PARADISE PAPERS: WEST AFRICAN DEVELOPMENT DREAMS STAND STILL WHILE MINING MONEY MOVES OFFSHORE
A village hoped for a better life, Burkina Faso expected more tax revenue
ON the night of September 6th, 2015, Juliette Kenyala awoke to the crunch of heavy vehicles rolling across the red dirt and coming to a halt outside her home in Perkoa in the landlocked West African nation of Burkina Faso.
For most of Perkoa’s 5,000 inhabitants the sound of a four-wheeler lumbering past the sparse mud brick homes, granaries and millet fields off the central highway signalled trouble: Most often, a visitor from the multimillion-dollar zinc mine that dominates the area.
Juliette (37), two months pregnant, laboured to her feet and walked past her four sleeping children to the front door, rousing mongrels and chickens from quiet corners as she went.
It was the police, and they wanted her husband, Bali Xavier Bado. The son of the village chief and head of a local youth association, Mr Bado had been among those leading protests at the west African mine owned by Nantou Mining SA, a subsidiary of the Swiss commodity giant Glencore PLC.
Mr Bado, an assistant engineer at the mine located about 80 miles from the capital of Ouagadougou, had helped to lead the men, women and children of Perkoa on a march to the mine to protest poverty, pay and environmental damages, and had blocked the entrance, halting operations.
The protest was peaceful until 4am on the fourth day, when police charged, and villagers scattered.
Now, a few days later, police were making more unannounced visits. They arrested one of the protesters at the market. They took another from the school. For others, they came in the dark of night.
Mr Bado fled on his motorbike without telling his wife where he was going. It was safer that way, he told her.
The protests failed to produce any change for the disappointed villagers. When the mine had opened it appeared to hold the promise of a better life for the people of Perkoa.
But that failed to materialise as did the tax revenue financially strapped Burkina Faso hoped for.
Details from leaked Glencore records reveal a story of contrasts. As villagers struggled with hunger and poverty and raised their voices over the hardships caused by the mine, boardroom machinations in faraway Switzerland and Bermuda and other offshore sanctuaries moved millions of dollars in and then out - of the small African nation whose name means “Land of Honest Men”.
The details are revealed in files - containing multimillion-dollar sales contracts, board of directors’ decisions, budgets and emails - from the blue-chip Bermuda law firm Appleby, documenting its relationship with the mining company’s parent, Glencore, one of the world’s largest metals, oil and grain traders.
Documents analysed by the International Consortium of Investigative Journalists (ICIJ), Suddeutsche Zeitung and 94 media partners reveal how Glencore made secret payments, fought lawsuits in cash-strapped countries and sought to reduce its tax bill in nations around the world.
Separately, ICIJ has obtained a confidential assessment by Burkina Faso’s tax office that accuses the Glencore subsidiary of abusing tax loopholes and creating fictitious charges by shell companies to reduce taxable earnings and skirt paying tens of millions of dollars in taxes to one of the world’s poorest countries. ‘Don’t give it back empty’
When the Perkoa zinc deposit was discovered in the 1980s, the village chief told the mine’s early owners: “When you borrow a cooking pot from someone to make dinner, don’t give it back empty,” a Burkina Faso expression meaning, don’t forget us.
Nearly two decades and a succession of mining companies later, relations began to deteriorate amid economic ups and downs in the mining industry.
Zinc prices plummeted 70 per cent in 2007, the year in which Nantou Mining took control. Nantou’s operations were temporarily suspended in 2008 until prices recovered.
Today the mine is the country’s main producer of zinc, sending 720,000 tonnes of concentrate, a fine gray dust, to Canada, Spain and elsewhere each year. Zinc is most commonly used as an anti-corrosion coating.
Mine management insists that it never fully recovered from the downturn. In addition, in 2012, a Nantou subcontractor dismissed 338 contract workers after a three-day strike.
The subcontractor said the employees’ contracts had ended. The workers said that they were sacked for seeking higher wages and better health and safety conditions.
“It’s like slavery in miniature,” one current employee who wished to remain anonymous told ICIJ.
“What hurts is when I read the amount of zinc that Perkoa produces. And then I see how we live and work. It doesn’t make any sense.”
Glencore told ICIJ that its salaries and benefits to workers are “among the best across the Burkina Faso mining industry”.
“We totally reject the allegation that Nantou Mining’s workforce was subjected to ‘slavery like conditions,’” Glencore said.
Villagers complained of what they called Perkoa’s “growing pauperisation.” Fruit trees near the mine’s perimeter were dying, villagers say, and poisoned by chemicals.
Even if they had remained healthy, they were off-limits to those used to picking them.
The mine obliterated the village’s most fertile food and oilseed fields, villagers complained.
When Nantou built new homes for villagers evicted by the mine’s takeover, it ignored community customs and family size, villagers lamented.
As a result, villagers stayed away and built other homes with their own scarce resources.
The mine’s housing now lies largely empty and abandoned, with broken gates and debris collecting in the entryways.
In addition to labour grievances and complaints about environmental damages, villagers accuse Nantou Mining of complicity in the mismanagement of a private foundation created to distribute social development funds. Complaints intensified in May 2015, focusing on the head of the foundation, the wife of Burkina Faso’s former foreign minister.