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GPPi Fellow contributes to "Digging for Peace" conference

GPPi Fellow Ricardo Soares de Oliveira spoke at the International Fatal Transactions Conference 2008 on 21 – 22 November in Bonn. The two day event entitled “Digging for Peace: Private Companies and Emerging Economies in Zones of Conflict” started with Soares de Oliveira’s presentation on “Resources for Peace.” Keynote speeches leading up to the presentation were given by H.E. Festus Gontebanye Mogae, former Preseident of the Republic of Botswana, and Adolf Kloke-Lesch, Director General for the Department on Global and Sectoral Policies at the German Federal Ministry for Economic Co-operation and Development. The conference Chair was Peter Eigen, Chair of the Extractive Industries Transparency Initiative.

Soares de Oliveira started by pointing out that until the early 1990s the nature of the relationship between oil companies and oil producing states in Africa was fairly unproblematic and remarkably collaborative. This was due partly to the technological needs by the African side from their international corporate partners, and partly because governance strategies at the time regarding environmental destruction were largely unquestioned. By the mid-1990s, however, a series of normative developments led to the mainstreaming of agendas on transparency, human rights and CSR which were soon embraced by many, corporations included albeit initially as lip service. By the early part of this decade, this agenda and other development rhetoric were taken up by the World Bank, the UN Global Compact, the Kimberley Process and others. Nonetheless, there remains a significant gap between rhetoric and reality. Speaking as the expert on issues of oil and governance in West and Central Africa, Soares de Oliveira put forth the following points:

Expectations were huge 7 – 8 years ago when oil prices were low and the when the traction of the reformist agenda was strong in addressing the grievances of people in the resource rich areas of Africa. From the vantage point of 2008, the reform agenda has not succeeded as the case of Congo tragically illustrates.
In order to start “digging for peace” Soares de Oliveira argued that we first need to tackle the problem of war in these areas and ask why it happened in the first place by looking at the history of these conflicts. Solving these issues based exclusively on our policy agendas or the economic agendas underlying civil war to the detriment of classic civil war resolution doesn’t even begin to address the problems.
Incentive structure will have to be revisited as well. He asked the audience: Have we really created the right incentive structures for companies to change their behaviours? According to Soares de Oliveira at the rhetorical we may have but not in terms of actual practice on the ground. He used the examples of off-shore drilling and the “bottom line” principle to demonstrate that companies which choose to remain in conflict areas are not being affected by the conflict. He added that companies need to incur real penalties which will effect their reputation if they continue to remain complacent to their responsibilities in conflict zones. Also, there needs to be good revenue management and decision making ability at the regime level where contractual agreements are reviewed carefully and support the fiscal sustainability of these countries over a long period.
China’s presence in Africa is a complex multilevel endeavor which in many aspects is very positive for the continent. However, the extractive industries are not one of them; on the contrary, China’s involvement has many negative consequences for the people in the area. Soares de Oliveira reminded the audience that China’s role in this sector will not be a break from the illiberal Western practices of the last 45 years but a continuation of this. He also warned that although Chinese corporations have their CSR and international accounting standards, there remain a few things that are not likely change anytime soon.

In his closing remarks, Soares de Oliveira pointed out that Chinese corporations want to please some constituencies, particularly the gatekeepers to China’s respectability in the West. These include the securities in the Exchange Commission, the London Stock Exchange and other regulators. However, the Chinese are less inclined to satisfy members of their own civil society as they are almost non-existent in China and therefore create less agitation regarding China’s responsibility in conflict areas. For their part, the Chinese leaders are not apologetic of their partnerships with governments in the likes of Sudan. Soares de Oliveira cautioned that it is not just opportunism, but the Chinese sincerely believe in the language of mutual respect and sovereign dealings.

On the second day of the conference, Soares de Oliveira Chaired the conference session entitled “EU and China – Africa relations and responsibility in resources management in (post-) conflict Africa”. Among the participants at the event were Peter Croll, Director of BICC; Andrew Bone, Director of International Relations at De Beers Group; John O’Reilly, former Senior Vice President for External Affairs, BP, Indonesia; Bo Kong, Director of Global Energy and Environment Initiative; Dr. Wenran Jiang, Founding Director of the China Institute at the University of Alberta; and Jan van der Putten, Founder, Chairman and CEO of Eyes on China Ltd.