Stealing Africa⎜WHY POVERTY?⎜(Documentary)

[Music] whoosh Lacan a tiny village on the outskirts of Zurich and one of the richest communities in Switzerland real estate prices are booming unemployment virtually non-existent and social problems are few INRIA OS the mayor puts it the roush Lacan is a wealthy community but they say of course you can be rich but please don't show it one of the 5300 villages of hoosh Lacan is Ivan Classen Berg CEO of the commodity giant Glencore last year his company went public burning him more than eight point eight billion US dollars overnight the next thing was surprising because we got a phone call from the tax office of the canton they said please be prepared to have a bank account that can accept three hundred sixty million of Swiss francs the tax revenues from Ivan pleasantburg alone produced a surplus of more than 50 million Swiss francs so the mayor decided to lower the taxes we proposed to reduced by 7% but then trouble began meet Peter Kaddish and his wife Anna Maria Jette combined vaulted historian whom simple sensing when we have done foolish locks he mocked noon faithful Saints who think as it's anglish a neckline lyosha ascent of auditing standards this is represents into honey Emilio crisis on the million Swiss francs were supposed to be used to help poor communities in Africa impacted by clean coal operations Maroons t-test is a skeleton key given we have two sisters gelt in the entwicklung fleece and free from selfishness Jesus geld Angus Tajin fleas were severe shafted waterphone denied an hour by the name roast of handle in keeping with a Swiss system of direct democracy the villagers gathered for town-hall meeting that was a flux of people coming to our meeting room and we said who okay maybe our 280 objected to it was unfair to when the time came to vote the outcome was obvious almost everyone wanted to keep the money in return the council had never to interfere or to defend our own proposal so that were the people that took it to their own Englishness extreme Stephen might insist NAFTA's the lighted in here laden does not Savannah cries the softest event received old Tasman other trots themself dark Petrovna lists man esteems orbit roughly after run incited alerted in Toronto lightness of ear lightness value filial to become a Burman send out the trophy [Music] this is the copper belt in Zambia beneath the ground are the largest copper reserves in Africa an essential commodity in the global economy Blanco and Adeline yes today virtually all sentient copper mines are owned by multinational corporations in ten years they've extracted copper worth more than 29 billion US dollars as a country as a nation God has blessed us with such an abundant natural resource now the paradox is that Zambia constraint among the bottom 20 in terms of poverty 20 poorest countries we are wealthy and yet we are poor [Music] the problem is no longer so much one of absolute poverty it's become one of inequality and Zambia is really a case in point for this a lot of people think that we in the West have been extremely generous in the amount of foreign aid that we provide to the developing countries and particularly to Africa globally our estimate is that the amount of money flowing out of developing countries is ten times the amount of foreign aid flowing into developing countries I've come to Sambia to find out why this country with its enormous wealth of natural resources is still among the poorest in the world why the boom in copper prices has not reduced poverty the same question many sampie ins ask themself in the latest election [Music] mr. speaker in October 2011 died Scott who once threatened to march on the copper plants if they didn't pay their taxes became vice-president real well that Africa is losing more money from tax avoidance by foreign companies every year then it's gaining from aid from the countries from which these people come god he gave copper to Zambia and this before they don't respect the Zambian soil where there is copper mining or any other business venture in Zambia they should contribute these days remaining industries they export and we don't know whether what they are doing with almond if they're exporting our minerals the money must come back to zombie so the current e investors should wake up stand up and be counted and they should not wait for the government to push them we don't have time pushing people vice-president kai Scott was born in Sambia he studied economics at Cambridge and holds a PhD in cognitive science well white vice presidents occur from place to place like United States of America Scott won and I don't think in the Caribbean is would be all that unusual it's just a thing that's a bit unusual in Africa but Africa's may be changing I mean I'd be a nationalist why not what else would I be no I think a clerical farmers don't have any votes anyway even if I wanted to stand on their ticket and there are very few farmers here what farmers know but you understand the question I guess I mean in this from from normally a white politician in an African country will be representing white minority interests that's not the case here unregarded is pro pro pro unemployed pro the ordinary people over there of the earth this is the London Metal Exchange where the world market price on copper is determined between 2001 and 2008 the price on carbon nearly quadrupled yet despite the boom the foreign investors paid virtually nothing in profit tax in Sambia one reason could be transfer pricing transfer pricing is an enormous ly damaging and phenomenon right the way