UK, A plan to transport 44 tonnes of radioactive uranium and plutonium by train has run into opposition from councils worried about accidents and terrorist attacks. The UK government’s Nuclear Decommissioning Authority (NDA) plans to make about 50 rail shipments over the next five years from the Dounreay nuclear site in Caithness to the Sellafield reprocessing complex in Cumbria. It wants to process material left over from Britain’s long-abandoned fast breeder reactor programme – a class of reactors that aim to produce more fuel as they operate – to extract plutonium and uranium for re-use or disposal. But councils say this is dangerous and risks theft of nuclear material by terrorists en route, arguing the material should be treated as waste and “immobilised” at Dounreay. A consultation on the plan is due to end on 31 August, and, if agreed, shipments will begin next year. The NDA argues there is a “clear and compelling strategic case” for moving the material 500km (310 miles) south. The safety record for transporting nuclear flasks is “well proven” and the environmental impact of the shipments will be “minimal”, the NDA says. Sending the material to Sellafield will cost about-
Japan faces the daunting task of decontaminating large areas of land around the Fukushima Daiichi nuclear complex, which is still leaking low levels of radiation nearly six months after an earthquake and tsunami triggered a nuclear meltdown. In a meeting with local officials on Saturday, the government estimated it could take more than 20 years before residents could safely return to areas with current radiation readings of 200 millisieverts per year, and a decade for areas at 100 millisieverts per year. The estimates, which merely confirm what many experts have been saying for months, are based on the natural decline of radiation over time and do not account for the impact of decontamination steps such as removing affected soil….The Japanese government unveiled guidelines this week with the aim of halving radiation in problem areas in two years, but for spots with very high readings it could take much longer to reach safe levels….Japan has banned people from entering within 20 km (12 miles) of the Fukushima plant, located 240 km northeast of Tokyo. Around 80,000 people have been evacuated since the March 11 quake and tsunami and many are living in shelters or temporary homes.
The government’s announcement follows the release of data this week showing radiation readings in 35 spots in the evacuation zone above the 20 millisieverts per year level deemed safe by the government. The highest reading was 508 millisieverts in the town of Okuma, about 3 km from the nuclear plant. Kan, who resigned on Friday [Aug. 26, 2011] as leader of the ruling Democratic Party of Japan amid intense criticism of his handling of the nuclear crisis, also told Sato that the government planned to build a temporary storage facility in Fukushima for radioactive waste.
The accident at the Fukushima plant is likely to have released about 15 percent of the radiation released at Chernobyl in 1986, Japan’s Nuclear and Industrial Safety Agency has estimated.But that is still more than seven times the amount of radiation produced by Three Mile Island accident in the United States in 1979, and experts have estimated Japan’s decontamination efforts could cost as much as 10 trillion yen ($130 billion).
Osamu Tsukimori and Nathan Layne, Reuters, Aug. 27, 2011
The fall of Libyan dictator Muammar Qaddafi has kicked off a race to recover key types of weapons taken from his stockpiles, such as shoulder-fired anti-aircraft missiles, by getting U.S. operatives to buy them before terrorists do. There is evidence that a small number of Soviet-made SA-7 anti-aircraft missiles from Qaddafi’s arsenal have reached the black market in Mali, where al-Qaeda in the Islamic Maghreb is active, according to two U.S. government officials not authorized to speak on the record.
The disintegration of Qaddafi’s four-decade dictatorship has created a business opportunity for looters trafficking in the war-stricken country’s missiles, which would enable terrorists to attack military or civilian aircraft. With a buyback program, operatives on the ground seek out the sellers and offer high prices to recover the weapons. “A buyback program is now critically important,” said Matt Schroeder, director of the Arms Sales Monitoring Project at the Federation of American Scientists, in a telephone interview. “In Iraq, hundreds of missiles were recovered like this and in Afghanistan in the 1990s.”
There is no evidence of looting of Libya’s chemical weapons, which have been under 24-hour watch via aerial reconnaissance, electronic surveillance and agents on the ground, according to U.S. officials.
