Congo, Republic of the
The Republic of Congo (ROC) possesses enormous potential wealth relative to its population of five million. The IMF projects GDP growth of 3.7 percent in 2019. A sustained economic crisis since a 2014 drop in oil prices, poor governance, and a lack of economic diversification, however, have pushed the government of ROC to near insolvency, reduced its creditworthiness, and caused the central bank to use enormous amounts of its foreign currency reserves.
Oil represents the largest sector of the economy and contributes upwards of 60 percent of the government’s annual declared revenue. The non-oil sector consists primarily of the logging industry, but significant economic activity also occurs in the telecommunications, banking, construction, and agricultural sectors. ROC seems poised for economic diversification, with a territory of 30 percent arable land, some of the largest iron ore and potash deposits in the world, a heavily forested land mass, and a deep-water International Ship and Port Facility Security (ISPS) Code-certified port. ROC has been AGOA eligible since October 2000, providing an additional enticement for export-related investment. ROC participates in the Central African Economic and Monetary Community (CEMAC).
Poverty rates in ROC remain much higher than in other oil-exporting countries, with 46 percent of the population living under the poverty line. A sizeable middle class with robust education, skills, and material living standards does not exist on a large scale. ROC suffers from poor access to education, low educational standards, and little social mobility. The majority of the population operates in the informal sector of the economy and does not declare revenues and profits, pay taxes, or pay employee benefits to the state. Women do not participate proportionally, in the formal or informal economies, and women entrepreneurs face additional structural challenges establishing and operating a business and accessing credit.
In addition to economic risks, ROC also faces periodic internal political and security risks Potential investors should always check www.travel.state.gov for the latest safety and security information before traveling to ROC.
ROC has made significant investments in recent years to develop its infrastructure, including the completion of paved roads linking Brazzaville to the commercial capital of Pointe-Noire and other departments (regions). Significant challenges remain, in particular ROC’s nascent internet and inconsistent supplies of electricity and water, which present both hurdles to and opportunities for foreign direct investment. Significant sections of the country’s road system remains in need of maintenance or paving. The limited railroad network competes with truck and bus traffic for commercial cargo. However, major infrastructure projects still reach major cities, and the government reports spending significant amounts on infrastructure improvements.
The petroleum, timber, and mining sectors remain the most significant sectors of the economy in the near term. Agro business presents a growth opportunity given that the country cultivates less than ten percent of its arable land. Most agriculture remains at the subsistence level, and the country imports more than 80 percent of its food. The government has also voiced great interest in developing the country’s nascent tourism sector, a sector with potential for investment thanks to ROC’s pristine rainforest reserves. Limited transportation infrastructure will challenge potential expansions of this sector, however.
The telecommunications and mobile banking sectors stand poised for growth as well. Mobile phones saturate ROC’s market, though the country lacks supporting infrastructure for telecommunications. Internet penetration remains at less than 10 percent and connections are extremely expensive, providing significant room for competition and growth in the sector. While low per capita income prevents most people from owning personal computers and accessing the internet, cyber cafes and satellite broadband projects continue to grow in prevalence, indicating both a desire for internet services as well as a potential market for investors. The government closely regulates internet and telecommunication networks and reliability of service remains limited.
Investors report that the commercial environment in ROC has not improved substantially in recent years. The World Bank’s 2019 Ease of Doing Business report ranked ROC at 180 out of 190 countries, and ROC ranked 165 out of 180 countries in Transparency International’s Corruption Perceptions Index 2018. American businesses operating in ROC and those considering establishing a presence regularly report obstacles linked to corruption, lack of transparency, and host government inefficiency in matters such as registering businesses, obtaining land titles, paying taxes, and negotiating natural resource contracts.