across Africa the name of the game is to shift your profits out of the high tax countries the onshore countries such as in Africa where the profits are actually being made and shift them artificially into low tax countries into tax havens where they won't be taxed or won't be taxed properly the way that this this is done is by multinational groups is that they have subsidiaries all around the world and these subsidiaries trade with each other and they can artificially manipulate the prices of these trays for bookkeeping first purposes for accounting purposes the tax havens subsidiary will buy something cheaply and sell it on much more expensively and between that gap there's a huge profit and but though they won't be taxed in the taxpayer much Sam bein kapa is not traded on the open market but bought and sold internally within the same multinational corporations on paper this makes Switzerland one of the biggest importers of Sam bein copper Switzerland is a huge purchaser of copper out of Zambia but that doesn't mean that the copper is shipped from Zambia to Switzerland the documentation goes to Switzerland but the copper goes all over the world only a 30 minute drive from Bush leçon is the headquarters of Glencoe owner of one of the biggest mining operations in Zambia [Music] this is where Ivan class and Berk works Katzenberg is the CEO of blue macaw and owns 15% of its shares still the male has been a very exciting period for the group glencoe is the world's largest integrated commodities trader with a yearly turnover on more than 180 billion US dollars more than eight times the gross national product of Zambia glencoe controls Malpani copper mines in Zambia through a 73 percent stake all copper produced by Malpani is sold internally to clean corn Switzerland despite its size Glencoe is virtually unknown to the public in 2011 attorneys for Glen Cove want news organizations in the UK that Glencoe executives are extremely private individuals and any reports about their homes or private lives could pose a security risk your company is a major investor in the developing world we believe in developing countries need more investment not less investment provides jobs education access to health care and improved infrastructure we spend hundreds of millions of dollars on goods and services as well as running schools and hospitals and many of our operations without foreign investment none of this would be possible part of Glencoe Zambian operations have been suspended by the environmental authorities I wish you a pleasant flight captain you go thank you very much thank yourself vice-president guy Scott is visiting the plant and has invited me along residents have complained that mist containing diluted acid is drifting from the plant to their homes this looks like something out of a bondage of discipline kids if we tell you entering the minds like this who gives everything that's [Applause] obviously the standards are pretty loose the only excuse of course always if you make us pay for the if you make us spend a lot of money on anti-pollution measures then we went and we need to spend on making more money double copper at the plant I meet with the chairman of Nepali copper mines when I asked him about the suspension he seems perplexed well no we are good corporate citizens we are open in our business we are we are very frank when we deal with all outsiders with authorities that we visit and we open our books we don't understand in this particular case the action by Zuma was completely surprising so we would like to find out why they took that action we have challenged them on that issue and we are expecting a response from them after further safety measures were installed the operation was allowed to reopen this is not the first time the plant has come to the attention of the Zambian authorities in 2005 acid spills from the plant contaminated drinking water in a nearby township in 2008 a similar accident occurred sending hundreds of residents to hospital I mean there were stages when people in towns were turning on their taps and blue water was running out as if it rated by pumping sulfuric acid into the subsoil and this was leaking into the town water supply and everyone was telling green you know blue we received about 400 missions with complications of vomiting abdominal pains we managed them yeah but it was clear that it was due to their what the contamination that came from there supported by 50 million dollar loan from the --use european investment bank Tenko has doubled the production capacity at Mopani the production of copper also emits high volumes of sulfuric dioxide and dust sulfur emissions can cause respiratory diseases and create acid rain that destroys vegetation a lot of the sweat of tract infection cases come from Callao especially when the emissions are too big you find that you get an influx of machines coming from the clinics to us I feel it myself The effect of the hell emission of sulfur dioxide air pollution is regulated by w-h-o guidelines and limits set by the same bein authorities the levels are measured at for installations around the plant the numbers are collected by Malpani officials and not made public according to environmental groups and local residents the undisclosed numbers prove that the pollution far exceeds both national and international standards the air tests that have been done by themselves but also by other independent companies have shown that we have as much as a thousand times more emission of undesirable impurities when required by the pH or the ODF organization we wake up all of