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Exorcising the Curse of Oil

Even following the end of 'formal' hostilities in Iraq, the world's attention to oil-related issues remained largely fixated on the Middle East. However, oil politics in another part of the world were as important to questions of corporate citizenship - West Africa. Western military intervention, in the form of broad international coalitions acting under a UN umbrella - in Liberia and Sierra Leone - and social intervention on issues like corruption and money laundering, steadily increased. The role and influence of oil interests and oil companies was never far from discussions about these interventions. Whether companies could help the people of West Africa finally escape the plague of corruption and armed-conflict that has arisen from the exploitation of their petroleum and other abundant natural resources was still to be seen.

In June, the 'Publish What You Pay' Coalition of NGOs - established to push for greater transparency in the extractives sector - was celebrating a considerable symbolic coup in getting Shell to disclose its political payments in Nigeria. 21 This and other events throughout the summer underlined the growing importance of west African oil and natural resources to global markets and world politics. It also highlighted the growing dependency of this notoriously unstable, corrupt and poor region of Africa on the international oil industry.

Previously, in 2001, the Bush administration's controversial energy plan had specified West Africa as one key foreign source for petroleum, to end America's dependency on the Persian Gulf. 22 Vice President Cheney - who headed the energy task force and was himself the former director of the oil services giant Halliburton - refused to release a list of individuals consulted by the committee, a move that sparked a confrontation between the administration and the General Accounting Office. In June, a senior CIA official, David Gordon - speaking at a meeting organised by the Corporate Council on Africa - predicted that African oil would be potentially more important to the US in a decade than oil from Russia or the Caucasus. 23

In July, when President Bush visited African states including Senegal, South Africa, Botswana, Uganda and Nigeria, the attendance of Colin Powell, Condoleezza Rice, and US business leaders, amply illustrated the growing importance of African natural resources to the Whitehouse. 24

Within days of the visit, soldiers in the tiny island nation of Sao Tome and Principe seized power, in a coup that appeared to be directly linked to a scramble for oil revenues. 25 Sao Tome, which is often compared to Kuwait because billions of barrels of oil are said to lie offshore, will soon be tapped, fuelling tension over how to share it with its coastal neighbours, including Nigeria.

The Publish What You Pay Coalition had highlighted Nigeria's disclosure of information about its dealing in the new Sao Tome concession as an example of how Africa's most populous, oil-rich nation was cleaning up its act. Whatever the merits of efforts towards increased transparency in the west African oil sector being supported by the regions' politicians, it seemed to be a case of business as usual as far as the military were concerned.

clare short

Yet this civil society initiative seemed to be faring better than the similar, UK-government backed Extractives Industries Transparency Initiative (EITI) 26 which was being negotiated in June. Earlier in the year, a remark from Clare Short (Minister for International Development, until May) seemed to demonstrate the apparent conflict within the Blair government on regulation of corporate power: "We are not ruling out mandatory requirements" Short said. 27Resistance to the scheme from the US and US-oil companies was generally blamed for the UK's failure to come up with a mandatory system of disclosure, and for the UK and France's seeming inability to argue for a tougher regime within the G8 at Evian. In addition, while it seemed that many in the oil industry wanted to open up to greater transparency on issues like political payments, others wanted to pull off a sleight of hand by covering things up again, citing 'confidentiality' concerns. 28


Short had argued previously that "Many oil companies would prefer something binding so that the best are protected from being undercut by the laggards." Those companies would need to act more forcefully to stop oil wealth fuelling corruption, war and further impoverishing the African continent.

21. See: Terry Mccalister, 20th June 2003 'Shell opens its books in Nigeria' Guardian, London. http://www.guardian.co.uk/business/story/0,3604,981193,00.html

22. The plan envisions ending "a condition of increased dependency on foreign powers that do not always have American interests at heart" by creating "deep water offshore exploration and production in the Atlantic Basin, stretching from offshore Canada to the Caribbean, Brazil and West Africa." National Energy Policy Development Group, 17th May 2001 'Reliable, Affordable and Environmentally Sound Energy for America's Future' US Energy Department, Washington, D.C. http://www.netl.doe.gov/publications/press/2001/nep/nep.html

23. Julian Borger, 10th July 2003 'US to lock Africa in a military embrace' Guardian, London. http://www.guardian.co.uk/guardianweekly/story/0,12674,995361,00.html

24. Rory Carroll, 7th July 2003 'Bush begins his African odyssey today, but is he there to plunder or provide?' Guardian, London. http://www.guardian.co.uk/international/story/0,3604,992914,00.html

25. Rory Carroll, 17th July 2003 'Troops seize power in oil rush' Guardian, London. http://www.guardian.co.uk/international/story/0,3604,999584,00.html

26. UK Department of International Finance & Development, 17th June 2003 'Report of the Extractive Industries Transparency Initiative (EITI) London Conference' London. http://www.dfid.gov.uk/News/News/files/eiti_draft_report.htm

27. See: Charlotte Denny, 11th February 2003 'Short warns of oil boycott over African corruption' Guardian, UK. http://www.guardian.co.uk/business/story/0,3604,893077,00.html

28. Terry Macalister, 18th June 2003 'US oilmen fight initiative on corruption' Guardian, London. http://www.guardian.co.uk/business/story/0,3604,979676,00.html
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