Published in the Huffington Post, 26 July 2016

Companies listed on the London Stock Exchange control over $1trillion worth of Africa’s resources in just five commodities – oil, gold, diamonds, coal and platinum. My research for the NGO, War on Want, which has just been published, reveals that 101 companies, most of them British, control $305 billion worth of platinum, $276 billion worth of oil and $216 billion worth of coal at current market prices. The ‘Scramble for Africa’ is proceeding apace, with the result that African governments have largely handed over their treasure.

Tanzania’s gold, Zambia’s copper, South Africa’s platinum and coal and Botswana’s diamonds are all dominated by London-listed companies. They have mines or mineral licences in 37 African countries and control vast swathes of Africa’s land: their concessions cover a staggering 1.03 million square kilometres on the continent. This is over four times the size of the UK and nearly one twentieth of sub-Saharan Africa’s total land area. China’s resources grabs have been widely vilified but the major foreign takeover of Africa’s natural riches springs from a lot closer to home.

Many African governments depend on mineral resources for revenues, yet the extent of foreign ownership means that most wealth is being extracted along with the minerals. In only a minority of mining operations do African governments have a shareholding. Company tax payments are minimal due to low tax rates while governments often provide companies with generous incentives such as corporation tax holidays.

Companies are also able to avoid paying taxes by their use of tax havens. Of the 101 London-listed companies, 25 are actually incorporated in tax havens, principally the British Virgin Islands. It is estimated that Africa loses around $35 billion a year in illicit financial flows out of the continent and a further $46 billion a year in multinational company profits taken from operations in Africa.

UK companies’ increasingly dominant role in Africa, which is akin to a new colonialism, is being facilitated by British governments, Conservative and Labour alike. Four policies stand out. First, Whitehall has long been a fierce advocate of liberalized trade and investment regimes in Africa that provide access to markets for foreign companies. It is largely opposed to African countries putting up regulatory or protectionist barriers to such investment, the sorts of policies where have often been used by successful developers in East Asia. Second, Britain has been a world leader in advocating low corporate taxes in Africa, including in the extractives sector.

Third, British policy has done nothing to challenge multinational companies using tax havens; indeed the global infrastructure of tax havens is largely a British creation. Fourth, British governments have constantly espoused only voluntary mechanisms for companies to monitor their human rights impacts; they are opposed to enhancing international legally binding mechanisms to curb abuses.

The result is that Africa, the world’s poorest continent, is being further impoverished. Recent research calculated, for the first time, all the financial inflows and outflows to and from sub-Saharan Africa to gauge whether Africa is being helped or exploited by the rest of the world. It found that $134 billion flows into the continent each year, mainly in the form of loans, foreign investment and aid. However, $192 billion is taken out, mainly in profits made by foreign companies and tax dodging. The result is that Africa suffers a net loss of $58billion a year. British mining companies and their government backers are contributing to this drainage of wealth.

We need to radically rethink the notion that Britain is helping Africa to develop. The UK’s large aid programme is, among other things, being used to promote African policies from which British corporations will further profit. British policy in Africa, and indeed that of African elites, needs to be challenged and substantially changed if we are serious about promoting long term economic development on the continent.

 


Report for War on Want (July 2016)

This report reveals the degree to which British companies now control Africa’s key mineral resources. It reviews the operations of all the companies listed on the London Stock Exchange (LSE) that have mining interests in Africa, focusing on key minerals and metals such as gold, platinum, diamonds, copper, oil, gas and coal. It finds that 101 companies have mining operations in 37 sub-Saharan African countries. These companies, which are mainly British, now control an identified $1.05 trillion worth of resources in Africa in just five commodities — oil, gold, diamonds, coal and platinum. Of the 101 LSE-listed companies, one quarter are incorporated in tax havens. A determination to plunder the natural resources of Africa is taking place, with the active support of the British government; this is contributing significantly to a net drain of resources from Africa, already the world’s poorest continent

Read the report here

NewColonialismCover

 


12 May 2016

This research, undertaken for Global Justice Now, is reported in the Guardian here.

