Today, the Angolan government will reportedly formally disclose, for the first time, information about revenues that it will receive from a multinational oil company working in its country. The payments, totalling $300 million, are to be made by US oil giant ChevronTexaco in a deal on a 20-year extension of Chevron’s Block Zero concession in the north of Cabinda province. The deal is to be signed in Washington DC today as part of President dos Santos visit to the US.
This disclosure may be a first step to improve the transparency of Angola’s oil income, which has previously been subject to wholesale diversion and theft by members of the country’s elite. Global Witness’ recent report Time for Transparency (see www.globalwitness.org ) details how over US$1.5 billion per year, a quarter of Angola’s state income, has gone missing in recent years. The report also reveals that large sums of money have been diverted to secret bank accounts abroad owned by the President.
The Angolan government must now put concrete measures in place to address oil revenue mismanagement and misappropriation. Publishing Chevron’s signature bonus is a step forwards, but billions of dollars of taxes and royalties paid by companies in Angola remain unaccounted for. State oil company Sonangol also remains an accounting ‘black hole’ and the Angolan government continues to mortgage the country’s oil income by taking out expensive and opaque oil-backed loans from international banks.
The government’s clean-up effort will only be credible if double-checks are built into Angola's oil accounting system. Global Witness wants companies to publish what they pay to the government, the government to publish what it receives, and any discrepancies to be publicly investigated by a reputable auditing institution. President Obassanjo of Nigeria has recently committed his country to this kind of system.
Angola should also now join the UK-led Extractive Industry Transparency Initiative, which has already done much of the work on how best to report and account for oil income. So far the Angolan government has rejected the initiative, casting doubt on the seriousness of their reform efforts.
Sarah Wykes of Global Witness said, “numerous past promises by the Angolan government to improve its oil accounting have come to nothing. The Angolan Government must now join the EITI, adopt double disclosure bookkeeping of its oil revenues, and enshrine this system in national law. There is a real danger that once the Angolan Government obtains a positive decision on access to debt relief and IMF funding, transparency reforms will simply be abandoned.”
For further information, call Sarah Wykes or Gavin Hayman on +44 (0) 207 561 6362/61 or +44 (0)7971 06 44 33.
(1) Global Witness focuses on the links between the exploitation of natural resources and the funding of conflict and corruption. It is non-partisan in all its countries of operation. Global Witness has been co-nominated for the 2003 Nobel Peace Prize for its leading work on ‘conflict diamonds’. Global Witness March 2004 report, Time for Transparency (available at ) contains extensive details of wholesale looting of Angolan oil revenues.
(2) Global Witness is one of the founder members of the Publish What You Pay campaign, which was launched in June 2002 and now has more than 190 members (see www.publishwhatyoupay.org). The coalition calls for stock market and international accounting rules to require oil, gas and mining companies to disclose their net payments to governments for resource access on a country-by-country basis. The coalition believes that revenue transparency is an essential condition for alleviating poverty, promoting just and equitable development, improving corporate social responsibility, and reducing corruption in many resource-rich developing countries.
(3) In addition to requiring companies to disclose their revenues, it is important to increase the transparency of government revenue streams from production sharing agreements and state-owned companies. Global Witness is calling for the imposition of appropriate conditionality on relevant bilateral and multilateral development assistance and loans, resource-backed loans from banks, and export credit agency funding.
(4) The UK Government has launched a voluntary initiative to encourage best practice in disclosure of revenues by companies and governments called the Extractive Industries Transparency Initiative. More information is available at: www.dfid.gov.uk.
Press Release / May 13, 2004