Edinburgh G8 summit and mining companies

The Commission for Africa and Corporate Involvement

Article from Corporate Watch

Date: June 2005

http://www.corporatewatch.org.uk/?lid=1535

As the G8 prepares to impose its neo-liberal "solutions" on Africa, Corporate Watch uncovers how this policy has been directly influenced by the very corporations responsible for creating poverty and havoc in the continent. These include Rio Tinto, De Beers, Shell and Anglo American as well as one of Africa's largest companies - UK alcohol multinational Diageo, which just happens to own Gleneagles Hotel where the Summit is taking place.

The Commission for Africa (CfA), was launched in February 2004 by Tony Blair, to 'take a fresh look at Africa's past and present and the international community's role in its development path'. Unfortunately for Africa, the CfA sees multinational corporations as Africa's only salvation. Its plan is to invest massive amounts of G8 and African money in public-private partnerships to build the infrastructure that will eventually turn Africa into a single free market economy, a major international trading partner and a new growth site for foreign investment.

'Business has an enormous interest if $25bn per year is to flow into Africa...clearly, that will unleash enormous potential and business opportunities on the continent'.1 As Haiko Alfeld, director of the Africa World Economic Forum illustrates, business is clearly thrilled by the outcome of Blair's Commission for Africa. The CfA totally ignored the strong and unambiguous critiques of forced trade liberalisation, deregulation and privatisation in Africa made by the UK Development NGOs in formal submissions.2

The Commission for Africa does concede that 'oil, diamonds, timber and other high-value commodities all fuel Africa's conflicts'.3 However, it mainly points the blame at the OECD Guidelines on Multinational Companies, for not providing 'clear enough guidance on what companies should do in these situations',4 rather than at the corporations themselves. Rather than regulating or even dismantling these corporations, the CfA will allow them to continue plundering at will, apparently satisfied by their 'corporate social responsibility' (CSR) policies and promises to be more transparent.

The reports recommendations are not surprising, however, if one only looks at how closely corporations have been consulted in developing the CfA report. Business is arriving at the G8 summit more organised than it has ever been, and instead of generating uproar, corporate integration into the shaping of international policy has become obvious, seamless, normal.

The "Business Contact Group" 'This is the first time a G8 president has formally sought ideas from the U.S. private sector to shape discussion at a G-8 Summit.'5

Corporate Council on Africa

In July 2004 Chancellor Gordon Brown and Reuter's chairman, Niall FitzGerald, set up a Business Contact Group explicitly to provide private sector input to the Commission for Africa. The Contact Group was comprised of leading corporate investors in Africa meeting the Commission three times during the consultation. Its 16 or so corporate members read like a role call of the most exploitative and despised companies currently operating on the continent including Anglo American, Shell, De Beers, Rio Tinto and...Diageo, who also own the Gleneagles hotel where the G8 Summit will take place. Its programme was managed by Shell International's Senior Business Development Advisor for Africa. Also managing the Contact Group is the Commonwealth Business Council (CBC). The Corporate Council on Africa and the Canadian Council on Africa also gave input, thus allowing oil corporations, ExxonMobil and ChevronTexaco, a say.

The group produced a number of formal submissions (not yet available on-line), which also took into account the outcomes of consultation with African regional business roundtables. In addition the Commission, together with Chatham House, organised a major business consultation event in October 2004 which appeared to have focused on attracting greater investment to the continent, especially through public/private infrastructure partnerships, as well as the CSR opportunities that investing in Africa presents.6

Business Action for Africa

With the publication of the Commission for Africa report in March 2005, a meeting took place in Whitehall Palace, London, under the title "Business Action for Africa". Taking part included members of the CfA business contact group which has now evolved into a well-coordinated lobby group with the same name. Its aim is to get the policies of the international community to match those of multinational corporations currently operating in the continent. The meeting was addressed by DfID minister Hilary Benn and hosted by Shell. Also involved are international bank, Standard Chartered, and venture capital fund, Capital for Development. Both are likely to gain from increasing multinational activity in Africa.

