How supply chain laundering hurts Africa (2)

MULTILATERAL Non-compliance with certain TRADING SYSTEM set of rules easily provides a leeway has undergone to violence, gun running, drug unprecedented dealing, money laundering and commodity laundering. On details, transformation, the volume of many essential records such as trade has grown exponentially product tags, elaborate documentation and the diversity of goods traded including source or origin has widened in scope of since the are part of transparency and supply World Trade Organisation (WTO) chain integrity. Some operators became operational. In particular, who indulge in sharp practices the last two decades have been a have found ways to launder illicit period of phenomenal growths commodities, using recognised intermediaries. in volumes and values of traded We are examining a commodities since the accession few here. In the agricultural sector, of big players – with China as a cocoa production in Ivory Coast prominent example – to the WTO. provides elaborate insight. In addition What have not kept pace over the to social misdemeanours, period are the implementation of there are reported cases of technical safeguards, early warning systems, and scientific flaws. Despite regulations and control mechanisms all the esoteric claims by produce for the benefit of the earth handlers, the exporters and the final and the people. Many challenges processors, children continue also arose within the global value to be trafficked from Ghana and chain and supply chain associated Burkina Faso to work as labourers with the greater complexity and interplay in cocoa farms in Ivory Coast, of factors within the system a country which produces 40 per that have proven inimical to environmental cent of world cocoa output. Child and human security labour is considered as blight and safety as well as sustainability. on the $100bn industry which These are essentially associated produces chocolate as one of its with absence of or non-adherence cherished end products. Satellite to certain requirements either in imagery and ground photographs the forms of standard operating have confirmed the unabated deforestation procedures or quality control. arising from the unregulated

The gaps thus created have expansion of cocoa farms provided loopholes or opportunities in Ivory Coast. If these operators to be exploited by those accustomed were to attend the Conference of to cutting corners for Parties (COP) on environment, it gains. Illicit activities have thus become is doubtful that they will speak in widespread and entrenched favour of reducing the world temperature in many ways and those involved through the reduction of have become more sophisticated, environmental destruction. Buying more highly influential and largely cocoa beans from questionable intractable globally as some have sources in the open markets and built formidable networks across rebranding them for sale to processors countries and continents. Under could be misleading and the consideration of Africa’s commodity-based fraudulent enough. economy, compliance Fishing off the Peruvian coasts with the relevant rules becomes in the Southern Pacific – which is relevant for effectiveness. one of the richest seas in the planet The Extractive Industries Transparency – is an activity illegally indulged in Initiative (EITI) provides a by some foreign operators. More global standard for the good governance than 250 fleet of Chinese fishing of the extractive sectors such boats were recently seen invading as oil, gas and mineral resources. It Peruvian territorial waters off seeks to promote understanding the coast of Peru. Fish caught are of natural resource management, processed on board and then sold strengthen public and corporate to various countries. It is apparent governance and provide the data that these foreign fishermen sell to inform greater transparency their catch as Chinese fish as their and accountability in the extractives fleets can be on the sea for months, sector. Membership requires plundering the depth of Latin disclosure of information along American seas with the Peruvian the extractive industry value chain authorities unable to checkmate – from how extraction rights are them. In Africa, Greenpeace environment awarded, to how revenues make group reported in 2020 their way through the government that Senegal’s fisheries ministry and how they benefit the public. has issued fishing licenses to vessels But, of all countries in the world, of a Chinese industrial fleet only 56 countries have agreed to involved in illegal, unreported the EITI Standard – a common set and unregulated fishing activity in of rules governing what has to be recent years. All these are despite disclosed and when. globally agreed conventions on sustainable fisheries. In almost all instances of value chain compromises or supply chain compromises, conspiracies between bad actors within states, multinationals and the mafias are combining efforts to destroy the world’s biodiversity and exposing the world to greater danger of environmental degradation, global warming and climate change. Their activities violate the dictum of “People, Planet and Profit” as they practically subjugate all other considerations under profit motive.

