US Corporate Interests or Real African Development?

Secretary of State Hillary Clinton’s seven-country tour of Africa included stops in Nigeria and Angola, the continent’s top two oil producers and the Congo. Naturally the issue of US corporate interests in Africa’s natural resources come to mind.

The fact is, Secretary Clinton’s itinerary for her tour of Africa included all of the countries who are rich in natural resources – oil, minerals, timber – that are in effect being made poorer or facing conflict and corruption as a result of those riches, rather than making themselves reduce poverty or promote development. In Africa there is a phrase that has been coined for this phenomenon: the resource curse. Assistant Secretary of State for African Affairs Johnnie Carson has denied that the visits to those countries, rich in oil and other natural resources, were motivated by American concern over Chinese competition for African oil. However, Clinton promised $6 million of investment in Angolan agriculture through a partnership with USAID and Chevron, the second-largest US oil company. In a statement Clinton thanked Chevron for, “recognizing that it is important to give back to the countries where the natural resources come from.” Despite billions of dollars in oil wealth, Angola ranks among the world’s lowest in terms of development indicators. Secretary Clinton also told reporters this past Sunday, “Corruption is a problem everywhere. It’s only fair to add that Angola has begun taking steps to increase transparency.” However, corruption watch group Global Witness revealed last week Angolan state oil company had given permission to bid for oil and gas licenses to a private company whose shareholders had the same names as top government officials. It would have been a tremendous opportunity for Secretary Clinton to raise the issue of how to increase transparency in the oil industry in order to ensure that the benefits of the wealth actually go to the people who need it rather than just benefiting those in power and a small elite. There is no indication that she raised that issue with long-time Angolan president Jose Eduardo Dos Santos or other people of influence that she met there. There is another issue of the MUO or Memo of Understanding with Chevron, the world’s second largest oil company. In Angola it is an example of how Secretary Clinton could possibly be talking to both the politicians in Angola, requesting or demanding greater transparency from them as part of the partnership that America is looking for, but also looking to American companies to play a more responsible role in ensuring that they are not channeling funds or accepting funds that have been in a non-transparent way. In the Democratic Republic of Congo, minerals are an underlying driving force of the twelve-year conflict. The DRC is very rich in minerals such as coltan, cassiteriteand other minerals such as wolframite. Many of these end up at the end of their lives in electronic devices that we Americans and people all over the globe use on a daily basis, such as mobile phones, computers and PDA’s.

American Refugee Committee/ Linda Cullen

Refugees from DR Congo in Rwanda

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That vast resource of wealth has not generally benefited its poorest people in the Congo, but it has provided an incentive for the conflict that’s been raging there for so long now. Even today those generated funds continue to fuel that conflict. The non-governmental agency Global Witness is tasked to monitor resource corruption around the globe and a recent report they authored highlights that every armed group involved in the ongoing conflict in the DRC is also involved in the mines and is illegally exploiting the mineral wealth in order to fuel the fighting. Currently the U.S. Congress has two bills that have been introduced, the Congo Conflict Minerals Act in the Senate and the Extractive Industries Transparency Disclosure Act in the House of Representatives. If either or both of those bills make it all the way into law it would require companies listed on the Securities and Exchange Commission, the SEC, to disclose new information in their financial reporting in order to help ensure that such minerals don’t support the conflict. It would be a major step which would increase transparency and theoretically reduce the chances of the money being used to fund armed groups or to be siphoned off by corrupt politicians, which happens in the DRC, but also in a number of other countries that have a rich natural resource wealth. Both bills are an indication progress in the US in terms of recognizing the importance of these underlying economic factors as drivers of violence, corruption and conflict in developing countries. The House bill would be a way of requiring American companies to publish the money that they’re paying or receiving from these sort of countries. Multinational companies can play a major role in pushing for greater transparency in the countries in which they operate, but concern for the so-called bottom line often causes these types of companies and government officials alike, to overlook ongoing corruption problems for the sake of promoting US energy interests. Secretary Clinton balked at commenting on the corruption issue in Angola, she did voice her concerns about corruption in the Congo. However, words are just words and many people in the Angola and around the world will be looking to the US to move from the sorts of rhetorical statements of concern to more concrete action such as legislation. Holding America’s own companies to account and making demands on the governments with whom they’re doing business will go further than any words can.