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Arabica Robusta

Monthly Review September 2006 Michael Watts ¦ Empire of Oil: Capitalist Dispo... - 0 views

  • Although Africa is not as well endowed in hydrocarbons (both oil and gas) as the Gulf states, the continent “is all set to balance power,” and as a consequence it is “the subject of fierce competition by energy companies.” IHS Energy—one of the oil industry’s major consulting companies—expects African oil production, especially along the Atlantic littoral, to attract “huge exploration investment” contributing over 30 percent of world liquid hydrocarbon production by 2010. Over the last five years when new oilfield discoveries were scarce, one in every four barrels of new petroleum discovered outside of Northern America was found in Africa. A new scramble is in the making. The battleground consists of the rich African oilfields
  • Africa is, according to the intelligence community, the “new frontier” in the fight against revolutionary Islam. Energy security, it turns out, is a terrifying hybrid of the old and the new: primitive accumulation and American militarism coupled to the war on terror.
  • To see the African crisis, however, as a moral or ethical failure on the part of the “international community” (not least in its failure to meet the pledges promised by the Millennium Development Goals of reducing poverty by half by 2015) is only a partial truth. The real crisis of Africa is that after twenty-five years of brutal neoliberal reform, and savage World Bank structural adjustment and IMF stabilization, African development has failed catastrophically.
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  • The pillaging and privatization of the state—whatever its African “pathologies”—and the African commons is the most extraordinary spectacle of accumulation by dispossession, all made in the name of foreign assistance. The involution of the African city, notes Davis, has as its corollary not an insurgent lumpenproletariat but rather a vast political universe of Islamism and Pentecostalism. It is this occult world of invisible powers—whether populist Islam in Kano or witchcraft in Soweto—that represents the most compelling ideological legacy of neoliberal utopianism in Africa.
  • The African accumulation crisis, and the dynamics of capital and trade flows, are in practice complex and uneven. In addition to oil (and the very few cases of manufacturing growth in places like Mauritius which are little more than national export-processing platforms), the other source of economic dynamism is the (uneven) emergence of global value chains. This can be seen especially in relation to high-value agricultures (fresh fruits and vegetables) in South Africa, flowers in Kenya, green beans in Senegal. Such forms of contract production, typically buyer-driven commodity chains in which retailers exert enormous power, have created islands of agrarian capitalism that contribute to and deepen patterns of existing inequality across Africa and further the interests of business elites, which are often not African. The deepening of commodification in the countryside in tandem with demographic pressures (caused as much by civil war and displacement as high fertility regimes) has made land struggles a vivid part of the new landscape of African development.
  • It is no surprise that against this backdrop the development establishment flails around wildly. On the one side stands former World Bank economist William Easterly for whom all aid (“planning”) has been a total (and unaccountable) failure.
  • On the other stands the one-man industry otherwise known as Jeffrey Sachs who seeks to expand foreign aid—$30 billion a year for Africa—and to initiate a Global Compact by which “the rich will help save the poor,” who are as much hampered by poor physical geography as governance failure.
  • In reality what is on offer is an even bleaker world of military neoliberalism. At one pole are enclaves of often militarily fortified accumulation (of which the oil complex is the paradigmatic case) and the violent, sometimes chaotic, markets so graphically depicted in the documentary film Darwin’s Nightmare. At the other pole are the black holes of recession, withdrawal, and uneven commodification. These complex trajectories of accumulation are dominated at this moment by the centrality of extraction and a return to primary commodity production.
  • All African governments have organized their oil sectors through state oil companies that have some forms of collaborative venture with the major transnational oil companies (customarily operated through oil leases and joint memoranda of understanding).
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      Production share arrangements and joint ventures.
  • In general the international oil companies operating in Africa have production share arrangements with state oil companies (Nigeria is the exception which operates largely through joint ventures).
  • The nightmarish legacy of oil politics must be traced back to the heady boom days of the 1970s. The boom detonated a huge influx of petro-dollars and launched an ambitious (and largely autocratic) state-led modernization program. Central to the operations of the new oil economy was the emergence of an “oil complex” that overlaps with, but is not identical to, the “petro-state.” The latter is comprised of several key institutional elements: (1) a statutory monopoly over mineral exploitation, (2) a nationalized (state) oil company that operates through joint ventures with oil majors who are granted territorial concessions (blocs), (3) the security apparatuses of the state (often working in a complementary fashion with the private security forces of the companies) who ensure that costly investments are secured, (4) the oil producing communities themselves within whose customary jurisdiction the wells are located, and (5) a political mechanism by which oil revenues are distributed.
  • The oil revenue distribution question—whether in a federal system like Nigeria or in an autocratic monarchy like Saudi Arabia—is an indispensable part of understanding the combustible politics of imperial oil.
  • there has been a process of radical fiscal centralism in which the oil-producing states (composed of ethnic minorities) have lost and the non-oil producing ethnic majorities have gained—by fair means or foul.
  • the oil complex. First, the geo-strategic interest in oil means that military and other forces are part of the local oil complex. Second, local and global civil society enters into the oil complex either through transnational advocacy groups concerned with human rights and the transparency of the entire oil sector, or through local social movements and NGOs fighting over the consequences of the oil industry and the accountability of the petro-state. Third, the transnational oil business—the majors, the independents, and the vast service industry—are actively involved in the process of local development through community development, corporate social responsibility and stakeholder inclusion. Fourth, the inevitable struggle over oil wealth—who controls and owns it, who has rights over it, and how the wealth is to be deployed and used—inserts a panoply of local political forces (ethnic militias, paramilitaries, separatist movements, and so on) into the operations of the oil complex (the conditions in Colombia are an exemplary case). In some circumstances oil operations are the object of civil wars. Fifth, multilateral development agencies (the IMF and the IBRD) and financial corporations like the export credit agencies appear as key “brokers” in the construction and expansion of the energy sectors in oil-producing states (and latterly the multilaterals are pressured to become the enforcers of transparency among governments and oil companies). And not least, there is the relationship between oil and the shady world of drugs, illicit wealth (oil theft for example), mercenaries, and the black economy.
  • oil complex is a sort of corporate enclave economy but also a center of political and economic calculation that can only be understood through the operation of a set of local, national, and transnational forces that can be dubbed as “imperial oil.” The struggle for resource control that has taken center stage o
    • Arabica Robusta
       
