Pambazuka - DRC’s magic dust: Who benefits?

Pambazuka - DRC’s magic dust: Who benefits?

Khadija Sharife looks at how commercial and political interests in the Democratic Republic of Congo’s mineral and natural resources have shaped the country’s history, with devastating consequences for its people, wildlife and environment. Will a new concession with China enable the Congolese to ‘really feel what all that copper, cobalt and nickel is good for’, as President Joseph Kabila says, or will the country continue to be seen as ‘a resource-rich bargain bin, open for business’?

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This inventory not only ‘commissioned and paid for US National Aeronautics and Space Administration (NASA) satellite studies of the country for infrared maps of its mineral potential,’ but also peeled back the skin of the forest and highlands to reveal its finite riches, chiefly coltan – the same magic dust used to develop the technologies underpinning the modernity of high-tech civilisation. Given that 80 per cent of the world’s coltan was located in Africa, and 82 per cent in the DRC, putting friends in high places remained a crucial tentacle of foreign policy.

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A report in the Inter Press Service (28 October 2009) details how exploitation, primarily from new concessions, save for portions of Katanga Mining Ltd (reimbursed), would see US$3 billion in revenues from the tax exempt Sino-Congolese joint venture, Socomins, used to repay investment, and Gecamines providing US$100 million to finance operating and employment concerns. The following phase of the contract stipulated that 66 per cent of the profit would finance China’s infrastructural works – realised through China Railway Engineering Company (CREC) and Sinohydro, a company specialising in hydroelectric and hydraulic engineering projects. The cost of the projects will be determined in-house, potentially leaving the door open to corporate mispricing. The remaining 34 per cent of profits will be divided among shareholders. In the event that the mines are not as profitable as imagined, China has secured the rights to further mineral concessions. According to the September agreement, China retains the right to extract 626,619 tons of cobalt and 10.6 million tons of copper from the Katanga region, which is part of the copperbelt extending from Angola through to the DRC and Zambia.

China Exim’s loans will pass exclusively through Chinese hands, circumventing the possibility of illicit flight on the part of the Congolese state. Congolese President Joseph Kabila, son of former DRC President Laurent Kabila, described the deal as crucial to the development of the DRC, stating: ‘The Chinese banks are prepared to finance our Five Works (water, electricity, education, health, and transport). For the first time in our history, the Congolese will really feel what all that copper, cobalt and nickel is good for.’ These works include 145 health centres, 20,000 council flats, 31 hospitals, 49 water distribution centres as well as expanded water supplies, four universities and a parliament building. China has also pledged to build 4,000 kilometres of tarred road (prior to Chinese activities, just 200 kilometres existed) in addition to 3,200 kilometres of railway systems). Approximately 50 per cent of loans from China Exim were directed toward the continent, incentivising South- South trade and investment. For this reason, in addition to the necessity of a counterweight, China’s potential as a developing-country investor levels the playing field, shifting investment goals from ‘returns’ to that of ‘access.’ (Africa’s biggest investors however – at 20 per cent – are other African nations.) How well did the DRC and ‘system d’ regions – resource-rich regions located on the peripheries – fare under the conventional system?

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For the DRC, ‘controlled’ by a fragmented and incoherent state, politically and physically distant from exploited territories, the situation – described by the 2002 UN Report as ‘the systematic and systemic exploitation of the DRC done in the name of resources’ – implies that humans born ‘rich’ in the DRC, are fast becoming as much an endangered species as the gorillas, elephants and other magnificent creatures gunned. Outside and alongside the DRC, in the contiguous world inhabited by ‘everyone else,’ accessorising life with mobile phones and computers and Sony PlayStations, we have become unwitting players in the system; spectators to a nation devoured by the terribly respectable white collar criminals, and their minions, rendering the DRC a large prison without walls, and the ‘unregulated’ free market, a religion of economic mercenaries. After half a century of prayer, the DRC has made into the desired image – a resource-rich bargain bin, open for business.

