by Bella Mosselmans
The current ebola crisis has drawn attention to the poor state of the public healthcare system in Sierra Leone. There is a critical shortage of healthcare workers, with fewer than 100 doctors practicing in the public sector. The country also holds some of the worst economic indicators: the lowest life expectancy, the highest infant mortality rate and the highest maternal mortality rate in the world.
Despite all this hardship and despite the brutal civil war that devastated the country between 1991 and 2002, the people are full of strength, tolerance and perseverance. Having spent 3 months in Sierra Leone – I discovered the beauty of the country and its people that is rarely covered by Western media. The sense of community, solidarity and hospitality I experienced in a town called Makeni was overwhelming. The country also has exemplary religious tolerance: Muslims and Christians intermarry, vans drive by with “God bless Allah” written on them. The people of Sierra Leone are full of potential – and the country is rich with natural resources.
What has hindered Sierra Leone is corruption and foreign exploitation. 60% of people live below the poverty line. Only 41% of adults are literate. While natural resources should offer West African countries a route out of poverty, the wealth that these minerals create often fails to reach the poor. In 2012, while Sierra Leone had the fastest growing economy in sub-Saharan Africa, it also had one of the lowest rankings in the HDI index: coming 177 out of 187 countries.
This is not a situation where you can simply place the blame on the government. British mining companies’ economic and social exploitation of the people of Sierra Leone also plays a major role. If mining companies demonstrated more corporate social responsibility, they could significantly improve the lives of 6 million people.
A major concern about the practices of foreign mining companies is their failure to pay adequate levels of tax.
Christian Aid has estimated that the government of Sierra Leone will lose revenues of US$131m in the three years from 2014-16 alone from the corporate income tax incentives granted to 5 mining companies – an average of $44m a year. Nearly all of these losses are the result of agreements with two British mining companies: African Minerals and London Mining.
Both British companies have not honored the Mining Act of 2009 – a legal framework created with international support to ensure that foreign mining companies operated in a responsible way. Instead, the Government has sharply lowered the tax rates paid by both companies. London Mining has negotiated a rate of 6% corporate income tax for the first 3 years of operations, compared to the statutory 30%. Both companies have also obtained complete exemptions on the Goods and Services tax, as well as taxes on imported capital goods, vehicles and equipment.
The National Revenue Authority has estimated that Customs and Goods and Service Tax exemptions lost the government of Sierra Leone $224m in 2012, which amounted to 8.3% of GDP.
Current agreements also allow London Mining and African Minerals to deduct much of their expenditure against tax and carry forward losses for at least 10 years from the start of operations. This further reduces taxable profits and in turn the amount that reaches the people of Sierra Leone.
While proponents of tax incentives argue that they are needed to attract foreign direct investment, a recent report by the African Department of the IMF establishes that the most successful countries in attracting foreign investors have not offered large tax incentives. Factors such as good quality infrastructure, which Sierra Leone cannot have without increased tax revenue, carry much more weight.
As Joseph Ayamba at Christian Aid office in Sierra Leone states: “The granting of tax incentives to mining companies, especially African Minerals and London Mining in the country has resulted in massive revenue losses to the government and largely hinder the government capacity to support its development priorities such as health, education and agriculture.”
For example, the $44m a year that Sierra Leone is estimated to lose in potential taxes from the mining industry is enough to provide an education for 2.9 million children.
Another major concern is British mining companies’ social exploitation of Sierra Leone. This stems from land grabbing to the fueling of child prostitution.
Many towns have been affected by British mining companies’ land grabbing. Human Rights Watch recently released a report denouncing African Minerals’ forced relocation of hundreds of families from verdant slopes to a flat, arid area in Tonkolili district. The move destroyed the people’s primary means of creating a livelihood.
Another town I came across was Lunsar. London Mining has placed beacons all across the town claiming that they mark the boundaries of their leased land – including over the site of the oldest Secondary School there. The population said they see this as an attempt by London Mining to wipe Lunsar ‘off the face of the map’.
Anyone who has been to Makeni knows that white British miners sleep with under-aged and vulnerable prostitutes. A student I met, Foray Sawanneh, explains how “Everyday they pass around the town going to bars using prostitutes – most of which are underaged. They are supposed to tell these girls to pursue their education but instead they sit at a big table and call my school mates to have sex with them. One of my friends, Abiatu, decided to sell herself to provide for her family and fund her education – her father had advised her not to become a prostitute but she decided she had to because of money. After the first person she had sex with, one of the white African Minerals workers, she was HIV positive. That is why I hate these people. She was embarrassed to talk to me because she thought she would expose the HIV sickness. She did not come back to school because she felt too ashamed.” Abiatu, aged 17 years old, died on September 17 2012 of Aids.
As Pascale Hall, an aid-worker who lived in Sierra Leone, points out “the worst thing is that they show no guilt, no remorse”. This is not just happening in Sierra Leone; HIV/Aids in South Africa is heavily fueled by prostitution surrounding mining circles. The problem is that girls, like Abiatu, often see it as their only choice.
On top of the economic and social challenges that this commercial exploitation has brought to Sierra Leone, the country now faces the huge additional problem of the ebola crisis. Given the vast revenues that foreign mining companies are earning in Sierra Leone, they face a moral imperative to help the communities where they are working to cope with the health emergency.
The ebola crisis offers a good opportunity for foreign companies in Sierra Leone to provide support so as to demonstrate that they can be a positive force in the country’s development. But to date, Professor Banerjee at London’s Cass Business school argues that ”there has been an obsession with ‘supply-side corporate social responsibility’, which is about managing reputation and the financial benefits without much consideration for how effective it might be”.
It will be instructive to examine whether the help provided by countries investing in Sierra Leone towards ebola is designed to deliver effective results or simply to gain a reputational advantage.
‘They can do better’
“I know they can do better for our country.” Mohammed Papa Bangura, a radio presenter in Makeni stated.
Mohammed Papa Bangura
When I explain these problems to people, the response I usually get is: “well someone has to exploit the resources – if it wasn’t them it’d be someone else”, or “it would be impossible to change”. Well for once instead of just accepting society as it is, I decided to take the route of attempting to change it – of calling upon corporations to take social responsibility. To dismiss something as “impossible” seems a feeble excuse to condone the exploitation occurring worldwide.
Getting foreign companies such as London Mining and African Minerals to act responsibly and pay their fair share in taxes in developing countries could make a major contribution to poverty eradication.
Join the campaign to Stop British Mining Companies Exploitation in Sierra Leone, and give all these wonderful people a chance to achieve the hopes they deserve. Email firstname.lastname@example.org to find out more and join the campaign.