      oil complex as a corporate enclave economy.
  • The current crisis points to the fact that the oil-producing region in Nigeria now stands at the center of Nigerian politics—for four reasons. First, the efforts led by a number of Niger Delta states for “resource control” expanded access to and control over oil and oil revenues. Second, there was the struggle for self-determination of minority peoples in the region and the clamor for a sovereign national conference to rewrite the constitutional basis of the federation itself. Third, there is a crisis of rule in the region as a number of state and local governments are rendered helpless by militant youth movements, growing insecurity, and ugly intra-community, inter-ethnic, and state violence which—as the recent events point out—can threaten the flow of oil and the much vaunted energy security of the United States. And not least, there is the emergence of a so-called South-South Alliance making for a powerful coalition of small and hitherto politically marginalized oil producing states (Akwa Ibom, Bayelsa, Cross River, Delta, Ondo, and Rivers) capable of challenging the ruling ethnic majorities (the Hausa, the Yoruba, and the Ibo) in the run-up to the 2007 elections.
  • Not surprisingly the deadly operations of corporate oil, autocratic petro-states, and the violent potentialities of the oil complex have forced the question of transparency and accountability of oil operations onto the international agenda. Tony Blair’s Extractive Industries Transparency Initiative, the IMF’s oil diagnostics program, and the Soros Foundation’s Revenue Watch are all (voluntary) efforts to provide a veneer of respectability to a rank and turbulent industry. But the real action lies elsewhere. The danger is that the ongoing U.S. militarization of the region could amplify the presence of mercenaries and paramilitaries, creating conditions not unlike those in Colombia.
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    In reality what is on offer is an even bleaker world of military neoliberalism. At one pole are enclaves of often militarily fortified accumulation (of which the oil complex is the paradigmatic case) and the violent, sometimes chaotic, markets so graphica
Arabica Robusta

Human Rights, Violence and the Oil Complex - 0 views

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    A particularly perceptive quote is below: "Oil has specific properties (it is a fluid, it tends to be moved in pipelines, it has a particular market structure, oil corporations have distinctive attributes and so on). But in this sort of analysis it is not clear what causal powers these material and other features of oil actually possess. Ross's analysis [of the "resource curse"] on its face might just as well hold for gold in South Africa. Furthermore if oil hinders democracy (as though copper might liberate parliamentary democracy?), one surely needs to appreciate the centralizing effect of oil and the state in relation to the oil-based nation-building enterprises that are unleashed in the context of a politics that pre-dates oil."
Arabica Robusta

Some good background reading while waiting for the Kiobel decision - Pipe(line)Dreams - 0 views