Table 1: Key Metrics and Rankings
|TI Corruption Perceptions Index||2018||165 of 180||http://www.transparency.org/research/cpi/overview|
|World Bank’s Doing Business Report||2019||180 of 190||http://www.doingbusiness.org/en/rankings|
|Global Innovation Index||2018||N/A||https://www.globalinnovationindex.org/analysis-indicator|
|U.S. FDI in partner country ($M USD, stock positions)||2017||$230||http://www.bea.gov/international/factsheet/|
|World Bank GNI per capita||2017||$1,430||http://data.worldbank.org/indicator/NY.GNP.PCAP.CD|
1. Openness To, and Restrictions Upon, Foreign Investment
Policies towards Foreign Direct Investment
The government sees investment beyond the petroleum sector, which accounts for over 90 percent of FDI inflows, as key to stimulating growth and development. The country has pledged to undertake a variety of legislative, regulatory and institutional reforms to improve the investment climate and attract more FDI with the goal of becoming an emerging market economy by 2025.
No known laws or practices discriminate against foreign investors, including U.S. investors, by prohibiting, limiting or conditioning foreign investment in a sector of the economy. The U.S. and ROC signed an investment agreement in 1994.
ROC’s Agency for the Promotion of Investments (API), established in 2013, promotes economic diversification by seeking to expand the pool of external investors. It provides limited services, however. The Ministry of Economy leads government-wide economic diversification efforts.
The government has made no significant efforts to retain foreign investments. The High Committee for Public-Private Dialogue (“Le Haut Comité du Dialogue Public-Privé”), established in 2012, has not convened since 2014, despite significant lobbying efforts in 2018-19 from ROC’s union of private enterprises to restart a serious public-private dialogue.
Limits on Foreign Control and Right to Private Ownership and Establishment
Foreign and domestic private entities have the right to establish and own business enterprises and engage in all forms of remunerative activity.
ROC has no known general limits on foreign ownership or control.
Foreign business entities investing in the petroleum sector must pursue a joint venture with the Congolese National Petroleum Company (SNPC). Informally, ROC enforces a policy that foreign companies must employ a significant number of Congolese workers, including managers, with a focus on employing an increased number of Congolese workers and managers in subsequent years. There are no other known sector-specific restrictions, limitations, or requirements applied to foreign ownership and control.
ROC does not have an investment screening mechanism for inbound foreign investment.
Other Investment Policy Reviews
The government undergone no third-party investment policy reviews (IPRs) in recent years.
The ROC government has a “one-stop shop” for establishing a business called “Agence Congolaise Pour la Création des Entreprises” (ACPCE). ACPCE has offices in Brazzaville, Pointe-Noire, N’kayi, Ouesso, and Dolisie. In order to establish a business in the ROC, investors must provide ACPCE with two copies of the company by-laws, two copies of capitalization documents (e.g. a bank letter or an affidavit), a copy of the company’s investment strategy, company-approved financial statements (if available), and ownership documents or lease agreements for the company’s offices in the ROC.
The ROC government does not promote or incentivize outward investment.
The ROC government does not restrict domestic investors from investing abroad.
2. Bilateral Investment Agreements and Taxation Treaties
On February 12, 1990, ROC signed a Bilateral Investment Treaty (BIT) with the United States. The treaty entered into force on August 13, 1994. ROC maintains BITs in force with France, China, Germany, Italy, Republic of Korea, Mauritius, Switzerland, and the United Kingdom. The ROC has fiscal agreements with the other member states of the Central African Economic and Monetary Community (CEMAC). Several African nations have signed commercial and bilateral agreements with ROC to safeguard investments, including South Africa in 2005 and Namibia in 2007. As a lower middle-income country, ROC may not join a number of trade agreements open to the Least Developed Countries.
ROC does not have stand-alone bilateral taxation treaties with any country. Some of ROC’s bilateral investment agreements, such as with the United States and France, do include taxation provisions to avoid double taxation, but tax authorities generally do not enforced these provisions. Some companies have reported issues recovering value added taxes (VAT) from the ROC government.
3. Legal Regime
Transparency of the Regulatory System
Lack of transparency poses one of the greatest hurdles to FDI, as investors must navigate an opaque regulatory bureaucracy. Companies that have successfully navigated the environment, including with Embassy support, serve as important sources of advice for prospective investors on how to adapt to ROC’s unclear “rules of the game.” The government does not publish proposed laws and regulations in draft form for public comment. Although Congolese law requires ministries and regulatory agencies to give notice of proposed regulations to the general public, these drafts in fact do not appear publically. Nongovernmental organizations and intra-governmental task forces have sought to improve government transparency with little success.
