The ecological and concessions watchdog group, Global Witness, has backed a call by prominent figures, including Kofi Annan, Bob Geldof and Graca Machel, for Africa’s natural resource wealth to be used for the benefit of its people.
This year’s report from the Africa Progress Panel, Equity in Extractives, calls on the G8 and the G20 nations to establish common rules requiring full public disclosure of the beneficial ownership of companies, with no exceptions. These include companies bidding for natural resource concessions, who are urged to disclose the names of the people who own and control them and Canada, China and Australia to support project-by-project disclosure standards by their companies overseas. The United States and European Union have recently supported these initiatives.
In a statement posted on its website on May 9, Global Witness said it endorses these recommendations as essential to lifting the veil of secrecy that facilitates corruption, state looting and worse.
At the same time, a Global Witness briefing published on May 9, highlights how hidden company ownership, for example, is a major barrier in the fight against poverty.
Global Witness campaigner Rosie Sharpe said: “It is hugely significant that such a prominent and respected figure as Kofi Annan has come out publicly to criticise the lack of transparency in natural resource deals and highlight the importance of increased financial transparency and better governance for African development. What’s needed is for the names of the real, ‘beneficial’ owners of companies and trusts to be put in the public domain.”
British Prime Minister David Cameron has made company ownership transparency a priority for the UK’s G8 presidency. Last month he wrote to European leaders to call on the EU and G8 to “break through the walls of corporate secrecy.”
The Africa Progress Panel, chaired by Kofi Annan, highlights the cases of the Democratic Republic of Congo and Guinea to show what can go wrong with natural resource deals. It reveals that Congo lost at least $1.36 billion from the under-priced sales of mining assets between 2010 and 2012, in deals involving companies registered in British overseas territories. This is almost twice the country’s annual spending on health and education combined.
Three of the deals involved a FTSE 100 mining company, the Eurasian Natural Resources Corporation (ENRC), which is currently the focus of a Serious Fraud Office corruption investigation. ENRC has said that it is “cooperating fully with the SFO”, according to Global Witness.
"The involvement of British tax havens in depriving Congo of over $1 billion in mining revenues should be a huge embarrassment to the UK government, especially as it stands to become Congo’s biggest aid donor” said Daniel Balint-Kurti of Global Witness.
According to Global Witness, the Panel’s report strengthens the imperative for David Cameron to act on his pledge to make transparency a key issue at the G8 and follow through with a promise to publish not only the beneficial owners of British companies, but also those located in the UK’s overseas territories and crown dependencies.
This would go a long way to preventing the sort of deals that impoverish places like Congo and Guinea - as well as helping to prevent tax evasion, drugs and arms smuggling, and terrorist financing, the global concession watchdog said.
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