Opening the fifth event of Zamyn’s Cultural Forum 2013 at Tate Modern, London, the executive director of the Africa Progress Panel (APP), Caroline Kende-Robb, introduced the ‘complex and contested’ theme of natural resources by emphasising the importance of the concept of global citizenship in the debate. ‘Whether it’s fuel or the whitener in our toothpaste,’ she said, ‘our actions and our decisions – some of which we don’t even know about or notice – have an impact all around the world.’
Drawing attention to the APP’s report Equity in Extractives: stewarding Africa’s natural resources for all, which was launched at the World Economic Forum on Africa in Cape Town last month, she noted that while Africa is ‘riding the crest of a global commodities wave’, resource-led growth has yet to transform the lives of many people across the continent. And in many countries, natural resources are in fact widening the gap between rich and poor. ‘Billions of dollars have been squandered on building personal fortunes, often supporting corrupt and unaccountable political elites,’ she said.
However, over the year in which the report was written, Caroline Kende-Robb observed that the momentum for change accelerated and a rare opportunity in global policymaking now presents itself, in that the interests of different parties are beginning to align. Pointing to the inclusion of tax and transparency on the agenda of the G8 leaders summit in the UK this month, she said that the ‘silos of secrecy are crumbling’ and a quite unique shared agenda is emerging, in which the different parties have overlapping interests and similar goals.
Introducing the high-level panel for the evening’s debate, which included the senior director for Africa at ExxonMobil Walter H. Kansteiner III, the co-founder of Global Witness Simon Taylor, the chairman of AngloGold Ashanti Tito Mboweni and the Nigerian novelist and poet Ben Okri, Caroline Kende-Robb quoted Kofi Annan, chair of the APP: ‘Building trust is harder than changing policies, yet it is the ultimate condition for successful policy reform. Mutually beneficial agreements are the only ones that will stand the test of time.’
In chairing the debate, Robert Guest drew on his experiences as Africa editor and business editor at the Economist magazine, as well as a number of years living in South Africa. He recalled visiting Kolwezi in the Democratic Republic of the Congo (DRC) in 2005 and described the cobalt and copper tailings there as a ‘big pile of cash lying on the ground’. The tragedy, he said, is that instead of paying for schools, hospitals and roads, the rich resource is still lying there, the reason being ‘absolutely appalling governance’.
Not having the governance necessary to make things happen is a really serious problem, Robert Guest said, not least because reputable companies stay away and disreputable companies move in. Turning to the panel, he asked: ‘How can we make it different? How can we make the resources in the poorest and middle-income countries of the world become a blessing rather than a curse?’
Walter H. Kansteiner III, formerly ‘George Bush’s man in Africa, now ExxonMobil’s man in Africa’, remarked that ownership of resources rests with sovereign peoples and their governments, and that a more interesting, harder question is: ‘who develops them?’ With seven of the ten fastest-growing economies of the world in sub-Saharan Africa, he countered Robert Guest’s portrayal of wasted opportunity in the DRC with examples of better governance and growing investment in schools, health, education and the infrastructure needed for further economic growth.
Walter Kansteiner also pointed to the continent’s deepening relationship with China, which is now Africa’s largest trading partner, with 30 per cent of all Chinese investment in Africa today going into the extractive industries. Africa is beginning to wonder about some of its trading relationships, he said, but as the Eurozone entered yet another financial crisis a few weeks ago, the BRIC countries (Brazil, Russia, India and China) were in South Africa planning for the future.
Other panellists and audience members stressed the importance of asking: who benefits? Bobby Banerjee, a professor at Cass Business School, City University London, pointed out that people are asking who owns resources precisely because they are not benefiting from them. ‘Mining has been going on in Australia for 250 years,’ he said, pointing to the legacy of colonialism, ‘but there are no Aboriginal company CEOs or presidents. Yes, Aboriginal people have jobs – they clean toilets – but the price they pay in environmental and social dislocation is too high.’
