Violence in Africa: multinationals in the visor?
Who does what in the mining conflicts in Africa? Tracking the origin of minerals is difficult for multinationals. However, faced with the scale of human and social damage, their responsibility is strongly committed. In a recent scientific article, Nicolas Berman, Mathieu Couttenier, Dominic Rohner, and Mathias Thoenig show that the presence of foreign firms in Africa increases the violence of the mining territories. Recently, companies, NGOs and States have been multiplying transparency initiatives. The authors examine their impact in this second part of our series of articles on conflicts in Africa.
In February 2019, Apple committed to improving the traceability of its raw materials. By 2017, Amnesty International had hailed the firm for publishing the names of its suppliers of cobalt to avoid feeding child labor in the Democratic Republic of Congo. The firm is a member of the Responsible Minerals Initiative (RMI), an organization dedicated to enforcing human rights in the supply chain.
These initiatives contrast with the current practices of most companies. Often located in Africa, where the basements are full of raw materials, they contribute to fuel an already highly conflicting terrain. Their responsibility for increasing violence in Africa has been detailed by the recent scientific article by economists Nicolas Berman, Mathieu Couttenier, Dominic Rohner, and Mathias Thoenig.
The authors rely on a geo-localized study comparing the presence of firms with the occurrence of mining conflicts. They surveyed Africa by 55 by 55 km zones to analyze the impact of the increase in the price of 14 ores. According to their results, foreign firms, unlike domestic firms, are one cause of the increase in violence caused by rising mineral prices.
Why such a difference between domestic and foreign companies? One explanation offered is that of their vulnerability to rebel extortion. While domestic firms usually have the protection of the military or the state, foreign multinationals must do without. If they settle in unstable areas, as in many mining jurisdictions, they have to deal with the practices of the groups in place. Where the lawlessness reigns, they adapt.
This is exactly what happened for the Chinese firm Kun Hou Mining, from 2013 to 2015, according to a report by the NGO Global Witness. To extract gold from the Ulindi River, in South Kivu, in the Democratic Republic of Congo, it knew how to play customary law in place. It relied on the corruption of local authorities and the support of militias operating in the territory to gain access to the mines. In exchange, she sent them bundles of notes, weapons, and food rations. The collected booty took off to Dubai. As a result, in the province of South Kivu, gold mining has not officially generated any tax revenue.
A story among many others for this country in the Great Lakes region. The wealth of its subsoil and the weakness of its institutions combine to make it a battlefield where human rights are violated. Since the Second World War, the Second Congo War (1998–2003) was the deadliest conflict and its repercussions have not stopped shaking the country.
The influence of foreign companies on African soil is far from negligible when we consider that they represent 60% of the total number of firms. If they are not held accountable, they become major factors of instability for the continent. But not all have the same profile. For firms in the former colonies, the behavior is different.
Who pays a tribute to the militias on the spot?
Some multinationals enjoy the protection of African states through the historical links that unite them. Here, the colonial past still permeates the economic fabric. several scientific research has emphasized the proximity that persists between the firms of the old colonists and the governments of the former colonies. Companies receive special attention from the state and are more easily protected by the military. This gives them more flexibility in resource exploitation.
The four economists join this consensus. Their estimates suggest that these multinationals do not have a significant impact on the increase in violence. However, since they represent only 1/5 of the sample of foreign firms they study, they invite further analysis.
For example, North American or Chinese companies face insecurity without external protection. For that, they are ready to pay the price. Most times, the ransom they pay is fueling rebel activity and illegal trafficking. This money allows the militia to stay in place and expand their area of influence.
How to pacify conflicts?
Initiatives to change business practices have gradually been put in place. Among them, section 1502 of the Dodd Franck Act of 2010 which aimed mainly at trade with the Democratic Republic of Congo. Although threatened by the Trump administration, it requires American companies to reveal the origin of the minerals they use.
Are such transparency measures effective in practice? The authors looked at multinational companies that have signed the International Council on Mining and Metals (ICMN) to promote corporate social responsibility. To verify the effectiveness of such measures, the four economists locate the signatory companies and study their correspondence with the conflicts. The result seems encouraging since the signatories have no effect on the violence. Good news for these regions where many initiatives have been flourishing for a few years. But companies are not
not the only levers.
New initiatives from the States Party
On April 9, the Nigerian government suspended all activity in the Zamfara area to restore peace. The Minister of Mines and Steel Development, Bwari, said, “When we aim at the development of economic activities, we must also think about the human aspects and losing the life we are witnessing.” . to make the government gave 48h to Foreign Affairs in the Mining to Leave its territory.
Like Nigeria, African states have a leading role in stabilizing their territory. They must fight against the corruption which gangrenes their institutions and their warning to the illegal activities. An initiative for transparency in the extractive industries (EITI) was created in 2003 with the aim of creating a standard for traceability compliance regarding oil, gas and mineral resources. It applies to 52 countries around the world. According to the study by the authors, the participation of African States in this positive offense on the incidence of conflict. The exacerbation of violence because of higher prices is diminished.
Through the traceability of minerals, states also take over the main ones on their resources. The Niger and Nigeria signed a memorandum of understanding on 26 March 2019 to pool their efforts in the mining sector and thus increase its contribution to GDP. New mining codes have emerged to renegotiate the position of foreign companies in the mining industry. The latest is the Democratic Republic of Congo which imposed new taxes in March 2018. It is likely to undergo a new review by the new President Felix Tshisekedi with a clear aim: these resources. The DRC has only followed a dynamic, enthusiastic by other countries for a decade (South Africa, Morocco, Mali, Senegal, Niger, Guinea or even Burkina Faso for example).
The effect of various traceability and transparency measures is complex: one-to-top Dodd-Frank Act, instead of insecurity, it has notably prompted to reorient their actions towards more violent acts, such as looting local populations. Depending on the context and the application of the measure, the effects may vary. These mechanisms are recent and little studied, which is why the authors call for new analyzes. However, these early results encourage States to put in place measures for illicit practical controls. Above all, they intend to assume their responsibilities when they are settled in a mining area.