IT’S HISTORICAL... HOW MINING COMPANIES ‘STEAL’ FROM ZAMBIA
KENNETH
Kaunda complained in 1973, that government agreements with mining companies allowed the companies to shift profits out of Zambia by providing “sales & marketing services for a large fee.
“Although most of the work is performed in Zambia, the minority shareholders (unlike today, GRZ was the majority shareholder in ZCCM) have entered into separate arrangements with nonresident companies for reasons best known to themselves.”
At that time, it was estimated that about a third of ‘investible surpluses’ were being taken out of Zambia annually.
In the 1970s in Kenya for example, the foreign companies’ tax avoidance included the practice of posting handwritten letters to Britain which were then typed and posted back to Nairobi with an inflated fee charged for secretarial services under the line of ‘Management
fees’!
So, when looking at the Vendata issue, let’s also reflect upon our history with these mining companies.
Are there lessons in that history?
Also let’s question the political wisdom of those Zambians who agreed that the arbitration court be in Johannesburg and not Lusaka.
Was this not undermining Zambia’s sovereignty as the mining companies operations were in Zambia? Treason?
On the other hand, as one observer noted, the capacities of African negotiators of these agreements are “quite limited,” lack initiative, inexperienced, willing to be led along by the foreigners they are negotiating with, and often unfamiliar with the details in their country’s negotiation document, or these African officials just know very little about the implications of international agreements.
Charles Irish, who in the 1970s was a tax advisor to the Zambian government writes:
“...Income Tax Dept’s of developing countries are woefully undertrained & understaffed... consequently, new tax agreements are too often the product of UNQUESTIONED ACCEPTANCE of the developed country’s position after LITTLE or NO substantive negotiation.”
This may reflect Zambia’s current situation with regard to Vendata.
For additional understanding of how foreign companies skin Zambia (and other African countries) alive, refer to:
- Andrew Sardanis book “Zambia: The fifty years.”
- Francis Kaunda’s book selling the family’s jewels (I have forgot the exact title of the book)
- L. Gardner’s 2013 book “Colonial Africa, the political economy of British Imperialism”
- Kwame Nkrumah’s book “Neo-colonialism, the last stage of imperialism.”
- Gogo Mtiko...you see why a whole country has to ‘fly’ to a foreign land to arbitrate an argument with Vedanta.
As Shakespeare wrote: ‘The fault, dear Brutus, is not in the stars, but in ourselves.’ “THE PATRIOT.”