There are no known informal regulatory processes managed by nongovernmental organizations or private sector associations.
Various ministries have regulatory authority over the individual industries in their area of responsibility, with overall authority coordinated by the Ministry of Economy. The government develops new regulations internally and rarely requests input from industry representatives. The government does not usually offer a formal, public comment period. Departmental (regional) and local authorities may impose additional regulations on a case-by-case basis. Scientific or data-driven assessments do not typically drive the development or review of regulations
ROC uses francophone Africa’s OHADA – the organization for business and customs harmonization, or “Organisation pour l’harmonisation en Afrique du droit des affaires” – system of accounting, legal, and regulatory procedures.
The government does not normally make draft bills or regulations available for public comment.
The Office of the President publishes new laws, regulations, and their summaries in ROC’s Official Journal. The Office of the President no longer publishes the Official Journal online.
No known oversight or enforcement mechanisms exist for the ROC.
The Office of the President publishes new laws, regulations, and their summaries in ROC’s Official Journal. The Office of the President no longer publishes the Official Journal online.
The government announced no new regulatory systems or enforcement reforms during the reporting period.
The executive branch, or government, generally proposes laws, which the two houses of the Congolese parliament, the National Assembly and the Senate, must pass. A parliamentarian or a group of parliamentarians in either of the two chambers may propose a law, though this rarely occurs in practice. A law passed by both houses of the parliament enters into effect from the date the president signs it into law.
No known regulatory enforcement mechanisms exist.
The government does not create or review most regulations based on scientific or data-driven assessments. No known instances exist where the government made public scientific studies or quantitative analyses on the impact of regulations.
The government does not make transparent its public finances and debt obligations, including explicit and contingent liabilities. As of the date of this report, the International Monetary Fund (IMF) continues to evaluate ROC’s eligibility for an IMF program. The IMF has cited ROC’s lack of transparency in many of the 17 IMF conditions that ROC must meet before receiving approval for an IMF program.
International Regulatory Considerations
ROC participates as a member in the Economic Community of Central African States (CEEAC), a regional economic cooperation community, and in the Economic and Monetary Community of Central Africa (CEMAC), a monetary union of six Central African states. These regional economic organizations inspire, legislate, or control much of the national regulatory system.
ROC’s regulatory system for business disputes and regulations governing company registration structure and incorporation frequently incorporate Francophone African regulatory norms, such as those promulgated by OHADA – the organization for business and customs harmonization, or “Organisation pour l’harmonisation en Afrique du droit des affaires.”
ROC participates as a member of the World Trade Organization (WTO). The government does not provide information as to whether or not it notifies the WTO Committee of all draft regulations relating to Technical Barriers to Trade. ROC has signed on to the WTO Trade Facilitation Agreement but has not begun implementing the agreement.
Legal System and Judicial Independence
The French common law legal system inspires the Congolese legal system.
OHADA – the organization for business and customs harmonization, or “Organisation pour l’harmonisation en Afrique du droit des affaires,” serves as the basis for ROC’s national commercial law, which also incorporates provisions unique to ROC. A commercial court exists in ROC but has not convened since 2016.
The judicial system remains independent in principle; however, in practice, the executive branch regularly intervenes in the judicial system. Judges face high pressure to rule in favor of the interests of the executive branch and the ruling party.
Appellate courts exist and receive appeals of enforcement actions. Public Law 6-2003, which established ROC’s Investment Charter, states that Congolese law will resolve investment disputes. Either party, however, may enact independent settlement or conciliation procedures. These procedures govern appeals:
- The convention regulating the Community Justice Court;
- The treaty of October 17, 1993, implementing the Organization for the Harmonization of Business Law in Africa (OHADA); and
- The International Center for the Settlement of Investment Disputes (ICSID).
In practice, judgments of foreign courts are difficult to enforce in the ROC. Though the government does not usually deny those judgments outright, it may propose process or procedural delays that prolong the matter indefinitely without resolution.
