1) Key African Natural Resources
a) Africa is rich in four key resources: oil, minerals, gems and timber
b) Oil—will describe in greater detail below
c) Minerals: substantial reserves of bauxite, chromium, cobalt, copper, gold, manganese, phosphate rock, platinum, titanium, uranium
d) Exports of minerals and gems are a major source of revenue for Angola, Botswana, Congo, Guinea, Namibia, South Africa, Zambia, etc.
e) World’s second-largest rain forest covers much of DR Congo, Congo, Gabon, Cameroon and Eq. Guinea. These ancient woodlands (some
over 15,000 years old) contain approx. 1/5 of the world’s remaining tropical rainforest.
Once neglected, now being logged at a furious pace.
2) Description of Trade Between United States and Africa
a) In 2003, the total value of US merchandise trade (imports and exports)
with sub-Saharan Africa was $32.5 billion. To put that in perspective, total
US merchandise trade abroad in 2003 was $1973.8 billion. So Sub-Saharan Africa
accounts for less than 1% of US merchandise exports, and less than 2% of merchandise imports.
b) Despite accounting for over 10% of the world’s population, Sub-Saharan Africa
accounted for only 1.4% of world trade in 2002. Africa’s share of trade has declined
steadily over time, increasing its isolation from the world economy and inability to
take advantage of growing world prosperity.
c) The US is sub-Saharan Africa’s largest single country market, purchasing almost 21% of
the region’s $89.9 billion of exports in 2002. But Europe as a whole is more important to
African trade. EU countries purchased 43.3% of sub-Saharan Africa’s exports in 2002.
d) In 2003, the US imported $25.6 billion worth of goods from the 48 countries of sub-Saharan Africa,
roughly equal to our imports from Italy.
e) And that trade is highly skewed: over 69% ($17.85 billion) of US imports from sub-Saharan
Africa in 2003 was oil. Apparel was the next largest component of imports (5.9%), followed
by platinum (5%), and diamonds (2.8%).
f) Over 86% of total imports from the region in 2003 came from just five countries:
Nigeria alone accounts for 40.5%, followed by South Africa, Angola, Gabon and Eq. Guinea.
All of these are major oil producers, except South Africa, which is a significant supplier of
platinum, diamonds and motor vehicles. So the remaining 43 countries of sub-Saharan Africa
together account for only about 0.3% of US imports, and an even smaller share of exports.
3) Profile of African Oil Sector
a) Production
(For the record, Libya, Algeria and Egypt are major oil producers, but my focus here is on sub-Saharan Africa.)
Sub-Saharan Africa produced 4.2 million bpd of crude oil in 2003, accounting for about 5.5% of world crude oil production.
b) Exports
40% of Sub-Saharan African production is exported to the United States, primarily from Nigeria, Angola,
Gabon, Congo (Brazzaville), Cameroon, and Congo (DRC).
In March of 2004, the Gulf of Guinea region was supplying 1.7 mil bpd of crude oil to the US, 17% of our appetite for foreign oil (10 mil bpd), compared to 23% (2.3 mil bpd) from the Persian Gulf. Within a decade, US imports from the region will surpass those from the Persian Gulf. The National Intelligence Council has predicted that West Africa will be supplying 25% of US imports by 2015.
c) Reserves
Nigeria and Angola together account for 85% of estimated proved oil reserves in the region.
Recent significant discoveries have been made off the coast of Eq. Guinea, Congo (Brazzaville) and
Ivory Coast, as well as in areas not traditionally associated with the Gulf of Guinea basin, such
as South Africa, Namibia and Mauritania.
d) Players
All of the international majors are active in the region, including Shell, BP, ChevronTexaco,
ExxonMobil, Total (France), and Agip/ENI (Italy)
4) Problems
Oil has been, at best, a mixed blessing for ordinary Africans. Witness:
a) Wealth created by oil has often been appropriated by those in positions of power, with lavish
personal expenditure by the top thieves. It appears that $4.22 billion of Angola’s estimated
$17.8 billion in oil revenues for the period 1997-2002 remain unaccounted for.
