While Canadians may think of ourselves as best known for owning the Olympic podium, among Africans we may actually be better known — and not particularly liked — for owning their natural resources.
Once beloved on the continent, Canada is no longer so fondly regarded in Africa.
The new, less enthusiastic view of Canada was vividly illustrated last month when more than 1,500 desperately poor Tanzanian villagers picked up machetes, rocks and hammers and stormed the mining compound of Canadian-owned African Barrick Gold.
The uprising — leading to the shooting deaths of seven of the villagers by police and security forces at the mine — is a startling reminder that theories widely held in the West about the benefits of foreign investment for the developing world are not always shared by people on the receiving end.
In theory, Barrick’s arrival in the 1990s has been a boon to the Tanzanian economy, pushing it toward development.
In reality, Tanzania has collected only a pittance in taxes and royalties from Barrick and other foreign multinationals through contracts that are shrouded in secrecy. So, although it sits on massive gold reserves worth more than $40 billion, Tanzania remains one of world’s 10 poorest countries.
A 2008 investigation funded by Norwegian church groups concluded that Tanzania collected an average of only $21.7 million (U.S.) a year in royalty and taxes on more than $2.5 billion worth of gold exported over the previous five years. The investigation also estimated some 400,000 Tanzanians, who formerly mined for gold with nothing but their own picks, shovels and ropes, have been left unemployed by the giant mining operations.
Two months after that report, a government-appointed commission headed by retired Tanzanian judge Mark Bomani strongly urged imposing higher royalties and taxes on the foreign mining companies.
With growing popular pressure for tougher legislation, the Canadian government intervened on the side of the multinationals, pressuring the Tanzanian government and parliament to oppose Bomani’s proposed reforms.
Officials from the Canadian High Commission launched an “intense” lobbying mission with Tanzanian legislators aimed at blocking the reforms, according to reports in the Tanzanian newspaper ThisDay.
Ottawa also sought to head off potentially tougher rules governing Canadian mining companies by pressing for stronger investor protections in trade talks with Tanzania, aimed at securing what Canada calls a Foreign Investment Promotion and Protection Agreement (FIPA).
“Canada’s objective in entering these negotiations is to secure a comprehensive, high-quality agreement to protect investors through the establishment of a framework of legally binding rights and obligations,” says a posting on the website of Canada’s Department of Foreign Affairs and International Trade.
The FIPA is “purely an instrument aimed at protecting the interests of Canadian companies in Tanzania,” according to Zitto Kabwe, a Tanzanian parliamentarian.
All this seems to be a departure from the way Canada used to operate in Africa.
Back in the 1970s, Canada actually gave African countries help, teaching them how to negotiate better deals with foreign multinationals, says Linda Freeman, a political scientist at Carleton University who specializes in African political economy.
Today, Freeman notes, Canada is solidly on the side of the multinationals, pressuring vulnerable African nations to accept deals favourable to multinationals, with negative implications for their own populations.
For the rest of this column, please go to the Toronto Star website: http://www.thestar.com/opinion/editorialopinion/article/1003672–mcquaig-canada-mines-african-discontent