New research shows that 389 companies listed on the London Stock Exchange are incorporated in tax havens controlled by the UK government. The largest number of companies – 129 – is incorporated in Guernsey, a British Crown Dependency. Yet the British Virgin Islands – a UK Overseas Territory that is at the centre of the Panama Papers scandal – is the choice of incorporation for 42 companies. The Cayman Islands accounts for 40 companies and Jersey 89 companies.

The 389 companies have a combined market capitalisation of £224.5 billion.

All seven UK territories rank highly on the Financial Secrecy Index produced annually by the Tax Justice Network. This ranks secrecy jurisdictions (or tax havens) by their level of banking and company secrecy.[1]

Companies on the London Stock Exchange are often regarded as ‘British’. By listing in London, they enjoy the advantage of raising capital on international markets and enhancing their reputation. For example, LSE-listed financial services group Atlas Mara, which is incorporated in the British Virgin Islands, says that it has raised $625 million on the Exchange.[2]

Yet being incorporated in secrecy jurisdictions increases the risk that corporations may be avoiding tax payments.  The London Stock Exchange is providing legitimacy to corporations which have chosen to domicile themselves in locations which are beyond proper international accountability. So far, the role of the Exchange has largely escaped critical attention in media coverage of the Panama Papers. It should surely not allow listing by companies registered in known secrecy jurisdictions.

Place of registration Status Number of companies Market capitalisation

(£ billion)

British Virgin Islands UK Overseas Territory 42 6.97
Bermuda UK Overseas Territory 34 58.9
Cayman Islands UK Overseas Territory 40 5.1
Gibraltar UK Overseas Territory 6 0.9
Guernsey Crown dependency 129 35.9
Jersey Crown dependency 89 125.2
Isle of Man Crown dependency 49 11.5
TOTAL .. 389 244.5

Source: London Stock Exchange, http://www.londonstockexchange.com/statistics/companies-and-issuers/companies-and-issuers.htm

[1] Available at : http://www.financialsecrecyindex.com/introduction/fsi-2015-results

[2] http://atlasmara.com/investor-relations/#


A call for voluntary researchers!

In my 2003 book, Unpeople, I included a table outlining conflicts in which Britain played a significant role since 1945. The purpose was to provide estimates for the number of deaths in each conflict and to assess what level of responsibility Britain had (or has) for each one. The conclusion was that Britain bears responsibility for 8.6m-13.5m deaths, or ‘around 10 million’.

The old table is attached here: Table.Deaths.

I want to revise and update this table. The research was done over 13 years ago and there have been significant foreign policy episodes since then. I also want to review the figures I originally used to see if there are more accurate figures now available.

I would ideally like this to be a collaborative effort involving other people who are interested. We need to work on all four columns in the attached and to do so in an academically rigorous way. I would like to hear from people interested in collaborating with me on this. The work will mainly involve checking for the best available available estimate of the number of deaths for each episode identified.

If you are interested in this, please email me at mark@markcurtis.info


An extract from Unpeople: Britain’s Secret Human Rights Abuses

British planners’ economic goals are revealed with crystal clear clarity in the secret record. A July 1970 report entitled ‘Priorities in our foreign policy’, for example, notes that Britain needs ‘to act in support of our commercial and financial interests throughout the world’ and that:

‘We must contribute within our economic capability to international stability and the protection of our interests in the rest of the world from which so many of our raw materials derive… We shall need to pay particular attention to the Middle East, Southeast Asia and Southern Africa’.

The key to this basic aim is to ensure that other countries establish economic climates favourable to British, and Western, companies. A Foreign Office report from 1968 states that the primary goal of foreign policy is to make Britain economically strong, meaning that ‘we should bend our energies to help produce a world economic climate in which our external trade, our income from invisibles and our balance of payments can prosper’. The key to this is ‘freer’ global trade and ‘increasing our efforts to open up new markets in Europe, Latin America and the Far East’.

