‘Blood Beer’ or Brewing Benefits? The Paradox of Heineken in the Congo, A guest post by Jason Miklian and Peer Schouten

As the sun goes down in the Democratic Republic of Congo, the sound of tropical birds and insects is slowly overtaken by the groaning hums of an army of small Chinese-made generators. They each light up a few light bulbs and a transistor, creating the much-valued ambiance for which Congo is well-known—an ambiance that is consistently lubricated with fair amounts of Congo’s finest beer, the eternal leader Primus. Sweet-voiced Lingala phrases and guitar riffs from the blown speakers pay playful homage to the bliss that the beer has brought the country; as the melodies bounce off the faintly illuminated hand-painted Primus ads all over the country, they form a pleasant multisensory immersion into Congo’s soul. Just like you can get a Coca-Cola everywhere in the world, so you can get a Primus everywhere in Congo. In addition to its contracts with celebrity singers, the brewery has exclusive deals with 68.857 bars in Congo, which carry Primus-branded tables, chairs, and ashtrays. Hand-painted signs for Primus seem to paper every surface in the DRC, making Bralima’s slogan Toujours Leader! (‘Always the Leader!’) into the most-read phrase in the country.

While nothing can ruin tonight except for the failure of the generator, tomorrow is another day of troubles for entrepreneurs in the Congo, which ranks 181st of 185 countries in the World Bank’s Doing Business project. There is hardly any infrastructure to speak of, corruption is rife, and much of the east of the country is plagued by tides of unrest sparked by a disturbing choreography of rebels and predatory security forces.

According to an increasingly dominant development paradigm of the United Nations, it is bad for Congo that Congo is bad for business. Over the past few years, many departments of the international behemoth have argued that corporations have a fundamental role to play to build peace and development in volatile environments. As such, the UN and other IOs/INGOs are increasingly partnering up with multinational corporations to uphold and spread the values for which it stands.

Brewing benefits?

Bralima, the brewer of not only Primus but a host of other beers and soft drinks (including Coca Cola), can serve as an example of the way businesses can contribute to peace and development in the Congo. That Heineken aims to actively do so is reflected in the Heineken group’s adage ‘brewing a better future’. The brewery Bralima—part of the Dutch Heineken Group—was founded in 1923 and is one of the few companies that has maintained a presence throughout the turbulent history of the country, brewing Primus for Belgian colonials, Mobutu’s Zairian elite, and the many factions part of what came to be known as ‘Africa’s First World War’. According to a 2012 corporate brochure, in 2011, Bralima made USD 384 million through its nearly seventy thousand retail locations throughout the country. Through its Foundation, Bralima has been responsible for hundreds of thousands USD worth of vast development projects with such titles as ‘Operation Peace in the DRC’ and ‘Investing in the Well-Being of the Congolese People’. And as the largest company in the country, it supplies secure employment to thousands of people.

War or no war, Bralima—with a towering market share of roughly 70%—has been able to continue contributing to peace and development in the Congo. Today, it celebrates its 90th birthday in the country and its 2012 corporate social responsibility report (published April 2013) fills the reader with hope, giving the impression that doing business in Congo is truly win-win. As Sylvain Malanda, Bralima’s Congolese communications manager, puts it: “The government is helping us a lot. Congo is open for business!”

We set out to find out how Heineken has been able to maintain such a remarkable enterprise running despite the vast challenges of operating in the DRC. How has the corporation been able to increase profits given the rest of Congo has progressively disintegrated to the extent that some Congo experts argue the country doesn’t even exist? How is it possible that during one of the world’s fiercest conflicts, the Heineken subsidiary ‘did not stop producing during the conflict and has experienced an upswing in sales’, as the New York Times reported? How is it possible to operate in the Congo without becoming entangled with the plethora of conflict actors that prey on anyone with money in the country?

We found that it’s not all a matter of painting the façade of crumbling walls with the happy colors of the Primus logo. While today’s emphasis on economic opening and corporate social responsibility means that many international organizations actively encourage corporations into conflict markets, when the Bralima’s battered beer trucks hit dusty Congo roads in search of both profit and peace, Heineken’s Congolese subsidiary deals with three different kinds of conflict actors: rebels, and security forces—both public and private.

Rebels

In large parts of the eastern Congo, it is rebels—usually unemployed youth with makeshift weapons or renegade Congolese soldiers—who control market access. Anyone driving through eastern Congo quickly becomes familiar with the choreography of checkpoints. They’re often just a wooden log or frayed rope thrown across a muddy red jeep trail, perhaps with a shack nearby sheltering a couple of guys holding Kalashnikovs. The checkpoints are the primary revenue source for local armed groups, more than enough to fund insurgencies in a country where many earn less than a dollar a day and used AK-47s cost under $75.

