Summer Adjournment

Eric Joyce Excerpts

Tuesday 19th July 2011 Commons Chamber

[Eric Joyce (Falkirk) (Lab)]

In the four minutes available to me, I wish to say a few words about the extractive industries in Africa. The UK has an important role to play, because some of the large mining companies from across the world are listed in London, and that brings a certain amount of responsibility to those companies. Most people recognise that, and I have had the good fortune to have long conversations with representatives of a number of mining companies based in the UK, which, naturally, operate mainly in Africa and across the rest of the world. Most of them seem to approach their role responsibly. New measures that are emerging, such as the Dodd-Frank legislation in the United States, which increases the transparency on payments made to Governments in some of those countries, are generally accepted as very important by most of the mining organisations that I have encountered.

I have spoken before in this place about a company whose way of operating in one particular country, the Democratic Republic of the Congo, has troubled me. I will not go into that today, but it is good that there has been some response by all the other companies. As they have seen that debate unfold to some extent in the newspapers and in the media, they have asked to have a chat with me and some of my colleagues who are interested in the issue. I think that these matters are taken very seriously across the industry.

The Secretary of State for International Development recently made a speech at the London business school about the importance of ideas that Paul Collier, an academic, has reflected on over the years. He wrote a very famous book called “The Bottom Billion” and what he says epitomises the argument that many others have put. He says that we should help these African states, which are potentially very rich in minerals but are very poor otherwise, to benefit from extracting the stuff that is beneath the ground and sometimes beneath the sea. Of course, such countries cannot always do that for themselves and need assistance from outside companies. Standards of governance apply to those companies, both in London, if they are listed in the UK—or in any stock market, for that matter—and in the countries concerned. The transparency with which payments are made is increasingly crucial.

For example, I discovered recently a number of cases in the Congo—I shall not give the names of companies or particular mines—where it seems that a mine may have been expropriated by the Government or may already have been owned by the Government and sold on. The World Bank has an understanding that it will be told the price for which state assets are sold, because that allows us to see how much is actually going back compared with the worth of the asset. It is clear that how much has gone to the treasury from a number of sales in the DRC in the past couple of years has been far from explained. I suspect that it is a very small amount compared with the large sum—hundreds of millions—that has been made available to private entrepreneurs.

The World Bank has an understanding with countries such as the DRC that when assets are sold to mining organisations it is known how much was paid for them. That is not happening in the DRC as far as I can tell at the moment. The UK Government, to their great credit and following on from the Labour Administration, make a very large contribution each year to the DRC and to other developing countries, such as Rwanda next door. The UK Government are doubling the sum at the moment and the Labour Administration ramped up expenditure too, moving towards a figure of 0.7%, but the amount that we give in aid is dwarfed by the amount that is not accounted for when such assets are sold on. It is completely pointless giving aid to a country if we cannot be sure that we are going to get the benefits, because money is simply being extracted from another place by the sale of assets. I hope that both our Administration and the European Commission, which will introduce regulations soon, will look very carefully at that.