Can Britain Break with its Colonial Past?

Can Britain Break with its Colonial Past?

History teaches us that Britain was the world’s largest empire and pre-eminent superpower during the 19th century. During this period, Britain built thriving global companies that cemented its economic dominance by exploiting the resources of its colonies and other countries. Africa’s vast resources were plundered to support the development of Britain – and other European powers – while contributing minimally to the development of the continent. Poverty on the continent is as bad as ever. Inequality is also just as severe, if not worse, and there are increasing conflicts between extractive companies and communities. This is symptomatic of widespread and age-old tension around access to – and exploitation, distribution and utilisation of – Africa’s resources. There is no discussion on Africa today that does not make reference to the contradiction that exists between its wealth of natural resources and the poverty of most of its people, especially those living in mining communities.

British Mining Companies

When speaking about British mining companies, there are two realities we need to keep in mind. The first is that today there are no companies that are purely British. Globalisation and the mobility of capital make it difficult to identify companies as entirely British. However, a British company is a company that is headquartered in the UK and formed under the UK Companies Act. It means these companies can access capital markets by being traded on a UK exchange. In Britain, the London Stock Exchange (or LSE) is the dominant UK listed platform. Any company that is listed on the LSE must be treated as a British company. 

The second reality is that Britain’s extractive industries should adhere to EU and UN normative frameworks. Most principles that guide British mining companies are designed and adopted at the EU level, such as the OECD principles, the Extractive Industries Transparency Initiative (EITI), and many more. Equally, Britain is a signatory of international human rights and environmental standards, including the Universal Declaration of Human Rights, the International Covenant on Economic, Social and Cultural Rights, the UN Declaration on the Rights of Indigenous Peoples and Convention on Biological Diversity.

There is no doubt the corporate governance and the social responsibility of British companies are major issues of public debate in Africa, given Britain’s significant role both now and in the past in the extractive sector in Africa. The mining sector might be in decline here in Britain, but it remains a key player in the global mining sector due to the strength of its financial sector and stock exchanges, as well as its technology and knowledge production. Many mining companies are connected to the UK through its financial sector and because it is a source of expertise on exploration and production, especially via a number of its universities. Most of these UK-linked companies are based in Scotland in places like Aberdeen. 

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British mining companies’ operations in Africa are not very different from that of other multinational companies. They provide the necessary capital investment and work in a manner designed to ensure maximum benefit to the company. In Africa, those who bring in capital have far more influence on mining rents than the owners of the minerals. The rent distribution is skewed in favour of mining companies because – they argue – they take enormous commercial risks to invest in unsecure environments. In this context, their investment becomes a ‘race to the bottom’.

It is not by accident that European companies, including British ones, have been on the receiving end of criticism for the pillage of Africa’s resources. The scramble for resources involving British mining companies usually sees them overlook the national context within which they operate. British companies have no problem investing in countries at war or in countries suffering from serious human right abuses and systemic corruption. In a number of cases, British companies are extracting minerals in situations of conflict or extreme poverty, which reflect William Reno’s description of Afrique Utile and Afrique Inutile (Usable and Unusable Africa).1 Usable Africa is the territory that contains minerals, which are protected by companies’ private security. Unusable Africa is land that is managed by a dysfunctional and corrupt state, which has disengaged from its primary prerogative – the delivery of basic services. There seems to be an acceptance by British companies of the idea that these two situations can operate in parallel – that effective mineral production and endemic violence or poverty can co-exist.

The reality is that the state provides British companies with licences in a dubious manner and at a reduced price, which allows them to reap the maximum rent. The little that is paid to African government in taxes, royalties and bonuses is captured by a small elite. British companies – despite their moral rhetoric – fall easily into the trap of accepting Africa’s logic of personal rule. Europe, when its interests are threatened, also helps to shore up extractive and destructive personal rule in Africa and in the process undermines democracy.

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