With no alternate routes available, even a single checkpoint can bring in at least $700,000 per year, according to a 2008 U.N. Group of Experts report. Checkpoints formed a pivotal source of revenue for rebels during the two wars (1996-1997 and 1998-2003) that devastated the Congo. During the Second Congo War (1998-2003), RCD-Goma occupied the Eastern Congo, and had territorial control over both Kinsangani and Bukavu, where two of Bralima’s breweries are located. While they occupied the eastern Congo, RCD-Goma’s forces engaged in brutal human rights abuses.

Despite the widely condemned rebel occupation that became part of the International Criminal Court prosecution of Laurent Nkunda as a war criminal, beer kept flowing from Bralima’s breweries. As the New York Times reported, ‘[i]n 2004, the plant in Bukavu, with a capacity of 300,000 hectoliters, had a sales volume of 220,000 hectoliters, despite its location in a rebel-controlled area’. While the war ravaged much of Congo’s infrastructure, the continuation of Bralima’s operations was taken as a given, noting the cynical dictum in Congo that ‘you can bomb a hospital, but not Bralima’. In practice, however, such popular beliefs are not enough to stave off rebels. The report of the Lutundula Commission for the Congolese National Assembly, that was commissioned to investigate fraudulent contracts signed during the Congo Wars, describes in detail the ‘protocol agreements’ that were allegedly drawn up between Bralima and RCD-Goma rebels during the period 1998-2003.

While the Congo Wars formally ended, the checkpoint economy is still very much alive, with the new rebel group M23 a major player in the blockade racket. M23 was formed by members of CNDP, a previous rebel group, that were unsatisfied with a 2009 peace deal that integrated Eastern rebels into the Congolese army. The group fights for greater autonomy in parts of North Kivu province. The United Nations sanctioned M23 late last year, accusing it of deadly rampages in an attempt to intimidate its way to power. Longtime Rwandan-Congolese rebel general Bosco Ntaganda, currently at the International Criminal Court on charges of war crimes, rape, and use of child soldiers, is one of M23’s founders.

As we reported in an article in Foreign Policy, we spoke in July with a taciturn Rwandan calling himself Mr. Damien, “tax collector” for M23. Damien said that he oversees operations at the Bunagana, Kibati, and Kiwanja checkpoints. As matter-of-factly as if discussing tolls on a national highway, Damien explained that he charges $38 for a van to pass, $300 for a medium-sized goods truck, and $700 for a fuel tanker, handing out official-looking receipts for payment. These three checkpoints bring in enough money to purchase much of M23’s weapons, pay salaries and bribes, and even occasionally dole out social aid to eastern Congo’s poor.

Mr Damien insisted that anyone pays—including Bralima’s logistics subcontractors that have to pass through rebel occupied territory to deliver Primus beer to some of the thousands of retail locations. Drivers leaving for rebel areas are given extra cash to cover these payments, a security officer at one of Bralima’s main distribution depots in eastern Congo told us. By the time the bottles reach their remote village destinations, prices can be four times the $1 they cost in Kinshasa.

We took Damien’s numbers and multiplied them by the thousands of trips per year that Bralima runs through rebel-held regions. According to our calculations, Bralima distributors could be paying upward of $1 million a year to rebel groups.

When we presented Heineken with our figures this August, John-Paul Schuirink, financial communications manager, said that due to the complexity of the situation in the DRC and the use of local distributors, the amount and the payments were difficult for Heineken to verify. Schuirink said that in response to our inquiry, the company was in investigating and had “immediately suspended all payment of third party distributor invoices in the area.” However, Primus tax receipts that we have obtained from M23 dated September 2013 suggest that the payments have already resumed.

Public and private security forces

Heineken’s subsidiary secures its DRC operations is by contracting a mix of public and private security forces, with the whole of Bralima’s infrastructure—its six breweries and its many distribution depots—secured by a mix of private security companies and officers of the Congolese National Police.

While it has become standard practice for multinationals to contract private security companies irrespective of where in the world they operate, it is often difficult to ascertain what kind of security one is actually buying. One private security company that works for Bralima is called Top S.I.G, a subsidiary of Saracen International according to a corporate presentation by one of Saracen’s founders. Paradoxically, while Top S.I.G allegedly makes it possible for business to operate in the Congo and as such supports the UN’s goal of attaining peace and development through business, the UN has condemned Saracen for transgressing a UN embargo on military training and supplies to Somalia. The Heineken Group is, through its subsidiary’s engagement with Top S.I.G, entangled with conflict actors, illustrating the risks involved in using transnational private security companies.

