1. — For some time, mining companies in the Democratic Republic of the Congo are facing the National Forest Fund, (“Fonds Forestier National”), a technical and financial public establishment set up by the law N° 011/2002 of 29 August 2002 relating to the Forestry Code (“Forestry Code”) for the payment of the “deforestation tax” as a result of the deforestation made by them concerning the mining areas covered by their mining titles.
2. — With regard to the taxes, customs and other duties and levies regime applicable to the mining titleholders provided for in the Law n° 007/2002 of11 July 2002 relating to the Mining Code (“Mining Code”) as implemented by Decree n° 038/2003 of 26 March 2003 about Mining Regulations (“Mining Regulations”) (collectively “Code and Mining Regulations”), can a mining titleholder be liable to deforestation tax? This is the problematic which is posed in the present article.
3. — To address this problematic, first of all, we are going to recall and mark out the exhaustive nature of the tax, customs and other duties and levies regime that applies to the mining titleholders as provided for in the Mining Code and Regulations as well as its rights and limitations in the use of forests and limits in the occupation of the mining area (I) ; thereafter, we will analyze the provisions of the Forestry Code that institutes the deforestation tax and their applicability to the mining titleholder (II), and finally we will draw our conclusions (III).
I. Exhaustiveness of the tax, customs and other duties and levies regime applicable to the mining titleholder and its rights in the use of the forests and limits in the occupation of a mining area.
I.1. Exhaustiveness of the tax, customs and other duties and levies regime applicable to the mining titleholder.
4. — The tax, customs and other duties and levies regime applicable to the mining titleholder is exhaustive in the sense that the Mining Code and Regulations enumerate, in an exhaustive manner all taxes, customs, duties, levies, fees, royalties and other rights (collectively referred to as “Taxes”) applicable to the mining titleholder excluding any other form of existing and future taxation. This permeates the 1st paragraph of article 220 of the Mining Code which clearly states that the tax and customs regime applicable to the mining activities (including mining activities of a mining titleholder) on the national territory is the one defined under title IX of the present Code.
5. — In other words, the exhaustive Tax regime means that mining titleholder may only be liable to tax and customs provided for under Title IX of the Mining Code. Concerning particularly the duties, levies, fees, royalties and other rights (collectively referred to as “Duties and Levies”), the analysis of article 509 of the Mining Regulations makes a distinction between Duties and Levies paid to the public administrations and personalized public services and other Duties and Levies paid to the Public Treasury which we refer here “Other Duties and Levies”. The mining titleholder is exempted from any Duties and Levies in force when the Mining Code came into force and from those that will be established after the coming into force of the Mining Code, excluding those defined at points a, b and c of the paragraph 4 of article 509 of the Mining Regulations. With regard to Other Duties and Levies, the mining titleholder is only liable to those provided for under article 220, paragraph 2 of the Mining Code and he/she is exempted from any other forms of taxation which are established or shall be established in connection with his/her mining activities by any national, provincial or local administrative authority .
6. — What about the “deforestation tax”, or levy on cutting trees, established by the Forestry Code, a law which came to existence after the Mining Code? The deforestation tax is one of Duties and Levies levied by a public administration, in this instance the ministry of environment. This levy is provided neither in the Mining Code nor in the Mining Regulations. Therefore and pursuant to the provisions of exhaustiveness of Taxes, and except for Duties and Levies not mentioned in article 509, paragraph 4, sub-paragraph a, b and c of the Mining Regulations, “Deforestation Tax” may not be applied to the mining titleholder; that is to say, the mining titleholder is legally exempted from it. Such inapplicability of the Deforestation Tax provided for in the Forest Code to the mining titleholder is much supported due to the specification of the Mining Code compared to Forest Code, which is a general law with regard to forest management and which, furthermore, is subsequent to the Mining Code under the principle of special (Specialia generalibus derogant).
I.2. Rights of the mining titleholder in the use of the forests and his/her limits in the occupation of the mining area.