The African Economic Summit 1-3 June 2005

Co-hosted by Anglo American, Reuters and SABMiller, with strategic partners including Coca Cola, Pfizer and Microsoft, the aim of the Summit was to promote the business opportunities presented by the Commission for Africa. The week turned into a public relations disaster for Anglo American, when it was accused by Human Rights Watch of developing links and making payments to a warlord in the Democratic Republic of Congo in order to gain access to rich gold reserves. Human Rights Watch claim that fighting between armed groups for control of the gold reserves has cost thousands of lives and resulted in massive human rights atrocities.7

Pushing Public Private Partnerships on Africa

Central to the Commission's blueprint are public-private partnerships (PPPs) in which the private sector is contracted to build and operate infrastructure like roads and ports, or provide basic services like water and electricity. The argument goes that because private companies are more efficient, these schemes will cost governments less. However, a report by the South African Institute of International Affairs assessing PPPs across Africa over the last 15 years finds the opposite: the private sector is not always more efficient, service provision is often more expensive and big government contracts are complex, demanding and open to corruption, and energy and water have been the least successful examples of PPPs.8 Most importantly, PPPs do not help the poor. The almost universal experience is that the poor are excluded from water networks, and that there are huge price hikes, such as the 500 per cent increase in water rates over five years in Guinea.

The pushing of PPP by Blair's Commissioners shouldn't come as any surprise. One of the report's authors is Myles Wickstead, head of the UK government's Department for International Development, which has been channelling large sums of the UK aid budget to UK management consultancy companies such as Adam Smith International, and private sector infrastructure specialists like Jacobs Babtie and Halcrow, to provide 'technical assistance' to African countries and champion public service privatisation from which UK companies have disproportionately benefited. Over the last 10 years, the UK government has pushed water privatisation as a solution to the global water crisis with UK water utility companies picking up PPP contracts across Africa including Northumbrian Water, subsidiary of French multinational, Suez, and BiWater, a Dorking-based company, which was part-running the water system in Dar es Salaam,Tanzania, until the project collapsed in late May.9

Other UK companies currently involved in PPPs in Africa include GSL, formerly part of Group 4, who manage South Africa's private prisons;1 and HSBC, part of the consortium,Trans African Concessions, who built the N4 toll road between South Africa and Mozambique. The toll road has attracted criticism since it facilitates big business rather than small traders and the informal economy.2 Other companies sponsoring this years Africa World Economic Summit and keen to get in on the action include Microsoft, Coca-Cola, ABB, McKinsey & Company and Pfizer.

The G8 Business Summit, Barbican centre, London, 5 - 6 July 2005 and the G8's favourite corporate statesman, Sir Mark Moody Stuart

Business Action for Africa is now the title for this year's G8 Business Summit, officially part of the G8 timetable.10 The event is being organised jointly by the CFA and by the Commonwealth Business Council. The ringmaster of this circus will be none other than ex-Shell boss, Sir Mark Moody Stuart is the G8's favourite corporate statesman. The man who, while still heading Shell, was put in charge of the G8 Renewables Task force. Moody Stuart is most infamous for his attempts to wreck UN environment summits and preventing the regulation of business, insisting instead on promoting voluntary action through his leadership of the Business Action for Sustainable Development (BASD) platform. BASD's proposed grassroots sustainable development projects for Africa included several nuclear energy projects and an oil and gas pipeline. Moody Stuart is currently is chair of Anglo-American, and a director of HSBC, which has funded numerous controversial development projects. Moody Stuart is also chairman of the Global Business Coalition on HIV/Aids (www.businessfightsaids.org) and has been busy chairing CSR conferences for the UK government this year.11

The Business Action for Africa event will be attended by senior business leaders and African Heads of State. The event will end with a "declaration and message to the G8 leaders" who we can be assured will already have their ears wide open.

References

1. 'African business to push British aid plan' Mail and Guardian online 31/5/05 www.mg.co.za/articlePage.aspx?articleid=242059&area=/breaking_news/breaking_news__business/

2. See submissions by Action Aid International; the UK NGO Trade Network and Oxfam and others. http://www.commissionforafrica.org/english/consultation/ submissions.html/

3. Our Common Interest: Report of the Commission for Africa (March 2005) http://www.commissionforafrica.org/english/report/thereport/ english/11-03-05_cr_report.pdf

4. Ibid.

5. Blair Commission for Africa Solicits Corporate Council on Africa to Provide U.S. Private Sector Input; Recommendations to G-8 6/1/05 Corporate Council on Africa press release. www.africacncl.org

6. Draft agenda: Commission for Africa Business Conference www.riia.org/pdf/conferences/CfAprog.pdf

7. Human Rights Watch press release - D.R.Congo: Gold fuels massive human rights attrocities (2/6/05) http://hrw.org/english/docs/2005/06/02/congo11041.htm