us in the lights and also always that cone field we are the children we didn't even sleep we just continue coughing and this the bad year comes I asked the chairman of Mopani if it's true the air pollution from the kaabah plant far exceeds w-h-o standards the reference point is the Samba Environmental Management Agency and we operate within the terms set by the sovereign money Environment Management Agency we and each and licenses of all our operations are within those terms so the statement by the NGO I cannot comment on it I would suggest that in fact we'll refer them to the zanga Environmental Management Agency so it's false it's not hundred folks about sometimes thousand folks about the standards what what we're saying is that we operate within what design the Environmental Management Agency stickiness within their licenses that stipulate and we abide by those so if other people do have caused the evidence of something else I would suggest that they contacted a Zambia Environmental Management Agency who are the authority to investigate any concerns that the public may raise I tried to obtain the figures from the measuring stations directly from Mopani and the Sam peon authorities but with no result finally I contacted the head of communications at Glencoe in Switzerland the numbers that you collect I know you have these measuring stations for pollution around roof alehrer is it possible to get those numbers from you guys they're not public numbers well it is something because they are this is something that is between us and environmental regulator in in Zambia I'm just asking about what are the emissions you must have the reverb distortion server site I've launched that question several times so if you said ok but then I'm a bit too slow what was the reply the reply is they were capturing half the take to the you a schema is not public data that is the reply to understand clean cause business practices I've decided to look into its past Glen Cove was founded in 1974 by American businessman mark rich and initially called mark rich and Co AG I've asked for an interview with mark rich but received no response instead I traveled to Tampa Florida to meet Morris Weinberg a former public prosecutor in New York in 1983 he headed an investigation into the company's tax practices there was a big investigation that justices part was doing and in the course of that investigation two businessmen from Texas had pled guilty and in the course of pleading guilty they said hey there's something we can tell you about some some guy named Mark rich and they explained to us that they had created with mark rich phony deals making it appear that they had bought some foreign oil from one of Mark Rich's companies and then sold it to another company that turned out to be a mark rich company and buy that sold at a loss and that by doing that they had literally laundered sent offshore close to a hundred million dollars and only about a six or seven month period you know from a trial perspective we ever tried it we we had all we needed during the course of the investigation we had learned about a series of transactions that mark rich had orchestrated with Iran he arranged for the Iranians to get weapons basically in exchange for oil and so we indicted him for trading with the enemy the company in its CEO Mockridge were indicted for tax evasion tax fraud and trading illegally with Iran during the hostage crisis according to Mars Weinberg rich and his attorney offered a one-time payment to settle the charges weight came in the office he's a big guy he's a really big guy Edward Bennett Williams and everybody all my friends were all excited because here's the most famous lawyer in the country is coming in to meet me and he comes in he sits down he puts his feet up on my desk and we talked about baseball and then eventually you know he said we can't you know something to the effect of you know can't we just get this resolved you know we'll just pay some money and you know it'll it'll go away I mean you know I need and then he said something you know I know you got a pretty good case here you know I know you got a pretty good case and I just want to you know make it go away and I said he's gonna have to plead guilty he's gonna have to plead guilty and he says what do you mean I said he has to plead guilty and he's gonna and he's gonna go to jail and I think I probably spelled it out by Jay ail jail and he said whew and they said well why and I said and and I said well look it's the biggest tax fraud in the history of the United States if we let him go how're we ever going to do another case [Music] the sentient copper mines were privatized and sold to foreign investors in 2000 it is fair to say that of all the frauds that have occurred in Zambia during presidential ubers time the privatization of jet cesium was one of the most significant the privatization process has never been officially investigated for corruption but the president at the time Frederick Chiluba was sued by the Sam piant State for misappropriation of funds in the London High Court in 2007 Michael Sullivan represented Zambia in the case against Chiluba president Chiluba was found liable in damages to the Republic of Zambia in the sum of 46 million dollars for conspiracy to defraud at the republic and for breach of fiduciary duty very living example concerns the purchase of extravagant shoes and suits from particular one named booty Brazil in Geneva there was spent over 1.1 million dollars and the clothes which were purchased were found during the investigation into state corruption