WASHINGTON, Aug 4 (Thomson Reuters Foundation) - China
should publicly disclose what it pays African governments for
extracting oil, gas and minerals as a way to level the playing
field for companies worldwide and help countries get a fair deal
for their natural resource wealth, billionaire investor George
Soros said on Monday.
"China has to line up to join the regulations. Otherwise
they are spoilers," Soros said at a forum on natural resources
held on the sidelines of the U.S.-Africa Leaders Summit that
runs through Wednesday.
Sub-Saharan Africa has immense riches in gold, gems and rare
minerals and new discoveries of oil and gas off east Africa
promise to make it a leading exporter of hydrocarbons by 2030.
Yet its citizens see only a fraction of that wealth on a
continent that has among the highest levels of poverty in the
The value of natural resources extracted each year in Africa
is estimated at $500 billion but revenues collected by their
governments are scarcely one-tenth of that, according to Daniel
Kaufmann, president of the Natural Resource Governance
Institute. In addition, $50 billion a year leaves Africa in
illicit finance through mispriced trade and corruption, said
Mojanki Gumbi, a trustee of the Thabo Mbeki Foundation, which
focuses on the political and economic development of Africa.
To increase accountability for natural resources, the United
States and the European Union have passed laws requiring
extractive industries listed on public exchanges to disclose
their payments to governments.
In addition, 35 countries including many in Africa are party
to the Extractive Industry Transparency Initiative (EITI), a
coalition of governments, companies and civil society that works
to improve accountability for management of revenues from
natural resources by setting global standards for payment
Soros called on Africans to urge China to participate in the
initiative, and to expand payment disclosure from oil, gas and
mining to include forestry and agriculture.
"It is a very important thing to get them to join, in fact
so important that we have to be ready to reconsider the
structure of EITI, or China won't consider it," he said.
Multi-national companies frequently complain that their
competitive position in bidding for contracts is undermined if
they have to adhere to U.S. and European disclosure rules that
would not apply to state-owned companies in China, which are big
players in Africa.
Mo Ibrahim, a philanthropist from Sudan who made his fortune
in mobile telecommunications, was cautious about whether the
proposal would succeed. China does not like to engage with civil
society, which is a central part of EITI, he said. However,
Chinese companies are learning that failure to engage poses
significant risks to their investments in Africa.
"It is the new kid on the block in Africa, and they are
finding their feet. They are getting their workers kidnapped and
they are learning that it is not just some nice forest you can
come in and cut down, or you can go in and pick up some good
iron ore," Ibrahim said.
Moreover, Chinese companies already must disclose their
payments to governments that are party to the EITI, and those
that list securities in the EU and the United States will have
to comply with new transparency rules that start taking effect
(Reporting by Stella Dawson; Editing by Ken Wills)