In Romania, earlier mentioned in the first part of this series, anyone who tries to scuttle the interest of the forest mafia gets into trouble or could even die, said an informed source. This is even as the Romanian forests are disappearing fast amidst quest for financial fortune while corruption is rife. Much of the loggings there are illegal for cheap furniture in Europe. Transloading or laundering points are common parts of their illicit activities, while under-declaration of resources being conveyed, improper or inappropriate documentation, absence of or forged legal papers, and forged auctions are parts of the game of elusiveness as the term Sustainability is regularly misused to justify what is done in the breach. Investigations revealed some stunning findings. After more than three years of evaluating the damage, said a Romania volunteer, “we reached a number of 4,000 big trucks full with timber that went out from here illegally. The big company that bought all the timber from here knew exactly what happened. They didn’t do anything. They just made a lot of profits.” By their actions, these are on collision path with environmental activists and climate campaigners. The country is being stripped of its forest, and there is public outrage at government’s complacency and multiple examples of wrongdoings as Romania, Ukraine and Russia are three European countries with great problems with corruption and illegalities, with the perpetrators working with powerful multinationals. In Romania, vested interest and wellconnected people are preventing the regulations to stop the uncontrolled deforestation from coming into force. Forest Mafia tries various means to eliminate whoever stands their way. The Democratic Republic of Congo faces similar dilemma for its forest resources.

The tragedy of countries that are richly endowed with mineral resources and yet riven by poverty, conflict and corruption is widely documented. Cases abound of armed groups, criminal gangs, corrupt elites and unscrupulous companies all feeding off the mineral trade and have removed vast wealth from developing economies over the years through a range of illegal and/or unethical practices. Africa has suffered immensely from the outcomes of some or all of these illegalities at various times. Angola, Liberia, and Sierra Leone have been the hotbed of brutal, diamond-funded civil wars fought in the 1990s, which tarnished the image of diamonds. Blood diamonds (also called conflict diamonds, brown diamonds, hot diamonds, or red diamonds) are diamonds mined in a war zone and sold to finance an insurgency, an invading army’s war efforts, or a warlord’s activity. Diamonds mined during the 20th to 21st century civil wars in Angola, Ivory Coast, Sierra Leone, Liberia, Guinea, and Guinea-Bissau have been given the label. In its 2018 List of Goods Produced by Child or Forced Labour, the U.S. Department of Labour identified abusive labour practices in diamond mines across West and Central Africa, and noted that deaths or injuries due to dangerous working conditions remain frequent.

Many multinationals are struggling to cut good corporate images for themselves despite the very nature and details of their activities. Glencore is the largest commodity trader in the world and the leading supplier of zinc and cobalt. It has also been accused of disastrous environmental pollution, poisoning rivers, and permitting child labour in its African mines, taking advantage of the vulnerabilities of the resource-rich but regulationpoor Africa. Glencore has had to embark on financial settlements to end some of its crisis in the DR Congo. Those who are at the receiving end of the mineral extraction often have to live with the human rights impacts of pollution, conflict and exploitation. Attention of rights activists have been drawn to the scale and scope of illegal activities being perpetrated in any mining activities. In a 2015 report titled Chains Of Abuse: The global diamond supply chain and the case of the Central African Republic, the Amnesty International was able to identify some of the infractions that are frequently committed along the value chains of precious mineral resources. Since Africa’s economy is dependent on these commodities, every country involved needs to raise awareness about wrongdoings and enact laws and policies to ensure effective policing and quality control if the continent is to continue to earn significant foreign exchange from their exports. Allowing bad actors to control the extraction, transformation and trade of these precious minerals can only spell doom for Africa in the future. It is time to correct the errors hitherto allowed and move Africa forward in the right path of accountability, transparency and sustainability. The world is not waiting for Africa. Let the right rules be set and followed for the common good of this and coming generations.