Laws and Regulations on Foreign Direct Investment
ROC’s Hydrocarbons Law and Mining Code of 2016 contains industry-specific regulations for foreign investments. No other known laws or regulations apply specifically to foreign investment, aside from the provisions of bilateral investment treaties. ROC’s Commercial Court has authority over any legal disputes involving foreign investors. Investors may also file legal complaints in the OHADA court – based in Abidjan, Cote d’Ivoire – which has jurisdiction throughout Francophone Africa.
The government has published no major laws, regulations, or judicial decisions related to foreign investment in the past year.
The Congolese “one-stop-shop” – the Congolese Agency for Business Creation, or“Agence Congolaise Pour la Création des Entreprises” (ACPCE) – has an active website: . The website provides information only and does not offer online registration.
Competition and Anti-Trust Laws
No agencies review transactions for competition-related concerns, either domestic or international in nature. Economic ministries monitor individual industries and review industry-related transactions.
Expropriation and Compensation
The ROC government may legally expropriate property if it finds a public need for a given public facility or infrastructure (e.g. roads, hospitals, etc.).
No recent history of expropriation regarding private companies exists. Historically, however, the ROC government has expropriated private property from Congolese citizens to build roads and stadiums. Law entitles the claimants to fair market value compensation, which the government makes inconsistently.
Beginning in 2012, the ROC government expropriated the land of Congolese private property owners in the Kintele suburb of Brazzaville to build a state-of-the-art sports complex for the 2015 African Games. The government offered no compensation, and property owners complained of a lack of legal recourse against the government.
ICSID Convention and New York Convention
The ROC is a party to the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID). The ROC government has not ratified the New York Convention of 1958 on the Recognition and Enforcement of Foreign Arbitral Awards.
There is no specific domestic legislation providing for enforcement of awards under the ICSID Convention.
Investor-State Dispute Settlement
The ROC is a member of the Organization for the Harmonization of Business Law in Africa (OHADA), which includes binding international arbitration of investment disputes.
The ROC has a Bilateral Investment Treaty (BIT) with the United States that includes an investment chapter. There were no recent claims by U.S. investors under the agreement.
There have been two investment disputes involving U.S. entities in the past ten years.
In one, a company successfully negotiated a settlement with ROC authorities after filing suit in a New York district court. In the second, a company successfully sued ROC in U.S. and French courts over unpaid revenue, however, the ROC government refused to recognize the judgements. Moreover, Congolese courts issued their own judgements in favor of the ROC government. The ROC government no longer engages on the issue.
Local courts have rarely recognized and enforced foreign arbitral awards issued against the government.
There is no known history of extrajudicial action against foreign investors.
International Commercial Arbitration and Foreign Courts
The ROC inconsistently abides by international arbitration for any treaty, international convention, or organization of which it is a member. In practice, arbitral judgments are difficult to enforce.
Commercial courts constitute the domestic arbitration bodies within the country.
Local courts inconsistently recognize and enforce foreign arbitral awards. ROC law allows for the recognitions of foreign judgments when the relevant laws appear sufficiently similar to Congolese law. In practice, Congolese courts have not accepted any foreign arbitral awards in recent years.
The U.S. Embassy is not aware of any investment disputes involving SOEs in recent years. Given reports that the government routinely exercises significant influence on the judicial system, however, such interference could foreseeably occur in disputes involving SOEs.
The ROC has no specific law that governs bankruptcy. As a member of OHADA, ROC applies OHADA bankruptcy provisions in the event of corporate or individual insolvency. No laws criminalize bankruptcy. The ROC does not have a credit bureau or other credit monitoring authority serving the country’s market.
4. Industrial Policies
The ROC’s Ministry of Economy, Industrial Development, and Promotion of the Private Sector has overall responsibility for investment promotion. When a potential investor believes its investment will bring substantial investment and job creation to the Congolese economy, it may apply for preferential tax and customs treatment by applying to the Ministry of Finance’s National Committee on Investments. The Minister of Finance chairs this committee, which includes the Minister of Economy and Industrial Development as well as the Minister of Budget Planning. The committee reviews applications once annually.