Ensuring a favourable investment climate was (and is) especially important for countries where Britain had important oil interests. The Cabinet Office noted in 1958, for example, that one of Britain’s aims was ‘to maintain political conditions favourable to our trading requirements throughout the world, and especially in the Middle East’. An interdepartmental Whitehall group noted in 1968 the ‘need in developing countries for an economic and political climate attractive to expatriate capital, and the advantages of the status quo both to security and to low prices’.

‘The broad aim’, the Foreign Office noted in 1968, ‘is to inhibit undue governmental interference in the international oil trade’. This meant that Britain should ‘oppose, or at least attempt to moderate’ resolutions in the United Nations that would encourage governments to ‘expropriate or acquire too direct a control over Western oil investments’.

British planners were at pains to counter the trend towards nationalisation since ‘expropriation nearly always results in a measure of loss for the UK interests involved’. This policy was promoted in the knowledge that nationalisation was undertaken in ‘the hope that a large share of the profits may be retained locally and increased funds be made available for local investment’. Thus British planners were perfectly aware that in opposing nationalisation they were also opposing likely improvements in the welfare of the people of those countries.

This aim of ensuring favourable investment climates for big business – and countering governments who do not – has been the primary goal of numerous postwar British and US military interventions, in Iran, Kenya, Indonesia, British Guiana, Central America and elsewhere. This is also the very basic root of Britain’s global economic policy, promoted in bilateral ‘aid’ programmes, the World Bank and International Monetary Fund’s ‘structural adjustment’ programmes and in the shaping of the rules of the World Trade Organisation. The consequences of promoting privatisation and liberalisation have often been devastating for hundreds of millions of people around the world as shown, for example, in the effects of ‘shock therapy’ programmes in Eastern Europe and Africa. The most basic of British goals in the world bears significant responsibility for maintaining, often deepening, global poverty – a fact unmentionable in the mainstream political culture.

The files indicate that strategies to address third world poverty are basically to be opposed except where they enhance British business interests. The Foreign Office noted in 1968, for example, that:

‘We should for the time being adopt a “heads down” attitude in regard to proposals which, however, desirable in themselves, would throw a significantly greater strain upon our balance of payments, eg commodity schemes directed primarily to raise prices rather than at stability of markets’.

Another report from the same year, 1968, noted that Britain should assist economic development in the poorest countries ‘especially those which are or can be expected to become important sources of raw materials or important markets for British goods and services’. Britain’s ‘aid’ programme was thus seen as ‘as a weapon in the armoury of foreign policy’, in the words of the Foreign Office in 1958. Ten years later, it similarly stated that:

‘We must ensure that our aid programme supports not only the developmental needs of recipient countries but also our own commercial and foreign policies… Wherever possible we should try to shape our aid programme to fit more appropriately the pattern of our trade and investment interests in different countries’.

This role for ‘aid’ has been long understood by planners: the forerunner of the modern aid programme was the Colonial Development Corporation, which was established after the Second World War ‘to promote and undertake the expansion the supplies for colonial foodstuffs, raw materials and other commodities’, a 1947 Cabinet memorandum reads.

Critical to achieving these basic economic goals is Britain’s political power – or ‘prestige’ or ‘status’ as it is variously referred to in the planning files. Promoting British ‘prestige’ is often seen as important in itself; indeed British planners have traditionally been obsessed with their standing in the world, and this factor has often been more important than economic goals in explaining policy.

The Foreign Office noted in 1958, for example, that ‘there is no alternative to remaining a Power with interests in many parts of the world’ for two reasons. The first is that ‘the UK is not self-sufficient’ and ‘must maintain and expand our level of trade or lose our standard of life’. The second is that ‘our prosperity is closely linked to the maintenance of the Sterling Area [the large part of the world where the pound was the then the dominant currency] and to the status of the pound’. Both of these depended on ‘our ability to preserve our influence in the world’.

As the Foreign Office noted in 1968:

‘For the foreseeable future our direct economic worldwide interests will require us to do what we can to maintain and increase our existing influence outside Europe. Indeed, in terms of stark economic interest, we cannot afford to lose such influence’.