I.2.1. Rights of use of the forests
7. —It may happen that the area of a mining title covers partially or totally a forest. In this case, to properly carry out its mining operations, is the mining titleholder entitled, in such circumstance, to cut trees due to his/her mining activities? To meet this concern, we must make a difference, as the case may be, between the mining exploration titleholder and the mining exploitation titleholder
a) Mining exploration titleholder
8. — Even if the Mining Code is not more explicit, we may state that the mining exploration titleholder has the right to cut trees to the extent that his/her mining title grants him/her the exclusive right to carry out, within the area and during the validity period, exploration works of mineral substances for which a mining title was issued. Such exploration works include, inter alia, surface and /or underground works by resorting to geological, geophysical and geochemical techniques. In the forest, it ensues that the right to carry out underground works in a forest implies the cutting of trees. Therefore, this right of depth of penetration implies the right to deforest. Besides, the mining exploration titleholder is authorized to set up an encampment in the area of his/her mining title; this also implies the cutting of trees if a forest is included in the area. Before setting up the encampment equipment, the titleholder is authorized to clear the ground pursuant to natural process which should not markedly affect the development and soil levelling, this also causes the cutting of trees.
9. — Besides, in his/her Mitigation and Rehabilitation Plan (“MRP”) to be filed with the Mining Registry before the commencement of exploration works, the mining exploration titleholder must draw a basic map showing the spots of the area which shall be affected by the exploration works including sensitive zones, restricted zones, water canals and lakes, roads and ways as well as forests. The MRP defines the impact on the environments; inter alia, the forest and the ways to mitigate the impacts and rehabilitate the environment, that is, to reforest after the cutting of trees.
b) Mining exploitation titleholder
10. — The mining exploitation titleholder, i.e., the titleholder of the exploitation permit or exploitation permit of slags or small mine exploitation permit, has also the right to cut trees, during the validity period, within the area for which the mining title had been granted since this title awards to him/her the exclusive right to carry out exploration works, development, construction and exploitation concerning mineral substances for which the permit had been granted but this also grants to him/her the authorization to use water resources and timbers within the area for the purpose of the mining exploitation. These different activities have always an impact on the environment, notably in the case the mining area covers partially or totally a forest. But, these impacts on the environment must comply with the standards defined in the Environmental Impact Study (“EIS”) and Environmental Management Plan for the Project (EMPP),.
11. — It ensues that the mining titleholder is implicitly authorized to do the cutting of trees not only when he/she carries out exploration works as in the case of a mining exploration titleholder (see paragraph 8) but also when he/she carries out development, construction and exploitation works for the purpose of mineral substances for which the permit had been granted. Therefore, if the perimeter is covered by a forest, he/she has the right to cut trees if the concerned area includes a forest, but also he/she has the right to use the woods cut.
12. In the light of the foregoing, we can state that the mining titleholder, (i.e., either the exploration permit holder or the exploitation permit holder) has the right to use the forest which is part of his/her mining area in compliance with his/her Mitigation Rehabilitation Plan (MRP) concerning the exploration permit and his/her EIS/EMPP concerning the exploitation mining permit. The MRP and EIS/EMPP are collectively referred to as “Environmental Plan”.
I.2.2. Limits of mining titleholder to occupy the mining area
13. — Regarding the forest, the Mining Code and Regulations impose a restriction on the mining titleholder only in the case of site earmarked for the nursery of forest trees or forest plantation. Hence, it is important to specify the nature of these limits and conditions for the occupancy of land earmarked for the nursery of forest or forest plantation.
Nature of limits on occupation of land reserved for tree nursery for forest or a ma-made forest
14. — Under article 1.28 of the Mining Regulations, the land reserved for a tree nursery or man-made forest is a restricted area, in other words, the area whose occupation for mining purposes shall be subjected to the prior authorization from the relevant authority.
15. — In compliance with article 1.24 of the Mining Regulations and article 279 of the Mining Code, establishing land reserved for a tree nursery or man-made forest relies on the relevant authorities and must be performed according to administrative procedures.
