Reversing the Resource Curse:
The Need for Transparency in the Oil, Gas and Mining Sector

Submission by anonymous NGO representative from Equatorial Guinea
2007

On behalf of all the Equatoguinean activists and their international allies working to promote transparency and accountability in the extractive industries, I thank the offices of Congresswoman Diane Watson and Congressman Ed Royce for helping to organize this briefing.

Although I would have preferred to travel to Washington to discuss with you the devastating effects of irresponsible resource extraction in Equatorial Guinea, I am deterred from joining you in person by the harsh consequences that would beset me and my family. The military regime of President Teodoro Obiang Nguema has harassed, incarcerated, and tortured advocates of human rights, transparency and accountability with little restraint. I am, therefore, thankful to you for allowing me to participate anonymously.

It is no longer news to most of you here today that the small West-Central African nation of Equatorial Guinea has achieved international prominence thanks to robust economic growth fueled by the discovery of vast oil and gas reserves and a multi-billion dollar investment by the United States. According to the IMF and the U.S. Department of Energy, Equatorial Guinea holds between 1.77 and 2.5 billon barrels of oil equivalent (BOE) and between 1.3 and 4.4 trillion cubic feet of gas reserves. U.S. multinational oil companies, such as ExxonMobil, Amerada Hess, Chevron-Texaco, and Marathon are the main producers. Just three months ago, Daniel Flynn, a Reuters newswire reporter, quoted a U.S. government official saying that oil production in Equatorial Guinea will increase to “around 415,000 barrels in about 2007.” This nation of almost 500,000 people has suddenly become one of the world’s largest per capita oil producers and one of Sub-Saharan Africa’s largest beneficiaries of U.S. foreign direct investment.

Despite this astonishing economic potential, most people in Equatorial Guinea live in abject poverty and are ruled by one of the most opaque and corrupt dictatorships in the world. The U.S. State Department asserted in its last annual country report on Equatorial Guinea that “poor fiscal management and a lack of transparency in public accounting of national finances have undermined the country’s economic potential.” Similarly, the U.S. Department of Energy affirmed in its 2005 report that “despite rapid growth in real GDP, allegations that oil revenues have been misappropriated by the government abound. Furthermore, the government´s failure to direct oil revenues toward development has undermined economic and social progress in the country.” More recently, in March of this year the Department of Energy stated that “[w]hile the government [of Equatorial Guinea] has made some infrastructure improvements to bolster the oil industry, the average Equatoguinean has yet to experience a higher standard of living from the oil revenues.”

Equatorial Guinea has become what Thomas Friedman termed a “petrolist state”— one that is “corrupt, antidemocratic, uses oil income to buy off its citizens with subsidies and government jobs, uses oil and gas exports to intimidate or buy off its enemies, and uses oil profits to build up its internal security forces and army to keep itself ensconced in power, without any transparency or checks and balances.”
In 2004, the U.S. Senate investigation of the Riggs Bank uncovered that Equatorial Guinea’s oil revenues flow directly into the pockets and foreign bank accounts of President Obiang, his relatives, and a few government officials. The misappropriation of oil revenues has allowed one of the world’s most corrupt and nepotistic governments to monopolize all the internal security forces, including the police, the military and private security. Consequently, the government has also been able to control all the services that the oil and gas industries demand; including property rentals and sales, local employment, and the marketing of oil and gas inside the country.

There is no independent judiciary in Equatorial Guinea, as judges are handpicked and appointed by President Obiang, the First Magistrate of the Nation. The government rules by decrees which are not published in an official gazette or bulletin for public display or knowledge. Similarly, the Parliament lacks independence; ninety eight per cent of the members of Parliament belong to President Obiang’s political party, the Partido Democratico de Guinea Ecuantorial (PDGE), and serve at the behest of the President.

By all accounts, the discovery of oil in Equatorial Guinea has accentuated the inequitable distribution of power and resources. The intermarriage of political and economic power in Equatorial Guinea, concentrated in the hands of President Obiang and his family, is severe. Consider these facts:

· President Obiang owns and controls the two national electricity companies, SEGESA and ENERGE, the national telecommunication company, GETESA, and a construction company, ABAYAC. He has a monopoly on the construction industry, the hospitality industry and the retail grocery industry. Additionally, he and his wife, Constancia Mangue, have misappropriated vast tracts of private land and property which they rent or sell to multinational companies operating in the country.
· The only private security company allowed to operate inside the country, SONAVI, is owned and controlled by Army General Armengol Ondo Nguema, President Obiang’s brother and National Security Advisor.
· Teodoro Nguema Obiang, President Obiang’s son, has a monopoly in the timber industry, where he owns Grupo SOFANA and SOMAGUI Forestal, and also owns the country’s only private radio and TV stations.
· A consortium formed by, among others, President Obiang, the Minister of Foreign Affairs, and the Minister of Justice, owns Nusiteles, G.E., the country’s only private telecommunication company.
· The oil and gas marketing company, GEOGAM is 75% owned by President Obiang and 25% owned by the state.
· The state oil and gas management companies, GEPETROL and SONAGAS are partially owned by private, unidentified, high-ranking members of the government, including President Obiang and his relatives.