The potential proliferation of Libyan small arms, portable weapons and old artillery shells that can be made into roadside bombs is a threat the U.S. considers serious and has taken urgent steps to combat, according to a State Department official who was not authorized to discuss the threats. “We’re very concerned about those weapons turning up in neighboring countries,” Frederic Wehrey, a senior policy analyst at the RAND Corp. in Santa Monica, California, who has been studying the Libyan uprising, said in a telephone interview. “They’re the ideal terrorist weapon — portable, easy to use and capable of inflicting large numbers of casualties.”
Army General Carter Ham, head of the U.S. military’s Africa Command, told the Senate Armed Services Committee on April 6 that Libya once had as many as 20,000 surface-to-air missiles. “Many of those, we know, are now not accounted for, and that’s going to be a concern for some period of time,” he said.
The Soviet SA-7 and SA-7b, an updated model, are the main shoulder-fired missile in Qaddafi’s arsenal. The units are about five feet long and sell on the black market for several thousand dollars, although the price fell as low as $500 when Saddam Hussein’s weapons were looted and flooded the market after the 2003 U.S. invasion of Iraq, according to a 2004 report from the Federation of American Scientists….The U.S. State Department is giving $3 million to two international non-profit organizations operating in Libya to secure and destroy weapons and munitions. The groups have been working since early May in coordination with Libya’s National Transitional Council.
The Obama administration said in May that it was committing $1.5 million to collect and destroy Libya’s missiles and other light weapons, according to a July 6 report by the Congressional Research Service.
NATO aircraft have kept Qaddafi’s vast military and industrial complex there under constant surveillance since the rebellion began in February, and asked rebel leaders to look for signs of mustard gas or other chemical or biological weapons. The surveillance includes Libya’s two main chemical weapons depots, which are at Sebha and Rabta, according to the two U.S. government officials. “All sensitive elements of Libya’s nuclear program, including everything that Libya received from the A.Q. Khan network, were removed in early 2004,” U.S. State Department spokeswoman Victoria Nuland told reporters in Washington. “The last of the highly enriched uranium, the bomb-making fuel, was removed from Libya in 2009.” Libya does have a supply of yellow cake, a uranium concentrate powder used to make bombs, and it’s safeguarded at the Tajoura nuclear research facility, Nuland said.
Mustafa Abdel Jalil, chairman of the Libyan National Transitional Council, said yesterday in Benghazi that no chemical or biological weapons have been found since rebel forces entered the capital, Tripoli, this week. Libya agreed in 2003 to destroy its chemical weapons, which at the time included an estimated 25 tons of mustard gas and some 3,300 bombs and artillery shells equipped to deliver.
U.S. May Buy Looted Libyan Missiles Sold in Mali’s Black Market,Bloomberg, Aug. 26, 2011
Mongolia’s Foreign Minister Gombojav Zandanshatar on Friday (Aug. 19, 2011) denied that any talks on accepting nuclear waste materials in Mongolia would be held during the upcoming visit of U.S. Vice President Joe Biden. “There was never any discussion on storing nuclear waste in Mongolia. We have sent an official letter to the Japanese newspaper Mainichi to correct the false information,” Zandanshatar said.
The Mainichi daily has reported that Japan and the U.S. planned to jointly build a spent nuclear fuel storage facility in Mongolia to serve customers of their nuclear plant exporters. Several Mongolian civil groups including Green Coalition, Just Society Front, Fire-Nation group are planning to hold protests during Biden’s visit. The groups consider that government officials held secret talks with Japan and the United States to accept and store nuclear waste materials in Mongolia.
Mongolia denies nuclear waste talks will be held during Biden visit, Xinhua, Aug. 19, 2011
Indonesia remains Asia’s most-forested nation, but it has suffered serious deforestation in recent decades, contributing to Indonesia’s status as the third-largest emitter of carbon after the U.S. and China. And perhaps there is no starker example than Borneo — roughly three-quarters of which belongs to Indonesia, the rest to Malaysia and Brunei. Conservationists are urging Indonesia’s government to respect the Dayak’s rights to their traditional lands and to affirm their stewardship of the forests based on their animist religion. But in much of Borneo, it appears too late.