b) Oil and other natural resources have been used as a currency to foment and maintain armed conflicts:
the Angolan civil war lasted 27 years.
c) Extraction of oil has resulted in environmental degradation. Unlike the case in America or Europe,
oil spills are frequent but rarely reported: Shell in Nigeria experiences on average five oil spill
incidents per week.
d) People whose indigenous homelands and fisheries have been appropriated for oil production often
remain economically marginalized. The Niger Delta and Cabinda enclave of Angola are prominent examples.
e) National legislation in developing countries is often weak or unevenly enforced, especially
in social rights and environmental protection. Resistance to regulation leaves the worst corporate
abusers effectively unrestrained, and the victims of their actions without adequate means of redress.
Extraction – Local Development = Theft
Equatorial Guinea situation is all-too-familiar...
“Despite rapid growth in real GDP, there is strong evidence of government misappropriation of oil revenues, in particular, for lavish personal expenditures. Furthermore, the failure of the government to inject oil revenues into the country's economy, especially to fund much-needed improvements in the country's infrastructure, has meant little improvement in the economic and social welfare of most Equatoguineans.” (U.S. Energy Information Administration)
5) Concept of “Corporate Social Responsibility”
a) Definition
Corporate Social Responsibility (CSR) is defined as the integration of business operations
and values whereby the interests of all stakeholders, including customers, employees, investors,
the community, and the environment are reflected in the company’s policies and actions.
b) Evolution
Modern CSR emerged at the 1992 Earth Summit in Rio, when UN-sponsored recommendations on
regulation were rejected in favor of a manifesto for voluntary self-regulation put forward by
a coalition of companies called the World Business Council for Sustainable Development.
In 1997, Shell--following major damage to its image caused by the execution of Ken Saro-Wiwa
in Nigeria and environmental debacles—adopted a “Statement of General Business Principles”
and sought dialogue with environmental and human rights NGOs. Other companies followed its
lead. The late 1990s were a period when “consultations with civil society” became fashionable
among Western governments and international aid donors, and that remains the case today. CSR
has now become a virtual industry itself, with full-time staff, websites, newsletters, auditors,
consultants, and analysts.
Companies have found it beneficial to promote (as distinct from practice) CSR because it: 1)
burnishes their public image, 2) attracts investors, 3) increases likelihood of being permitted to
operate in sensitive areas, 4) wards off governmental regulation.
6) Corporate Social Responsibility in practice.
a) Positive
Proponents of CSR generally hail such voluntary initiatives as a pragmatic and innovative way
to enhance the contributions of multinational corporations to development. I believe it is fair
to say that CSR has led in many cases to improvements in company reporting and to an elaboration
of good principles.
b) Criticisms
1. Many CSR initiatives amount to "greenwash" or attempts to gloss over "business as usual."
Indeed, some of the companies that appear most committed to CSR also continue to be fined for breaches
of environmental law.
2. Even when it is a genuine attempt to improve social, environmental and human rights conditions,
CSR’s agenda needs to be broadened and its implementation strengthened. The World Bank: "Despite
widespread rhetoric, the impact of CSR is patchy. Many companies' implementation of CSR is shallow
and fragmented."
3. Voluntary approaches, whether by design or default, serve to bypass or undermine some of the key
forces that promote corporate responsibility, i.e., most importantly government or international
regulation, but also trade unionism, and more confrontational forms of activism.
Without binding legal standards and regulation, companies will be at the mercy of their
shareholders, communities will be at the mercy of companies’ voluntary standards of
behavior, and consumers can never be sure that companies are living up to their promises.
