Broken Promises - Danwatch. Cost of coal and copper production carried by people and the environment. The African continent has abundant natural resources and is a major exporter of valuable raw materials. For half a century, the riches underground have brought foreign companies to the region in their quest to find new ways to feed the world’s growing demand for fuel, metals and minerals. This investigation, ‘Broken Promises’, looks into both the short- term effects of extractive industry in Mozambique, and its long- term effects in Zambia, where mining has been going on for almost a century. During the past two decades, thousands of people in Mozambique and Zambia have sacrificed their health and livelihoods to make way for fast- growing mining industries.

In the case of Mozambique, mining companies have knowingly resettled communities to areas with restricted access to food, water and transportation, posing an immediate challenge to their livelihoods. In Zambia, public health and the environment have been severely affected in many ways, some irreversible, by pollution from mining.

This investigation finds that revenues from the billion- dollar mining industry have left Zambia through illicit cash flows, and have therefore not resulted in the country’s development, which is a violation of their basichuman rights. Displacement of thousands. The ‘Broken Promises’ investigation shows that at least three of the biggest steel companies in Europe are sourcing coking coal from mines in Mozambique, where people and communities have been removed and resettled with insufficient compensation and housing, and unreliable access to water and jobs. Watch Dangerous: The Short Films Online Full Movie on this page. In 2. 00. 9- 2. 01.

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Mozambique and international mining companies initiated two major resettlements. One of the world’s largest mining companies, Brazil’s Vale, moved thousands of people to the Cateme resettlement. In subsequent years, in Moatize, 7. Revuboè riverside by Riversdale (Australian), Rio Tinto (British- Australian), Tata Steel (British- Indian)and ICVL (Indian). In June 2. 01. 5, Danwatch interviewed a large number of community members in the Cateme and Mualadzi resettlements in the Tete province of central Mozambique. The communities tell similar stories of never receiving the compensation they were promised and to which they are legally entitled. They describe major deterioration in living standards as well as livelihoods threatened by the lack of water, food and jobs in the newresettlement. According to national mining law and international guidelines, resettlements are not permitted unless people are compensated fairly and are able to maintain their livelihoods. It is the duty of Mozambique to protect human rights, and the duty of companies to respect them, according to the UN’s Guiding Principles on Business and Human Rights.

These include the right to food, water and adequate housing, as defined in Article 2. Universal Declaration of Human Rights (UDHR) and Article 1. International Covenant on Economic, Social and Cultural Rights. Nevertheless, the government and mining companies moved communities to Mualadzi, knowing full well the location lacked sufficient access to water, according to the Resettlement Action Plan obtained by Danwatch. According to the UN human rights conventions to which Mozambique is a signatory, companies with activities in Mozambique are obliged to make sure that: “Operations do not adversely impact local or regional access to adequate food or the availability, accessibility and quality of clean water in both the short and long term.”None of the steel companies that source from Mozambique has been willing to comment directly on the findings in this investigation. The resource curse in Zambia. In neighbouring Zambia, where foreign direct investments (FDI) in the Copperbelt region began more than 5.

Air and water pollution have been some of the direct impacts of copper mining, affecting people’s lives and the environment. Zambia is the second- largest producer of copper in Africa, and according to the US Geological Survey 2. But the attentions of foreign investors and comprehensive extractive mega- projects have had little effect on the share of people living below the poverty line. Tax abuse is one reason. Tax avoidance or manipulation by multinational mining companies is draining the country of billions of dollars in resources meant for development. On the other hand, systematic tax abuse is only possible because of a lack of regulation and enforcement, which means that the state is again failing to protect its people’s human rights.

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Tax abuse, poverty and violation of human rights are deeply entwined, because tax abuses deprive governments of the resources required to ensure the economic, social and cultural rights, according to the report “Tax Abuses, Poverty and Human Rights” (2. International Bar Association’s Human Rights Institute (IBAHRI). In parts of the country, the long- term effects of copper mining have resulted in pollution of local waterways and have caused catastrophic damage to people’s health and livelihoods.

While extractive industries are a significant source of economic growth for resource- rich countries, their serious downsides have frequently been called the ’resource curse’. How copper is sneaking off the books. In 2. 01. 4, copper worth billions of dollars seems to have disappeared on its way from Zambia to Switzerland. A first glance at trade statistics from Trade Map shows that ‘copper and articles thereof’ valued at USD 4. Zambia’s largest export market for copper, Switzerland. But the same database shows that Switzerland did not import any ‘copper and articles thereof’ at all from Zambia in 2.

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What happened to the copper? It never went to Switzerland, says Dr. Andreas Missbach, head of the Commodities, Trade and Finance Department, Berne Declaration. “Switzerland appears in Zambian statistics of copper exports because a multinational Swiss- based company exports a lot of that copper.

But it is not going physically to Switzerland. The business model of commodity traders is called ‘transit trade’, since the products never reach Switzerland. They are going directly to end users everywhere.”This is confirmed by Nkula Edward Goma, a former programme officer at Center for Trade Policy in Zambia and from one of the CSO’s, who raised the case against Glencore. This article looks into the various trade and tax schemes that multinational mining companies use in order to lower their tax rates and increase their profits from extracting resources in Zambia; these practices have demonstrated long- term impacts, including illicit cash flows out of the country at the expense of the Zambian people and of their basic human rights.

Transfer mispricing is draining Zambia. Discrepancies in trade data show up for many reasons – countries may use different valuation methods or different types of trade recording systems – but the fact that the discrepancies are so large that Switzerland’s import of copper from Zambia does not even appear in trade statistics is an indicator that transfer mispricing is going on, said two researchers, Mwanda Phiri and Shebo Nalishebo from the Zambia Institute for Policy Analysis and Research, in the Zambia Daily Mail, March 2. Transfer pricing happens whenever two companies from the same multinational group trade with each other, establishing a price for the transaction; this is not illegal. Transfer mis- pricing, or re- invoicing, happens when goods leave the exporting country under one invoice, and the invoice is re- directed to the purchaser’s subsidiary in another country (usually a tax haven), where the price is altered. Watch Misery Full Movie here. The revised invoice is then sent to the purchaser in the importing country for payment.

This allows a multinational company to shift profits to subsidiaries located in countries with lower tax rates, thereby increasing the company’s overall profits; this practice is considered abusive and illegal. WORLD RESOURCES OF COPPERA 2.