24th January 2001
Re: Oil Company transparency & Angola:
In December 1999,Global Witness published the report “A Crude Awakening”, which examined massive corruption and the impact of the lack transparency of oil companies and that of the banking world in Angola. Since publication, Global Witness has continued a twin-track approach to this issue – with both investigations into the activities of the architects of state robbery in Angola, and through dialogue with the oil companies. We will be commencing a similar dialogue with banks in due course.
Overall, the dialogue with companies has been relatively constructive. Global Witness has been keen to explore how it might be possible for the oil companies in Angola to publish their tax and royalty payments to the Angolan Government, together with the amounts of signature bonus which have been paid. Please note this is NOT a call for companies to publish details during say a bidding process, when it is clear that there are issues of corporate confidentiality at stake. However, it is a call for companies to publish the kind of data which is already published for company operations in the “developed world” – see details of company tax payments which are available for example in “Companies House” filings, or which can be found in the US under SEC filings.
The purpose of this exercise is that it would for first time provide significant data about government income in the public domain, which would at least start the process of enabling Angolans to hold their government to account for subsequent expenditure. It is clear that in the absence of data about the scale of Government income, Angolans are not in a position to question State expenditure and the vast scale of corruption currently taking place. Given that roughly 90% of Angolan state income is generated through oil and that the oil companies are not transparent about what they pay to Government, there is currently a clear complicity of the oil sector in the looting of Angola by the elite.
Global Witness recognises that this is a difficult situation to overcome. That is why we are looking for a common approach where all the companies move as one and publish the kind of data we are looking for – after all, for a variety of different reasons, companies are already obliged to publish this kind of data in the developed world – so why not for countries such as Angola, Nigeria, Gabon, Azerbaijan etc – all countries where there is a significant problem of corruption, and where the oil companies are not transparent about the payments they make to government.
In conclusion, we are not looking to expose companies to unreasonable risk. We believe that if the companies were to publish this kind of data in all countries of operation, then there would be a minimal risk associated with doing so. The positive impacts of doing so would be enormous for the countries concerned, and would provide a considerable positive return for the companies concerned.
Given that we are now one year into this campaign and the positive dialogue has produced no progress, and even deliberate obfuscation by some companies at a key meeting hosted by the UK’s Minister for Africa, Peter Hain in October 2000, Global Witness seriously doubts the “positive” intent stated by different company officials at various one-to-one meetings, held throughout last year.
We are now considering what we should do next. In that regard we felt it appropriate to write to all the CEO’s of the oil companies currently operating in Angola to determine their personal views about transparency of oil company payments to national governments. The key question here is whether oil companies wish to remain part of the problem, or whether they have the imagination to become part of the solution, with immense benefits for the countries concerned, a likely considerable reduction in company overheads, considerable potential kudos and the chance to make a serious impact on cleaning up international corruption – the chance, in fact, to level the playing field, which we know is a major complaint of some companies.
Thank you for your time and consideration. I look forward to hearing from you at your earliest convenience.
24th January 2001