The civil society is unceasingly denouncing the mining companies´ behaviour in Africa. Most of the denounced cases involve companies from developed countries such as the French AREVA, the Swiss Glencore, the French-Israeli Beny Steinmetz, the British Rio Tinto, AngloAmerican, AngloGold Ashanti and Vedanta Resources, the Spanish SEPHOS, the Chinese Haiyu or the Canadian Barrick Gold.
These companies are just a few examples of companies known for their bad practices that have gone unpunished. These practices include environmental scandals and human rights violations in the communities where they are established, cases of corruption, violation of international treaties on good practices of extractive companies or non-compliance with international agreements to combat climate change.
The predatory attitude of mining companies persists in addition to the social and environmental conflicts they provoke in their extractive operations. The tension between the companies and the affected local communities causes mutual distrust that generates social unrest and in many cases violence. On the one hand, the mining companies are striving to clean up their image through the corporate social responsibility that is clearly insufficient and often false, such as that carried out by Fuelstock in Madagascar.
Extractive companies complain that they are always under suspicion and are often questioned and denounced for their behaviour. On the other hand, the local communities are the first to feel the harmful effects of mining operations, such as air and water pollution, illegal dumping of dangerous materials, infrastructure wear and tear, an increase in diseases associated with mining activity, etc. But extractives do not only affect the environment of local communities, they also have a significant impact on climate change.
The vast reserves of minerals and Hydrocarbons located in the subsoil of the African continent are the target of greedy multinationals of Western countries and China. However, despite the profits originated by these minerals, only extractive companies enjoy their economic benefits. Most of extractive companies are set up in Africa through non-transparent contracts between governments and companies.
The local communities affected by extractive industries do not receive fair compensation for the exploitation of their soils and are often forced to abandon their lands. Companies do not invest part of their profits in these communities to compensate them for the lack of arable land or to alleviate the negative consequences of the environmental impact.
In the case of National governments in Africa their income received from extractive industries are very low. Governments receive minimal amounts compared to the economic benefits that companies receive with the mining. In many cases the extractive industry enjoys long periods of tax exemption and when they start paying taxes based on their profits the percentages are minimal. For example, of the 2600 million euros of profits obtained from the exploitation of the Coltan in the DRC in 2016, the Congolese government received 88 million.
Mining codes in different countries in Africa have been changing in the last decade under the influence of the International Monetary Fund (IMF). The most recent case was a few months ago when the IMF called on African government to adapt the mining codes to favour the Transnational Companies. Moreover, tax rates on company profits are particularly low in mining codes such as the DRC which is 2% or 4% in Zambia. These Codes do not promote transparency or prosecution of tax evasion. It is estimated that last year Africa lost $80 billion through illicit financial flows.
Unfortunately, the regulatory standards for ethical corporate behaviour at the international level are voluntary. There are no legally binding regulations requiring extractive companies to respect environmental commitments against climate change.
Nor are there binding standards that hold them accountable for their human rights obligations. The United Nations initiative on Business and Human Rights is continually being blocked by the European Union and the United States. Without even attending to its content they refuse to participate in the discussion under ridiculous excuses such as an unambitious standard…
Faced with such a bleak outlook, companies have a relevant responsibility. The respect of the environment and the commitment to fight against climate change must be a priority for companies and above all for the new president of the European Commission who said that she is committed to a green agenda.
Including the commitments of international agreements against climate change into European directives must be a priority of the utmost urgency. The effects of climate change are increasingly evident in the natural disasters that take place all over the planet. The EU cannot simply commit itself to the exclusion of certain harmful practices from its territory, but must demand the same behaviour from its companies when they operate abroad. The national governments of the Member States must also demand from their companies an ethical and respectful commitment to international treaties.
The new course of the relations between Africa and the EU of the post Cotonou agreement 2020 cannot be a rhetorical game of words but a truthful commitment that promotes a fair distribution of wealth.
These commitments must be concrete and binding, such as the increase in royalties paid by extractive companies to governments in Africa; direct investment by companies in local communities affected by mining operations; a commitment to restore mining areas once the exploitations are over; or the fight against corruption through the exclusion of members of the government and public officials from company shareholdings.These are simple transparency commitments that European companies and the EU are reluctant to carry out.
José Luis Gutiérrez Aranda,
Trade Policy Officer,
Africa Europe Faith and Justice Network (AEFJN)