I've seen them myself there were 11 trunks I mean I have the list of what was found in the trunks and you have 206 designer suits 185 shirts 36 jackets 157 trials and 64 pairs of shoes and 74 ties all these ties were designer ties mainly coming from Switzerland and Italy so there you have a graphic example of the nature and extent of the corruption said CCM was sold for total of 627 million u.s. dollars last year alone the mines produce copper worth more than six billion US dollars presidential uber died in 2011 Francis Kaunda who headed the negotiations still lives in Sambia in 2008 he was sentenced to two years in prison for corruption relating to the privatization of set CCM for half a year I tried to get an interview so you you would want the payment for the interview yeah I'll trade for it when I declined to pay our communication ended okay I just want you to have the opportunity because we talk can I please say something okay any right-thinking Zambian anybody could see that what was being agreed was not transparent information is very important and knowledge based on information is very important this state represented by very bribed ignorant politicians at the very top could not legitimately act as negotiators for example [Music] from the outset the investors had the upper hand in the sales negotiations copper prices had hit rock bottom and the state was running out of money it's dead to the World Bank and the IMF was so large they could not get new loans Zambia had its back against the wall and was forced to sell the executive board were more and more nervous about that so the board led me with no initiative but to get the money back and not that to extend more credit to that country if we are not repaid or if we don't invent a scheme to be repaid the mines was the last great resource that the state held and the bank and fund were very keen for that for the mines to be privatized and so they made it a condition of a series of blows to Zambia and a series of debt relief initiatives that the mines be privatized along once again and welcome to privatisation government appears to be committed we will ensure us government that not only do we keep the promises but we work as responsibly as possible to ensure that we succeed so the IMF acted as a effectively a gatekeeper to alternans both the bank the fund and ruled bilateral donors we were basically under the the instructions of the World Bank and the International Monetary Fund the IMF has itself has never imposed a privatization possibly some very limited cases but not in the case of Zambia but with what occurred frequently is a government have said that public opinion we are privatizing because the World Bank and IMF tell us that if we don't do that they will not finances but it is not correct or it is only partially correct but it's part of the rhetoric is part of the of the good for the governments of let's say saving their face effectively Zambia made a decision that the country was in such a desperate situation with its very high debt that it should do anything it could to please the foreigners anything you need to do to keep the donors engaged and to an extent to attract investors should be done these were very very painful moments because we were not given the opportunity to get the correct value of our assets if you want to have foreign investors well you should treat them properly and not to be let's say more demanding on them than the neighboring countries if not they will go to to the neighboring countries here a degree of wisdom is needed in the management of the countries today the privatization of the copper mines combined with the boom in prices has revitalized the mining sector yet despite economic growth unemployment remains largely unchanged with more than 64 percent of the population living below the poverty line Sam Pearce more than ever disparate to attract foreign investment hoping this will create new jobs since we came to power which is only six months ago something like 100 people have been dumped on jobs we have created jobs every speech every every path every newspaper story talks about we are the reviews jobs unemployment unemployment unemployment and you just can't escape it and even the opposition now the ones here in government for 20 years and now trying to tell us that we have failed because we haven't managed to create million jobs or whatever it is the foreign foreign mining companies go certain way towards that and they'd go a lot further if they paid their tax aren't you do you read my lips I didn't say they're not paying tax but if they paid if they were to pay more tax they do a very long way to indirectly creating jobs to think I will do contributions to the deepening of friendship between China and beer and we also want to see the friendship between the people of the two countries can be different through our investment because we can tell each other and much better through our investment here thank you very much for coming thank you very much for organizing the lunch we need Chinese lunch and be a more often our priorities exactly on our jobs jobs and more jobs and Taxation revenue goes to provide decent living for the majority of Zambians we have to find them something worthwhile to do and we also have to be able to provide them with social services such as free education to second grade level and to supply them with medical services but all that takes money and thank you for coming along to supply the money so our friendship I believe it's a genuine friendship but it's based on material I can expand to take photo with you we