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New Report Targets Embezzlement of Billions of Petrodollars to Bring Chance for Lasting PeaceGlobal Witness (London)

March 25, 2002


The possibility for a lasting peace dawns in Angola after the death of UNITA leader Jonas Savimbi. Meanwhile, senior representatives of the UN Security Council meet today under an initiative of Norway’s chairmanship to discuss how to tackle the economic agendas underpinning conflicts like the Angolan civil war.

Global Witness’ new report 'All the Presidents’ Men’ links these two issues: economic and political disorder from the war has been exploited to loot the Angolan state through kickbacks on arms trafficking and a highly over-priced military procurement process. Lasting peace will be founded on addressing this problem through transparent management of Angola’s natural resources. The report reveals how a network of international leaders, bagmen and influence peddlers - 'the Presidents and their Men’ - have presided over a system that has led to the embezzlement of Angola’s oil wealth. The report also examines links between this process and the 'Angolagate’ arms-to-Angola scandal, uncovered in France at the end of 2000.

'All the Presidents’ Men’ reveals a US$1.1 billion bank account in the British Virgin Islands, connected to a company supplying the Angolan military, whose signatories move amongst the highest levels of Angolan public life. This account may go some way to explaining the black holes in state finances, such as the US$1.4 billion - about a third of estimated state revenue - that economists close to the IMF’s Oil Diagnostic study suggest is currently missing from state accounts in 2001. Such estimates of Angola’s missing money may be conservative: the report also details how US$3.55 billion in unaccountable oil-backed loans was raised from September 2000 to October 2001 alone, despite an agreement with the IMF to limit borrowing to about US$270 million for 2001.

International oil companies and banks are complicit in this process of embezzlement because they refuse to publish what they pay to the Angolan State, preventing ordinary Angolans from calling their government to account over missing oil revenues. International oil companies like ChevronTexco, TotalFinaElf and ExxonMobil claim that payments are confidential, although they routinely publish such information in developed countries. "As a result, this lack of transparency allows the ruling elite to embezzle the State’s assets with impunity, whilst one child dies every three minutes of preventable causes in this war-ravaged country", said Global Witness director Simon Taylor.

Savimbi’s death now places the initiative to deliver lasting peace firmly in the hands of the Angolan Government. Global Witness calls on them to counter the vested economic interests in maintaining the war by dismantling the web of secrecy around Angola’s oil revenues. The international community must help counter such 'resource wars’ in future by ending the practice of secret deals between transnational resource companies and unaccountable government elites. Solutions must level the playing field between competitors by requiring multinational resource extraction companies to publish what they pay to all national governments as part of the requirements for being listed on international securities exchanges.

Please contact Simon Taylor or Gavin Hayman on +44 (0)207 272 6731 or ++44 (0)7957 142 121.

Editor’s notes:

(1) Global Witness focuses on the role of natural resources in funding conflict and corruption and was nominated last week for the 2003 Nobel Peace Prize for its work on conflict diamonds. It is non-partisan in all its countries of operation. In Angola, Global Witness has previously highlighted how the traffic of conflict diamonds funds UNITA’s continued insurgency as well as questioning management of oil revenues by the Government. 'All the Presidents’ Men’ is available in English, Portuguese and French from the Global Witness website - www.globalwitness.org.

(2) Monday, 25 March 2002 sees an international meeting discussing the Economic Agendas in Armed Conflict: Defining and Developing the Role of the UN. The Symposium is being sponsored by the Government of Norway, which chairs the UN Security Council during March. It is being co-organized by the International Peace Academy and the Fafo Institute for Applied Social Science. Speakers include Deputy Secretary-General of the United Nations Louise Fréchette, Norwegian Foreign Minister Jan Petersen and Global Witness Director Patrick Alley.

(3) Angola’s oil sector is a worst-case scenario of the looting of natural resources to fund conflict. Despite earning around US$3-5 billon from oil last year (an estimated 87% of state revenue), social and economic development in Angola has continued to deteriorate. The latest figures from the UN show that three-quarters of the population are forced to survive in absolute poverty on less than one dollar a day; over 30% of all children die before reaching the age of five and one child now dies of preventable diseases and malnutrition every three minutes (480 every day); overall life expectancy is a mere 45 years and almost a third of the country’s population has been displaced by the conflict (some four million civilians).

(4) Major oil companies operating in Angola are: Chevron-Texaco, TotalFinaElf and ExxonMobil, BP-Amoco, Norsk Hydro, Statoil, Shell, Agip, Petrobras and Petrogal. BP-Amoco created a precedent on transparency in February 2001 by stating that it will publish what its pays in Angola. So far, no information has been provided to date regarding tax payments to the Angolan Government from the company’s shareholding in Angola’s Block 17, which commenced commercial operations in December 2001.

    
    
    

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