Ethics Newsline®

LONDON
In a scathing report, a British watchdog group last week claimed that a voluntary initiative to stop embezzlement, skimming, and backroom deals between international energy firms and corrupt governments has failed.

Global Witness said such deals are continuing to cripple the economies of developing nations while lining the pockets of their corrupt leaders and making Western executives wealthy, reported the Guardian.

The group concludes that a voluntary initiative backed by U.K prime minister Tony Blair has failed, claiming that, “political and business elites currently have a vested interest in avoiding transparency.”

The group’s report focuses on five struggling nations — Angola, Congo-Brazzaville, Equatorial Guinea, Kazakhstan, and Nauru where, the group says, the situations are especially dire and egregious.

In Angola, according to Global Witness, a quarter of the nation’s oil revenues — $500 million last year — go missing annually, leaving the oil-rich nation’s people among the poorest in the world while its leaders send an enormous amount of funds to a bank in Washington.

As those missing funds add up each year, international donors and other nations are forced to make up the difference, paying an estimated $200 million each year in food aid, Gavin Hayman of Global Witness told the BBC.

The group’s report claims that Tony Blair’s voluntary Extractive Industries Transparency Initiative has failed, with powerful Western energy firms continuing to sign “confidentiality clauses” with oil-rich governments that shelter bribes and illicit fees from scrutiny.

“These scandals could not have happened if companies had been obliged to publish their payments to governments, and governments to publish their earnings,” Hayman charged in the Guardian report. “But leading countries and companies are doing next to nothing and revenues that should be used to reduce poverty are being wasted.”

Masood Ahmed of the International Monetary Fund denies that the voluntary scheme has failed, saying that Azerbaijan, Ghana, and Nigeria are planning to join the effort.

Even if it were failing, he told the BBC, the British government cannot afford to make the voluntary guidelines into law since doing so would put U.K. firms at a competitive disadvantage as long as other nations refuse to follow suit.