Presidential decree No. 2004-30 of February 18, 2004, defines the requirements for foreign and national companies to benefit from incentives offered by the Congolese Investment Charter. The decree promulgates four types of incentives:
(a) Incentives to export;
(b) Incentives to reinvest the company’s profit in ROC;
(c) Incentives for businesses in remote areas or areas that are difficult to access; and
(d) Incentives for social and cultural investment.
Examples of incentives include reduced or exempted taxes below the corporate tax rate of 30 percent, reduced customs duties over a period of five to 10 years, a 50 percent reduction in business registration fees and an accelerated depreciation mechanism. For companies owned at least 25 percent by domestic entities, other incentives include a reduced dividend tax rate of 10 percent, capital gains tax reductions, deductions for business expenditures, reduced rents, and deductible remunerations. Businesses may negotiate other incentives during the incorporation process.
Foreign Trade Zones/Free Ports/Trade Facilitation
The government has named four special economic zones (SEZs): in the main economic hub of Pointe-Noire, the capital Brazzaville, and the cities of Ouesso and Oyo. ROC signed memoranda of understanding with the Governments of Mauritius, Singapore, and China to advise on the development of the SEZs and has also expressed a desire to attract U.S. investment. Little to no activity occurs in the SEZs, however, and no known timeline exists to render the SEZs operational.
Performance and Data Localization Requirements
Foreign companies must offer local employment to receive tax and investment benefits through the National Committee on Investment. Major foreign direct investment must demonstrate a significant economic windfall for the local community, including increased local employment, to receive an investment agreement from the National Committee on Investment.
ROC’s labor code requires the top manager of all companies to be a Congolese national. The government frequently waives this requirement for multinational companies.
Applications for residence or work permits involve multiple, paperwork-intensive steps typically riddled with low-level requests for bribes in the immigration and customs sectors. Visitors require a letter of invitation, approved by the immigration authority, prior to applying for any type of visa. A visitor or an investor must obtain a visa before travel; authorities do not provide visas on arrival.
The ROC government encourages local purchasing and production but in most cases does not impose requirements. The new Hydrocarbons Law includes local content requirements for companies operating in the energy sector.
The Ministry of Commerce applies price controls on roughly four dozen staple products, including food and fuel. The Ministry of Commerce also subsidizes certain products – such as sugar, for example – to make the domestic market more profitable for companies that might otherwise seek to export additional supply.
ROC imposes water pollution safeguards and forest regeneration requirements in the oil and forestry sectors. All forestry companies, both foreign- and locally-owned, are required by law to process 85 percent of their timber domestically and export it as furniture or otherwise transformed wood, and allows timber companies to export up to 15 percent of their wood product as natural timber. In practice, the economy exports much timber as natural timber.
The timber industry in ROC increasingly requires international certification, most often Forest Stewardship Council (FSC) certification. A number of foreign-owned timber companies in the ROC’s west and south, however, still operate without certification. FSC-certified companies may benefit from future government incentives as the ROC continues to participate in a Voluntary Partnership Agreement with the European Union’s Forest Law Enforcement and Governance Transparency program and with the United Nations’ Reducing Emissions from Degradation and Deforestation program.
ROC applies tariffs and import price controls to a number of staple food goods to encourage local purchasing.
The government does not force local hiring, but has in recent years informally encouraged companies, particularly those in the oil sector, to hire more Congolese and “Congolize” their operations.
No known performance requirements exist for foreign or local companies. No known restrictions apply to U.S. or other foreign firms’ participation in ROC government-financed or subsidized research and development programs.
No known procedures for performance requirements exist in the Republic of the Congo.
No requirements for foreign information technology providers exist to provide source code and/or access to encryption.
No requirements prevent companies from transmitting customer or other business data outside the country.
No known requirements enforce local data storage.
5. Protection of Property Rights
A process exists for the acquisition and retention of real property. The government enforces property rights, though companies and individuals cite inconsistent enforcement. Mortgages and liens exist. A generally reliable system of property exists.