don't know my lady's minutes the first key to development in a country like Zambia where you've got a serious unemployment problem in its going I mean I have to give my file to my secretary every morning I keep it turned off at life because there's so many people wanting jobs and they think I know I've somehow gone older the vice president's phone number and he owes me a job because I once organized the rally for him in some part of the country or or maybe he knows my brother or you know this endless people needing jobs any old job will do they're so desperate you can tell it you can spell in your concealers if you if you keep your phone turned on you you hear it you see it on the sms's come in the whole time I want a job I want a job I want a job thank you thank you well the leg of tax revenue from the mines has left some toner countries concerned that Zambia is not benefiting enough from its copper at the Norwegian Embassy economists have scrutinized the numbers physiology for the Dumas's a la la falourdel exporters related to a million dollar e le revenue the telecom be netted sank count million the dollar Janka fertility near canta said yeah the contra definite electricity he put above animus ambiences account million the dollar don't is a tad impaired a World Bank report from 2011 states that Zambia is losing money on the production of electricity and that the rates paid only capture 40% of historic costs according to the mining companies there's a simple explanation to why they've hardly paid any profit tax what am I saying what I'm saying is I did a number of companies are dakari over tax losses that's 122 because the productive infrastructure had deteriorated dilapidated so badly it's required huge investment to bring the production up the production now is over 700 but over five billion dollars has been as has been injected has been invested in plenty rehabilitations plant expansions and new facilities according to the Norwegian findings Sambia was hardly benefiting from the extraction of copper in 2007 the tax revenue from the mining sector amounted to only 0.2 percent of the gross national product while at the same time copper made up nearly seventy one percent of samia's exports I read on second thought new newsom superseded have anomalies especially on Osaka especially Devon assemblee nationale podía support affair miss civil demand a symbol of otaku vanamali diamond a new community Internacional so leadership innovation Newsom Dhaka to fiancee let's expire champion president Levin wanna Massa took the advice and ordered a revision of the sales agreements and thus ambient tax laws in Somalia Hong Kong International photo villemarette Mahalo beasts the mayor's expected school is on conclude le contra de Leon now Genevieve adovada Edco is su ke a new voltage a fiscal a permit awesome beyond the beneficial envelope do the credit fever in April 2008 the Zambian government cancelled the conditions in the original sales agreements and introduced a new tax regime the mining companies it would be an understatement to say that they didn't like it they went bananas and they threatened with international courts and I'd like they introduced the taxation levels which were going to put mining companies auto auto business so it was complicated from the - silence from the mining company's point of view the effective tax rate was too high from the other stakeholders ambient people it was a welcome move because it was going to mop up a lot of money which would have been used for the development the mining companies all except one refused to accept the new legislation and withheld payments Malygos MOU ambassador v mo e Banda even opava a Bandhan Ave Palamon Concepcion teletig adelante corruption the curvy in opportunities or multinational do call regime fiscal la parte application already left legislation is not the only challenge sophisticated tax planning is today making it possible for multinational companies to reduce their tax payments moving profits out of the country the phenomena is simply rife all the way across Africa and indeed the rest of the developing world in Africa you see a particular focus in commodity markets Africa's natural resources are being extracted frequently without countries and citizens of those countries getting their fair share in 2008 if Zambia had received for its copper exports the same price that Switzerland declared for its copper exports in the same quite detailed commodity categories Zambia's GDP would have nearly doubled that year and this is in a country where something like 80 percent of people are living on less than $2 a day the impact of GDP potentially being twenty five billion dollars rather than fourteen billion dollars could have been enormous on development we in the Western countries have created the mechanisms by which this money flows and it flows into our own coffers and therefore we have as much responsibility as the as the poorer countries to try to curtail this phenomenon in many cases the methods used for paying less tax is almost impossible for developing countries to scrutinize transfer pricing is inherently complex and the the OECD model which is the unfortunately perhaps the dominant model to work out what a fair price is for trade between two subsidiaries of the same multinational that process is very complex now what you find in the lower-income country as MBA was until recently is that the capacity within the tax authority to deal with the complexity and to deal with the army of lawyers and the contents that a multinational company has at their disposal simply