Biofuels and the scramble for farmland in Africa

Note:There are actually members from AYICC-Kenya doing research on jatropha, the kind of crops planted for fuel mentioned in this article. This is always such a heated topic and dilemma in that the competition between fuel and food and the pressure on land are such particular issues, which I think, largely depends on local management and practice. There was just another article a week ago telling the story that biofuels won't compete with food security but rather generate income for the locals, if the crops are right and land is marginal (will find that one).

by East African (Kenya) 6 September 2010

The European Union has been urged to drop its pledge to produce 10 per cent of all transport fuels from biofuels by 2020 because of the effect this has had on the purchase of African land by multinational companies.

According to a report released on August 30 by a UK-based campaign group, Friends of the Earth, the amount of land being taken in Africa to meet the EU’s rising demand for biofuels “is underestimated and out of control.”

Its report echoes findings from another UK aid agency, Action Aid, which predicts that the EU biofuels target could result in up to 100 million more hungry people across the continent, increased food prices and landlessness.

The report’s findings are challenged by companies who argue that they typically farm land not destined or suitable for food crops.

It’s an argument rejected by the Friends of the Earth report, which argues that biofuel crops — including non-edible ones such as jatropha — “are competing directly with food crops for fertile land.

“The African continent is increasingly being targeted as a source of agricultural land and natural resources for the rest of the world.


“National governments, private companies and investment funds are buying up access to land across the continent to grow crops for food and fuel.”

The FoE report concentrates on 11 African countries, including Kenya and Tanzania, where it says that around 40 foreign owned companies have invested in agro-fuel developments.

It says that many of the activities are actually raising carbon emissions because virgin forests are being chopped down to make way for the crops.

This report looks in detail at the deals for agrofuels and questions the impacts on local communities and the environment.

It finds that although information is limited, there is growing evidence that significant levels of farmland are being acquired for fuel crops, in some cases without the consent of local communities and often without a full assessment of the impact on the local environment.

The FoE report estimates that a third of the land sold or acquired in Africa is intended for fuel crops — some 5 million hectares.

While some of this land is sold outright — to private companies, state companies or investment funds — most is leased and some is obtained through contracting with the farmer to grow specific crops (known as “outgrowing”).

Downsides

A number of, often small, EU companies are involved, sometimes with support or involvement from their national government.

Many are keen to vaunt the social and environmental benefits of their business, offering employment and the promise of development to rural areas.

But FoE says there is also a growing awareness of the downsides of this agrofuel boom. As scientists and international institutions challenge the climate benefits of this alternative fuel source, local communities and in some cases national governments are waking up to the impact of land grabs on the environment and on local livelihoods.

In Tanzania, Madagascar and Ghana, there have already been protests following land grabs by foreign companies.

Companies have been accused of providing misleading information to local farmers, of obtaining land from fraudulent community landowners and of bypassing environmental protection laws.

Agrofuels are competing with food crops for farmland, and agrofuel development companies are competing with farmers for access to that land.

And this appears to be as much the case for jatropha, as for other crops, despite the claim that it grows on non-agricultural land.

The result however is that because of losing their access to traditional land, local communities face growing food insecurity and hunger — “their human right to food is threatened,” the report says.

Pressure on farmland has led to forests being cleared to make way for agrofuel plantations, destroying valuable natural resources and increasing greenhouse gas emissions. In Ethiopia, land inside an elephant sanctuary was cleared to make way for agrofuels.

Farmers have found that the much vaunted wonder crop jatropha, rather than bringing a guaranteed income, in fact takes valuable water resources and needs expensive pesticides.

In some cases, food crops have been cleared to plant jatropha, leaving farmers with no income and no source of food.

But the Guardian quoted Sun Biofuels, a UK company named by Friends of the Earth, as saying the reports findings were “emotional and anecdotal.”