In 1950, at a time when Britain was increasingly being forced to ‘decolonise’, the Foreign Office had warned:

‘If the United Kingdom were voluntarily to abandon her position or political influence in selected areas, she would probably find herself not only without economic access to those areas but unable, through loss of prestige, to prevent a further involuntary decline in her influence elsewhere and consequently a general decline in the strength of the Western powers’.

Eight years later, in 1958, the Foreign Office similarly warned of the dangers of decolonisation occurring too fast:

‘Our remaining colonial territories are likely to be in many, if not most years, net contributors to our gold and dollar reserves. Premature withdrawal would lead to collapse of markets and sources of supply for the United Kingdom’.

However, ‘timely grants of independence would not endanger economic links with the United Kingdom’ which were seen as ‘sacrifices to maximise long term investment in colonies’.

Maintaining such ‘great power’ status will only come at a price. The Cabinet Office noted in 1960, for example, that:

‘There are many desirable ways of using our resources at home, especially the    improvement of our standard of living through better social services and the increasing of our wealth through productive investment. But we cannot exert  influence in the world unless we devote resources sufficient to underwrite our  external responsibilities’.

Therefore, the price for the British elite to maintain its global prestige will be paid by the general public. The £3 billion forked out for invading and occupying Iraq is but the recent cost.

Possessing nuclear weapons is another way British elites maintain their status in the world. The Cabinet Office in 1960, for example, noted that in the 1950s ‘our influence throughout the world was enhanced’ by ‘being a nuclear power with a significant potential both in weapons and delivery systems’. It noted that ‘unilateral nuclear disarmament is, of course, within our power’ but this would threaten Britain’s security and ‘would undermine our standing in the Atlantic Alliance and in the world as a whole’. It was largely to uphold the British position with the US that Attlee’s Labour government acquired nuclear weapons after the war.

The twin goals of ensuring favourable investment climates and maintaining ‘great power’ status have been especially important in three key regions – the Middle East, Southeast Asia and Southern Africa. In the Middle East, oil has of course been of paramount importance; the Foreign Office had described the region’s oil in 1947 as ‘a vital prize for any power interested in world influence or domination’. The need to maintain vast profits from the operations of British oil companies was considered in chapter 4. Prime Minister Harold Wilson’s private secretary, Oliver Wright, noted in 1964 that:

‘We have really only two interests in the Middle East. The first is access on reasonable terms to Middle East oil. The second is overflying rights across the Middle East barrier so that we may get to the other parts of the world where our presence is necessary’.

In the Middle East as elsewhere the British strategy under ‘decolonisation’ was to ensure that power passed to local clients. In this way, control over oil could be maintained. The Cabinet Office noted in 1958, for example, that in the Middle East many countries have:

‘… evolved to a point which makes it impossible to subject them to further tutelage… The basic task which confronts the United Kingdom in the Middle East is thus to pass smoothly from the previous patron-client relationship, suitable to our former strategic needs, to a new and more equally balanced commercial relationship which will preserve for as long as possible the continued supply of oil as a mutually advantageous basis of trade’.

Not only Arab countries but also Iran was important for oil. Indeed, Iran had a particular importance, as the Joint Intelligence Committee noted in 1961:

‘Iran is the only source of Middle Eastern oil which is not under the control of an Arab government, and present production could be considerably increased in an emergency. This strengthens the West’s hand vis-à-vis the Arab oil producing countries’.

Noticeably absent from the government’s planning record is anything about the concerns of the people of the region. Nowhere that I have seen in any of these files, covering several decades, are the interests or wishes of the inhabitants of the Middle East even considered, let alone a major factor in policy-making.