Conditions to occupy a land reserved for a tree nursery or man-made forest
16. — We have to recall that the occupation of land reserved for tree nursery or man-made forest shall be subjected to an agreement or authorization from relevant authority. However, the Mining Code and Regulations do not specify which conditions the authorization of administrative authority should give for the occupation of sites reserved for forest nursery or tree plantation. Shall such authorization be granted free of charge or upon payment of a fee? Based upon the exhaustiveness of Taxes and except for Duties and Levies not mentioned in article 509, paragraph 4, sub-paragraph a, b and c of the Mining Regulations, the mining titleholder may not pay any whatsoever fee to obtain such authorization.
17. — In a practical way and generally, administrative authorities are not, however, ready to grant authorizations free of charge, i.e., without paying any fee. The need to collect fee by the relevant administrative authorities poses two major difficulties: first, the lists of Duties and Levies to be collected by the central government and by the provincial authorities do not provide any “authorization charge of the occupation of site reserved for forest nursery and free plantation” so that the collection of such fee would be illegal. Second, requiring such fee presents to the titleholder a dilemma: if the titleholder does not pay the fee, he/she will not have the authorization and if the titleholder occupies a site reserved for forest nursery or tree plantation without authorization, he/she would breach the Mining Code and may be liable to penalties. This represents an inadequacy in the Mining Code, which should have stated such authorization should have been granted without paying any fee and even provide with the mechanism of an authorization granted automatically in the event of exceeding certain period by the authority required to grant such authorization.
II. Provisions of the Forest Code and Mining Code relating to deforestation and-reforestation and provisions of the Forest Code pertaining to deforestation tax as well as applicability thereof, to the mining titleholder
II.1. Provisions of the Forest Code and Mining Code relating to deforestation-reforestation
18. — Pursuant to article 52 of the Forest Code, any deforestation must be offset through an equivalent, quality and surface area reforestation, with initial forest canopy achieved by the responsible for deforestation or at the costs of the latter. This provision sets out the principle of deforestation-reforestation, which means that any individual deforesting the forest shall reforest it, this is rational and aims to control the deforestation.
19. — With regard to the mining titleholder, this principle of deforestation-reforestation has been already provided for in the Mining Code and Regulations when they require the titleholder that the deforestation shall be carried out in compliance with rules defined in the Environmental Plan which defines the way timber deforested will be replaced or reforested (see paragraphs 9 to 11 supra). Thus, the mining titleholder shall perform its obligation in accordance with its Environmental Plan.
20. — To ensure the performance of any environmental obligation of the mining titleholder including that of reforestation, the Mining Code and Regulations imposes the titleholder to create a financial security of restoration,  which, in case of failure, may be subjected to the forfeiture by the State.
21. — Yet, the Forest Code states in its articles 53, 54 and 121.4° that any individual that, for mining, industrial, urban, tourist, farm or other activity, shall deforest a portion of forest, shall first obtain in this regard, a forestry cutting operation permit which gives rise to a prior payment of deforestation tax whose rate corresponds to the cost of reforestation per hectare.
22. — If the above provisions of the Forest Code are applied without discrimination and/or with closed eyes to the mining titleholder, the provisions may provoke a double obligation of reforestation to the extent that the latter is already submitted to a reforestation obligation in accordance with its Environmental Plan. Then, we should make the difference between the obligation to obtain the deforestation permit and the obligation to pay deforestation tax. If it is obvious that the mining titleholder shall fulfill the first obligation, as provided for in the Forest Code, as nothing exempts the mining titleholder therefrom; the issue still open is whether or not the deforestation tax shall be applied to the titleholder?
I.2. Applicability of deforestation tax to a mining titleholder and modes of payment thereof
I.2.1. Applicability of deforestation tax to a mining titleholder
23. — Therefore, we recall that, the provisions of the Mining Code related to the exhaustiveness of Taxes and the provisions of Mining Regulations relative to the exemption of the titleholder from Duties and Levies, the deforestation tax may not be applied to the legally exempted mining titleholder according to the Forest Code when a mining titleholder is obligated to, for the purposes of its mining activity, deforest a portion of forest, he/she shall first obtain in this regard, a forestry cutting operation permit which is granted after prior payment of a deforestation tax whose tax basis, rate and modes are defined in a joint Ministerial Order of the Minister of Forest and Minister of Finances. Income generated by such tax will be allocated to the forest capital recovery (See paragraph 21). .
