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New scramble for Africa

David Leigh and David Pallister

Corporations from the U.S., France, Britain and China are competing to profit from the rulers of often chaotic and corrupt regimes.

A NEW "scramble for Africa" is taking place among the world's big powers, who are tapping into the continent for its oil and diamonds.

Tony Blair is pushing hard for African debt relief agreements in the run-up to the G8 summit in Scotland in July. But while sub-Saharan Africa is the object of the West's charitable concern, billions of dollars' worth of natural resources are being removed from it.

A Guardian investigation beginning on Wednesday reveals that instead of enriching often debt-ridden countries, some big corporations are accused by campaigners of facilitating corruption and provoking instability — so much so that organisations such as Friends of the Earth talk of an "oil curse."

`Resources stripped'

Simon Taylor, director of Global Witness, which has been prominent in urging reform, said: "Western companies and banks have colluded in stripping Africa's resources. We need to track revenues from oil, mining and logging into national budgets to make sure that the money isn't siphoned off by corrupt officials." Looting of state assets by corrupt leaders should become a crime under international law, he said. "The G8 should take the lead in this."

A "scramble for Africa" took place in the late 19th century, when Britain, France and Germany competed to carve Africa into colonies. Today corporations from the U.S., France, Britain and China are competing to profit from the rulers of often chaotic and corrupt regimes.

Investigations in three African countries rich in resources — Angola, Equatorial Guinea and Liberia — show how British-based companies have negotiated deals that critics say are against the interests of some of the poorest and most traumatised people on earth. The Guardian's inquiries focus on a big gas project in Equatorial Guinea; plans to exploit Liberia's diamonds, and Western banks' readiness to provide Angola with huge oil-backed loans.

In Equatorial Guinea, BG plc (formerly the British Gas state company) has closed a deal with the regime of President Teodoro Obiang to buy up the country's production of liquefied natural gas for the next 17 years. Britain's HSBC bank has been accused by a U.S. Senate committee of helping Mr. Obiang move cash from the country's oil revenues into financial "black holes" in Luxembourg and Cyprus. The country is threatened with repeated coups by outsiders keen on getting their hands on the oil wealth.

In Liberia, which has been beset by civil war, LIB, a private London bank, was behind attempts to monopolise alluvial diamond production and the country's telecommunications. The United Nations and the World Bank have criticised the schemes as secretive and against the country's interests. LIB has now withdrawn.

And in Angola, the victim of an even more destructive internal war, one of the United Kingdom's leading development banks, Standard Chartered, has been accused of damaging the country's economy by providing record multi-billion dollar loans which give a stranglehold over future oil production.

In Sudan and Chad, Chinese companies are moving in, backing and arming military rulers and building pipelines.

In France, the then state oil company Elf has been accused in corruption investigations of having paid kickbacks and encouraged regimes to run up debts as part of a deliberate "African strategy." Congo-Brazzaville, the fourth-largest sub-Saharan oil producer, was dominated by Elf, and now has the highest per capita debt in the world.

Global Witness says in a 2004 report: "Oil wealth [there] has left a legacy of corruption, poverty and conflict."

The British Government is pushing an international plan for disclosure by companies of how much they pay African rulers for their natural resources. The Extractive Industries Transparency Initiative has been praised by anti-corruption bodies. But campaigners say that on present evidence improvements in Western behaviour so far appear slight. And they fear the chances of these issues being raised as priorities at the G8 summit at Gleneagles in July remain bleak as European Union countries quibble about levels of aid and the U.S. balks at innovative schemes for debt relief. — © Guardian Newspapers Limited 2004

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