With oil prices rising worldwide, African oil producing countries are expecting windfall earnings. Global oil companies and consuming countries are giving even greater attention to Africa’s oil. The World Petroleum Congress, held last month in Africa for the first time, in Sandton, South Africa, celebrated the potential. But a new report from South Africa’s groundWork questions the fundamental structure of the oil industry on the continent.
The new report by the South African environmental group, which has a long record of research and protests against the environmental damage from the refining industry in South Africa, goes beyond the common critique that corruption and bad governance block the productive use of oil income. Analyzing both “upstream” production and “downstream” processing on the continent, the report charges that “the oil industry is providing the context for bad governance and corruption,” in the words of Nnimmo Bassey of Nigeria’s Environmental Rights Action. It also lays out a detailed analysis of the “value subtracted” by the oil industry — costs to communities and society not included in the balance sheets of company and government accounts.
The AfricaFocus Bulletin from which we took this portion contains brief excerpts from the introduction and chapter 2 of the groundWork Report, focusing on oil production in Africa and in particular on the negative “externalities” suffered by affected communities. The full report, including graphics and references, is available at http://www.groundwork.org.za