Where forests once stood, towns now hum with traffic and commerce. According to Indonesian government statistics, 60 percent of Borneo’s rainforests have been cut down. Only 8 percent of its virgin forests remain, mostly in national parks. Western Borneo is the most denuded. Efforts to combat deforestation are under way. In May, the Indonesian government announced a two-year moratorium on cutting down virgin forests. As well, a U.N.-backed scheme will see developed countries paying Indonesia to protect its rainforests. But it’s too soon to say how effective these measures will be, calling into question the sustainability of Indonesia’s current economic boom, which is largely dependent on the extraction of natural resources.
Andy White, a coordinator at the Washington, D.C.-based Rights and Resources Initiative, a coalition of groups focusing on land rights, says confusion over property rights [generates conflict]. “Seventy percent of the territory of the country, tens of millions of people are essentially squatters on their own historic lands,” he says. “And over 20,000 villages are in this contested status, basically sitting on land that they think is their own and the ministry of forestry claims as their own.” In the future, the children and grandchildren of the indigenous people will not own these lands. They will become beggars or criminals, because the bounty before their eyes is no longer theirs. Corruption is endemic at all levels of government in Indonesia, but some observers point to the forestry ministry as an egregious example. A recent expose in Indonesia’s Tempo magazine accuses officials from the forestry ministry of filling their political party’s war chests with bribes, which businessmen pay in exchange for tracts of forested land. The ministry denies the allegations. But Kuntoro Mangkusobroto, a troubleshooter for Indonesia’s president and the chairman of a government task force on deforestation and climate change, says the reports are “not surprising.” Indonesia’s Corruption Eradication Commission will investigate suspected illegal grants of forested land, but Kuntoro says that the problem has become deeply entrenched and hard to root out. “Forests are a means for the power holder to maintain his power, by giving concessions to the military commander in the regions, governors or those who can support the regime,” he explains. “You cut trees, you got money, OK? And it’s been practiced like that for 40 years.”
Conservationists’ hopes of saving Borneo’s rainforests and its inhabitants’ traditions may be unrealistic, romantic, or simply too late. They may also obscure indigenous peoples’ fight to control the terms on which they develop and modernize. Some Indonesians see the Dayaks as culturally backwards, and many Dayaks themselves seem unsentimental about shedding the ways of their forefathers.
White, of the Rights and Resources Initiative, notes that forests can be re-grown to support communities and store carbon. Indigenous people have the right to choose their own path of development, he adds, and the issue of rights will not go away with the destruction Indonesia’s forests. “Of course it’s sad, of course it should be stopped, but that does not diminish the importance of this issue,” he says, “or the potential of these lands to be restored and for these communities to live much better lives in the future and for these areas to contribute much, much more to their country’s development.”
Excerpts from Anthony Kuhn, Battle Is Under Way For The Forests Of Borneo, NPR, Aug.21, 2011
See also Rights and Resources Initiative
As part of the Obama Administration’s commitment to strengthen global nuclear nonproliferation efforts, the U.S. Department of Energy (DOE) and the National Nuclear Security Administration (NNSA) today announced the availability of a reserve stockpile of low-enriched uranium (LEU) for use as commercial nuclear power fuel. The stockpile was derived from down-blending surplus highly enriched uranium (HEU) from the U.S. stockpile.
This new American Assured Fuel Supply (AFS) creates a vehicle for promoting the peaceful use of nuclear energy without exacerbating nuclear proliferation risks. Through this plan, the U.S. is able to encourage wider use of nuclear power production at the same time as it meets U.S. nuclear disarmament obligations.
The AFS sets aside LEU down-blended from surplus U.S. weapons HEU to serve as a backup fuel supply for foreign or domestic reactors in the event of a supply disruption. Along with the International Fuel Bank to be administered by the International Atomic Energy Agency (IAEA), the AFS gives nation states that are looking to nuclear power as a clean energy source an assured supply of LEU, decreasing the need to develop costly enrichment technology. Establishing this reserve will put confidence in the U.S. as a reliable supplier of nuclear fuel and should encourage other governments to see American nuclear vendors as preferable partners.