isn't there so a multinational company like Glencore is able to resource their ability to defend a particular set of prices in a way that there's ambient X Authority finds extremely difficult to respond to I've spent my whole career looking at this yes I'm on the OECD Task Force on tax and development but by and large I find that the OECD is not interest not interested at all in debating the broader subject their interest is in protecting their guidelines because osed countries want to maintain the status quo [Music] Glynn cause history of legal problems are remarkable in 1983 the company's founder mark rich fled the United States to avoid jail the US authorities reacted promptly putting him on FBI's top 10 most wanted list he decided he didn't want to go to jail he felt like he was above the law and therefore he was gonna do everything he you know he had more money than anybody and he was gonna do everything he could to try to you know to try to beat this mark rich because of his flight from the United States became the most wanted white-collar criminal in American history Switzerland refused to extradite him to the US but he risked apprehension every time he set foot outside of Switzerland rich tried a different tack he hired then President Bill Clinton's former White House Counsel Jack Quinn to secure a pardon for him his wife Denise rich was responsible for providing more than a million dollars to the Democratic Party she also donated an undisclosed amount to the Clinton Presidential Library among others Israeli prime minister hood Barak as well as the king of Spain personally telephoned President Clinton encouraging him to grant mark rich a presidential pardon I'm a Democrat I grew up in Tennessee I worked for Al Gore's father Al Gore himself was an old friend we'd gone to law school together and I was devastated by what had happened in Bush Gore and so one of the worst days of my life really was the inauguration of George Bush and so I don't want to have anything to do with the inauguration I'm sitting at home and I get a call telephone call and it's Michael Isikoff there's a well-known reporter who I knew someone and he says what do you think about they pardon and I said what Milka Milka duffel yeah because that the the publicity was is that milk it was and he said don't know mark rich and I said I cursed I said no effing way and he said no mark rich I said well what about pinky green he said who's pinky green I said what's his partner do you get pardoned to and he goes down the list you could hear he said yeah he got pardon to it said good lord I was in Paris working in Paris when the pardon was was published and I wasn't surprised I was a little bit shell-shocked on how blatant and didn't carried out I thought it would been done with a little bit more panache how do you pardon a person who thumbed his nose at the American system you know if he came back if he thought he had such a good defense come back and fight it you put put your defense on he never did that he was a fugitive and he renounced his American citizenship if you were announced your American citizenship and you're a fugitive you don't deserve to be pardoned certainly not in a case where you committed the biggest tax fraud leaves the United States up until that time and your companies pled guilty to it Ivan Glasson Berg joined the company just as Marc Rich fled to Switzerland blessin Berg's first post was as a co trader in Johannesburg at that time the company's core business was providing oil to the apartheid regime in South Africa from his exile in Switzerland mark rich made an estimated two billion US dollars selling oil to South Africa before and during the UN embargo in 1991 ivan Glasson berg had caught mark rich attention and was brought to the headquarter in switzerland over the next couple of years I think lesson berg became a trusted member of the inner circle known as the rich boys the pardon of markridge did not include the company [Music] the companies pled guilty and it was signed sealed and delivered and and when we are in court when this happened it was like a closing because the way in which the monies were paid included Marc Rich selling his interest in 20th Century Fox and some oil wells and stuff which generated cash that was then delivered to us to to satisfy the two hundred million dollars we were all collected in a bathroom and a court signing you know signing papers like a you know like a closing that's really what it was and then you know that was it case was over one year after his flight the company MOC rich and Co pled guilty to tax fraud they did act like from day one that they were above the law every time I turned around his company and people for his company were cheatin and we're breaking the law with who's doing a midnight sale that was bogus or trying to secrete documents out of the United States or or cheating on taxes or making up phony deals to launder money out of the United States or doing deals with the Iranians when they were prohibited whatever it was he was cheap in 1994 Mike rich stepped down as CEO and sold his shares to the management the company was renamed Glencoe in 2004 Ivan Classen Burke took over today chairman Simon Murray assures that Glencoe is involved in no illegal activities our position on the issues of bribery and corruption is clear offering paying authorizing soliciting or accepting bribes is totally unacceptable to claim for [Music] at the time Simon Murray made these assurances to the shareholders Glenn coarse-grain division and two of its employees were standing trial in a Belgian court