AFRICANGLOBE – When a seminar room full of former public servants – a United Nations secretary general, managing director of the International Monetary Fund, US Treasury secretary – combines forces with African business leaders such as Zimbabwe’s Strive Masiyiwa and Côte d’Ivoire’s Tidjane Thiam to sound alarm bells about the theft of Africa’s natural resources, it is time to take notice.
As members of the Africa Progress Panel, chaired by Kofi Annan, this illustrious group has endorsed a hard-hitting report demanding sweeping reforms on how the natural resource business works in Africa.
It calls for tougher rules on corporate disclosure of payments, transfer pricing, tax evasion, and collusion with state officials and their business friends.
It also calls for more local processing of minerals and more effort on environmental protection.
It was launched at the World Economic Forum in Cape Town on 10 May.
The timing was deliberate: That week, the finance ministers of the G8 group of industrial countries were meeting in Britain. Even in the West’s straitened economic circumstances, its treasuries can influence policy.
Under pressure from activists, legislators in the US and Europe have been strengthening regulations on corporate accountability.
In 2010, the US Congress passed the Dodd-Frank Act, which imposes a legal duty on all resource companies listed on the US capital markets to disclose payments to foreign governments of over $100,000.
Last year, the Securities and Exchange Commission introduced rules that require US-listed companies to file annual reports on these payments.
This year, the European Union introduced its own version of Dodd-Frank, imposing reporting requirements on companies listed on Europe’s markets.
This covers more than 60 percent of the world’s resource companies.
That still leaves markets such as Hong Kong, Shanghai, Toronto and Vancouver.
A key task for Annan’s team is to mobilise opinion in Africa, the West and Asia behind stronger rules.
The Annan report’s other mission is to name those companies and governments that have big questions to answer.
At the top of the list is the Democratic Republic of Congo.
The report names two London-listed companies – Glencore and ENRC – it says completed clandestine deals with front companies buying state assets for at least $1.4bn below the market price.
The companies deny all wrongdoing, but they could resolve the matter by submitting to the independent audit the report proposes