A new hard-hitting joint report by Scottish Catholic International Aid Fund (SCIAF), Christian Aid and Action for Southern Africa(ACTSA) has been released today, which argues our government was blackmailed into privatising its nationalised copper industry by the IMF and the World Bank, who threatened to withhold debt relief and other aid, eight years ago. It claims that less than one penny in every pound is going to Zambia, whose health and education programmes are collapsing for lack of resources. One-third of children do not get even basic schooling, and hospitals have to make do with paracetamol tablets for pain relief.
According to the report, major Scottish investors are backing a Vedanta Resources-owned copper mining company which is selling Zambia short whilst generating huge profits from the country’s finite natural resource. It calls on Vedanta and its Scottish investors including Standard Life, HBOS and Dundee-based Alliance Trust, to use their ‘corporate social responsibility’ credentials to help rectify the situation before current contract renegotiations with Zambia are concluded. You can access the hard hitting report here.
Update (28th October) : On a related issue - The Guardian has an article on Zambia's new bid to cash in on copper. It carries this interesting observation:
Just how Zambia signed up to the original privatisation agreement remains, after seven years, something of a mystery. The contracts, which ran to over 20 bulky volumes, were never presented to parliament. At the time the country was run by disgraced former President Frederick Chiluba. Earlier this year, Chiluba, who is now gravely ill, was convicted in a London court of siphoning off tens of millions of pounds. Civil servants allege that MPs received advances on expenses as the vote came to a head, and there is widespread suspicion that government officials benefited greatly from the sale.Update (30th October 2007) : Christian Aid and SCIAF are calling for the companies involved not to undermine Zambia’s efforts to tackle poverty and renegotiate their contracts - find out more and take action.
Others point the finger at the World Bank and its advisers. Professor John Lungu, a respected academic at Zambia's Copperbelt University, says the World Bank told the government that some of the mines to be sold had just seven years of life in them. Yet the very same mines are still fully functioning and scheduled to operate for at least another 15 years. 'How could so much investment go in with seven years' worth of copper left? It baffles the mind,' Lungu said.
Update (7th December 2008) : Vedanta have now responded to the report. You can read Vedanta's response here, and SCIAF's response to Vedanta can be read here. My thanks to the exceptional Minewatch blog for bringing this to our attention.