charged with bribing a European Union official he's Dolphy everything is presumed innocent we don't like for two years Glencoe had supplied EU official Carol Bruce with cash travel and a free phone all in exchange for inside information information Glencoe used to secure you export refunds a lucrative arrangement making millions for Glencoe on June 27th 2012 Glencoe scream division was found guilty and fined 500,000 euros Glencoe has appealed and declined to comment Glenn Korff has full oversight of his tax practices and fully adheres to all its tax obligations in line with the laws in the countries and the Tara to charities in which we operate a confidential report leaked in January 2011 raises serious questions about clean cost tax practices in Zambia the report contains the results of a comprehensive tax inspection of Glencoe Zambian subsidiary for Pawnee copper mines there it is I got a brown envelope from my in my mail it's here and I mean it was very simple envelopes nothing specified and it just my address and inside there was a pilot audit of the new penny copper mine who sent it to you I don't know no I don't know because I think that it wasn't meant to be public [Music] financed by a group of donor countries led by Norway Zambia had hired the international audit firm Grant Thornton to carry out the audit Tom Palermo Las Yasu factory Osceola manipulation de receta ya vo silly fakie de partie carrée defend iridology for the fire it a complete ma or cavity the purpose of the audit was to establish if nopony's tax payments for 2006 in 2007 had been correct the auditors found strong indications of transfer pricing and noted that prices seem to be determined by the parent company ie the purchaser this concludes the auditors was not in accordance with the arms-length principle in other words Glencoe in Switzerland appeared to have been manipulating copper prices and as a result reduced its tax bill in Zambia [Music] that situation is not correct we deal with the Glencoe at arm's length and we are paid at prices that relate to the London Metal Exchange based on the findings the auditors concluded that Glencoe had traded with its subsidiary in breach of the OECD's arms-length principle and that this should have an impact on the techs assessments for the period under review it was a report - that contained issues that were not factual that report was a desktop report which had a fundamental flaw in the sense that the auditors did not familiarize themselves with the chain of production according to the auditors Mopani had resisted the ordered at every stage and did not appear to be concerned of any sanctions that might come if a similar audit report had been carried out for the tax authority in the UK for example then I think you would very quickly have seen as a first step I think you would have seen a threat of proceedings simply on the grounds of non-cooperation even before we start looking the potential for redress given the apparent scale of distortion in the way that the mine has been operated we were very cooperative to Grant Thornton and Zed Araya in fact at the end of the audit we received a letter from Zeid RA commending Mopani for being so cooperative after the report was leaked the EU European Investment Bank suspended any further loans to Glencoe in Zambia the Finance Minister called for the company to pay without but Glencoe has refused once ambient charity has reported Glencoe to the OECD under the OECD you these companies make an ism where you can actually file a complaint against a company for violating tax related guidelines which we did nothing because Glencoe refused and/or the OECD said they can't do anything if one party does not want to cooperate for six months I've tried to get an interview with Ivan Glasson burg but he has declined in a written response to the ordered Glencoe rejects all its findings the issue remains unresolved [Music] [Music] [Music] you don't have crack squads of auditors and accountants and computer operators and people who can parachute in and open a safes and fly back again and give us the information the man who's hiding what so if you just tell me the best you can do and that's what we do and I hope you get better at it I can't jump out of this chair run through the door grab my ak-47 from my car rush off and accost the nearest miner you know it just takes a bit of time may take more time than people are prepared to through it [Music] Zambia's sold its copper at the worst possible time on terms that made it difficult for the country to benefit from its own natural wealth today the government is working to increase tax revenue from the mines revenue badly needed to pay for schools health care and to reduce poverty the League of the audit report did not upset the market in May 2011 Glencoe raised over 10 billion US dollars making it the world's largest IPO that year buyers included the Church of England and the Norwegian government through its own fund made has been a very exciting period for the group it saw the successful IPO offering the largest ever IPO on the premium segment of the London Stock Exchange and the first ever simultaneous London primary and Hong Kong secondary IPO Ivan pleasantburg made eight point eight billion u.s. dollars on the IPO 400 other Glencoe employees made more than 100 million dollars each in late 2012 former British Prime Minister Tony Blair was brought in to help negotiate an 80 billion dollar merger between Glencoe and the mining giant Xstrata if successful the merger will almost double the company size and influence in the world [Music] you