  • Amid severe repression, nine members of the movement, including Dr Barinem Kiobel, were arrested, charged with specious crimes, tortured and summarily hanged. Dr Kiobel’s widow Esther and 11 other plaintiffs, all either victims of torture or relatives of victims residing in the US brought a class action suit in the US District Court.
  • In its defence, Shell argued that “the law of nations” does not recognise corporate liability for human rights abuses and that the ATS does not apply extraterritorially. Legal observers expect a decision in the Kiobel case at any time.
  • In justifying its position against the extraterritorial application of US laws, Shell underscored the “adverse consequences to US trade and foreign policy of a liberal expansion of private causes of action against corporations under international law”. It also posited that the costs associated with potential liability “may lead corporations to reduce their operations in the less-developed countries from which these suits tend to arise, to the detriment of citizens of those countries who benefit from foreign investment”.
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  • The US is not alone in grappling with the liability of transnational corporations for human rights abuses: in path-breaking litigation, Hudbay Minerals stands accused in Canadian courts of complicity in human rights abuses in Guatemala.
  • Complicating efforts to hold transnational corporations accountable is the fact that companies often construct a series of subsidiary companies that mask their true ownership, make it hard to impost corporate liability. Imposing corporate accountability is further impeded by other factors.
  • Logistically, many countries in the Global South where many transnational corporations operate lack the institutional and judicial capacity to manage complex litigation. Moreover, subsidiary companies often funnel profits to the parent corporations, leaving them with inadequate cash reserves to satisfy legal liabilities. Lastly, as noted above, governments may be reluctant to send a message of corporate accountability because those in power are often the most direct beneficiaries of corporate activity.
  • The corporations that voluntarily adhere to principles of Corporate Social Responsibility are likely not the vociferous opponents of accountability, and are arguably at a competitive disadvantage when others are permitted to violate human rights with impunity. Given corporate complicity in egregious abuses around the world, respect for human rights should not be a function of voluntary compliance but instead a matter of enforceable legal rights. The international community must demand accountability, and reinforce and reaffirm the practices of corporations that do take seriously the impact of their behaviour. The Supreme Court’s decision in the Kiobel case should advance global justice by categorically rejecting impunity for human rights abuses in which transnational corporations are complicit.
Arabica Robusta

NGOs and BBC targeted by Shell PR machine in wake of Saro-Wiwa death | Business | The G... - 0 views

  • The company's "crisis plan" focused on what the documents refer to as "the message" and getting the "style, tone, content and timing right, reflecting greater humanity". Philip Watts, who would later become Shell chairman, emphasised that everyone must "sing to the same 'hymn sheet'."
  • Dividing NGOs into friends and foes, Shell emphasised the need to "work with [and] sway 'middle of the road' activists". The Body Shop, Greenpeace and Friends of the Earth were seen as unlikely to change their position. One suggested tactic to counter these organisations was to "challenge [the] basis on which they continue their campaign against Shell in order to make it more difficult for them to sustain it". Human rights organisations such as Amnesty International and Human Rights Watch were seen as more easily persuaded. The document suggests building relationships with the organisations and encouraging "buy-in to the complexity of the issue".
  • In particular they wanted to "build a relationship" with journalist Hilary Andersson, who had recently become the BBC's Lagos correspondent, as well as "any of her known contacts in the divisions".
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  • But Nnimmo Bassey, Executive Director of Environmental Rights Action and chair of Friends of the Earth International said the company had not changed and were still not doing enough to help local people in the Niger Delta. "Internationally they polish their image. The claims they make in the international areas, do not stand scrutiny on the ground."
Arabica Robusta

Africa: The Next Victim in Our Quest for Cheap Oil | ForeignPolicy | AlterNet - 0 views

  • What have you learned from your experience on the book?MW: I have learned several things. The first is that oil is not always a curse, meaning that oil dependency does not always produce poverty or conflict or corruption. It did not in Norway or the U.K. But vast oil wealth captured by oil-producing governments always places the question of how that wealth is to be allocated and spent at the center. If oil is inserted into a corrupt federal system, then the combination of non-transparent Big Oil and authoritarian Big Government produces a perfect storm of violence, corruption, ecological destruction and poverty. And this storm will have a huge blowback.
Arabica Robusta

African Democracy and Oil: A Combustible Mix | Revenue Watch Institute - 0 views

  • I was motivated by the conviction that parliaments are central to good governance—representing the voice of the people, making laws and holding the executive to account. I still believe that, but the complex challenges posed by oil wealth in today's Africa means parliaments across the continent struggle to fulfil these roles.
  • The message was clear: to be an MP representing the voice of your constituents against the interests of the elite can be dangerous. African MPs need not only to be wealthy, but also brave.
  • Tribalism is never far beneath the surface and is a major barrier to achieving a national consensus. For many Africans, tribal allegiances are strong, but there is weak identification with the nation. Crafting unity in a nation created by imposed colonial boundaries remains a distant concept—witness the imminent breakup in Sudan—and often impedes efforts to garner widespread support for a national oil or mining policy. Failed efforts to build national consensus around policy objectives can lead to situations like Ghana's, where the country has begun oil production without coming to agreement on a national oil policy, instead following an outdated law drafted in 1984 with few regulations to ensure the country derives the maximum benefit from its finite resources.
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  • Oil laws are still written without a national consensus on the role of the oil sector in the country's development. Detailed regulations are unwritten or unenforced. Lack of information and knowledge leave MPs with formal power but no means to actually hold government to account.
  • Foreign oil companies and their contractors effectively regulate themselves in places like Ghana and Sierra Leone. The lack of explicit regulations gives too much leeway for officials' discretion in approving activity, and too much risk of their making personal gain from their official position.
  • Most Ugandans I met assumed that they had been sold short by either their government or the oil companies. In fact, in my review of the contracts the Ugandan government negotiated, the agreements were tough and compared favourably with other countries.
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