“As more countries look to nuclear power as a low-carbon option for addressing growing energy demands, assuring a fuel supply without promoting proliferation sensitive technologies is a critical national security priority,” said Secretary of Energy Steven Chu. “In addition to protecting fuel supplies for commercial power producers, the Assured Fuel Supply helps demonstrate our commitment to nuclear nonproliferation by eliminating surplus weapons uranium in a way that promotes the peaceful use of nuclear energy.”
In 2005, the Department of Energy announced that the U.S. would set aside 17.4 metric tons of surplus HEU to be blended-down to LEU and held in reserve to deal with disruptions in the nuclear fuel supply. The down-blending of the 17.4 metric tons of surplus HEU is scheduled for completion in 2012. When complete, it will result in approximately 290 metric tons of LEU, of which approximately 230 metric tons will form the reserve. The remainder of the LEU is being used to pay for the down-blending and processing costs. This will leave the AFS with approximately six reloads for an average 1,000 MW reactor.
The AFS reserve is modest in size and designed not to disrupt or replace market mechanisms. Rather, it is to be sold at market value in the event of demonstrated need after all other market options are exhausted. DOE published an announcement of the availability of the AFS today in the Federal Register. The AFS will be available through U.S. persons to both domestic and foreign recipients. The Secretary of Energy will approve any AFS sale and have the authority to prioritize requests.
The NNSA’s Office of Nonproliferation and International Security will chair an AFS Committee that will be responsible for assessing eligibility of applicants and making a recommendation to the Secretary on the sale of LEU from the AFS. This Committee will include representatives from several different DOE offices, including DOE’s Office of Nuclear Energy, DOE’s Office of Environmental Management, and the DOE and NNSA Offices of General Counsel.
Established by Congress in 2000, NNSA is a semi-autonomous agency within the U.S. Department of Energy responsible for enhancing national security through the military application of nuclear science in the nation’s national security enterprise. NNSA maintains and enhances the safety, security, reliability, and performance of the U.S. nuclear weapons stockpile without nuclear testing; reduces the global danger from weapons of mass destruction; provides the U.S. Navy with safe and effective nuclear propulsion; and responds to nuclear and radiological emergencies in the U.S. and abroad.
DOE, NNSA Announce Availability of Reserve Stockpile of Nuclear Power Reactor Fuel Material from Down-blending of Surplus Weapons-Usable Uranium, Press Release, Aug 18, 2011
According to The Economist,
Angola…is a partner in a syndicate founded by well-connected Cantonese entrepreneurs who, with their African partners, have taken control of one of China’s most important trade channels. Operating out of offices in Hong Kong’s Queensway, the syndicate calls itself China International Fund or China Sonangol. Over the past seven years it has signed contracts worth billions of dollars for oil, minerals and diamonds from Africa.
These deals are shrouded in secrecy. However, they appear to grant the Queensway syndicate remarkably profitable terms. If that is right, then they would be depriving some of the world’s poorest people of desperately needed wealth. Because the syndicate has done deals with the regimes in strife-torn places, such as Zimbabwe and Guinea, it may also have indirectly helped sustain violent conflicts…
The syndicate is built on links forged during the cold war. It is largely the creation of a man known as Sam Pa. Though he uses several names, he was born Xu Jinghua. After attending a Soviet academy in Baku four decades ago, say people who have looked into his career, he traded with Angola during its civil war, which lasted from 1975 to 2002 and over the years was a proxy battleground for several outside powers, including China, America, Cuba, the Soviet Union and South Africa. Mr Pa is a private and rarely photographed person. His name appears in few syndicate documents. He is believed to exert control through Veronica Fung, who may be a member of his family. She controls 70% of a core company, Newbright International. The two frequently travel in Africa, using the syndicate’s fleet of Airbus jets. They are said sometimes to bypass customs.