Channel: THE WHY

Views: 948,401

Rating: 4.7633653 out of 5

Keywords: why is africa poor, africa documentary, poverty documentary, glencore documentary, zambia documentary, africa poverty, africa foreign investment, zambian copper, zambia copper mines, capitalism documentary, trickle down, glencore, glasenberg, zambia, rüschlikon, why poverty, the why foundation, the why documentary

Id: WNYemuiAOfU

Length: 58min 17sec (3497 seconds)

Published: Sat Jan 05 2013

Reddit Comments

[u/AnEngineer2018]

"This looks like something out of a bondage and discipline kit"

[u/BobLeRoi]

Transfer pricing is a simple device that international corporations, and their native countries, use both to minimize taxes and to direct their tax payments to their favorite jurisdictions. Forty years ago while working as an attorney in LA I asked a German employee of an American subsidiary why they finagled the books to allocate zero profits (and thus pay zero taxes) to the US, while paying all their taxes to Germany. He said it had nothing to do with tax rates, they were just patriotic Germans. The US Congress lets this happen. They easily could pass a law that fairly apportioned worldwide income based upon objective factors, like sales and property values, but obviously the politicians are paid off by lobbyists to allow this to happen. One big loser is the US.

[u/beaknit]

They're robbing us all blind. America, EU, Africa, Asia, all of us.

[u/Switchkick95]

13:06 that was uh... Oddly specific....

[u/Purple_Stacked]

As an African I want to thank you for posting this. Do you also have other documentaries about how China is robbing Africa the same way? Or documentaries about the Xinjiang region where millions are being forced to work in concentration camps while their resources are being stolen. Many thanks!

Edit: OP is a CCP shill and has been posting topics that are influencing the followers of this sub. I'd like it to stay neutral, the mods should do something about this. The documentary itself is good, the motives of OP however are not.

[u/BrockCage]

When people say globalism this is what they are talking about, globalist forces or corporations stripping a sovereign nation of their resources is a part of it

[u/C_L_I_C_K_]

What’s sad is that this documentary is from 2012 and I just googled glencore seems like they did same thing in Congo in 2018.. sad how much they worth and so little is know about the corruption they cause

[u/jaxnmarko]

Corrupt corporations, corrupt leaders. Nothing new and they don't feel the shame, which is all that is produced, as they are both protected by the other leaders of countries and corporations.

[u/Custom_Credit]

China