Southeast Asia was also recognised as critical, mainly owing to British investments in the region, notably Malaya. The war in Malaya in the 1950s was described by the Foreign Office as ‘very much in defence of [the] rubber industry’. It was fought at a time when Malaya was the largest net earner of dollars in the sterling area, due mainly to its rubber and tin exports, then partly in the hands of British companies. By 1962, British companies had invested £810 million in Southeast Asia. A Foreign Office paper noted two other interests in the region – that sea and air routes from Britain to Australia and New Zealand pass through it, and that it was a ‘conspicuous battlefield in the cold war’.

Southern Africa, and especially South Africa, has always been of primary importance to British planners as a field for commercial investment – a priority which was never seriously upset through the long decades of apartheid. A Foreign Office paper from 1964 notes that in 1961 the return on British investment in the region was £124 million – 26 per cent of the global total. A Cabinet Office study of 1959 summed up the role of Southern Africa:

‘General interests of the West will be: (1) excluding Sino-Soviet infiltration and keeping local governments and populations on our side or, at least, benevolently neutral; (2) developing trade and guarding access to raw materials’.

A 1967 Cabinet Office report noted two big political issues of the time – the international debates over the racist regimes in Rhodesia and South Africa – and stated that ‘apart from this our major interests in both Middle and Southern Africa in the long run are economic and are substantial’. ‘Our only political interest’ in the region, it added, ‘is to do what we can to create conditions… in which we can pursue our important economic interests to the best advantage’. This meant that ‘we should positively seek to create in Middle African states an atmosphere conducive to British trade and investment and to the presence of British nationals’.

As regards apartheid South Africa, ‘we should continue to make it clear… that we cannot contemplate economic or political warfare with South Africa’. Rather, South Africa ‘is likely to remain impregnable for a long time to come and must therefore be left to evolve in whatever way her own internal pressures dictate’, while ‘we are prepared to do business with South Africa and the Portuguese colonies’, referring to Mozambique and Angola. The most important issue overall was to ‘have regard to the protection of our investments and other economic interests’.

If anyone believes that the interests of mere Africans have ever had anything to do with British policy towards Africa, they should read these files.

Seeing Africa primarily as a source of raw materials and a field for investment was a direct continuation of pre-war and immediate postwar policy. Foreign Secretary Ernest Bevin noted in 1948, for example, that the basic need was ‘to develop the African continent and to make its resources available to all’ (ie, us). This echoed the view of Field Marshall Montgomery, who the previous year had noted the ‘immense possibilities that exist in British Africa for development’ and ‘the use to which such development could be put to enable Great Britain to maintain her standard of living, and to survive’. ‘These lands contain everything we need’, he wrote, such as minerals, food and labour. But, he said, ‘there must be a grand design for African development as a whole’. Britain needed to develop the continent since the African ‘is a complete savage and is quite incapable of the developing the country [sic] himself’.

Latin America was even more starkly viewed as simply a source of raw materials. A 1958 Foreign Office paper noted, for example, two British aims:

‘(1) Promotion of trade and good relations. Latin America is an important source of raw materials for the United Kingdom and in some cases might become a vital one if the delivery of supplies from other parts of the world were to be interrupted, eg, oil, tin, copper and meat; (2) The retention in the Western camp of an economically rich area which has comparatively secure communications and is at present opposed to communist penetration’.

 

This is an extract from Chapter 8 of Mark Curtis’ book, Unpeople: Britain’s Secret Human Rights Abuses, where the full references can be found.


D.Tatham, Middle East Department, FCO to FCO, 10 September 73

Notes his talk today with Mohammed Al Fawzan, the Director of Foreign Broadcasting in the Saudi Ministry of Information:

‘Mohammed had been very ably fielded by Mr Morris in our embassy in Paris who had advised the COI [Central Office of Information] of the collapse of his French tour. The COI had provided him with a large Jaguar and an attractively leggy blonde and Mohammed seemed in a thoroughly anglophile mood’.

National Archives, FCO 8 / 2105


The British files remain largely censored on the SAS overthrow of the Sultan of Oman, Said bin Taimur, in July 1970, and the placement in power of his son, Qaboos. But some of the files from the National Archives that are available are outlined below. Qaboos, consistently backed by Britain for the past 46 years, remains in absolute control of Oman and is now one of the world’s longest serving rulers.

