Gas industry will exploit Mozambique like all the others
The usual human rights violations, environmental destruction and corruption will keep the country a basket case
Gas in Mozambique is yet another example of what happens when a fossil fuel development is whitewashed by the usual rhetoric of “infrastructure development”, “education” and “socioeconomic progress”. The country’s nascent gas industry is straight out of the textbook on fossil-fuel exploitation in poor countries — mass human rights violations, irreversible environmental destruction and government corruption that renders any chance of a trickle-down effect null and void.
This is unfolding just as the “resource curse” operates in so many other parts of Africa and the world. The only economy that will change is the padding of the pockets of corporate and government individuals in power. The idea that the two current gas projects — Mozambique LNG, led by Anadarko (and soon Total), and Coral LNG, led by Eni and ExxonMobil — will actually double the GDP of the country, as the industry is promising, is laughable.
Mozambique has been one of the leading producers of coal and ruby resources in Africa for many years, yet it remains the sixth poorest in the world, with only about 20% of the population having access to electricity. What makes anyone think the gas industry will have more of a conscience or effect? The idea that the huge profits from the gas industry will seep down to the population is a copy-and-paste from press releases of nearly every energy company the world.
Standard Bank is, of course, thrilled with the lightning-quick growth of the industry — with 20% of the bank owned by the Industrial and Commercial Bank of China, they are collectively the largest lenders to the project.
In 2018, Mozambican organisation Justiça Ambiental! (JA!) asked for and was granted a meeting with the relevant executives at Standard Bank, but on the agreed day the bank cancelled just two hours in advance. When JA!, whose employees had travelled from Maputo, still insisted on the meeting, the two executives we were planning to meet were claimed to be busy, and instead we were attended to by more junior employees who began the meeting by saying they “can’t give you any answers because we know nothing about the projects”. Standard Bank has refused to hold another meeting since.
The Export Credit Insurance Corporation of SA (ECIC) has been completely irresponsible in agreeing to finance this project after JA! had clearly informed it of the terrible effects of the industry. While it was still in the “consultation” phase, JA! and other organisations communicated with the COO, and on two occasions provided the ECIC with detailed information gathered from the ground and from affected communities — communities that have now been forcefully removed from their homes, lost their lands and livelihoods, and face violence from military and private security companies if they try to resist.
The “consultation” and “compensation” processes have been farcical. Community meetings held by companies take place in the presence of community leaders, who in many cases have been bought by the companies, meaning community members do not voice discontent for fear of being denied compensation or of bullying from the government. As a compensation measurement, companies determine the size of community members’ land by counting the number of palm trees, which has led to people who have 10ha of land but few trees, receiving 1ha in compensation.
The ECIC, along with the export credit agencies of Italy, Japan and China, contracted Rina, an Italian company, to do the assessment. Rina is currently the subject of an Organisation for Economic Co-operation and Development complaint and is the defendant in an Italian court case for its part in a fire at the Ali Enterprises clothing factory in Karachi, which burnt down, killing 250 workers. It was established that Rina had not set foot in the factory before deeming the building safe, but instead had done the risk assessment over the phone.
Mozambique’s systemic corruption is right on SA’s doorstep. The Mozambican economy is still recovering from the 2017 debt crisis, which the government created by illegally borrowing $2bn in an alliance with bankers from Credit Suisse, VTB Bank and private security mogul Erik Prince, to spend on arms, and which they promised to repay in gas revenues. Central to the loans was former finance minister Manuel Chang, who was arrested at OR Tambo airport in Johannesburg in December 2018 and is still in custody in SA.
While in utopian theory the gas industry will raise the GDP (not even mentioning the invalidity of GDP as an actual measure of societal wellbeing), the Mozambican people will not benefit in reality. Most of the gas will be processed and immediately exported to other, mostly Asian and European, countries.
No other extractive project in Mozambique has actually benefited the country as the press conferences and “corporate social responsibility” websites claim. If they had, the country wouldn’t be the economic and social basket case it is. How can anyone expect the gas industry to be any different?
• Rawoot is co-ordinator of the No to Gas! Mozambique campaign at Justiça Ambiental/Friends of the Earth Mozambique.