Africa News blog

African business, politics and lifestyle

Turkcell’s dubious case against MTN

 By Alison Frankel
NEW YORK (Reuters) – On February 28, during oral arguments at the U.S. Supreme Court in an Alien Tort Statute suit by a group of Nigerians who accused Shell of complicity in state-sponsored torture in their country, Justice Samuel Alito interrupted the Nigerians’ lawyer, Paul Hoffman of Schonbrun DeSimone Seplow Harris Hoffman & Harrison. “What business does a case like this have in the courts of the United States?” Alito said.

Enough justices agreed with Alito that days after the argument in the case, called Kiobel v. Royal Dutch Petroleum, the Supreme Court decided it was more interested in the extraterritorial application of the Alien Tort Statute than in the nominal issue in Kiobel, which concerned corporate liability under the ATS. In an extraordinary post-argument order, the justices called for additional briefing from both sides on the question of “whether and under what circumstances the Alien Tort Statute allows courts to recognize a cause of action for violations of the law occurring within the territory of a sovereign other than the United States.”

Whoever defends South Africa’s MTN Group in a new suit in federal court in Washington, is going to be very interested in the answer the Supreme Court eventually delivers to that question. In a 70-page complaint filed on March 28, the Turkish cellular services company Turkcell is asserting the Alien Tort Statute against MTN Group . According to Turkcell’s lawyers at Patton Boggs, MTN engaged in all sorts of corporate skullduggery, from bribery to peddling votes at the United Nations, to wrest away Turkcell’s contract to provide private mobile phone service in Iran. Turkcell said that MTN’s conduct is a “violation of the law of nations,” and has demanded $4.2 billion in damages.

The Turkish company’s allegations were explosive enough to have led to a 6 percent fall in MTN’s share price since the suit was filed . “MTN used its high-level political influence within the South African government to offer Iran the two most important items that the country could not obtain for itself: (1) support for the Iranian development of nuclear weapons; and (2) the procurement of high-tech defense equipment,” the complaint said. “MTN developed a scheme to trade these items — nuclear votes and illicitly procured arms — for (Turkcell’s)license. MTN furthered its scheme by bribing and trading in influence with government officials in both Iran and South Africa in exchange for the license…. MTN went so far as to create a code name for its corrupt scheme — ‘Project Snooker.’ Between February 2004 and November 2005, MTN Group worked feverishly to ‘snooker’ its business competitor through these corrupt arrangements.”

Australia worse than Africa for mining? Yikes!: Clyde

By Clyde Russell
The idea that Australia is a more dangerous place for mining investment than Mali might seem strange to most observers, but that’s exactly the view of the boss of the world’s third-biggest gold producer.
Mark Cutifani, the chief executive officer of AngloGold Ashanti, said last week he was more concerned about government policies toward mining in Australia than about nationalism in Africa.
On the face of it, this is an extraordinary comment that has gone largely unreported by both the Australian and international media.
How can it possibly be that Australia, a stable Western democracy with rule of law, independent courts and a culture of vigorous debate, is a more risky place than countries like Mali, which had a military coup last month and is battling an insurgency by Tuareg separatists?
Of course, it may be that Cutifani, an Australian-born mining engineer who has headed the Johannesburg-based company since October 2007, was ramping up the rhetoric to make a point when he talked to reporters on March 27 in Perth, capital of the resource-rich state of Western Australia.
But this would appear to be at odds with his previous record of speaking sensibly about the gold-mining industry while remaining an advocate of the interests of his global company.
The point Cutifani was probably trying to drive home is that the debate in Australia over its vast mineral resources appears to have veered off-track and descended into political point-scoring.
“The politicians and we as industry leaders are missing each other,” the Australian Associated Press quoted him as saying. “Somehow, we’ve got to land this discussion and stop the class warfare-type conversations and turn the conversations into constructive dialogue about the future of the country and the industry.”
To be fair, Cutifani has also lobbied against proposals for a resource rent tax in South Africa and moves to raise taxes in other African countries where AngloGold operates, such as Ghana and Mali.
But for Australia, the background to his comments is an intensifying war of words between Wayne Swan, the treasurer in the Labor Party-led minority government, and mining magnates over the new Mineral Resource Rent Tax (MRRT) and the carbon tax.
Both these taxes are due to start on July 1 and have raised the ire of many industries and the opposition Liberal Party.

