See also:
» 13.04.2010 - Corruption still fuels Angola's poverty
» 19.02.2010 - 18 arrested for defrauding government
» 26.11.2009 - UNITA demands the naming of corrupt officials
» 28.10.2009 - Angola slams French ruling on arms deal
» 19.05.2009 - Angola intensifies security at DRC border to halt diamond smuggling
» 15.03.2007 - Angola frees anti-corruption activist
» 22.02.2007 - Anti-corruption "spy" still held in Angola
» 20.02.2007 - Outcry at Angolan corruption fighter's arrest

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Angola | Congo Brazzaville | Equatorial Guinea
Economy - Development

Call for oil transparency in Central Africa

afrol News, 25 March - A new campaign titled 'Time for Transparency' calls for an end to the repeated financial scandals of the oil and mining industries in Angola, Congo Brazzaville and Equatorial Guinea. In these countries, the campaigners hold, governments do not provide even basic information about their revenues from natural resources, which in turn promotes an environment of corruption.

- Across the globe, revenues from oil, gas and mining that should be funding sustainable economic development have been misappropriated and mismanaged, according to the conclusions of a report by the London-based group Global Witness. The report highlights the situation in five countries, where problems are seen to be particular grave. This includes Central Africa's Congo Brazzaville, Angola and Equatorial Guinea, in addition to Kazakhstan in Central Asia and the Pacific island state Nauru.

In these countries, Global Witness holds, "governments do not provide even basic information about their revenues from natural resources. Nor do oil, mining and gas companies publish any information about payments made to governments. Huge amounts of money are therefore not subject to any oversight and crooked elites can extract all sorts of 'facilitation payments' from firms that would probably prefer not to pay bribes."

Investigations had also revealed that some companies have played a willing role in facilitating off-the-books payments, misappropriation of state assets, and other nefarious activities such as arms shipments, as part of an anti-competitive, under-the-table method of winning business with unaccountable regimes. Ordinary citizens, who often own the resources under the constitution, are thus left without the information to call their governments to account over the management of their revenues.

- The end result is a litany of corruption, social decay, increased poverty, reinforcement of authoritarian government and political unrest, which can ultimately lead to state failure and the spread of instability across regions, the anti-corruption group says.

According to Global Witness, Congo Brazzaville is one of the petro-states "most closely associated with the legacy of influence peddling and dirty deals in Africa by the now-notorious French state oil company Elf Aquitaine," now Total. Elf was said to have "treated Congo as its colony, buying off the ruling elite and helping it to mortgage the country's future oil income in exchange for expensive loans." The company even was said to have "financed both sides of the civil war, as it also did in Angola."

Although former senior Elf officials have been jailed in France for "misuse of company assets," their "legacy of opacity and hair-raising accounting endures," the group had found. Despite huge existing debts and a supposed programme of cooperation with the international community to restructure Congo's finances, "the government has entered into ever more arcane and tortuous deals to avoid financial scrutiny."

Indeed, Brazzaville's national oil company Société Nationale des Pétroles du Congo makes a multi-million dollar profit but, according to the IMF, does not pay a single penny of this money into the Congolese government's coffers.

In Angola, new evidence from IMF documents had confirmed previous allegations made by Global Witness that over US$1 billion per year of the country's oil revenues - about a quarter of the state's yearly income - has gone unaccounted for since 1996. Meanwhile, one in four of Angola's children die before the age of five and one million internally-displaced people remain dependent on international food aid.

The London-based group's report highlights the latest revelations from what it calls the 'Angolagate' scandal, in which political and business elites in France, Angola and elsewhere exploited the country's civil war to siphon off oil revenues. Most recently, evidence has emerged in a Swiss investigation of millions of dollars being paid to President Jose Eduardo dos Santos himself.

The Angolan government was said to continue to "seek oil-backed loans at high rates of interest, which are financed through opaque and unaccountable offshore structures." According to Global Witness, " major concern exists that Angola's elite will now simply switch from wartime looting of state assets to profiteering from its reconstruction."

In Equatorial Guinea, oil companies appear keen to do business with the brutal regime of President Teodoro Obiang Nguema. The country's government has been tarnished by allegations of corruption, political violence, human rights abuses, and narcotics trafficking.

Although Equatorial Guinea's oil boom has resulted in a dramatic increase in GDP, its living standards remain among the worst in Africa. This may be because much of the country's oil money stays abroad, Global Witness observed. Journalists have recently uncovered evidence that major US oil companies are paying revenues directly into an account under President Obiang's control at Riggs Bank in downtown Washington DC.

Riggs Bank has also managed the purchase of million-dollar luxury homes abroad for President Obiang and his family. "The line between state revenues and the President's personal finances seems unclear," the group notes.

The Equatoguinean government maintains that it is completely open and transparent about its oil revenues but, so far, the only way that any information has entered the public domain is when it has been dragged there by the international media. President Obiang has been quoted as saying that oil revenues are a "state secret."

Global Witness concludes its report, saying that none of the revenue embezzlement scandals discussed could have happened if multinational companies had been required to disclose publicly their basic payments for resources to the state. However, the only serious international effort on revenue transparency, led by the UK, had been "so watered down by intransigent oil companies that it is unlikely to solve this global problem."

The report calls instead for companies to be made to disclose their payments to states via laws, stock market rules and accounting standards. This would cost little, protect companies' reputations and create fairer competition. "At the same time, the World Bank and IMF, other lenders, donors and export credit agencies should require transparency of oil, gas and mining revenues from governments that depend on them, as a condition of any financial support," the group concludes.

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