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EQUATORIAL GUINEA: Elites Hoarding Oil Revenues, Report Charges

Marina Litvinsky

WASHINGTON, Jul 8 2009 (IPS) - The government of Equatorial Guinea has looted billions of dollars in oil revenue instead of improving the lives of its citizens, Human Rights Watch (HRW) said in a report released Thursday.

The report, “Well Oiled: Oil and Human Rights in Equatorial Guinea”, details how the dictatorship under President Teodoro Obiang Nguema Mbasogo has used an oil boom to entrench and enrich itself further at the expense of the country’s people.

“Here is a country where people should have the per capita wealth of Spain or Italy, but instead they live in poverty worse than in Afghanistan or Chad,” said Arvind Ganesan, director of the Business and Human Rights Programme at HRW. “This is a testament to the government’s corruption, mismanagement, and callousness toward its own people.”

Since oil was discovered there in the early 1990s, Equatorial Guinea’s gross domestic product (GDP) has increased more than 5,000 percent, and the country has become the fourth-largest oil producer in sub-Saharan Africa. At the same time, living standards for the country’s 500,000 people have not substantially improved.

For example, infant and child mortality increased from 103 deaths per thousand in 1990 to 124 per thousand in 2007. Similarly, under-five mortality rates increased from 170 per 1,000 in 1990 to 206 per 1,000 in 2007.

The government’s failure to provide basic social services violates its obligations under the International Covenant on Economic, Social and Cultural Rights, HRW said.

Several other African governments, with banks as their accomplices, have been exposed as pocketing revenues meant for state coffers.

In March, Global Witness released a report, “Undue Diligence: How banks do business with corrupt regimes,” which shows how by doing business with dubious customers in corrupt, natural resource-rich states, like Equatorial Guinea, banks are facilitating corruption and state looting, which deny these countries the chance to lift themselves out of poverty and leave them dependent on aid.

In 2004, a U.S. Senate investigation into the Equatorial Guinea’s dealings with the now-defunct Riggs Bank detailed how President Obiang used the country’s oil wealth to finance numerous personal transactions, including spending 3.8 million dollars to buy two mansions in a suburb of Washington, DC.

That investigation led to one of the largest fines against a bank in U.S. history, and ultimately the bank’s takeover.

“When the Equatorial Guinea accounts at Riggs were closed in 2004 there was 700 million dollars left,” said Robert Palmer of the independent watchdog group Global Witness.

“According to the IMF (International Monetary Fund), Equatorial Guinea keeps two billion dollars of government revenues in commercial banks abroad. Yet the people of Equatorial Guinea do not know where their money is being kept. The lessons of Riggs do not seem to have been learnt,” he said.

“Three years later the British bank Barclays was still holding an account in Paris for President Obiang’s son, Teodorin, who reportedly earns 4,000 dollars as a minister in his father’s government but who also owns a 35 million dollar mansion and a fleet of fast cars,” added Palmer.

According to the Global Witness report, in 2004, Teodorin spent about 8.45 million dollars for mansions and luxury cars in South Africa. His 43.45 million dollars in spending on his lavish lifestyle from 2004 to 2006 was more than the 43 million dollars the government spent on education in 2005.

Obiang has been in power since 1979, when he deposed his uncle in a coup. His uncle, Francisco Macías Nguema, took control of the country when it gained independence from Spain in 1969. His rule was brutal and, by the time his nephew overthrew him, as much as a third of the population had been killed or exiled.

In the most recent parliamentary elections in May 2008, Obiang and his allies won 99 out of 100 seats. Obiang has also indicated that he wants to seek re-election for a further seven years in the next presidential elections, scheduled for December 2009.

The current regime’s efforts to control the country’s political space and economic resources have fuelled a culture of fear marked by repression of the opposition and military purges.

The government severely curtails press freedom and independent civil society, and the political opposition is weak and faces constant government harassment, intimidation, and arrests. The people of Equatorial Guinea have no ability to hold their government accountable, said the HRW report.

“Obiang controls the oil, the government, and the country,” Ganesan said. “Without meaningful international pressure, the immense wealth of Equatorial Guinea will continue to be a private cash machine for a few instead of the means to improving the lives of many,” it said.

As one of the world’s newest oil hotspots, Equatorial Guinea, where oil was discovered in 1995, garners global attention as a valuable source of natural resources. The bulk of investment in the country’s oil industry comes from U.S.-based oil companies such as Exxon Mobil, Marathon Oil, Amerada Hess, and Vanco Energy.

Under the George W. Bush administration, relations with Equatorial Guinea warmed, despite the Riggs Bank corruption scandal and ongoing human rights violations.

“The Obama administration should take a different approach than its predecessor,” said Ganesan. “Instead of ignoring corruption and human rights in favour of energy interests, it can make it clear that good governance and respect for human rights is essential for energy security.”

Although Equatorial Guinea joined the Extractive Industries Transparency Initiative (EITI), which requires transparent management of revenues from oil, gas and mining sectors, HRW has serious concerns that the government may not be fully committed to it because it still has not guaranteed that civil society can operate freely in the country and has been very slow to implement the initiative’s standards.

It has until March 2010 to get validated as a compliant country.

“This is a key test for the government,” Ganesan said. “But it is also a test for the credibility of the initiative, which risks just endorsing a slightly more transparent dictatorship.”

HRW called on the government of Equatorial Guinea to carry out policies for complete public disclosure of how it manages its oil wealth, including: making its budgets public; identifying all of the government’s foreign bank accounts; implementing the law that requires government officials to declare their assets, and verifying those declarations; and conducting an audit of government accounts and making those results public.

The group called on foreign governments such as the U.S. and Spain to put concerted pressure on the government to improve human rights; deny visas to the country’s officials who have been implicated in corruption; and identify any assets held by those officials in their countries, with the intent of seizing the proceeds of corruption and eventually returning them to the people of Equatorial Guinea.

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