8. The South African Institute of International Affairs (Feb 2005) 'Working Together. Assessing Public-Private Partnerships in Africa' by Peter Farlam. www.oecd.org/dataoecd/44/4/34867724.pdf

9. See WDM report and campaign 'Dirty Aid Dirty Water' for more details. www.wdm.org.uk

10. "G8: Business Action for Africa conference 5-6 July London": http://www.businessactionforafrica.org/english/documents/G8 Business Summit.pdf http://www.cbcglobelink.org/cbcglobelink/events/bafa2005/Overview.htm

11. See 'Moral Choice' Africa Confidential Vol 46 Number 6, 18th March 2005

G8 Summit: 'Greenwashing' Does Not Make the World Cleaner

Sanjay Suri, IPS

3 July 2005

London - The "greenwashing" that corporations are now doing as their bit to clean up the environment cannot hide the damage they are causing, Meena Raman, chair of Friends of the Earth International, said Saturday.

In fact, any attempt to contain climate change must tackle the big corporations first, she said. Host Britain has made climate change one of two priorities, along with the development of Africa, at the summit of heads of government of the eight leading industrialised nations (the United States, Canada, Britain, Germany, France, Italy, Japan and Russia) to be held in Gleneagles, Scotland, July 6-8.

"The oil companies are the ones contributing primarily to global carbon dioxide emissions," Raman told IPS in an interview. "Fossil fuel burning comes primarily from the big oil corporations. And we feel that climate justice dictates that governments take action to reduce global emissions."

These emissions of greenhouse gases, principally carbon dioxide and methane, are believed to cause global warming, leading to disruptive climate change.

Governments have done little to contain corporations, Raman argued. "In our corporate accountability campaign, the point we are making is that global corporations are getting away with causing damaging environmental and social impacts around the world." But "there are no international liability regimes which are in place, or binding rules for corporations which oblige corporations to be more responsible for their actions."

The power of corporations -- given to them by governments -- means also that "corporations are influencing the world trade agenda and pushing national governments to have more and more rights for corporations instead of having governments placing obligations and responsibilities on them," Raman said.

"So what we are saying is that governments must put in place national legislation which is binding, and make corporations accountable, and at the same time this will not happen if there are no international regulations in place because corporations move from one country to another, and until they are reigned in by international binding rules, big business will continue to disrespect people and the environment, and cause environmental and social destruction around the world," she added.

It is important to be cautious in accepting claims about the contributions that many corporations say they are now making to the environment, according to the environmentalist. "They speak of what they have done by way of corporate social responsibility, which is voluntary and non-binding," Raman said. "But we find these claims are ''greenwashing'', and much more of a public relations exercise."

In the Philippines, she said, the big mining companies "have gone in through investment agreements which give them tremendous power to go into areas where indigenous people live and create havoc, and at the same time we see in many parts of Africa that local communities have been affected by mining activities."

A problem is that many developing country governments are struggling to attract foreign investments, Raman said. "When this whole notion of needing to be competitive and needing to attract foreign investment comes in, governments of the South are quite weak to put in place strong national legislation," she added. "So what is happening is a race to the bottom."

Raman said the summit is unlikely to do anything to remedy such problems. "To be honest we don't have much hope with the G8," she said. "The G8 is about powerful governments who are backed by industry. If you take George Bush, he represents the interests of the oil industry, especially if you look at the way he is disregarding climate change, and continues to deny the scientific evidence staring at the face of all of us."

"On climate up to now (British Prime Minister) Tony Blair has been giving the right signals, but what remains to be seen is whether the United States will influence him or he will influence the United States," she added. "He remains to be tested. We have to see that when the crunch comes, is he able to criticise the United States and distance himself from the United States."

Nor are the world's most powerful leaders likely to produce agreements to make poverty history, despite claims by Blair and Chancellor of the Exchequer (finance minister) Gordon Brown to work towards that, Raman said.

"If you look at the way in which trade negotiations are going on in the WTO (World Trade Organisation) right now, they are pushing quite the contrary agenda," Raman said. "For example the EU (European Union) is very adamant in wanting to bring down the industrial tariffs of developing countries, because this will be beneficial to their corporations, and they can export more."

Friends of the Earth and other groups have gathered for the summit "not because we believe that the G8 is going to make any dramatic change, but rather to show that as people who are concerned, and as people who are working at the local and national and international level, that we have to hold our governments accountable and we have to ensure that people's voices are louder than the voices of the corporations," Raman said.