Mr Pa has several Chinese partners, according to a 2009 American congressional report. The daughter of a Chinese general, Lo Fong Hung, married to Wang Xiangfei, a well-connected banker, controls 30% of Newbright. Mrs Lo is the public face of China International Fund and China Sonangol. She is listed as a director of dozens of interconnected companies. The business’s operations were initially entrusted to the head of a privatised engineering firm from the mainland, Wu Yang. Later, African partners took over.
Although the Queensway syndicate has sometimes been suspected of being an arm of the Chinese government, there is little evidence of that. Indeed, it has often been the butt of criticism from Chinese officials. More likely it was set up to take advantage of a new strategy by the Chinese government, known as the “going out” policy. In 2002, after decades of commercial isolation, China started encouraging entrepreneurs to venture abroad. Short of contacts, Mr Pa teamed up with Hélder Bataglia, a Portuguese trader who had grown up in Angola and had links to Latin America. Together in 2004 they visited Néstor Kirchner, the president of Argentina, and Hugo Chávez, the president of Venezuela. Mr Chávez welcomed them on his weekly television show “Aló Presidente”, where Mr Pa grandiloquently declared: “This is an historic day because we are taking part in your programme.”…..
In late 2004 Mr Pa travelled to Angola. He knew President José Eduardo dos Santos, having first met him as a student in Baku and later traded with his guerrilla army. Mr Pa’s new partner, Mr Bataglia, also knew the guerrillas from having supplied them with food during the civil war. They were joined by a third trader, Pierre Falcone, a French Algerian who has long enjoyed close links with the Angolan elite and particularly the president.
Together the men persuaded the Angolan elite to channel their fast-expanding oil exports to China through a new joint venture, called China Sonangol. Mr Vicente, boss of Angola’s Sonangol, became its chairman. Contracts, signed in 2005, gave the company the right to export Angolan oil and act as middleman between Sonangol and Sinopec, one of China’s oil majors.
China Sonangol threw itself into the business, according to Angolan oil ministry records and applications for bank loans backed by oil shipments. The official statistics are incomplete, but good sources have concluded that almost all of China’s imports of oil from Angola—worth more than $20 billion last year—come from China Sonangol. By contrast, China’s state-owned oil companies have no direct interest in Angolan oilfields, one of their two biggest sources of crude. Their names do not show up on the map of concessions.
By 2009 the syndicate was trading a lot of Angolan oil and decided to expand to other African countries. Mr Vicente, both head of the Angolan state oil company and of China Sonangol, flew to Guinea in 2009 to arrange a deal for the syndicate. One of the people he met was Mahmoud Thiam, Guinea’s minister of mines, whose government had come to power the same year in a coup. Mr Thiam is an American citizen who studied at Cornell University and had previously worked as a Wall Street banker at Merrill Lynch and UBS.
With Mr Thiam’s support, the syndicate won the chance to become a partner in a new national mining company. This would control the state’s share of existing projects and, much more important, gain control of future projects in what is a relatively undeveloped mineral territory. Guinea contains the world’s largest reserves of bauxite and its largest untapped reserves of high-grade iron ore. Under a contract signed by Mr Vicente, the syndicate got an 85% share in a venture called the African Development Corporation. The government received the other 15%. The venture won exclusive rights to new mineral concessions in Guinea, including the right to negotiate oil-production contracts in the Gulf of Guinea. In return, the syndicate promised to invest “up to $7 billion” in housing, transport and public utilities, according to the government of Guinea (GDP $4.5 billion).
Ultimately this deal foundered on a Guinean election, but at the time the Queensway syndicate was so pleased that it reportedly gave Guinea’s military ruler a helicopter as a present. Mr Thiam began to travel with representatives for the syndicate—though in a response to our questions (and as the only person to reply to us) he says he was representing the Guinean government’s shareholding in the joint venture and he denies ever having become one of its employees. Mr Thiam went to Madagascar for the negotiation of a deal modelled on the one he made on Guinea’s behalf. Simultaneously, he carried on as mines minister for another year.