No known regulations exist to prohibit land lease or acquisition by foreign investors.
The government has no definitive registry of untitled land.
Property ownership can transfer to other owners if the property remains unoccupied for 10 consecutive years while having been simultaneously used by another user (squatter).
Intellectual Property Rights
As a member of the Economic and Monetary Community of Central Africa (CEMAC), ROC participates in the African Intellectual Property Organization (AIPO). AIPO manages a single copyright system for all member states. Additionally, as a member of the World Trade Organization (WTO), ROC must ensure that legislation conforms to WTO intellectual property norms and standards. The Ministry of Commerce leads issues related to counterfeit products. Local authorities have historically seized and destroyed contraband items, such as medical supplies and food products. The ROC government reportedly uses unlicensed software on its computers; however, overall infringement of intellectual property rights (IPR) remains uncommon.
The government has enacted no new IP-related laws or regulations in the past year.
ROC maintains no formal system of tracking and reporting seizures of counterfeit goods.
The ROC is not listed in the United States Trade Representative (USTR) Special 301 Report.
The ROC is not included in USTR’s Notorious Markets List.
6. Financial Sector
Capital Markets and Portfolio Investment
ROC maintains a neutral attitude toward foreign portfolio investment and does not widely practice foreign portfolio investment.
ROC does not have a stock exchange. ROC-based companies may seek regional listing on the Douala Stock Exchange (DAC), which merged with the CEMAC Zone Stock Exchange (BVMAC). The regional central bank, BEAC, determines monetary and credit policies within the CEMAC framework to ensure the stability of the common regional currency.
Existing policies facilitate the free flow of financial resources, though complex products are not widely used.
The government and central bank respect IMF Article VIII and do not impose restrictions on international payments and transfers.
The central bank (BEAC) monitors credits and market terms. Foreign investors can easily obtain credit on the local market. As an immature financial market, the ROC offers a limited range of credit instruments.
Money and Banking System
ROC’s banking sector lags behind regional peers. The regulatory body of the Central Bank of Central African States (BEAC), the Banking Commission of Central Africa (COBAC), supervises the Congolese banking sector. Banking penetration likely remains in the five-to-seven percent range, although a government survey conducted in 2015 estimated a rate of 25-30 percent. High intermediation costs and high collateral requirements limit the pool of customers. The 13 banks that operate in ROC suffer from strained liquidity and generally have deposits that outpace credit. Microfinance banks and electronic banking remain the fastest growth areas in the banking sector.
The current economic crisis and the government’s consecutive years of fiscal deficits have additionally strained the banking sector over the past five years.
Non-performing loans remained steady at approximately five percent in 2018.
Fiscal transparency issues limit any estimate of the total assets controlled by ROC’s largest banks. The assets of the largest banks have likely decreased significantly in recent years as a result of the economic crisis.
ROC participates in the Central African Economic and Monetary Community (CEMAC) zone and the Central Bank of the Central African States (BEAC) system.
Foreign banks and branches may operate in ROC and constitute the majority of banking operations in ROC. BEAC banking regulations govern foreign and domestic banks in ROC. No banks have left ROC in the past three years.
No known restrictions exist on a foreigner’s ability to establish a bank account.
Foreign Exchange and Remittances
No known legal restrictions or limitations exist against converting, transferring or repatriating funds associated with an investment, including remittances. CEMAC regulations require banks to record and report the identity of customers engaging in transactions valued at over USD 10,000. Financial institutions must maintain records of large transactions for a minimum of five years. The General Director of Monies and Credit (DGMC) within the Ministry of Finance oversees exchange control. Investors may remit on a legal parallel market with approval from the DGMC. The Central Bank (BEAC) recently began monitoring fund transfers larger than USD 100,000.
Foreign investors may hold local bank accounts and report no difficulty obtaining foreign assets (currencies) from any of the major commercial banks, which include French, Chinese, Moroccan, or African banks. No U.S.-based banks operate in ROC, but transfers directly to and from the United States are possible.