Similarly, all the employment agencies authorized to employ local workers for the oil industry are in the hands of government officials, most from President Obiang’s family:

· In addition to acting as National Security Advisor and owning the only private security company in the country, President Obiang’s brother, Army General Armengol Ondo Nguema, also owns the employment agency AMLOCASER.
· Gabriel M. Obiang Lima, another son of President Obiang and Vice Minister of Mines and Energy, owns NOMEX.
· Army General, Antonio Mba Nguema, President Obiang’s brother and Minister of Defense, owns Multi Service Systems (MSS).
· Army General Manuel Nguema Mba, President Obiang’s uncle and Minister of National Security, owns ATSIGE.
· Juan Olo Mba Nseng, President Obiang’s father-in-law and former Minister of Mines, and Atanasio Ela Ntugu Nsa, the current Minister of Mines, own APEGESA.
· Army Colonel Julian Ondo Nkumu, President Obiang’s son-in-law and Director of Presidential Security owns BOMDEN.

These employment agencies work directly with the Equatoguinean oil companies and provide the manpower necessary for their operation. They only hire workers loyal to the President’s party. Each month, the agencies retain 20% of the workers’ wages as an income tax, 21% as a treasury charge, 0.4% for social security, $3 to support the political party, and $3.50 for unemployment taxes. Workers know that these deductions do not entitle them to any benefits or rights, as they are for the direct and sole profit of President Obiang and his family.

Over the last decade, despite the increase of oil revenues, the abysmal human rights record of Equatorial Guinea has not improved. Just last year, the U.S. State Department’s country report on Equatorial Guinea stated that:

The Government´s human rights record remained poor, and the Government continued to commit serious abuses. Citizens did not have the ability to change their government peacefully. Security forces committed numerous abuses, including torture, beating, and other physical abuse of prisoners and suspects, which at times resulted in deaths. Prisoners often were tortured to coerce confessions. Prison conditions remained harsh and life threatening. Members of the security forces generally committed abuses with impunity. Security forces used arbitrary arrest, detention, and incommunicado detention. Foreigners with legal standing were arbitrarily harassed, detained, and deported. The judicial system repeatedly failed to ensure due process. The Government restricted the right to privacy and severely restricted freedom of speech and of the press. The Government continued to restrict the rights of assembly and association and limit freedom of movement. Corruption remained a problem. There were no effective domestic human rights nongovernmental organizations (NGOs).

These massive human rights violations are possible because of the monopolization of total political and military power by one corrupt despot and his family. In the absence of an independent judiciary, a functioning legislative branch, and civil society organizations to check its power, the regime has perpetuated a record of systematic abuses against its people.

In the summer of 2004, when news and reports from the U.S. Senate investigations into the activities of the Riggs Bank were translated into Spanish and published over the Internet, the government of Equatorial Guinea swiftly moved to issue arrest warrants and convict in absentia two exiled Equatoguineans, Fernando Abaga and Celestino Okenve, for allegedly publishing “treasonable materials against the government.” Coincidentally, Mr. Okenve is the President of the Madrid-based NGO Equatorial Guinea’s Solidarity Forum (Foro Solidario de Guinea Ecuatorial), a member of the Publish What You Pay campaign.

Another pertinent example involves Placido Mico, leader of an opposition political party and a fervent pro-democracy and transparency advocate. In April of 2005, Mr. Mico attended a conference organized by International Alert in Sao Tome en Principe entitled “Living With Oil: The Experiences of African Oil Producing Countries.” On his return to Equatorial Guinea from Sao Tome, Mr. Mico was detained for several hours at the airport in Malabo, interrogated, and some of his personal belongings were destroyed andɔr confiscated. The government of Equatorial Guinea accused him of having traveled to Sao Tome with the aim of contacting mercenaries.

Similarly, in May 2005, military officials detained a group of students on their way to Madrid, Spain to attend a human rights seminar organized by a Spanish NGO. The students were publicly undressed, humiliated, and beaten at the Malabo airport. The military police refused to allow them to leave the country and incarcerated them for several days. They were later released without charges.

Widespread government-sponsored harassment, incarceration, torture and assassination of independent and outspoken journalists, lawyers, opposition politicians and other individuals has silenced dissenting voices inside the country and driven many people into exile. Concurrently, the government has stepped up its kidnapping and assassination efforts of opposition leaders and sympathizers in neighboring African countries—Benin, Gabon, Nigeria, and the Ivory Coast, to name a few—and in Spain. Amnesty International has widely reported on this growing phenomenon.

In conclusion, creating and demanding a system of transparency in the extractive industry is crucial because it offers the best hope of reducing corruption, establishing democracy, and fueling sustainable economic development in “petrolist” states like Equatorial Guinea. If we, collectively, can expose the actions of corrupt government officials and hold them accountable for the revenues generated by the country’s shared resources, we can begin to eradicate corruption and advance good governance and sustainable economic development.

Thank you.



Fuente: representante anónimo

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