation against the Government based on the mere promulgation and gazetting of the amending Act before any court or any arbitral entity, could be considered as premature.
However, the Government of the Republic, being under the obligation to implement the provisions of the amending Act, should comprehensively and unequivocally clarify, in its Mining Regulations to be amended, the scope of the Legal Guarantee of Stability and its effects on the existing mining projects, as at the effective date of the amending Act. The Government should further instruct and train the civil servants tasked with implementing the Mining Code and the amending Act on the best practices of the Code regarding the scope and the effects of the amendment of the Mining Code on the existing mining projects which are under the regime of the Mining Code. This would contribute to the good conduct of civil servants whose contrary practices would expose the State to compensatory actions for breach of acquired rights and legally guaranteed by the State. This would allow the beneficiaries of the Legal guarantee of Stability an opportunity to rightfully litigate for wrong or damaging application of the provisions of the Mining Code and its amending Act.
 Mr. Emery Mukendi Wafwana is a well-known business practicing lawyer in the Democratic Republic of Congo (DRC) and Africa. He is an Advocate at the Supreme Court of Justice of the DRC after rendering services as an Advocate at the courts of appeal of Kinshasa / Gombe and Lubumbashi. He is a Legal Consultant registered with New York State Supreme Court, Appellate Division, and First Department. He is a Mines and Quarries Attorney and an Attorney on Intellectual Property. In his practice, he actively intervenes as a lawyer and represents domestic and foreign clients in legal matters and issues affecting the sectors of energy and natural resources; infrastructure, transport and NICT; banking, insurance, finance and tax; trade and industry as well as the litigation and arbitration practice. For further details, please visit https://juriafrique.com/lawyers/listing/emery-mukendi-wafwana/
 Mining Code Amending Act promulgated on 09 March 2018. Gazetted under Special Number of 28/03/2018, 59th year.
The expression “Legal Guarantee of Stability” aims to highlight the level state commitment to the beneficiaries of this guarantee. It carries a legal value but not a contractual one (“Contractual Guarantee of Stability”) or (“Stability Clause”). Consequently, we shall not in this article touch on the issue of the stability clauses contained in the mining contracts still in force in the DRC. This could be the subject of a separate analysis.
 We borrowed the expression “bedrock” based on what emerges from the Preamble of the Mining Code which justifies the objectives aimed at by the Code in the following terms: “To address this gap, the lawmakers made it a point to put in place a new incentive legislation comprising objective, fast and transparent procedures for the granting of mining rights or quarries rights, which organises the fiscal, customs and change regimes. This one of raison d’être of the first Code…” It follows that the Legal Guarantee of Stability constitutes the foundation upon which mining projects are built, as it enables operators to have trust in the regimes based on which their financial and profitability forecasts are worked out.
 Please read the Preamble of Act No 007/2002 of 11th July 2002 related to the Mining Code, Gazetted on 15th July 2002, in the special issue of the Official Gazette p. 26
 Read Emery Mukendi Wafwana, Droit minier congolais, Volume I, Principes de gestion du domaine minier de l’Etat, JuriCongo-Bruylant, Bruxelles, 2005, pp.27-28.
 See Pascal ANCEL, Contractualisation et Théorie Générale du Contrat : Quelques remarques méthodologiques, in
Approche renouvelée de la contractualisation, Presse Universitaire d’Aix-Marseille, 2007, p.15
 This is the Constitution of 18 February 2006, Official Gazette, Special No. 05/04/2006
 Article 129 of the Constitution.
 Articles 64 and 283 of the Mining Code.
 Articles 219, 220 and other provisions of Title IX of the Mining Code.
 Articles 266 to 272 of the Mining Code.
 Articles 273 et 275 du Code Minier.
 Articles 43 et 46 du Code Minier.
 The case law of the Supreme Court of Justice holds as a principle that the acquired rights of individuals, consecrated by administrative acts are intangible. The individual administrative act creating rights can only be withdrawn if it is vitiated by unlawfulness and its withdrawal pronounced within the time limit for an action for annulment. See decisions RA 149 of 27/11/1987 ; RA 258 of 26/11/1993 and RA 340 of 19/02/1998, Juricongo, Case law of the Supreme Court of Justice, Tome II, administrative litigation, Kinshasa 2011, p.88
 Article 135 section 1 of the organic Law n° 16/027 of 15/10/2016 relative to the organisation, competences and
functionning of the jurisdictions of the administrative order, hereunder « Law relative to the jurisdictions of the
administrative order ».
 Article 34 section 3 of the Constitution and Article 275 of the Mining Code.
 Article 219 section 2 and Article 223 of Mining Code.
 JO, 43th year, Special Issue, 15/07/2002, pp 4-5.
 Statistics show that the mining sector soared from 35 mining companies to 101 in the exploitation phase and from 679 mining and quarries rights validated and confirmed to 2,510 (1,471 Exploration Permits, 466 Exploitation Permits, 11 Tailings exploitation Permits, 177 Small scale mining permits, 1163 exploration permits for quarries products, 9 temporary exploitation authorisations for quarries products, 213 permanent exploitation authorisations for quarries products). Production of metal content soared between 2002 and 2013, from 27,359 tons to 922,016 tons of copper, 11,865 tons to 76,593 tons of cobalt, 828 tons to 12,114 tons of zinc. Industrial production gold, which disappeared before 2002, reappeared with 5,833 kg in 2013 and a forecast of more than 15,000 kg for 2014. Source: Ministry of Mining, Mining Code Review, Draft of the Mining Code Amending Act, Preamble, Version of 19 February 2015.
 JO, 59th year, Special n., 28/03/2018, pp 1-2.
 The terms « the normative freedom and the prerogatives to act for the general interest » in their orignal french versions are from Arnaud De Nanteuil « L’expropriation indirecte en Droit international de l’Investissement », Pedone, Paris, 2014, p. 5
 Article 9 of the Constitution.
 Article 123 of the Constitution.
 Article 1 of the Amendment Act provides that « Under this code, it is understood : […] Beneficiairy : Any person to whom a mining or quarry right is granted and a mining or quarry title is established, in accordance with the provisions of this code and who realise authorised operations pursuant to his/her mining or quarry title. Nevertheless, the [amodiataire] is assimilated to a beneficiary. »
 Article 326 of the Mining Code provides “Associated matters not expressly stipulated, defined or regulated by the provisions of the present Code shall be governed by the Mining Regulations.» and Article 334 of the Mining Code provides “The conditions for application of the provisions of the present Code are specified in the Mining Regulations which shall be adopted by decree within a period of six (6) months following enactment of the present Code.”
 Although Article 153 last subparagraph of the Constitution does not quote the general principles of law as a basis for a
judge’s decision, the law relative to the jurisdiction of the administrative order includes them as for the jurisdiction of the administrative order.
 Civ. 3e 29 janvier 1980
 Civ. 1e, 12 juin 2013
 Civ. 1e 17 juin 1981
 We approach this question in a separate study on the survival of the mining conventions after the entry into force of the Amending Act