For Further Information:
"Behind the Mask: the Real Face of Corporate Social Responsibility," Christian Aid, 21 January 2004.
http://www.christianaid.org.uk/indepth/0401csr/index.htm
"Country Analysis Briefs," Energy Information Administration, U.S. Department of Energy.
http://www.eia.doe.gov/emeu/cabs/contents.html
"Fuelling Poverty: Oil, War, and Corruption," Christian Aid, 12 May 2003.
http://www.christianaid.org.uk/indepth/0305cawreport/fuellingpoverty.htm
"The Rio Declaration on Environment and Development," United Nations Conference on Environment and Development, 1992.
http://www.unep.org/Documents/Default.asp?DocumentID=78&ArticleID=1163
"Some Transparency, No Accountability: The Use of Oil Revenue in Angola and Its Impact on Human Rights," Human Rights Watch, 13 January 2004.
http://www.hrw.org/reports/2004/angola0104/
"Time for Transparency: Coming Clean on Oil, Mining, and Gas Revenues," Global Witness, March 2004.
http://www.globalwitness.org/reports/download.php/00121.pdf
"World Summit on Sustainable Development," 2002.
http://www.johannesburgsummit.org/
Keith Younger
RR1 Box 4E
Jay, New York 12941
e-mail: keith_younger@frontiernet.net
LAST WORDS OF “KEN” SARO-WIWA
(executed by the Abacha military dictatorship in Nigeria, November 10, 1995)
"We all stand before history. I am a man of peace, of ideas. Appalled by the denigrating poverty of my people who live on a richly endowed land, distressed by their political marginalization and economic strangulation, angered by the devastation of their land, their ultimate heritage, anxious to preserve their right to life and to a decent living, and determined to usher to this country as a whole a fair and just democratic system which protects everyone and every ethnic group and gives us all a valid claim to human civilization, I have devoted my intellectual and material resources, my very life, to a cause in which I have total belief and from which I cannot be blackmailed or intimidated. I have no doubt at all about the ultimate success of my cause, no matter the trials and tribulations which I and those who believe with me may encounter on our journey. Neither imprisonment nor death can stop our ultimate victory.
"I repeat that we all stand before history. I and my colleagues are not the only ones on trial. Shell is here on trial and it is as well that it is as well that it is represented by counsel said to be holding a watching brief [or friend-of-the-court status]. The company has, indeed, ducked this particular trial, but its day will surely come and the lessons learnt here may prove useful to it for there is no doubt in my mind that the ecological war that the company has waged in the Delta will be called to question sooner than later and the crimes of that war be duly punished. The crime of the company’s dirty wars against the Ogoni people will also be punished.
"On trial also is the Nigerian nation, its present rulers and those who assist them. Any nation which can do to the weak and disadvantaged what the Nigerian nation has done to the Ogoni, loses a claim to independence and to freedom from outside influence. I am not one of those who shy away from protesting injustice and oppression, arguing that they are expected in a military regime. The military do not act alone. They are supported by a gaggle of politicians, lawyers, judges, academics and businessmen, all of them hiding under the claim that they are only doing their duty, men and women too afraid to wash their pants of urine. We all stand on trial, my lord, for by our actions we have denigrated our Country and jeopardized the future of our children. As we subscribe to the sub-normal and accept double standards, as we lie and cheat openly, as we protect injustice and oppression, we empty our classrooms, denigrate our hospitals, fill our stomachs with hunger and elect to make ourselves the slaves of those who ascribe to higher standards, pursue the truth, and honour justice, freedom, and hard work. I predict that the scene here will be played and replayed by generations yet unborn. Some have already cast themselves in the role of villains, some are tragic victims, some still have a chance to redeem themselves. The choice is for each individual.
"I predict that the denouement of the riddle of the Niger delta will soon come. The agenda is being set at this trial. Whether the peaceful ways I have favoured will prevail depends on what the oppressor decides, what signals it sends out to the waiting public. In my innocence of the false charges I face here, in my utter conviction, I call upon the Ogoni people, the peoples of the Niger delta, and the oppressed ethnic minorities of Nigeria to stand up now and fight fearlessly and peacefully for their rights. History is on their side. God is on their side. For the Holy Quran says in Sura 42, verse 41:"All those that fight when oppressed incur no guilt, but Allah shall punish the oppressor." Come the day."