Around the same time, Zimbabwe also caught the syndicate’s eye. Mr Pa met Happyton Bonyongwe, the head of the Central Intelligence Organisation (CIO), the country’s notorious secret police, which helps to keep Robert Mugabe in power. Mr Pa’s plane frequently showed up at the Harare airport and he bought properties in the capital, including the 20-storey Livingstone House. His two original partners, Mrs Fong and Mrs Lo, became directors in a new company, called Sino-Zimbabwe Development Limited, which received rights to extract oil and gas, and to mine gold, platinum and chromium. In return, the company publicly promised to build railways, airports and public housing. These pledges were valued at $8 billion by Mr Mugabe’s government.
By 2009 the Queensway syndicate spanned the globe from Tanzania and Côte d’Ivoire to Russia and North Korea and on to Indonesia, Malaysia and America. It had bought the JPMorgan Chase building at 23 Wall Street in New York.
Nobody should begrudge an entrepreneur commercial success. And China needs the raw materials that the Queensway syndicate can supply. However, there are three worries about the syndicate’s conduct. The first is personal gain. The terms under which China Sonangol buys oil from Angola have never been made public. However, several informed observers say that the syndicate gets the oil from the Angolan state at a low price that was fixed in 2005 and sells it on to China at today’s market prices. The price at which the contract was fixed is confidential, but Brent crude stood at just under $55 a barrel in 2005; today it is trading above $100.
In return for Angolan oil, the syndicate promised to build infrastructure, including low-cost housing, public water-mains, hydroelectric plants, cross-country roads and railways, according to the government. The country desperately needs such things, to be sure. But their value is unlikely to exceed several billion dollars. That looks like a poor deal for the Angolan people.
In Angola accusations of personal enrichment percolate up towards the top of the state structure. In 2006 the head of the external intelligence service, General Fernando Miala, alleged that $2 billion of Chinese money intended for infrastructure projects had disappeared. He claimed that the funds had been transferred to private accounts in Hong Kong by senior officials, though without naming people mentioned in this article. The general was swiftly sacked, tried and imprisoned (he may, however, now be about to make a comeback to government).
Parts of the Angola-China oil trade appear to be contaminated by conflicts of interest. The Angolan president’s son is said to be a director of China Sonangol, the main trading partner of the state oil company. The Economist’s requests for comment to the companies went unanswered. As well as running both the state oil company and its main customer, Mr Vicente is a director of private shell companies linked to the syndicate. Although these may exist for tax purposes, a report on foreign corruption, prepared last year by the American Senate, reveals that Sonangol was deemed so corrupt in 2003 that Citibank closed all its accounts. The report also says that Mr Vicente personally owns 5% of Sonangol’s house bank which has assets worth $8.2 billion. According to the IMF and the World Bank, billions of dollars have disappeared from Sonangol’s accounts. At one point, Sonangol awarded Mr Vicente a 1% ownership stake in the company he chairs. He was forced to give it back after a public outcry in Angola.
In Guinea criticism is focused on the former mines minister. An unpublished 2009 WikiLeaks cable quotes an American mining executive, whose company stood to lose business in Guinea because of the syndicate, complaining that Mr Thiam has “personally benefited from promoting [the] China International Fund”. Mr Thiam denies this. As a former Wall Street banker, he already had money before he returned to the country of his birth.
The second complaint about the Queensway syndicate is that in Africa it has failed to meet many of the obligations it took on to win mining licences. Zimbabwe is still awaiting even a fraction of its promised infrastructure. Guinea never received the 100 public buses that were meant to arrive within 45 days of the 2009 deal.
The situation in Angola is more complicated, though also disappointing. Chinese contractors have built some housing and railway lines and the projects were at first financed by the syndicate. Signs saying “China International Fund” appeared on construction sites. But in recent years they have been replaced by those of other Chinese companies. According to Western diplomats and Chinese businessmen, the syndicate stopped paying bills for more than eight months in 2007. All work stopped, 2,000 Angolan day labourers were fired on the Benguela railway project and only a Chinese cook remained on duty. Western diplomats suspected the syndicate was banking on being bailed out by the Angolan government, which had staked its legitimacy on infrastructure development. Soon enough, the government issued treasury bonds worth $3.5 billion to finance the projects. Subcontractors are now paid directly by the Angolan state. Six years after the syndicate arrived more than 90% of the residents of the capital, Luanda, remain without running water. Meanwhile, the syndicate has continued to prosper.
