OREANDA-NEWS.  July 17, 2013. A common perception levelled against Chinese engagement within Africa is that its extractive industries cosy up to corrupt African leaders in order to facilitate business interests. Local communities are rarely consulted, their livelihoods are threatened and they see little of the vast revenues generated.

In the worst case scenario, such as 1990s and mid 2000s Sudan, where the author recently conducted research, money generated for government is used to wage war on segments of the population who are very same people displaced by oil ventures. This is a worst case scenario and there are plenty of other instances of large Chinese investments in Africa which include large-scale aid and infrastructure projects.

Nevertheless, negative episodes are the ones which tend to stick - particularly in the Euro-American press which often relishes tarring China’s image in Africa. Such criticism obscures the fact, particularly in Africa’s extractive industries, that other global companies fare little better when it comes to living up to the best practices which they so often tout in their advertisements, brochures and company websites. 

In some respects, the singling out of China is reflective of a general unease by western actors about China’s rise on the world stage. More crucially however, the singling out of China obscures the fact that may other regions’ corporations are engaged in equally questionable activities. To put the blame on China is to overlook far larger problems not only endemic to the extraction industry at large but also the global economy of which China is only one part.

Nigeria and Shell

There exists a much wider spectrum of dubious extractive activities within Africa. For instance, in 1995, the Nigerian government executed human rights activist, Ken Saro Wiwa, and eight others, for their opposition to Shell’s ecological destruction brought upon Saro Wiwa’s Ogoni homeland in the Niger Delta. US banks have, until recently, been the storehouse of hundreds of million dollars in oil revenues stashed by Equatorial Guinea’s Obiang regime. Additionally, the attempted coup of that country in 2004 by former British army officers included financial backing by none other than the son of former British Prime Minister, Margret Thatcher. 

Within Sudan, where China has received extensively negative coverage, it is significant to note that its controversial engagements were always in partnerships with other countries. CNPC’s (China National Petroleum Corporation)  engagement is part of the Greater Nile Petroleum Corporation consortium involving Malaysia’s Petronas, Sudan’s Sudapet and India’s Oil and Natural Gas Corporation.

Thus, the case of China’s petroleum extraction in Africa should be situated within the broader political and economic realm of energy extraction. The corporations involved are for-profit organizations, whose primary aim is to successfully remove oil and sell it on international markets. Oil is frequently classified as a strategic resource by the states of the corporations involved, leading to frequent government lobbying in awarding exploration rights.

Many African states with oil are often corrupt and the oil is often located in politically unstable regions which are prone to ethnic tensions. It is within this context that the oil companies must compete with each other; engagement in such a business environment naturally lends itself to secrecy, corruption and violence.

Such companies frequently attempt to immunise themselves from the turbulence of the states in which they engage – a turbulence which is often enflamed by their presence. Oil production centres are often fenced off and heavily guarded by the military and private security firms. Moreover, several oil sites are in possession of their own airports so that personnel flying in and out don’t even have to enter regional towns. Various military checkpoints are assembled on the roads which lead into these compounds.

When such hyper-securitised infrastructure is in place, there is little possibility, and more importantly, incentive, to engage with communities displaced and shut out from such spaces. Quite simply, the security measures put in place render what occurs outside such parameters increasingly irrelevant. This is part of a much broader problem within the resource extraction industry in developing countries, of which China is now an instrumental part.

The oil PR campaign

Against this backdrop, oil companies have embarked on a massive PR campaign stressing corporate social responsibility. The home webpages of many of the big oil companies depict as many oil rigs and pipelines as they do thriving forests and contented local communities. The question is, in terms of conditions on the ground, to what degree such programmes mitigate damages inflicted by oil companies as opposed to them functioning as superficial propaganda bearing little resemblance to reality.

Certainly, Chinese oil companies have made strides forward in the previous decade. Within China, there have been significant policy shifts regarding Chinese companies investing abroad, including the 2006 ‘Corporation Law’ providing a legal foundation for CSR and the ‘Guidelines for CSR compliance for Foreign-Invested Enterprises’ issued in 2008 by the Chinese Academy of International Trade and Economic Cooperation.

Within South Sudan, CNPC has made strides in the implementation of community development schemes. Despite such shifts, South Sudanese, both at government and local level, speak of a persistent lack of direct and sustained contact between Chinese representatives and local communities.

It is vital that Chinese actors seek to work against these factors through sustained interaction with local communities. However it is equally true that the extraction of resources in the interests of profit is a global phenomenon and Chinese companies are by no means the only actors who need to engage more in this regard. Oil is becoming more difficult to find and companies are increasingly entering ‘frontier” regions to secure it.

The rise of a vast Chinese consuming class, who want comfortable apartments and luxury cars are, by no fault of their own, exacerbating this global scramble. In such a competitive market, there is pressure for companies to compromise ethical standards insofar as “if we don’t take this oil, our competitors will”.  It is against the grain of this phenomenon that a culture of collective international responsibility needs to be cultivated, in which Chinese companies will, amongst others, play their part.