Besides private security companies, Bralima also contracts Congolese state security forces for all its DRC operations. As PSC are not allowed to carry firearms, different forms of institutionalized cooperation exist with the Congolese police (PNC). The PNC is either directly hired by someone seeking security, or is part of a service package provided by a private security company. In the first case, police agents are hired as static guards providing physical security; in the latter, police agents are part of mobile intervention teams of the private security company that are deployed on alarms.

These arrangements are driven by a situation that was created during the Congolese conflict. During the second Congo War, individuals in the police force created by President Kabila, created a ‘Brigade de Garde’, a special section of the police that would protect businesses in the still conflict-laden Eastern DRC. This proved such a success, that in 2002 this service was converted into an institutionalized for-fee guarding service. Currently, thousands of PNC agents are used as guards for private clients and immense amounts of money circulate inside this for-fee police force. Bralima uses the PNC for all its operations and the Naval Forces (part of the Congolese Armed Forces) for its Bukavu and Goma sites. The Congolese Naval Forces—as other FARDC units—have a long track record of human rights abuses (see this and this item, in French).

In a state where official security forces are prone to human rights abuses, handing over trespassers or thieves to those security forces can implicate companies themselves in abuses. This is illustrated by a recent event involving Bralima in Bukavu. On November 16 2005, a private security guard working for Bralima arrested a civilian suspected of theft, kept him in a trunk before handing him over to the ANR—the Congolese intelligence service. The UN reports that 40 soldiers then took the suspect to the home of the military commander in charge, where the suspect was tortured to make him confess his crime, before being transferred to Goma’s prison.

Brewing a better future?

According to the new consensus among western donors, corporations are supposed to contribute to peace and development in volatile environments, amongst others by generating taxes, creating employment, and producing surplus wealth that translates into demand for services. Businesses are happy to echo this idea, not least because it legitimizes their expansion into new untapped consumer and producer markets. The Dutch Heineken has even made this idea into its adage, ‘brewing a better future’. However, in order to tap the Congo market and flood it with Primus and other beverages, Heineken’s subsidiary flirts with the boundaries of the permissible.

This raises the question how far corporations should go to contribute to development? International NGOs and governments have spent the better part of six decades attempting to import poverty reduction and economic development to the most vulnerable parts of the Global South, and to say that the record is mixed is putting it kindly. Adding a trickle-down profit motive atop this schematic in an effort to right the ship can smell like passing the buck, but fits with the liberal peacebuilding rationale of economic exchange and liberalization that has been codified amongst the international community’s most important players. But these policies are untested and unproven within fragile countries, which is why both academics and activists are increasingly concerned that they are exacerbating many of the greatest pressures that today’s global poor face. While doubling down on the strategy might please the business community in the short term, securing the dash for unexplored market share may just mean that anything—even beer—will end up entrenching the world’s most violent and despotic warlords in the name of economic opening.

Peer Schouten is a PhD candidate at the School of Global Studies, University of Gothenburg, and editor-in-chief of Theory Talks. His research focuses on the relation between transformations in global governance and postcolonial state formation, with a particular emphasis on the intersections of mineral resource extraction and corporate security governance in ‘volatile environments’. Peer also frequently consults non-governmental organizations and international organizations on related topics.

Jason Miklian is a researcher at PRIO,exploring the arenas where conflict and commerce meet.  Miklian’s research studies how demands for natural resources (such as iron, diamonds, and rare earth elements) and market access by consumer goods firms can influence how business, governance and violent conflict intersect in fragile countries and how these production chains are traced around the world.


Note: this blog post is inspired on, and takes portions from, the report ‘Brewing Security? Heineken’s engagement with commercial conflict-dependent actors in the Eastern DRC’ (pdf here) and the article ‘Fluid Markets’ that appeared in Foreign Policy (html here)

This entry was posted in Uncategorized. Bookmark the permalink.

3 Responses to ‘Blood Beer’ or Brewing Benefits? The Paradox of Heineken in the Congo, A guest post by Jason Miklian and Peer Schouten

  1. Pingback: Big Alcohol And The War In Congo — Maik's Blog

  2. Thank you very much for all your efforts and this work being done. I appreciate it and find many of your conclusions crucial and worthwhile advocating for.
    However, I think it’s of disadvantage to your scientific endeavor (though it’s not central) that you’re not questioning the role of Big Alcohol (in this case Heineken) and their corporate social responsibility schemes. Alcohol very clear must be characterised as obstacle to development with its negative impact on a number of MDGs and with many other harms it causes. I wrote a blog about your work, including my perspective outlined here: http://www.iogt.org/policyofficerupdate/454/heineken-and-the-war-in-congo/
    Looking forward to your comments.

  3. Williscit says:

    You have a great blog here,I will start reading more.Please visit blog,I have a great article about the last king of Rwanda in Africa,I’m trying to inform people of this matter because his presence in the area would bring peace to the great lake region in central Africa.Thanks

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s