The MRRT will impose a 30 percent levy on so-called super profits of large coal and iron ore, and doesn’t yet include other producers such as gold miners.
The carbon tax will impose a price of A$23 on the emissions of the top 500 polluters, to be phased in, while reducing income taxes for poorer households in order to offset the expected increase in energy costs.
The Labor Party, which has slumped in opinion polls partly over public disquiet over the new taxes and a broken promise not to introduce a carbon tax by Prime Minister Julia Gillard, appears to be following the tactic of stoking the politics of envy as a distraction method.
Since the financial crisis that sparked the global recession in 2008 it has been easy for politicians to attack the rich and blame untrammeled greed for the economic carnage.
In Australia, the target is billionaire mining barons and Swan attacked iron ore magnates Gina Rinehart and Andrew Forrest as well as coal developer Clive Palmer in an essay published last month.
Interestingly enough, Swan didn’t attack BHP Billiton and Rio Tinto, the two global miners that led initial opposition to a stiffer resource tax that was watered down after Gillard deposed former prime minister Kevin Rudd in a party-room coup.
Swan accused the billionaires of trying to use their wealth to “distort public policy,” apparently without any sense of irony, given that he was using his position as the second-most powerful politician in Australia to do the same.
It seems to me that Australia would benefit from a more sensible debate on how to ensure the mineral wealth is developed in a way that rewards the owners of capital that take the risks of developing projects as well the overall economy and citizens in general.
Debate in Australia appears to be driven by short-term political cycles, with federal elections every three years leading politicians to focus more on spin than sound policies.
Is the MRRT the best design that could have been implemented?
Will it raise sufficient revenue without leading to less investment, and will it help ensure the long-term viability of mining?
Should the revenue it raises be used to fund a one percentage point cut in the company tax rate, as Labor proposes, or would it be better put toward building a sovereign wealth fund?
These are all valid points for debate, but aren’t getting a hearing in Australia currently.
Instead, as AngloGold’s Cutifani pointed out, there is an unedifying mud-slinging match that does little to enhance the reputations of either Swan or his targets.

Has Kenya learned from the 2007/2008 post-election violence?

By Isaac Esipisu

Kenya is set to hold in December of this year its first elections since the 2007 vote that was marred by deadly violence. The east African country’s election will come under intense scrutiny because it will be the first under a new constitution and the first since the 2007 poll in which more than 1,220 people were killed, mostly in post-election violence.

The bloodshed and property destruction were unprecedented. Many Kenyans were rendered homeless as well; many as I write are still leaving as internally displaced persons (IDPs)

Emerging donors chip away at aid industry’s status quo

By Alex Whiting

Jan 26 (AlertNet) – Where most expat aid workers fear to tread in Mogadishu, recently arrived Turkish aid workers have been driving in the streets, swimming in the sea and praying in local mosques.

Turkish Prime Minister Tayyip Erdogan visited Somalia in August, the first head of a non-African state to do so for nearly 20 years. The Turks have since opened an embassy, started work on the international airport, offered Somalis university places in Turkey and made plans to build a new hospital.

Rape, corruption in camps blight lives of Somali

By Abdi Sheikh

MOGADISHU, Jan 26 (AlertNet) – Nurto Isak’s food rations are feeding her, her three children, and — she suspects — the militiamen guarding the camp in Mogadishu where she and other uprooted Somalis have taken refuge.

The city is host to more than 180,000 internally displaced people (IDPs) who, like Isak, have fled a killer combination of conflict, drought and hunger back home.

Does Youssou N’Dour change the stakes in Senegal’s election?

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Although N’Dour has only an outside chance of winning, the  answer is yes he does – for at least two reasons.

1 – As N’Dour himself points out, his entry into the Feb. 26 race will guarantee a degree of international media exposure that the election otherwise would not have had. That may in turn mean there will be closer scrutiny of the kind of irregularities in voting procedures that have been a feature of recent African elections. Put simply, it will be harder for anyone to rig the poll.

100 years and going strong; But has the ANC-led government done enough for its people?

By Isaac Esipisu

Although the role of political parties in Africa has changed dramatically since the sweeping reintroduction of multi-party politics in the early 1990s, Africa’s political parties remain deficient in many ways, particularly their organizational capacity, programmatic profiles and inner-party democracy.

The third wave of democratization that hit the shores of Africa 20 years ago has undoubtedly produced mixed results as regards to the democratic quality of the over 48 countries south of the Sahara. However, one finding can hardly be denied: the role of political parties has evidently changed dramatically.

Will 2012 see more strong men of Africa leave office?

By Isaac Esipisu

There are many reasons for being angry with Africa ’s strong men, whose autocratic ways have thrust some African countries back into the eye of the storm and threatened to undo the democratic gains in other parts of the continent of the past decades.

For those who made ultimate political capital from opposing strongman rule in their respective countries, it is a chilling commentary of African politics that several leaders now seek to cement their places and refusing to retire and watch the upcoming elections from the sidelines, or refusing to hand over power after losing presidential elections.

Operation Somalia: The U.S., Ethiopia and now Kenya

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By Aaron Maasho

Ethiopia did it five years ago, the Americans a while back. Now Kenya has rolled tanks and troops across its arid frontier into lawless Somalia, in another campaign to stamp out a rag-tag militia of Islamist rebels that has stoked terror throughout the region with threats of strikes.

The catalyst for Nairobi’s incursion was a series of kidnappings by Somali gunmen on its soil. A Frenchwoman was bundled off to Somalia from northern Kenya, while a British woman and two female aid workers from Spain, abducted from a refugee camp inside Kenya,  are also being held across the border.

Could Islamist rebels undermine change in Africa?

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Creeping from the periphery in Africa’s east and west, Islamist militant groups now pose serious security challenges to key countries and potentially even a threat to the continent’s new success.

The biggest story in Africa south of the Sahara over the past few years hasn’t been plague, famine or war but the emergence of the world’s poorest continent as one of its fastest growing – thanks to factors that include fresh investment, economic reform, the spread of new technology, higher prices for commodity exports and generally greater political stability.

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