Initiating a richly detailed discussion of corruption, collusion and conflict relating to who is benefiting from natural resources, Robert Guest asked Simon Taylor of Global Witness whether big extractive companies were listening to his organisation’s calls for transparency in their financial dealings. Simon Taylor replied that some companies, such as ExxonMobil, Shell, BP and others, are being very constructive within the process called the Extractive Industries Transparency Initiative (EITI), whereby governments voluntarily commit to disclosing the payments they receive from extractive companies, in so doing obliging companies to disclose the payments they make. But he admitted that the EITI is only so good as the countries that voluntarily come to the table.
‘What do you do with the kleptocratically run countries where there is no interest to create a system of governance because it will challenge the ability to asset-strip the country?’ he asked. ‘Many will simply not join the process at all.’ What we need, he argued, is a global system that will require all oil, gas, and mining companies to disclose all the payments they make of a significant amount in every country of operation.
Simon Taylor noted the advances made with the passing of section 1504 of the Dodd-Frank Act in the US in 2010 and the EU accounting and transparency directives, which mark the beginning of the rollout of a new global standard of accountability. However, there is a huge fight going on in Washington, with major corporations trying to kill off Dodd-Frank. He urged extractive companies to have a more adult conversation and adopt a ‘cleverer strategy’, seizing the opportunities of creating a global standard. He also remarked that it ‘takes two to tango’ and pointed to the city ‘down the road’ which provides a ‘brilliant conduit to move the money so you can’t find it’.
Tito Mboweni, a former anti-apartheid activist and governor of South Africa’s central bank, gave a view of the challenges faced by mining companies such as AngloGold Ashanti, which operates on four different continents. ‘Mining is difficult in any environment,’ he said, giving as examples the imperative not to ‘disturb the jewels’ in Australia or overuse the water in the Rocky Mountains. In South Africa the mines are very deep and there are too many accidents, he said, and in Ghana there are serious environmental problems that must be fixed; in the DRC mining is conducted with the constant threat of violence.
He admitted that it is legitimate to ask if mining companies should be operating in certain countries, and that a debate must be had where a significant number of people object to a company’s operations, but he also suggested that a company cannot simply withdraw wherever or whenever there is protest. The important thing is for companies to be responsible and accountable, and to operate in a way that benefits the people of those countries.
Tito Mboweni went on to say that ‘rogue mining companies’ give the industry a bad name, and the industry as a whole must do something about it. ‘To a large extent, the industry is an enemy unto itself. It has been unable to demonstrate positively what it can do – that it is not just an extractive industry, but actually a major developmental resource available in many countries, if they act responsibly.’ Welcoming the APP’s report, he said: ‘It provides the basis for us to try to clean up the industry, which needs a lot of cleaning up, but also to clean up governments.’
Responding to a question from the audience, he stressed the importance of creating an environment that encouraged whistleblowers and protected those who came forward so they don’t become the victims. Echoing Simon Taylor’s comments about collusion, Tito Mboweni criticised the British media for giving the impression that corruption happens only in Africa, and pointed the finger at cities such as London and Washington, where serious corruption is to be found.
Speaking for ‘the people who can’t be here’, Ben Okri insisted that the question of who owns the world’s resources affects the livelihoods of ordinary people as well as very powerful people, and affects the texture of nations, how people live, how they die, what their salaries are and how they feed their families.
Drawing attention to the gap between Africa’s potential and the realisation of that potential, he said that companies should acquire greater vision for the future, going beyond extraction or the contingent communities. ‘I believe in globalisation plus justice; globalisation plus concern for the local environment,’ he said.
The author of the Booker Prize-winning novel The Famished Road gave a graphic picture of the ‘horrifying’ experiences on the ground when extractive companies roll in, based on what he has seen first-hand in the Niger Delta region of Nigeria. ‘The effect on the earth, the land, is one of the ugliest things on the planet. Why does it have to be this way? Why can’t it change?’
Questions and comments from the audience highlighted the growing anger felt by citizens around the world, such as people working on rubbish dumps in Lagos while oil is extracted practically from their back yards. ‘The growing anger will be an important part of the transformation we are looking forward to,’ Ben Okri said.
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