ENERGY-CONGO: Extracting Honesty for an Extractive Resource

By Arsène Séverin Reprint | | Print |

Arsène Séverin

BRAZZAVILLE, Nov 16 2007 (IPS) - As 2007 draws to a close, citizens of Congo can look back on another year in which the challenge of introducing greater accountability into the Central African country’s opaque and corrupt oil sector loomed large.

In October, a council representing a cross-section of interests was set up to supervise implementation of the Extractive Industries Transparency Initiative (EITI) in Congo, the fourth-largest oil producer in sub-Saharan Africa after Nigeria, Angola and Equatorial Guinea. The creation of such a body is stipulated as one of the steps to be taken by countries that want a stamp of approval under the initiative.

EITI was launched by former British prime minister Tony Blair in 2002 at the World Summit for Sustainable Development. It gathers government, business and civil society together in promoting the use of internationally accepted standards for reporting on revenues from the oil, gas and mining sectors – notably in countries that have a wealth of resources, but a poor record of using these resources to benefit all citizens.

Activists from the local branch of the Publish What You Pay (PWYP) campaign and others have been sceptical about figures issued by the National Petroleum Company of Congo. (PWYP is also aimed at increasing accountability in the resource sector, through pushing for disclosure of fees paid for resources.)

Now, “We have…an opportunity for companies and the government to make available, seriously and sincerely, the real figures (concerning oil) in a way that civil society, parliament and communities can have the means of understanding the extent of revenues,” Christian Mounzéo, an activist who lobbies for accountability in the Congolese oil sector, told IPS by e-mail from New York.

“Credible international validators will be recruited to scrutinse this information.”

Mounzéo serves as vice president of the executive committee of the council, which also includes other activists, such as Brice Mackosso; François Okoko, a government representative, heads the committee. Members of the council were named in a decree issued in September by President Denis Sassou Nguesso.

Congo first came out in support of EITI in 2004, and the country has committed itself to improved management of its oil sector in exchange for debt relief.

But, the treatment meted out to Mounzéo and Mackosso in previous months highlights how far government has to go in bettering the oil industry.

The two men were given 12-month suspended sentences in December last year after being convicted of misappropriating funds from their non-governmental organisation (NGO), the Gathering for Peace and Human Rights.

The proceedings were described as a sham by many rights organisations, which viewed them as retribution for the activists’ stance against the looting of Congolese oil revenues.

A Nov. 14, 2006 press release from Global Witness noted, for instance, that the men were put on trial “despite the fact that their international funders have categorically denied any mismanagement, and the pre-trial investigation dropped a charge of misappropriation for lack of evidence.” (Global Witness is an NGO headquartered in London that reveals instances of corrupt exploitation of natural resources.)

Mackosso points out that government’s 2007 budget assumes a rate of 45 dollars per barrel of oil, even though the commodity has been selling for much more: on Friday, crude rose to over 94 dollars a barrel in European trading. “Where is the balance of this money going?” he asks.

For their part, authorities claim the surplus profits – 303 million dollars for 2005, and 512 million dollars for 2006 – are in a stabilisation fund at the central bank.

Mounzéo has estimated Congo’s 2006 earnings from oil at about 2.5 billion dollars. For over three decades, oil has been the mainstay of the economy, accounting for most of the budget; it is also Congo’s principal export.

Brazzaville’s commitment to rooting out graft in the oil sector may also be tested in its willingness to follow a corruption trail that apparently leads to the family of the president himself.

Earlier this year, Global Witness published documents that, according to the group, suggest illicit expenditure of oil revenues by the president’s son, Denis Christel Sassou-Nguesso, and by Blaise Elenga of Cotrade – a governmental agency that sells Congolese oil. Christel Sassou-Nguesso later made an unsuccessful bid in the London High Court to have the NGO remove the information from its website.

According to an Aug. 15 press release from Global Witness, the two men “spent hundreds of thousands of dollars on what seem to be personal items, including designer brands. The bills were paid by companies which appear to have received, via other shell companies, money related to Congo’s oil sales.”

This apparent instance of luxurious living contrasts sharply with the daily reality of most Congolese. Official figures published in July indicate that 51 percent of the country’s three million citizens make do on less than a dollar a day (2004 statistics from the World Bank indicated that 70 percent of people lived below the poverty line).

The extent to which graft has taken hold in Congo was also indicated by the 2007 Corruption Perceptions Index, published by Berlin-based watchdog Transparency International. Congo tied with several other countries at 150th position; 179 states were ranked on the list.

Sylvestre Ossiala, head of a parliamentary commission on economy and finance, admits to “errors” in the negotiation of petrol contracts.

But, he claims certain front companies are formed to prevent Congolese petrol cargoes from being seized by vulture funds: firms which acquire the debts of poor countries cheaply, later suing for the full amount of debt as well as interest owed on it. Substantial amounts of Congolese debt are owed to commercial lenders.

“We must camouflage ourselves to avoid losing everything,” Ossiala says, noting that civil society should be more prompt in exposing wrongdoing within the oil sector – not when “when you can no longer correct errors”.

Anger at Congo’s oil-related injustices has also contributed to the rash of conflicts that the country has experienced since the 1990s.

Ironically, the commodity that this country produces so much of is not even regularly available to its citizens. Fuel and paraffin shortages are often experienced – and last year transporters went on strike to protest against an increase in the price of petrol, now selling at about a dollar per litre.

“Our paraffin can no longer…be found on the market. A litre presently costs 1,000 CFA francs (about two dollars). This is hard in a country where electricity is also scarce,” Pamela Ngoma, a teacher in the coastal town and economic capital of Pointe-Noire, told IPS.

“A minority in power monopolises all the wealth and dismisses the majority that slave away in misery. What are we doing with our petrol?”