ROC and other CEMAC member states use the Central African CFA Franc (FCFA, sometimes abbreviated XAF) as a common currency. The CFA is pegged to the Euro as an intervention monetary unit at a fixed exchange rate of EUR 1: CFA 655.957. This agreement guarantees the availability of foreign exchange and the unlimited convertibility of the CFA Franc. It also provides considerable monetary stability to the ROC and other CEMAC countries. The exchange rate between the CFA Franc and the U.S. dollar fluctuates according to the exchange rate between the Euro and the U.S. dollar.
There have been no recent changes or plans to change investment remittance policies that either tighten or relax access to foreign exchange for investment remittances.
No known time limitations on remittances exist.
Sovereign Wealth Funds
ROC maintains no formal Sovereign Wealth Fund (SWF), although the Parliament adopted a law enabling the creation of a SWF. The law envisages establishment of the SWF at the BEAC and acquiring mostly risk-free foreign assets.
No official sovereign wealth fund exists.
7. State-Owned Enterprises
As a former people’s republic, state-owned enterprises (SOEs) dominated the Congolese economy of the 1970s and 1980s. The remaining number of SOEs remains comparatively small following a wave of privatization in the 1990s. The national oil company (SNPC), electricity company (SNE), and water supply company (SNDE) constitute the largest remaining SOEs. The government reorganized the country’s electricity and water companies in October 2018 to increase efficiency and place a greater emphasis on public-private partnership.
SOEs report to their respective ministries. SOE corporate governance regulations require non-state corporate directorship. SOEs do not meet this requirement in practice, most notably by the SNPC.
Private companies may compete with public companies and, in some cases, have won contracts sought by SOEs.
Government budget constraints limit SOEs’ operations. Constraints on SOEs operating in the non-oil sector appear sufficiently monitored and subject to civil society and media scrutiny. The operations of SNPC, however, continue to present transparency concerns.
SOEs must publish annual reports subject to examination by the government’s supreme audit institution. In practice, these examinations do not always occur.
The government publishes no official list of SOEs.
No known SOEs in receive non-market based advantages from the government. SOEs do not directly compete with U.S. or other private companies.
The ROC has no known program for privatization.
8. Responsible Business Conduct
Corporate social responsibility (CSR) remains a well-known concept in ROC that local communities view favorably. Foreign oil companies constitute the primary CSR actors; however, telecommunications and transportation companies and banks have increasingly supported CSR initiatives and improved their public images. CSR actors appear to follow accepted CSR principles. The government promotes CSR to finance hospitals, education, nutrition programs, and road construction.
The government has not established a national contact point or ombudsman for responsible business conduct (RBC), nor has it established a national action plan to define and drive its approach to RBC. The government encourages RBC by partnering with or endorsing companies’ CSR initiatives. RBC policies do not factor significantly into government procurement decisions.
No known high profile, controversial instances exist of private sector entities negatively impacting human rights.
ROC inconsistently enforces laws related to human rights, labor, and commerce.
No known corporate governance, accounting, or executive compensation standards exist to protect shareholders.
No independent NGOs, investment funds, worker organizations/unions, or business associations promote or monitor RBC practices. Civil society groups promote individual matters of interest on a case-by-case basis.
ROC does not adhere to the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Afflicted and High-Risk Areas. No domestic measures require supply chain due diligence for companies that source minerals that may originate from conflict-affected areas.
ROC has participated in the Extractive Industries Transparency Initiative (EITI) since 2012 and published reports up to 2016. No domestic transparency measures require the disclosure of payments made to the government and/or of RBC policies or practices.
ROC has a law against corruption by public officials. The government inconsistently enforces the law. ROC ranks 165 out of 180 countries in Transparency International’s 2018 Corruption Perceptions Index.
The corruption law applies to elected and appointed officials. It does not extend to family members of officials or to political parties.
No specific laws or regulations address conflict-of-interest in awarding contracts or government procurement.
ROC does not encourage or require private companies to establish internal codes of conduct that prohibit bribery of public officials.
Some private companies, multinationals in particular, use internal controls, ethics, and compliance programs to detect and prevent bribery of government officials.
