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Revealed: the new scramble for Africa

David Leigh and David Pallister

Wednesday June 1, 2005

Guardian

A new "scramble for Africa" is taking place among the world's big powers,
who are tapping into the continent for its oil and diamonds.

Tony Blair is pushing hard for African debt relief agreements in the run-up
to the G8 summit in Scotland in July. But while sub-Saharan Africa is the
object of the west's charitable concern, billions of pounds' worth of
natural resources are being removed from it.

A Guardian investigation beginning today reveals that instead of enriching
often debt-ridden countries, some big corporations are accused by
campaigners of facilitating corruption and provoking instability - so much
so that organisations such as Friends of the Earth talk of an "oil curse".

Simon Taylor, director of Global Witness, which has been prominent in urging
reform, said: "Western companies and banks have colluded in stripping
Africa's resources. We need to track revenues from oil, mining and logging
into national budgets to make sure that the money isn't siphoned off by
corrupt officials."

Looting of state assets by corrupt leaders should become a crime under
international law, he said.

"The G8 should take the lead in this."

The original Scramble for Africa took place in the late 19th century, when
Britain, France and Germany competed to carve Africa into colonies.

Today corporations from the US, France, Britain and China are competing to
profit from the rulers of often chaotic and corrupt regimes.

Our investigations in three African countries rich in resources - Angola,
Equatorial Guinea and Liberia - show how British-based companies have
negotiated deals that critics say are against the interests of some of the
poorest and most traumatised people on earth.

The Guardian's inquiries focus on a big gas project in Equatorial Guinea;
plans to exploit Liberia's diamonds, and western banks' readiness to provide
Angola with huge oil-backed loans.

In Equatorial Guinea, BG plc (formerly the British Gas state company) has
closed a deal with the regime of President Teodoro Obiang to buy up the
country's production of liquefied natural gas for the next 17 years.

Britain's HSBC bank has been accused by a US Senate committee of helping Mr
Obiang move cash from the country's oil revenues into financial "black
holes" in Luxembourg and Cyprus. The country is threatened with repeated
coups by outsiders keen to get their hands on the oil wealth.

In Liberia, which has been beset by civil war, LIB, a private London bank,
was behind attempts to monopolise alluvial diamond production and the
country's telecommunications. The UN and the World Bank have criticised the
schemes as secretive and against the country's interests. LIB has now
withdrawn.

And in Angola, the victim of an even more destructive internal war, one of
the UK's leading development banks, Standard Chartered, has been accused of
damaging the country's economy by providing record multibillion dollar loans
which give a stranglehold over future oil production.

A succession of scandals has already revealed how oil wealth was looted in
billions from the former Abacha military regime in Nigeria with the
assistance of western banks and bribes paid by US oil firms.

In Sudan and Chad, Chinese companies are moving in, backing and arming
military rulers and building pipelines.

And in France, the then state oil company Elf has been accused in corruption
investigations of having paid kickbacks and encouraged regimes to run up
debts as part of a deliberate "African strategy".

Congo-Brazzaville, the fourth-largest sub-Saharan oil producer, was
dominated by Elf, and now has the highest per capita debt in the world.

Global Witness says in a 2004 report: "Oil wealth [there] has left a legacy
of corruption, poverty and conflict."

The British government is pushing an international plan for disclosure by
companies of how much they pay African rulers for their natural resources.
The Extractive Industries Transparency Initiative has been praised by
anti-corruption bodies.

But campaigners say that on present evidence improvements in western
behaviour so far appear slight. And they fear the chances of these issues
being raised as priorities at the G8 summit at Gleneagles in July remain
bleak as EU countries quibble about levels of aid and the US balks at
innovative schemes for debt relief.

Gareth Thomas, the international development minister, said Britain hoped to
have 20 African countries signed up to the transparency code by the end of
the year. "There is big political support for this programme and we will be
addressing the issue in the G8 summit communique," he said.

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