Press Release / / 04.28.22

New Report on Strategic Resource Wars, Private Sector Responsibility

Report by The Sentry:

In Worldwide Resource Wars, Responsible Reporting Could Support Constructive Private Sector Engagement

 

April 28, 2022 (Washington, DC) – A new report published today by The Sentry details a complex and risk-laden environment for companies currently seeking to do business in regions where an international “scramble” for strategically critical natural resources has fueled human rights abuse, armed conflict, and mass atrocities.

The report, “Getting Responsible: Rules of Engagement in the Proxy War for Economic Access“, spotlights a range of countries, from Myanmar to Afghanistan to the Democratic Republic of Congo (DRC), where predatory foreign private and state-owned businesses are currently thriving, and it charts a course for responsible enterprises to engage and play a constructive role. Specifically, the report focuses on an underutilized policy tool, responsible business reporting requirements, that holds promise in a mix of approaches to counter entrenched corruption and support good governance, human rights, and sustainable peace.

Brad Brooks-Rubin, Senior Advisor at The Sentry and report author, said: “The drive for critical minerals in complex business environments like the Democratic Republic of Congo has created a sort of proxy war among governments seeking access for companies, with little in the way of guidance for companies on how to engage. What companies and other stakeholders, including communities in mining areas, need most is the ability to have an open and honest conversation about what that business engagement looks like in reality, what impacts it is having, and how it can be improved. Reviving a model of responsible reporting requirements can be one straightforward and meaningful approach.”

Justyna Gudzowska, Director of Illicit Finance Policy at The Sentry, said: “The US and other governments focused on encouraging responsible business need an array of tools, from sanctions and anti-money laundering measures to investment opportunities to due diligence standards. Whether in countries where conflicts are worsening or in situations where peace is emerging, transparent reporting on due diligence can provide governments and the broader public with a clear sense of what challenges companies are facing, how they are addressing them, and where future concerns may emerge.”

Key report excerpts:

> It is time for the US to, among other things, return to an instrument that was used only once but that showed great promise: responsible business reporting requirements. If used properly, this tool could be flexibly applied from Afghanistan to Sudan to the DRC, complementing and enhancing many existing initiatives.

> For a country like the DRC, which has experienced decades of horrific conflict linked to the exploitation of its natural resources, the engagement to promote US business interests comes amid a 21st-century version of the colonial-era “Scramble for Africa.”

> China, Russia, and others rely on state-owned enterprises (SOEs) or similar proxies in this shadowy and sometimes violent contest, from foreign state proxies like the Kremlin-linked Wagner Group in the Central African Republic (CAR) and Mali to highly connected deal brokers like China’s David Du Wei, who was recently profiled in an investigative report by The Sentry for using less-than-legitimate means to advance Chinese infrastructure deals in the DRC.

> These foreign SOEs are willing to engage in an array of corrupt and damaging practices as they expand their business footprints into uncertain contexts, according to recent analysis by the Natural Resources Governance Institute. As The Sentry showed in its recent report on the DRC, and as many other investigations in the Congo Hold-up leak revealed, these infractions can involve outright bribery or investment in activities that degrade the environment, human rights, and economic development.

> Without SOEs that can directly tap into government strategy or resources, most companies and banks from the US and other countries focused on responsible business wait on the sidelines, uncertain of whether or how to engage in such challenging environments, understandably afraid of the consequences that can come from a bad decision or an unwitting mistake being discovered by a government agency or civil society organization.

> Doing business in complex environments means facing difficult, if not impossible, dilemmas. If these dilemmas are to be answered at all, it must be accountable political leaders who do so, whether in the administration or in Congress. Otherwise, companies will make poor choices based on narrower economic interests, or, more likely, they will simply walk the other way. But decisions about whether to invest in difficult contexts are best informed through ongoing—and public—conversation and information-sharing, which the business requirements would provide. By framing the approach in this manner—as a conversation that encourages progress over time—the private sector will feel more comfortable taking the risks inherent to these contexts.

Read the full report: https://thesentry.org/reports/getting-responsible/


For media inquiries or interview requests
, please contact: Greg Hittelman, Director of Communications, gh@thesentry.org

 

ABOUT THE SENTRY

The Sentry is an investigative and policy organization that seeks to disable multinational predatory networks that benefit from violent conflict, repression, and kleptocracy.

Pull back the curtain on wars, mass atrocities, and other human rights abuses, and you’ll find grand corruption and unchecked greed. These tragedies persist because the perpetrators rarely face meaningful consequences. The Sentry aims to alter the warped incentive structures that continually undermine peace and good governance. Our investigations follow the money as it is laundered from war zones to financial centers around the world. We provide evidence and strategies for governments, banks, and law enforcement to hold the perpetrators and enablers of violence and corruption to account. These efforts provide new leverage for human rights, peace, and anti-corruption efforts.

Co-founded by George Clooney and John Prendergast, The Sentry is a strategic partner of the Clooney Foundation for Justice. Learn more at www.TheSentry.org.