J.Gibbon, Head of DS 11, Defence Intelligence Staff, APS/S of S, 8 July 1970

‘You will already know’ from Bahrain telegram of 1 July that the Sultan’s son Qabus [Qaboos] ‘may attempt a coup in the near future’. The file attaches a telegram from Muscat reporting that a coup is planned for between 8 and 11 July. Notes that the Foreign Office agrees that ‘if a change of ruler occurred this would be on the whole less disadvantageous to British interests, and to the maintenance of peace and stability within the Sultanate, than a continuance of the present situation’.

Memorandum signed ‘JG, Acting Chief of the Defence Staff’ to Defence Secretary Peter [later Lord] Carrington, 16 July 1970, marked secret UK eyes only

‘As you will be aware a change of ruler in Muscat and Oman offers the best hope of winning the war in the Dhofar and of checking the deterioration of the situation in Oman. Such developments are important in order to preserve our position in Masirah. In his minute of 9 July the Head of DS 11 informed you that there was a possibility of a coup by Qabus against his father the Sultan of Muscat and Oman. You will recall that a signal was sent to the Commander British Forces Gulf authorising him to tell the Commander Sultan’s Armed Forces that should the coup fail Qabus was not be to handed over to the Sultan but to be held by the Sultan’s armed forces pending instructions from HMG. If for any reason this were to become too difficult, he was instructed to pass Qabus on to OC RAF Salalah for flying out. Colonel Oldham, the Military Secretary to the Sultan, was not to be told of these instructions. We have now heard that Colonel Oldham knows that we are ready to fly Qabus out of the country should the coup fail. Colonel Oldham now believes that in view of this, and the time it would take to accomplish, he cannot see how either he or the Sultan’s Armed Forces could maintain a viable relationship with the Sultan. A situation could arise where the coup fails and the Sultan remains in control expecting his instructions to be obeyed, and Qabus flees to the sanctuary of the Sultan’s armed forces or RAF Salalah. To meet this contingency Colonel Oldham has instructed the Commander, Sultan’s Armed Forces to prepare a plan to assist Qabus in gaining control of Salalah town and in deposing his father. Such a plan would include the suppression of any disorder or fighting which might follow a failed coup. PRPG [?] has recommended that we should support Colonel Oldham’s views on the need for a contingency plan in this eventuality. The Foreign and Commonwealth office are advising their minister to agree to this plan, subject to your agreement also…. Despite our misgivings at the possible use of British officers to assist in deposing a ruler to whom they are seconded, we have agreed to support the Foreign and Commonwealth Office approval of Colonel Oldham’s contingency planning…However, since our meeting yesterday, we have heard [ref to telegram from Muscat to Bahrain 16 July] that the coup against the Sultan may take place next Sunday 19 July. This means there is no time for us to examine the contingency plan… You will wish to know that, subject to your concurrence, we have agreed to the course of action set out above’.

Illegible signature on file, PS/Minister of State, MoD to PSO/CDS, 16 July 1970

Notes that it is established that Foreign Office Minister Joseph Godber ‘has agreed’ to the course of action outlined in the above provided that Lord Balniel, the Defence Minister, ‘is content’.

The coup went ahead on 23 July

P.England, Defence Intelligence Straff, to AUS(P)(Air) [?], 3 August 1970

Notes that the now former Sultan, Said bin Taimur, is in RAF hospital Wroughton. It adds that he has various wounds, the most serious being a bullet wound in his left foot which damaged the bones. The Sultan said he wished to stay in the UK ‘and asked Mr Mayall [hd of protocol dept of FCO, who visited the Sultan on 1 August in hospital] to find him a house with a staff, including some English staff’. The former Sultan and his four retainers have an upstairs floor room in a two- storey wing of the hospital. ‘The security arrangements are very tight… No public announcement has been made of the Sultan’s whereabouts’.

Source: National Archives files, DEFE 31/40

 

 




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