Nov. 13, 2017 (GIN) –As hundreds of investigative journalists scoured a “data dump” of leaked financial records, a number of African countries left nearly broke by multinational corporations came into focus.
The story of Burkina Faso is a case in point.
Details of the apparent misappropriation of monies were revealed in what is now called the Paradise Papers.
Burkina Faso was a country short on development but rich in resources. It drew the attention of miners and their parent company in Switzerland. With high-priced lawyers and advisers, plans were hatched to mine zinc in a town called Perkoa. The mineral, an anti-corrosion coating, would make the parent company, Swiss commodity giant Glencore, already rich, even richer.
“When the mine opened it appeared to hold the promise of a better life for the people of Perkoa,” wrote Will Farrington of the International Consortium of Investigative Journalists (ICIJ). “But that failed to materialize – as did the tax revenue financially strapped Burkina Faso had hoped for.”
“As villagers struggled with hunger, poverty and other hardships, boardroom machinations in faraway Switzerland, Bermuda and other tax havens moved millions of dollars into – and then out of – the small African nation whose name means “Land of Honest Men.”
According to leaked documents seen by Farrington, Glencore abused tax loopholes and created fictitious charges by shell companies to reduce taxable earnings and avoid paying tens of millions of dollars in taxes to one of the world’s poorest countries.
Villagers complained of what they called Perkoa’s “growing pauperization” and environmental contamination.
“It’s like slavery in miniature,” a worker who wished to remain anonymous was quoted to say. “What hurts is when I read the amount of zinc that Perkoa produces. And then I see how we live and work. It doesn’t make any sense.”
Burkina Faso’s Parliament convened a committee to investigate the mining sector. Its September 2016 report estimated that seven mining companies, including Glencore, had avoided paying the country $36.7 million by using an accounting technique to reduce the company’s taxable income.
“We were victims, in a way, of our own naiveté and inexperience faced with these companies that are very experienced,” Ousseni Tamboura, the head of the parliamentary committee, told ICIJ.
The Paradise Papers are a cross-border, global investigation that reveals the offshore activities of some of the world’s most powerful people and companies. The project involved 95 media partners and was based on 13.4 million leaked files.