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 (see above), 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.
1. ‘African business to push British aid plan’ Mail and Guardian online 31/5/05
2. See submissions by Action Aid International; the UK NGO Trade Network and Oxfam and others.
3. Our Common Interest: Report of the Commission for Africa (March 2005)
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”: www.businessactionforafrica.org/english/documents/G8 Business Summit.pdf www.cbcglobelink.org/cbcglobelink/events/bafa2005/Overview.htm
11. See ‘Moral Choice’ Africa Confidential Vol 46 Number 6, 18th March 2005