ROC serves as a party to the UN Anticorruption Convention.
ROC does not provide protection to non-governmental organizations (NGOs), to include NGOs investigating corruption.
Corruption remains rampant in ROC. U.S. companies have cited corruption as an impediment to investment, particularly in the petroleum sector, where corruption practices remain prolific.
Resources to Report Corruption
Contact at government agency or agencies responsible for combating corruption:
Emmanuel Ollita Ondongo
Centre Ville, Brazzaville
06 944 6165, 05 551 2229
Contact at “watchdog” organization:
Rencontre pour la Paix et les Droits de l’Homme (RPDH)
B.P. 939 Pointe-Noire, République du Congo
+242 05 595 52 46
10. Political and Security Environment
U.S.-Republic of the Congo relations are positive and cooperative. The two countries work together on issues of common interest such as strengthening regional security, improving living standards of Congolese citizens, and safeguarding the environment. The United States has encouraged Congolese efforts to diversify the economy and improve the business environment. The United States collaborates with the next generation of Congolese leaders to improve access to knowledge and skills to build a more stable, secure, democratic, and prosperous Congo.
There are no known examples of damage to projects and/or installations. Civil disturbances have occasionally resulted in damage to high-profile public places such as police stations.
The political environment has become noticeably calmer since the end of the 2017 legislative elections.
11. Labor Policies and Practices
Unemployment in the ROC remains high, with youth and women disproportionately affected. Reliable unemployment figures do not exist. The International Labor Organization (ILO) of the United Nations reports an overall unemployment rate of 18 percent, with unemployment among the 15-24 age group at 12.1 percent. The actual rate is most likely closer to the numbers reported by Trading Economics and African Economic Outlook, which report 46.1 percent unemployment. A large pool of applicants exists for potential employers.
Except for members of the police, gendarmerie, and armed forces, ROC’s constitution provides workers with the right to form unions and to strike, subject to conditions established by law. The Labor Code allows for collective bargaining. Public and private institutions usually resolve occasional strikes over non-payment of salaries quickly and without incident.
The Labor Code establishes a standard work period of seven hours per day and 35 hours per week.
Skilled labor shortages exist in a number of technical areas, including medicine, engineering, math, science, and banking. The government has no specific training programs to address these shortages.
Excepting in the hydrocarbons sector, no government policy requires the hiring of Congolese nationals. However, the Government continues to pursue a local content law that may mandate increased hiring of Congolese nationals.
Government regulations govern employment adjustments attempting to respond to changing market conditions, including a severance requirement. Employers must demonstrate that market conditions have changed and obtain government approval before adjusting employment. Congolese severance laws differentiate between layoffs and firing. An employer must generally document illegal behavior in order to terminate an employee for cause.
The government may waive some labor laws to attract or retain investment on a case-by-case basis. ROC has, for example, waived the requirement for certain multinationals to hire a Congolese general manager. No known labor law exceptions exist for Special Economic Zones.
Collective bargaining remains uncommon.
No known labor dispute resolution mechanisms exist. Courts mediate and arbitrate labor disputes.
A number of strikes occurred in 2018, primarily by public sector university students and professors, health sector workers, and public transportation workers. A notable strike in the oil sector–where employees represent 60 percent of ROC’s total production volume–ceased production for one week. In this case, government security services intervened and oversaw negotiations to end the strike.
No known compliance gaps exist between ROC law and international labor standards that pose reputational risks to investors.
The government enacted no new labor laws or regulations during the last year.
12. OPIC and Other Investment Insurance Programs
The Overseas Private Investment Corporation (OPIC) has exposure in ROC. One U.S. company has a political risk insurance program with OPIC. ROC participates in the Multilateral Investment Guarantee Agency (MIGA).
13. Foreign Direct Investment and Foreign Portfolio Investment Statistics
Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy
Table 3: Sources and Destination of FDI
Data not available.
Table 4: Sources of Portfolio Investment
Data not available.
14. Contact for More Information
Embassy of the United States of America
Boulevard Denis Sassou Nguesso
Brazzaville, Republic of Congo
+ 242 06 612 2000