Some of the most serious contestations around mining activities in Africa in recent decades have involved British companies, including the Marikana massacre in South Africa and the execution of Ogoni activists in Nigeria. The killing of 34 striking workers in Marikana in 2012 took place at Lonmin’s platinum mine, while Nigerian dictator, Sani Abacha, hanged Ken Saro Wiwa and eight others in 1995 for protesting against the extraction of oil in the Niger Delta by the British company, Shell. These two crises arose because of the social deprivation of mining communities and the economic neglect of the Niger Delta and Marikana communities. In both cases, the killings also highlighted the collusion between British companies and the political elites – and the fact that British companies are happy to extract resources without trying to genuinely improve the lives of workers and mining communities.
In Zimbabwe, De Beers is suspected of having extracted diamonds in the Marange area for years without declaring it to the Zimbabwean government – while it was supposedly just doing geological surveys. This was the area where De Beers said it could not find any diamonds and which subsequently – from 1996 onwards – experienced a major diamond rush. And then there is Rio Tinto, which has been singled out as one of the most aggressive anti-union companies in the sector. Rio Tinto’s behaviour in Africa has seen unions and civil society groups around the world join forces to expose its negative labour practices. Indeed, 200 people marched in protest against Rio Tinto’s ill treatment of mineworkers outside the international conference – the annual Mining Indaba – in Cape Town in February this year.
There are also British companies that have been involved in perpetual misconduct and have refused to change their ways despite the cries of communities and civil society organisations. In Zambia, a recent study entitled Copper colonialism: Vedanta-KCM and the copper loot of Zambia makes very clear that this British company does not respect human rights or the labour laws of the host country or international standards to which Britain is a signatory.
Vedanta-KCM has created misconceptions in Zambia that it is an Indian company when it is actually a British one. Such misrepresentation raises questions about the integrity of the company. Since it started operating the mine the company has been in the news for damaging the environment and violating workers’ rights. It is also accused of tax avoidance – with illicit flows finding their way to many of the UK’s tax haven territories, such as the Bahamas. These islands are where Anil Agarwal keeps the enormous profits from his 68% share in Vedanta, via his holding company Volcan Investments, and avoids paying any tax in the UK or elsewhere.
How the British government deals – or currently fails to deal – with the illicit flow of funds to British tax havens, which come from the exploitation of mineral resources in Africa, is a big question. Many illicitfinancial lows from Africa involve systems set up by companies, which are listed on LSE, to ensure that as little money as possible stays in the host countries. Is the British financial system supporting corrupt companies – whether they are British or not is immaterial – to list on, and benefit from, its stock exchange?
This is a critical question that the British government will have to answer if its claim to support transparent resource trade is ever to be taken seriously. The British government must also answer why it allows its tax haven territories, such as the Bahamas, to be used by companies to stockpile their enormous profits – and to simultaneously avoid paying tax in the UK or elsewhere. In addition, it seems that the UK Listing Authority (UKLA) is not equipped to perform one of its key duties – namely to keep an eye on the social, environmental and human rights impacts of UK listed mining companies not only in Africa but around the world.
But maybe it is Glencore above all which epitomises the behaviour of British companies in Africa. Glencore is one of the biggest commodity companies in the world. It has operations in the DRC and Zambia, where it uses obscure business networks, which suggest that the company may be trying to create a monopoly over the DRC’s and Zambia’s copper and cobalt. This would allow it to control the international market and set the price of these commodities. The impact on the Congolese and Zambian economies in general and the mining sector in particular would be catastrophic.
In the DRC, it has been accused of buying copper from artisanal miners, including children, which it pushes on the international market. Several European and African NGOs have denounced the abuse and exploitation of women and children by Glencore, particularly in cobalt mines in the DRC.6 In terms of governance and transparency, Glencore’s monopoly aims, its opaque activities and suspicions of fraud have contributed to financial losses in several countries, including Zambia, which lost more than US$ 100 million due to tax evasion in 2011 alone. The reality is that Glencore’s activities are difficult to control because it is in collusion with key figures in the host governments, which enable it to access the richest deposits and to maximise its own profits at the expense of local communities and the country’s coffers.
It must be noted that there has been a change of attitude from Western governments over the past decade in relation to the promotion of transparency and accountability in the extractive sector. Many international standards have been designed to monitor the behaviour of Western multinationals to ensure that their footprint is not associated with human rights abuses, environmental degradation, corruption, and tax evasion and avoidance. And one EU nation that has committed itself to improving transparency and accountability in the extractive industries is Britain. Indeed, it has been one of the leaders in terms of setting up new standards, such as the EITI and the Kimberley Process. To demonstrate its support for transparency, Britain has signed up to the EITI despite the fact that it has a very negligible mining sector. However, the government’s commitment has not yet translated into efforts to try and curtail profit shifting and use of tax secrecy jurisdictions by its mining companies – and neither has it helped to change the behaviour of many Britain companies.
The work of Southern Africa Research Watch unfortunately shows that British companies are falling short in their commitment to some of these standards. There is a considerable gap between the proclaimed commitments of British companies and their actual work on the ground – and between the desire of the British government to see its multinationals behave in a more responsible and sustainable way and the realities within which these companies operate. Often these gaps lead to accusations of hypocrisy and deceit. Unless the commercial relationship between Britain and Africa becomes more pro-poor, prodemocracy and pro-justice, we will see an increase in the number of protests and uprisings against British extractive companies on the continent.
Extractive companies – regardless of their origin – are continuing to take advantage of the weaknesses of governance structures in most African states. In particular, with few exceptions, the state in Africa – despite democratic dispensations – still means the so-called ‘big man’. Because countries are poor and have very few economic options, the big man uses the country’s mineral resources to secure money for himself and so entrench himself in power. Major mineral extraction allows the big man – and his elite clique – to make secret deals with multinational companies, which allow them to run extremely lucrative – but usually environmentally destructive and socially damaging – operations in return for under-the-table payments.