michael sata

Chinese investors in Zambia told to play by the rules

Posted by Simeon Gready at 12:54 pm In the News No Responses »

Oct 042011

The recent presidential elections in Zambia saw the emergence of a familiar face, Michael Sata, who was sworn in as the country’s new president after three failed attempts. This change in fortune for the former British Rail worker was largely down to his much-publicised stance on Chinese investment in Zambia, as he looks to put an end to the ease with which Chinese investors have torn through the country’s resources – particularly copper – over the last few years.

As the Telegraph’s Southern African correspondent Aislinn Laing put it, the former Zambian President Rupiah Banda “made life as easy as possible for the Chinese,” introducing policies that cut the windfall tax on mine earnings and other investor-friendly legislation. Sata’s anti-Chinese rhetoric, though less pronounced than in previous years, reflected the mood within the Zambian population, particularly the largely unemployed youth.

There are few places where its [China’s] presence is felt more than Zambia, where Chinese investment in agriculture and the country’s bountiful copper mines exceeded $1bn in 2010…The Chinese claim they have created as many as 150,000 new jobs and point to investments in infrastructure as proof they are giving back…But there have also been accusations that Chinese businessmen in Zambia act with impunity – and treat local workers badly with poor pay and working conditions. Anger boiled over into protests last year when two Chinese managers shot and injured 13 workers at a coal mine…With two thirds of Zambia’s population still living on less than $2 a day, dismay is growing at his [Banda’s] perceived failure to make the relationship work for his countrymen…Mr. Sata, although toning down his anti-Chinese rants for this election … has pledged to reinstate the windfall tax to combat the problem…The affect that pledge has had in some of the country’s poorest slums was evident yesterday, where crowds of youths rampaged through the streets ripping down posters of Mr. Banda and chanting for change.

Change is indeed what the Zambian population got, as the election, a supposed ‘referendum on China,’ saw Sata receive 43% of the votes, with Banda receiving 36%. Sata, as expected, has immediately begun his attempts to reduce Chinese exploitation of his copper-rich country. He announced that China would have to play by the rules, through employing more Zambian workers and limiting the number of people the Chinese investors bring to Zambia.

This leaves the door open to continued Chinese investment in Zambia, and with Sata in charge, the African country might be able to strike a more balanced deal with Chinese companies, and better use the promise of Chinese investment to improve the lives of its people.

Zambian mine shooting: horrible, criminal, but not political

Posted by Bradley Gardner at 9:30 am In the News No Responses »

Oct 202010

Why does this keep happening in Zambia?:

Police have charged two Chinese mine managers there with attempted murder after live rounds were used last week to quell protests over pay and conditions at a coal mine south of the capital, Lusaka. Eleven miners were wounded in the incident, two of them are apparently in very bad shape.

A similar incident in 2005 when five Zambians were shot and wounded during riots over pay at another Chinese owned mine, raised a political storm. It fed in to campaigning by opposition activists, who accused the Chinese of operating like latter day colonialists, leaving few benefits to the country as a whole in return for the resources they are taking out.

Michael Sata, the populist opposition leader who only narrowly lost the last elections, has been quick to draw on the latest incident, suggesting that the Chinese are untouchable, because they are funding the ruling party ahead of fresh polls next year. The arrest of the two Chinese men involved in this latest shooting appears to have scotched that.

Zambia as much as anywhere has tested Beijing’s policy of non interference in Africa’s domestic affairs, given the close ties it enjoys with the current government, the scale of its mining investment in the country and the threat to those interests posed by an opposition that is overtly hostile.

. . .

Imagine if managers from a western multinational – say an ExxonMobil or an Anglo American – were responsible. The hue and cry would be loud. Chinese mistreatment of African workers gets considerably less attention.

I don’t want to be seen as acting as an apologist for what seems pretty clearly to be a criminal act, but I felt like the last statement deserved a thought out response. What actually would happen if ExxonMobil or Anglo American managers were to shoot some workers at a foreign mine? Here’s my guess:

1. ExxonMobil or Anglo American would try to minimize the public relations damage by first distancing themselves from the managers involved, while presenting the protest as a dangerous situation which the manager was unable to handle.

2. Few newspapers would point to it as proof that the corporations home countries have colonial ambitions in these countries, but would instead point the blame squarely at the managers or the corporations.

3. It is fairly likely that it wouldn’t be reported on at all. If you doubt that, I would do a quick survey of how many people know what the Rössing Uranium Mine is. Or how many people think that this story, means that Australia has colonial plans in Indonesia.

Part of the reason why this story has played out as a “Chinese are evil” story is largely China’s doing. It’s easy to put the blame on a country for a corporations actions if the corporation has state support (though in this case its a private corporation). Similarly its easier to attack criminals if the criminals do nothing to defend themselves. But the point is that newspapers generally need a bit more evidence to extend culpability for isolated criminal acts to entire countries. Chinese companies are often poorly run, and African governments need to be a lot more careful picking their partners* (and the Chinese government needs to be a lot more careful about who they give implicit support to), but it would take a long chain of causation to attach the actions of these two men with the policies of “China.” And its a chain which I recommend the average pundit tred carefully on.

* Iain Manley pointed out to me in the writing of this post that mining in China is pretty much the world’s most dangerous job. The point is particularly applicable because state-owned companies have much better safety records in China, and much better governance records in Africa (according to an official at Standard Bank I spoke to). This mine, and the Chambishi mine both have poor governance records stretching back half a decade