Chief executive Richard Morgan said that biofuel production offered “an opportunity to get investment into local communities in an ethical way.”

The FoE report however disagrees, saying that this is an issue which is likely to become fiercely political over the coming decade.

“While (African) politicians promise that agrofuels will bring locally sourced energy supplies to their countries, the reality is that most of the foreign companies are developing agrofuels to sell on the international market,” the report concludes.

“Just as African economies have seen fossil fuels and other natural resources exploited for the benefit of other countries, there is a risk that agrofuels will be exported abroad with minimal benefit for local communities and national economies. Countries will be left with depleted soils, rivers that have been drained and forests that have been destroyed.”

Business Daily (Nairobi) Africa: Continent Rejects New Climate Change Pact Cosmas Butunyi 27 October 2009

As the clock ticks towards the climate change talks in Copenhagen, Africa has now declared that it will not accept a new pact to replace the Kyoto Protocol.

The African negotiators have also stated that neither will they accept a merger of the protocol that is currently in use, with a new agreement.

In a statement to mark the end of their Second Technical Meeting in Addis Ababa, the negotiators said successful negotiations should produce...

They want sections of the Kyoto Protocol on the developed countries to be amended to include further commitments for a second and subsequent commitment periods.

Africa also wants a separate legal instrument to be developed based on the outcome of the negotiations of the Bali Action Plan under the Climate Change Convention.

The statement reiterated that Africa should be equitably compensated in the context of environmental justice, for environmental resources, economic and social losses considering developed countries historical responsibilities on climate change.

"In this respect, Africa requires new, sustained and scaled-up finance, technology and capacity for adaptation and risk management," the statement read in part.

Africa wants the outcome of the Copenhagen convention to provide new, additional, sustainable, accessible and predictable finance to support a comprehensive international programme on adaptation, that reduces vulnerability and increases resilience.

The provision of financial, technological and capacity building support by developed country parties for adaptation in developing countries, they argued, is a commitment under the climate change Convention that must be urgently fulfilled.

The second technical meeting in Addis Ababa brought together about 150 African lead negotiators and high level experts on climate change from all African countries.

It is an initiative of the African Ministerial Conference on the Environment and the African Union, (AU), in collaboration with the United Nations Economic Commission for Africa and the United Nations Environment Programme.

This was one of the last meetings the continent is holding to consolidate consensus on its common position and was held in the backdrop of new developments in the ongoing negotiations on climate change, which tend to suggest the replacement or the merger of the Kyoto Protocol, among others.

The updated and consolidated African Common Position will be submitted to African Ministers and Heads of State on the eve of the COP- 15 in Copenhagen. The negotiators' statement said that the post-2012 regime should be based on the principle of common but differentiated responsibilities and respective capabilities of the United Nations Framework Convention on Climate Change.

"Africa's shared vision calls for a fair, inclusive, effective and equitable new agreement in Copenhagen that will benefit the climate and vulnerable countries and be undertaken in the context of poverty eradication, sustainable development and the need for gender equity," the statement said.

The negotiators said that as the most vulnerable continent, Africa deserved the right for full support to adapt to climate change.

This is also due to the continent's least contribution to the global greenhouse gas emissions yet its communities stand to suffer the most.

Concerning mitigation, the African negotiators would like to see a firewall maintained between mitigation commitments by all developed countries and mitigation actions by developing countries.

While developed Countries must reduce their greenhouse gas emissions by at least 40 per cent below 1990 levels by 2020 and at least 80 per cent to 95 per cent below 1990 levels by 2050, in order to achieve the lowest level of stabilisation assessed by the IPCC's Fourth Assessment Report, mitigation actions for Africa should be voluntary and nationally appropriate and must be fully supported and enabled by technology transfer, finance and capacity building from developed Countries.

Other key messages are related to institutional arrangements that must be equitable and transparent; Technology deployment, diffusion and transfer and institutional capacity in Africa.