24. — In addition, under articles 81 and 122 of the Forest Code, to ensure the financing of reforestation and laying-out, control and monitoring operations and achievement thereof, a National Forestry Fund has been created from the budget for and fueled particularly by income from reforestation tax whose proceeds shall be put in the Public Treasury account, then distributed at the rate of 50% to the Public Treasury and 50% to National Forestry Fund.
25. — The provisions of Mining Code and Forest Code mentioned above, (see paragraph 23) seem to be inconsistent. But, to not violate the provisions of the Mining Code, which may not be amended by the provisions of the Forest Code to the extent that the Mining Code may be amended only by law respecting amendment to the Mining Code, we conclude that the deforestation tax mentioned in the provisions of the Forest Code may be applied only to mining operations subjected to the system of taxation and customs of common law, i.e., activities not concerned by the exhaustive tax, customs and other duties and levies regime of the Mining Code, such as exploration activities of products from quarries and exploitation of quarries, which are subjected to the common-law schemes. But, the mining titleholder (exploration or exploitation) must be exempted from the deforestation tax whenever the deforestation is effected in line with its mining project.
26. — Also, as the mining titleholder is obligated to deforest-reforest in line with its Environmental Plan, and shall create a financial security to ensure particularly the reforestation, requiring the same to pay deforestation tax for the forestry recovery of which the rate corresponds to the reforestation cost, will be not only illegal but would also mean to require the titleholder a double tax for the forest restoration. This seems unfair.
27. — However, as stated above, the mining titleholder should first obtain a forestry cutting operation permit whenever he/she shall deforest a portion of forest within its mining tenement as the titleholder needs an administrative authorization to use a land reserved for forest nursery or tree plantation also within its mining tenement. But, operationally, neither the forestry cutting operation permit nor the occupation permit will be granted to the titleholder without paying the tax, despite as the same is exempted. This leads us to the dilemma mentioned above (see paragraph 17). Will the titleholder deforest without permit? If this was done, the titleholder runs the risk to violate the Forest Code. The Code denotes an inadequacy in the coordination of statutory materials. The Forest Code, material enacted after, should have considered the tax and customs system regulated by the Mining Code. This, given that it could not amend the same, as the Mining Code could be changed only through law respecting modification of the Mining Code.
I.2.2. Modes of payment of the deforestation tax
28. — It should be noted that the deforestation tax is mentioned in the attached Decree-law No 13/002 of 23 February 2013 establishing the list of duties, taxes and royalties of the Central Power as tax or duty to be collected by the Ministry of Environment. Thus, it is one of Duties and Levies under the Ministry of Environment. In this regard, pursuant to article 4 of Decree-law No 13/003 of 23 February 2013 on the procedural reform related to the taxation base, control and modes of collection of non-fiscal income, its rate as well as the period of its payment must be established through the joint Order Ministerial of the Minister of Finances and the Minister of Environment. To be paid, a collection note must be drawn up after control by the authorizing officer for non-fiscal income. At the end of payment order, the authorizing officer will send under his own responsibility, the collection note to the collector of non-fiscal income for management and enforcement of income by the taxpayer. The income “listed” shall be under the Authorities in charge of non-fiscal income, i.e., the “Direction Générale des Recettes administratives, judiciaires, domaniales et des participations” (DGRAD).
29. — Pursuant to article 6 of Decree-law 13/002 of 23 February 2013 establishing the list of duties, taxes and royalties of Central Power “any income collected based on duties, taxes and royalties defined in this list will be entirely transferred to the account of Public Treasury”. Thus, the deforestation tax that is an income “listed” must be entirely transferred to the Public Treasury and shall not be paid to the National Forestry Fund.
