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Tuesday, 7 June 2011

Glencore on Fire! (Updated)

The European Investment Bank last week froze all new loans to Glencore and its subsidiaries citing "serious concerns" over the group's corporate governance. The primary reason relates to Mopani Copper Mines, a Zambian subsidiary of Swiss-based Glencore and its many tax evasion problems in Zambia. Mopani continues to be a subject of many allegations by active NGOs - most recently by campaign groups in an open letter signed by a group of European parliamentarians - of tax evasion and of causing widespread pollution.  The pressure on Glencore has been relentless since the leaked pilot audit report commissioned by Zambia Revenue Authority

Zambian Economist received many threats (alongside the usual abuse) regarding this issue to the extent that that we had to withdraw much of the information. It is good to see the EIB taking a serious look at this. Such a shame that European institutions should care more about how companies behave than our own government. Equally shameful than many Zambians seem content at such abuses and it takes the work of foreign NGOs to come to our aid (text corrected below). When are we going to stop being intellectual and economic infants? When will Zambians actually start standing up for themselves? 

More detail on this via Reuters.

Correction (7 June) :

In the note above, I suggested that this was entirely a western led venture. I have been rightly corrected that this is not the case. The Centre for Trade Policy and Development - a Zambian NGO has been heavily involved in pushing pressure alongside EU based NGO. They have been involved  in knowledge building and advocacy activities on matters of matters of tax justice and deserve much credit. You can read about their activities on this issue here.  For further information see the CTPD website http://www.ctpd.org.zm/ . We hope that many Zambians can get on board and start supporting them. 

3 comments:

  1. Such a shame that European institutions should care more about how companies behave than our own government.

    Not merely a shame, a crime. They have received money to look the other way.

    This is why these Development Agreements are not merely immoral, but likely illegal.

    In the USA, it is illegal to bribe a foreign government official. If anyone in the mining industry did so and is a US citizen, they are in violation of their own country's laws.

    Canada (*home of First Quantum Mining*) has similar legislation:

    THE CORRUPTION OF FOREIGN PUBLIC OFFICIALS ACT - A GUIDE
    May 1999

    The offence

    The offence of bribing a foreign public official is dealt with in subsection 3(1) of the Act. This offence is the centrepiece of the Act and represents Canada's legislative contribution to the international effort to criminalize this conduct.

    No particular mental element (mens rea) is expressly set out in the offence since it is intended that the offence will be interpreted in accordance with common law principles of criminal culpability. The courts will be expected to read in the mens rea of intention and knowledge.

    The conduct element (actus reus), however, is more complicated. The offence reads as follows:

    3.(1) Every person commits an offence who, in order to obtain or retain an advantage in the course of business, directly or indirectly gives, offers or agrees to give or offer a loan, reward, advantage or benefit of any kind to a foreign public official or to any person for the benefit of a foreign public official.

    (a) as consideration for an act or omission by the official in connection with the performance of the official's duties or functions; or

    (b) to induce the official to use his or her position to influence any acts or decisions of the foreign state or public international organization for which the official performs duties or functions.


    Interesting, isn't it? It puts the way the development agreements were arrived at in a whole new light.

    In the USA, it is illegal to bribe a foreign government official. If anyone in the mining industry did so and is a US citizen, they are in violation of their own country's laws.

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  2. Is this a news article or someone just wants to have a go at Zambians? Come on, do you even have to raise your own profile by claiming to be threatened bla bla bla? Eish Zambian journalism of the cheque book or awards or accolades!

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  3. Shalala; I take it you are new to this blog otherwise you wouldnt be so cynical and/or rather insulting. If you were a regular on this site you would have known that Chola had written about the 'Glencore affair' before. He once had to pull down an article and he explained to the followers of this blog why he had to do so. And you are wrong in assuming that this is your typical 'News' site. Please look on the left hand side of the blog and click on 'here' under 'About'. That will tell you what this blog is all about.

    Anyway, it seems the govt has finally succumbed to pressure and Finance Minister Musokotwane is reportedly now demanding that Glencore pay the taxes they dodged. Quite interesting turnaround considering that he and a number of Ministers had been lining up one after another dismissing the whole thing as a 'little misunderstanding'!

    ReplyDelete

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