MAC: Mines and Communities

British companies leading new 800bn extractives 'scramble for Africa'

Published by MAC on 2016-07-12
Source: Independent, statement (2016-07-11)

The report mentioned below can be downloaded here.

British companies leading new ‘£800bn scramble for Africa’ to control raw materials

Cahal Milmo

Independent

11 July 2016

British companies are at the forefront of a new “scramble for Africa” with the help of government which is seeing the continent lose as much as £45bn a year to the rich world, a study claims today.

Campaign group War on Want has pinpointed 101 corporations and companies listed on the London Stock Exchange who between them now control resources in Africa worth at least $1.05 trillion (£810bn), including 6.6bn barrels of oil and 79.5m ounces of gold. The figure is equivalent to the GDP of Mexico.

An investigation into the holdings, whose beneficiaries include some of Britain’s biggest corporate names such as Rio Tinto, BP and Jersey-based commodities giant Glencore, found that 36 of the 101 companies control mineral resources in sub-Saharan Africa across a land area larger than Germany.

“The African continent is today facing a new colonial invasion, no less devastating in scale and impact than the one it suffered during the nineteenth century.” - Saranel Benjamin, War on Want

“New colonial invasion”

The campaigners claim the profits seen by the companies and their shareholders from their access to these five key raw materials – oil, gold, diamonds, coal and platinum – are not being fairly shared with the originating countries and British government policy is assisting a “new colonial invasion”.

While the focus has been on China and the rapid expansion of its influence in Africa in the last decade, the report said that Britain had quietly ensured its access to the continent’s commodities was maintained and deepened.

War on Want said ministers and Whitehall were “complicit”  in helping to ensure that British and UK-based companies had access to commodities in countries from Ghana to South Africa. As a result, British business is extracting vastly more revenue from the continent than it is receiving in aid or economic development, it is claimed.

Research has found that sub-Saharan Africa receives some £103bn a year in aid, loans and foreign investment but sees £148bn flow outwards in profits, lost tax receipts and costs such as adapting to climate change – a net cost of £45bn a year.

Saranel Benjamin, international programmes director at War on Want, said: “The African continent is today facing a new colonial invasion, no less devastating in scale and impact than the one it suffered during the nineteenth century.

“For too long, British companies have been at the forefront of the plunder, yet rather than rein in these companies, successive UK governments are actively championing them through trade, investment and tax policies. It is time British companies and the UK government were held to account.”

Profits rather than aid

In common with other corporations, British companies insist they have in place social responsibility policies which ensure communities are properly consulted and environmental damage is minimised and rectified where it occurs. They also point to the benefits of having profitable commercial enterprises in developing countries rather than relying on aid.

But the campaign group said its investigations found a significant number of British companies had invested in subsidiaries in Africa which stood accused of causing ecological damage, perpetuating territorial disputes and striking deals which represented poor value for host governments and their citizens.

Its report, entitled the New Colonialism, was critical of a new measure – High Level Prosperity Partnerships (HLPP) – pioneered by the Foreign Office and the Department for International Development, which seek to match UK businesses with investment opportunities in Africa. It found that four of the five countries identified for HLPPs – Angola, Ghana, Mozambique and Tanzania, were developing new oil or gas fields.

Support for Africa

War on Want said it wanted to see measures to ensure that more revenues from mining stayed in the host country, rather than being exported, often via tax havens, and raw materials were processed in the originating country.

The Department for International Development defended the HLPP system, saying it did not favour British companies. It added that the UK works with African countries to ensure they develop their resources to their best advantage, including a scheme which provides leading lawyers to negotiate contracts with private investors.

A Dfid spokeswoman said: "The UK plays a leading role in supporting Africa to make the most of its oil, gas and mining resources, providing vital foreign investment to encourage economic development, as well as expert advice to help manage resources effectively and stamp out corruption."


New report: British companies leading new ‘scramble for Africa’ worth $1 trillion

Press release

11 July 2016

British companies, aided and abetted by the UK government, are at the forefront of a new ‘scramble for Africa’, according to a new report published today by War on Want.

The report, The New Colonialism: Britain’s scramble for Africa’s energy and mineral resources, reveals that as many as 101 companies listed on the London Stock Exchange (LSE), the majority of which are British, have mining operations in Africa and control resources worth in excess of $1 trillion.

British companies now control Africa’s key mineral resources of gold, platinum, diamonds, copper, oil, gas and coal, and the UK government is using its power and influence to give these companies increasing access to the continent’s wealth.

Saranel Benjamin, International Programmes Director at War on Want, said:

“The African continent is today facing a new colonial invasion, no less devastating in scale and impact than the one it suffered during the nineteenth century.

“It’s a scandal that Africa’s wealth in natural resources is being seized by foreign, private interests, whose operations are leaving a devastating trail of social, environmental and human rights abuses in their wake.

“For too long, British companies have been at the forefront of the plunder, yet rather than rein in these companies, successive UK governments are actively championing them through trade, investment and tax policies. It is time British companies and the UK government were held to account.”

War on Want supports the call, by mining affected communities in sub-Saharan Africa, for mining revenues to stay in the countries where they are mined; for raw materials to be processed in the countries where they are mined; and for governments to act to protect the rights of people affected by the extractives industry rather than protecting companies’ profits.

Notes to editors

For further information or interviews, contact Ross Hemingway on +44 7983 550728

The new War on Want report, The New Colonialism: Britain’s scramble for Africa’s energy and mineral resources can be downloaded here.

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