The third complaint against the Queensway syndicate is that its cash props up certain political leaders and thereby fuels violent conflicts. For instance, in Guinea the syndicate came to the rescue of the junta. In September 2009 government men went on the rampage, raping women by the score and massacring more than 150 protesters in a sports stadium, which triggered EU and African Union sanctions. A month later, the syndicate signed its minerals deal, transferring $100m to the cash-strapped junta. Bashir Bah, a member of the opposition, condemned the deal. “First of all it is immoral, and second of all it is illegal,” he said.
The deal caused outrage even inside the government. The prime minister, Kabine Komara, a relatively powerless figure, protested about ministers’ conduct to other officials. A memo from the prime minister’s office, dated November 26th and leaked to Global Witness, declared: “The council of ministers did not discuss or bring up the question of creating a national mining company. What’s more it is not acceptable that a foreign company could become a shareholder in such a company, as it would grant the company, ipso facto, the ownership of all the current and future wealth of the country.” Mr Thiam denies any knowledge of Mr Komara’s complaint.
According to international institutions, the military leaders, who backed Mr Thiam, needed the syndicate’s money if they were to hold on to power. A World Bank official told Western diplomats the junta would “sell the country short on mining revenues and tell the international donors to get lost”. The junta eventually fell and, following elections last year, the minerals deal is now in limbo.
In Zimbabwe the situation is even more egregious. The finance minister, an opposition member of the governing coalition, has blocked extra funding for the CIO, presumably because it backs Mr Mugabe. And yet, it is suddenly flush with cash. In recent months it has reportedly doubled the salaries of agents, acquired hundreds of new off-road vehicles and trained thousands of militiamen who are now in a position to intimidate voters during next year’s elections. Several sources who have looked at the deal concluded that the money came from Mr Pa. They say he struck a side deal with the CIO that gives him access to Zimbabwe’s vast diamond wealth—controlled in part by the CIO. The diamonds were for some years banned from reaching international markets because of global industry prohibitions over violence routinely inflicted on Zimbabwean miners. Yet, Mr Pa is said to buy them and apparently makes payments directly to the CIO, bypassing government coffers.
Little is certain about China Sonangol and China International Fund. Our repeated questions to the companies and their representatives went unanswered. The documents and witnesses we tracked down around the world paint an incomplete picture. But they raise questions of immense public interest.
Oversight of the Queensway syndicate’s businesses is almost non-existent. A decade ago Mr Vicente forbade foreign oil companies in Angola to publish even routine data, on threat of ejection. Since then Sonangol has published some information on its operations. But oil contracts are treated as state secrets. Revenues from deals with the syndicate go to an opaque agency controlled by the president whose accounts are off-limits even to government ministers. Although Sonangol scores reasonably for some criteria, such as revenue, in rankings by Transparency International and Revenue Watch, two lobbies for corporate openness, it still receives bottom rankings for safeguards against corruption.
The syndicate itself is even more opaque. Who ultimately benefits by how much from the lucrative deals is not clear from public records. The syndicate’s corporate structure is fiendishly complex. Individual companies are not vertically integrated—it is not a group in the usual sense. There is no holding company, though the same people keep cropping up as directors in the records of affiliated companies, which are often owned by shell companies registered in lightly regulated tax shelters. Final beneficial ownership is impossible for an outsider to establish.
All this means that the syndicate taints China’s “going out” policy, a cornerstone of the country’s rise in recent years. When the policy works, African resources are swapped for aid, commercial financing and payments in kind such as public infrastructure. But with the syndicate, billions of dollars meant for schools, roads and hospitals have apparently ended up in private accounts. Rather than fixing Africa’s lack of infrastructure, Chinese entrepreneurs and Africa’s governing elites look as if they are conspiring to use the development model as a pretext for plunder.
Excerpts, China International Fund: The Queensway syndicate and the Africa trade, Economist,Aug. 13, 2011, at 21.