30. — We have to inform that article 81 of Forest Code ascertains that the National Forestry Fund draws from the budget for the order, which is fuelled particularly by forest tax revenues (see also paragraph 21). Actually, budget for the order has been removed since 2005 through the Law No 05/008 of 31 March 2005 amending and supplementing the Law No 04/015 of 16 July 2004 defining the list of chargeable events of administrative, legal, and property income and income from participation as well as their procedures for collection. Such budget included revenue collected directly by some public bodies, without referring to the Public Treasury, in respect thereof, revenue collected particularly by the Reconstruction Fund of Forest Stock., the suppression of budget for the order was imposed by the universal principle of Government Budget and resulted in the integration of revenue collected by such bodies into non-taxable revenue to be raised by DGRAD, this had allowed to direct them to the Public Treasury and then, to avoid allocating them in advance to expenditures determined by decision-maker departments.
31. — So, the provisions of article 81 of the Forest Code related to the budget for order are deemed to be repealed and inexistent so as deforestation tax income must be entirely collected for the Public Treasury. This is in line with article 122 of the same Forest Code clearly stipulates that “proceeds of forest taxes and royalties shall be transferred to the Public Treasury”. If the deforestation tax must be in full transferred to the Public Treasury, therefore, it is within the responsibility of the Public Treasury to cede back to the National Forest Fund its quota of 50%, after payment.
32. — Thus, clashes and/or misunderstandings between the National Forest Fund and mining companies described in paragraph 1 above may not happen because not only the deforestation tax is not applicable to the mining titleholder but, even the mining titleholder should pay such tax, he can not pay it to the National Forest Fund. He should rather pay it in full to the Public Treasury.
33. — Based on the foregoing, we conclude that:
1° The tax, customs and other duties and levies regime applicable to the mining titleholder is exhaustive, it means that the holder of mining rights shall pay only Taxes defined in the Mining Code and Regulations, except any other forms of taxation, present and future. As the “deforestation tax” is not defined in the Mining Code and Regulations, apart from the technical aspect of mining law with regard to the forest management in a mining perimeter, the mining titleholder is technically exempted from such tax, though established by a legal text subsequent to the Mining Code.
2° The mining titleholder is entitled to clear the forest, if its mining tenement is covered by a forest; the mining titleholder may even use the timber thus cut. But, this land clearing shall be in compliance with the rules defined in its Environmental Plan, in other words, to deforest-reforest. However, the Mining Code and Regulations require that a limitation to this right to use the mining perimeter with regard to lands for a tree nursery or a tree plantation is subjected to authorization from relevant authorities. So, the Forest Code requires prior obtaining of a land-clearing permit. But, such authorization and permit are awarded only by means of payment of a tax.
3° Regarding the exhaustiveness of Taxes in favour of the mining titleholder, the latter is not required to pay neither any whatsoever fee to obtain a permit to occupy the land for a tree nursery or for tree plantation, nor deforestation tax before carrying out the deforestation. But, in practice, administrative authorities purposefully or by lack of knowledge, ignore the particularity of the Mining Code and require the mining titleholder to pay fees from which he/she is however exempted. This situation places the mining titleholder in a dilemma: on the one hand, if the mining titleholder does not pay the tax, the latter will not obtain the authorization to occupy lands reserved for tree nursery or tree plantation or land-clearing permits; on the other hand, if the mining titleholder occupies a land reserved for tree nursery or tree plantation without authorization or if the latter clears the lands without any permit, it would violate the Mining Code and Forest Code and may be liable to penalties.
4° To resolve this dilemma, the mining titleholder has to choose among three solutions: whether to pay the tax in order to obtain the required authorization or permit, by accepting then a loss; or to require that the authorization or permit be issued without paying the tax, this would be hard to imagine; or finally, to pay the tax in order to obtain the authorization or permit, but then, to claim the reimbursement by legal process, this will provide with a case law, which could fill legislative gaps and to show the administration that the titleholder shall obtain the authorization and the permit, but not to pay the tax.
5° As for the payment of the deforestation tax, the titleholder shall need the payment note issued by the Ministry of Environment; after verification by the authorizing officer of non-tax revenue, such tax should be paid and assessed. The deforestation tax shall not be, therefore, paid to the National Forest Fund, which should wait its quota of 50% after payment into the account of the Public Treasury.
6° De lege ferenda, we would recommend that the Mining Code and Forest Code be amended in order to take into account that the mining titleholder is exempted from any whatsoever tax in the event of occupation of lands reserved for a tree nursery or man-made forest and from the deforestation tax.