By Pete Jones and Bienvenu Bakumanya
KINSHASA (Reuters) - Democratic Republic of Congo is owed an estimated $3.7 billion in unpaid customs duties and fines by companies operating in its copper-rich Katanga province between 2008 and 2013, according to an unpublished report commissioned by the public prosecutor's office.
The report, seen by Reuters and dated November 2013, is part of an ongoing government probe into suspected malpractice by customs agents and companies in the vast southeastern province. It accused companies there of under-declaring the value of imports and exports, and sometimes avoiding tax altogether, often with the collusion of customs officials.
Some companies named in the report questioned the accuracy of its findings. The head of the customs agency in Katanga also said proper consultations had not been held with the companies and the report's findings were exaggerated.
Public Prosecutor Flory Kabange Numbi declined to comment directly on the report. In a letter to local rights group seen by Reuters, he said it was too early to draw conclusions about the outcome of the overall investigation, which is continuing.
Congo's mining production has been limited by energy and infrastructure problems, and the government is under pressure to maximize revenues from the sector if it is to stand a chance of hauling its 65 million people out of poverty.
Two government ministers backed the broader investigation, saying it must be completed and any cash owed by firms must paid to the government.
The report, compiled by a team that undertook a 10-day mission to Katanga, led by Congolese Attorney General Simon Nyandu Shabandu, examined 25 cases of alleged customs infractions. It found that 11 companies were liable for $741 million in unpaid taxes and fines, including Mutanda Mining, a copper miner 69 percent-owned by Glencore Xstrata plc.
The mission's report said penalties were agreed by "all parties" following talks between the firms and the customs agency. It noted, however, the experts had not visited Mutanda Mining, pending instructions from authorities.
Glencore strongly denied any wrongdoing and said the report was inaccurate. It said it had not agreed to any penalties.
"Contrary to what is stated in the draft document, no contact was made by the ‘mission' with Mutanda mining. Mutanda has no outstanding taxes or fines," said a Glencore spokesman in an emailed statement.
The mission said a further 252 alleged cases remained outstanding and it estimated the total amount owed to the state from these at $3 billion.
Chemaf, a privately owned Congolese company cited by the report as among the 11 owing taxes, also denied its findings. "We are confirming that Chemaf does not owe $21.4 million in unpaid taxes," said Chemaf Director Sebastien Ansel.
Representatives for Hyper Psaro, United Petroleum and United Oil & Soap - all named in the report as owing taxes - declined to comment. The companies are all part of privately owned Congolese fuel, commodities and transportation conglomerate Hyper Psaro Group.
Other companies identified as owing money - Comexas, Socimex, Sabot, Marine International, Frontier, Congo Loyal and Trade Service - either did not respond to requests for comment or could not immediately be traced.
REPORT CALLS FOR ACTION
International mining firms have invested billions in Katanga in recent years to tap into its vast copper and cobalt reserves. Mining made up 15.4 percent of Congo's gross domestic product in 2012, according to the International Monetary Fund.
Congo produced 600,000 tons of copper in 2012, making it the world's eighth-largest producer.
Shabandu's team complained in the report that it was only given 10 days to carry out its work on the ground in Katanga, adding that firms did not cooperate fully with investigators, singling out Chemaf as one of the most uncooperative.
"It is difficult for us to comment on specifics in the report when the report has not been shared with us," said Chemaf's Ansel. "Chemaf does cooperate appropriately with the various Congolese agencies, and we are not aware of any instances where it has not been the case."
The report highlighted alleged corruption among officials of Congo's customs agency (DGDA) in the province, some of whom were accused of destroying evidence of tax evasion.
"The contempt of companies with regard to the customs administration (refusing to answer invitations) and the nonchalance of agents of the DGDA show an excessive degree of impunity which requires energetic action to uphold the law," the report concluded.
The provincial director of the customs agency in Katanga questioned the accuracy of the figuers in the report, and denied that some meetings with the companies had taken place.
"There is an inflation of the numbers, because discussions were not held with the stakeholders. This inflation of numbers is dangerous," said David Kalande.
In a letter to ASADHO, a local human rights group formed in response to widespread violations under the late former dictator Mobutu Sese Seko, Public Prosecutor Numbi rejected a demand to publish the report and said it was too early to draw conclusions from investigations.
"It is understood that the judicial inquiry in the strict sense remains at an investigative stage, with the background of the presumption of innocence," read the letter, which was copied to senior government figures. "Judicial inquiries do not proceed following the diktat or cries of alarm of journalists or human rights defenders."
The investigation was launched following a letter from Communications Minister Lambert Mende to President Joseph Kabila - copied to Prime Minister Augustin Matata Ponyo and the public prosecutor - which raised fears of malpractice in Katanga.
"Sources close to the (Katanga customs agency) have sent me documents containing bundles of indications of cases of corruption, misappropriation and fraud at the (agency)," wrote Mende, who is also the government's spokesman.
Mende told Reuters that the investigation would be completed at its own speed.
Finance Minister Patrice Kitebi threw his weight behind the probe. "I support the process carried out by the Attorney General that aims to recover the revenues not paid by these traders," said Kitebi.
The total of $3.7 billion in unpaid duties and fines would be equivalent to nearly half of the annual budget in Congo, where simmering local conflicts and rampant corruption have hobbled internationally backed efforts to pacify and develop the mineral-rich giant. Congo's budget is expected to be $8.2 billion in 2014.
(Editing by David Lewis, Daniel Flynn and Will Waterman)