Kofi Annan has called on Britain to use its presidency of the G8 to stamp out the “unconscionable” business practices of companies such as Glencore Xstrata and ENRC in Africa.
The Africa Progress Panel, chaired by the former Secretary-General of the United Nations, wants an international crackdown on tax avoidance with a particular push for transparency in the mining and oil sector, it said in a report.
ENRC and Glencore strongly deny any wrongdoing and said that they were not contacted by the Africa Progress Panel before the publication of its report. The panel estimates that Africa lost $63 billion (£40 billion) in tax revenues through illicit practices between 2008 and 2010 alone.
“It is unconscionable that some companies, often supported by dishonest officials, are using unethical tax avoidance, transfer pricing and anonymous company ownership to maximise their profits, while millions of Africans go without adequate nutrition, health and education,” the report said.
It highlights recent deals by ENRC, the miner being investigated by the Serious Fraud Office for “fraud, bribery and corruption”, and Glencore Xstrata in the Democratic Republic of Congo.
The report claims that assets were undervalued, costing the country an estimated $1.4 billion, a figure close to 10 per cent of its GDP.
The panel counts prominent executives and policymakers among its members, including Tidjane Thiam, the chief executive of Prudential, Robert Rubin, the former US Treasury Secretary, and Michel Camdessus, the former managing director of the IMF. Its donors include the UK Department for International Development and the Bill & Melinda Gates Foundation.
The panel’s criticism could focus the spotlight on Britain’s regulatory regime. Kevin Watkins, author of the report, asked why it had taken British authorities so long to investigate ENRC’s dealings in the DRC.
“We call on the G8 and the G20 to step up to the mark to show leadership,” the report read.
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