First published in the Daily Maverick 168 weekly newspaper.

South Africa has notably not signed up to either initiative, which is a pity, as the disclosure of beneficial ownership in companies is a key tool in the fight against corruption, tax avoidance, capital flight, environmental mismanagement and other ills linked to the sector. Ultimately, such initiatives can help lift the spell of the “resource curse” – the paradox of widespread poverty amid abundant natural resource wealth. Think of DRC, Angola, Nigeria and even South Africa.  

EITI, citing UN figures, says Africa loses “£88.6-billion in illicit capital flight every year, according to the United Nations. At a time when the continent faces costs of more than $200-billion to deal with the Covid-19 crisis, citizens and governments can ill afford to see such wealth sent abroad.”

South Africans can certainly relate to money stolen and squandered that could have been used to address the mounting costs of the pandemic, and that does not include the “extractive” sector in the orthodox sense of the term.

“If we succeed, the prize is large,” Helen Clark, former prime minister of New Zealand and EITI chairperson, said in a statement. “Billions of dollars should be going into infrastructure and investment to make life better for many millions of people, rather than into the pockets of corrupt officials or businessmen. Managed responsibly, the extractive sector can be a source of wealth. Making the ownership of companies transparent and promoting the use of beneficial ownership data can help make this a reality.”

In parallel, major publicly listed extractive companies – BHP, Rio Tinto, Anglo American, Newmont, Glencore and Repsol – have signed a commitment to support the project’s goals. The ownership of listed companies is generally fairly transparent, but EITI said it will disclose information on “subsidiaries, and assess data on company ownership as they undertake due diligence on partners and suppliers”.

One rule of thumb: if you can’t find a warm body at the apex of the ownership structure, chances are it is buried in some tax haven and there is a reason why the beating heart at the top does not want to be detected.  

For the record, the participating countries include Mexico, Argentina, Zambia, Mongolia, Ghana and Indonesia. South Africa – which has a fondness for multilateral initiatives, regardless of their utility – remains a glaring omission. That raises some obvious questions. DM168

This story first appeared in our weekly Daily Maverick 168 newspaper which is available for R25 at Pick n Pay, Exclusive Books and airport bookstores. For your nearest stockist, please click here.