Transparent industry can make a real difference to fight poverty

On the day the EU voted in favour of extractive industry transparency laws, Tearfund has a guest post by Bishop Stephen Munga.  Bishop Munga is a member of the working group of the Tanzania Extractive Industries Transparency Initiative and chair of the interfaith standing committee of Tanzania. He travelled to the EU with Tearfund as part of its Unearth the Truth campaign

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Africa has vast riches, whilst being classified as the most economically underdeveloped continent. It astonishes me that with mineral wealth, quite literally splitting at the seams, it still fails to deliver even the basic services for the poorest people. On the surface it makes no sense at all.

I see this as a chronic injustice and one that I’ve lobbied hard to change.

It’s hard to tell where Africa’s wealth goes when there’s a lack of accountability and public scrutiny – and corruption is shrouded in secrecy. That’s why the best way of tackling it is to maximise transparency.

This week the EU voted for laws which will mean revenues collected from mining operations may soon help to benefit the poorest communities. Companies will be required to publish meaningful information about their projects, often directly affecting people who often have little or no access to basic services, which will help them to call their government officials to account for the revenues coming into their community.

For decades minerals, oil and gas have been extracted from beneath the homes of some of Africa’s poorest people. Corruption associated with this industry has resulted in massive economic losses, with human costs in terms of livelihoods lost and poverty increased. Are we at long last redressing the balance?

My country, Tanzania, is ranked among the three poorest countries despite being rich in platinum, gold and phosphate. I meet families in the dioceses I frequently visit who have limited access to the basic essentials we take for granted, such as clean water, a local health centre and adequate education for their children. For too long they have put up with indifference and excuses from officials; worst still, intimidation and marginalization when forced from their homes and land.

It doesn’t stop at mining operations. We currently have an explosive case in Mtwara surrounding the gas sector; the people rioting and property destroyed. They think the government has embarked on the new gas investment behind their backs and they want to make sure that they benefit from the deal with compensation for land and better service provision.

You might say that providing public services and tackling poverty isn’t the business of corporations. Directly it isn’t. But if regulation enforces publishing the accounts of operations, then surely all that transparency can lead to is no more than what a responsible company should welcome.

And it needn’t be seen as too radical for the people of Tanzania to benefit from Tanzania’s natural resources.

Africa needs economic growth. We need employment. We need innovation to improve how industry operates. But sustainable exploration is one conversation; systematic exploitation is a different thing altogether.

In 2010 exports of oil, minerals and gas to Africa were nearly seven times what the continent received in international aid[1].

Funds made available, from what are massive profits and corporation taxes, are crucial in the fight against poverty. They can improve the lives of the poorest people in Africa and around the world and reduce the reliance on development aid.

A year ago in Brussels I heard for myself from permanent representatives, civil society groups and the MEPs who fought for many months for the legislation on behalf of the European Parliament. In addition, tens of thousands of supporters backed Tearfund’s Unearth the Truth campaign.

Together their efforts have paid off, and I thank them. But let’s not be in any doubt that this is just one major river crossed.

I am part of the Tanzanian branch of the international Extractive Industries Transparency Initiative (EITI). The scheme requires companies to report their payments to the government, which must in turn report its receipts. So I am pleased that the UK has now signed up to this initiative, showing continued leadership on transparency issues.

However, the initiative is voluntary, and so far only 37 governments have signed up. It leaves dozens of countries – rich in natural resources – with no publicly available information.

The EU legislation and the similar US Dodd-Frank regulations, passed last August, will now cover approximately two thirds of all listed oil, gas and mining companies worldwide. But it leaves the door open for industry to exploit resource-rich countries that are not bound by it.

David Cameron and his business ministers have showed strong commitment to the Brussels negotiations. He has put transparency at the top of the G8 agenda for next week’s Summit in Northern Ireland. With Canada making an announcement today that it too will pass similar laws, this is an opportunity for Japan and Russia to commit to passing their own legislation – and to encourage the major economies of Brazil, India, China and South Africa to do the same. Society globally must work together to confront corruption and poverty.

With more information available we improve the quality of public debate. Society as a whole will be able to convince government to enter business deals with companies as credible partners – prepared to go the extra mile to increase transparency and ultimately reduce poverty.

The EU vote shows Africa and the world that it will tackle exploitation and injustice. This legislation must now be fully implemented by EU nations without delay or loophole. People have waited far too long for the benefits that must now follow.


[1] OECD, (2011), Development at a Glance. ODA to Africa, p2 and WTO, (2011), International Trade Statistics, Merchandise trade by product, Table II.23

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  1. […] year ago the EU passed legislation requiring oil, gas and mining companies to publish what they pay to foreign governments on a […]

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