Africa’s extractive industries (hydrocarbons, minerals, timber) are regularly singled out for corrupt practices. The British NGO Global Witness, which has been denouncing the continent’s bad practices in this area for years, is well aware of this. In this interview for Resources, researcher Nathasha White, a specialist in these issues within the organisation, looks back at this phenomenon.
At stake: understanding the forms taken by corruption in African extractive industries and its causes.
Ressources: Global Witness is known for its extensive investigative work on African corrupt practices related to natural resource revenues. A word about your methodology. How is this investigative work carried out? Do you have contacts within the organisations in question?
Natasha White: My work is often based on « open source » techniques, e.g. finding and analysing information that is already in the public domain in a structured or unstructured format. You’d be surprised by what you can find! For example, “A Dud Deal” drew upon London-listed oil company Soco International telling its shareholders in its accounts that its deal to sell its Republic of Congo assets was likely to fail. “The Spotlight Sharpens” used information published in Congo’s government gazette to identify a stark conflict of interest linked to the Italian oil major Eni’s oil business. There’s also so-called “OSINT” techniques, which require sometimes quite techy skills to draw upon public info that is often online in an unstructured format. Finally, we also receive tip-offs and info from whistleblowers, and we have secure channels for this.
R: What do you say to those who accuse you of interfering in the management of sovereign states?
NW: We are an independent, non-profit organisation that conducts evidence-based reporting and advocacy in the public interest and to hold wrong-doers to account, across many countries and sectors globally. Unfortunately, sometimes these wrong-doers include public officials or governments and, where this is the case, we aim to call it out. Information on our funders, values and mandate is provided on our website: www.globalwitness.org.
R: Which mining resources are the most difficult to investigate?
NW: Each natural resource has different characteristics, which influence the way in which it is exploited and therefore researched. For example, oil extraction is very technical and capital-intensive, production is often centralised (for example, via deep offshore oil wells), and the paperwork often goes via central government, companies and a network of accountants and lawyers. In comparison, diamonds, for example, are often mined via “artisanal” means. They may be found on the surface or deep underground. They may be extracted by big companies using high-tech equipment, or by men, women and children using spades. In the latter case, they are then often traded many times before being exported. They have a high value-volume ratio and are therefore prone to smuggling. All of these resource-specific characteristics influence the political economy that builds up around the sector, the way in which different actors generate profit from it and, therefore, the methods of investigation we use.
R: What are generally the factors that encourage corruption?
NW: In my experience, people are creative beings and will always find a way to make money, whether that be via legal or illegal means. Corruption sadly feels fairly omnipresent, irrespective of where we are in the world; what varies is its means, scale and visibility. Corruption certainly favours opaque systems, undemocratic governments and weak accountability mechanisms. However, it can also take place in broad daylight in the most “democratic” of settings, where law enforcement and the penalties are often too weak to act as real deterrents.
R: What about corrupters?
NW: Most of my reporting has focussed on the extraction and trade of natural resources mined in Sub-Saharan Africa. In these cases, the “corruptor” is usually the individual/s or companies (public, private or state-owned) trying to get their hands on – or obtain favourable access to – resources, whether that be gold, oil or other minerals. They may do so through the issuance of debt to be repaid in resources, so-called resource-backed loans (these loans aren’t all corrupt, of course, but many prove to be highly problematic for the borrowing country). Global Witness has reported for almost three decades on the modes and mechanisms of corruption, and there is plenty of variety. These also change over time, for example to dodge new regulations, adapt to new market dynamics or profit from new technologies. Anonymous companies, often registered in secrecy jurisdictions, so-called “politically-exposed persons” and a slick law, accountancy and PR firm to oil the wheels, are common denominators across most cases.
R: Often implicated in your investigations, the Congolese authorities are currently renegotiating part of their debt with some of their private creditors. What is your assessment of these talks?
NW: At Global Witness, we’ve reported for years on corruption and the misappropriation of public goods in Congo, including by members of the presidential family, which have in part contributed to why the country – Sub-Saharan Africa’s third largest oil producer – has needed multiple bailouts in the first place. We have therefore called for any future financial support to come with serious strings attached. It was this conditionality requirement that prompted the IMF to postpone a further tranche of assistance to the country in December 2019, as it was linked to the conclusion of outstanding debt restructuring agreements with some of the country’s private creditors – three commodity traders, Glencore, Trafigura and Orion Oil. While Congo reportedly recently reached an agreement with Orion Oil, my understanding at the time of writing is that negotiations are still underway with Glencore and Trafigura. In the current context, with the coronavirus pandemic and a low oil price, there is nevertheless an urgent need to find a lasting solution to the country’s debt.
R: In the end, what options could be envisaged to reduce this corruption in Africa?
NW: There’s no silver bullet. I’d begin with enhanced transparency around financial flows, e.g. the extraction and trade of natural resources, public loans (including to state-owned entities), public spending and company ownership. But transparency is not an end in itself and this information needs to be put to good use, to bring accountability where wrong-doing arises. A free, independent and well-resourced judiciary and civil society, which includes journalists and the media, are also key. On the “corruptor” side, financial hubs where many parent companies are based (Switzerland, UK, EU, US, Singapore, Dubai, etc.) need to ensure that they have robust anti-corruption legislation and independent public agencies that have the resources, teeth and jurisdiction to pursue cases of corruption committed at home and overseas. Given the cross-jurisdictional nature of most crimes of this sort, mutual legal assistance must be ready and efficient. Finally, the penalties must match the gravity of the consequences of these crimes for the populations affected – too often we see a symbolic fine, which is simply neither a punishment nor a deterrent.