Caroline Muchanga, Zambia
Caroline Muchanga works seven days a week from 5.45 a.m. to 9 p.m. in Nakambala market in Mazabuka, a town in southern Zambia. At her small kantemba (market stall) she sells drinks, toiletries and foodstuffs, including bags of the ‘White Spoon’ sugar that is produced on Zambia Sugar’s vast plantation and in the factory less than a kilometre away. On a good day, Caroline makes ZK 20,000 (about US$ 4).
At 7 a.m. Caroline’s two daughters leave for their volunteer-run community school, where Caroline says the teaching is not always reliable. “We take our children there out of desperation, as we mostly want to prevent their staying at home,” she says. Government schools in Zambia have professional, paid teachers, and usually better facilities, but despite her 15-hour workdays Caroline cannot consistently afford to pay the cost of the books and uniforms. The Zambian government has pledged to make primary education free, but its education budget can still only provide around ZK 32,000 (US$ 6.50) per child per month, so most schools still charge additional parent-teacher association fees to cover the cost of books, teaching materials and school maintenance. Keeping up with these payments is simply beyond the means of some parents. Only 53% of Zambian school children complete their primary education, one-fifth fewer than a decade ago.
Every day, though, Caroline pays her business taxes. Indeed, she has no choice: each evening a council official comes around to collect a market levy of ZK 1,000 (US$ 0.20), whether Caroline has made any money that day or not.
Now, meet Zambia Sugar Plc, a subsidiary of UK food giant Associated British Foods and part of its Illovo group of companies – Africa’s largest sugar producer. Its factory just outside Mazabuka is the biggest sugar mill in Africa. Zambia Sugar makes nine-tenths of all the sugar produced in Zambia, both for the country’s growing consumer market and for export to the UK and elsewhere in Europe. Over the past five years the company has had record annual revenues of over ZK 1 trillion (US$ 200 million), and healthy profits of over ZK 83 billion (US$ 18 million) a year.
Who pays more tax: Zambia Sugar, or Caroline Muchanga who sells the company’s product? The answer is surprising. From 2008 to 2010, Caroline paid more income tax in absolute terms than the company whose US$ 200 million revenues have benefited from her sales. In these three years, while Caroline has duly paid tax on her income, Zambia Sugar has managed to pay no corporate income tax at all on theirs. In the fiscal years 2010/11 and 2011/12 the company did pay some income tax, but even then at a rate of just 0.5% of its income: 90 times less than Caroline, relative to her income.
Halima Ally, Tanzania
Halima Ally, the mother of three children, lives in Kisarawe District, Tanzania. She and her community have been affected by a European (UK) company that sought to produce biofuels for export to Europe.
Adoaga Ousmane, Chad
Adoaga Ousmane is 45 and lives in Louga, a small village in Chad. She spends hours chewing on fruit stones, a common way of trying to kill hunger even though there is no fruit left on them. Adoaga depends on the fertility of the soil and on the weather: “When it rains a lot, the situation is good”, she says. “It’s when the rain doesn’t come or when it comes at the wrong time that problems start. If the rains are good, I ask my friends to lend me seeds. I grow sorghum and other vegetables. This year is really the worst because of the lack of rain.”
In 2012, over 18 million people in the Sahel region of West Africa were affected by a severe food crisis caused by drought, desertification, and consequent rises in food prices. Normally, a food crisis in the Sahel used to come once in a decade, but in the last 10 years three food crises have hit, leaving little time for people to recover before the next one arrives. Rainfall patterns in the region are highly variable, but there has been a significant drying trend since the 1950s. Droughts have become longer, and more intense.
Adoaga used to have meat once a week, on a Monday, but it has become too expensive to buy at the market. Extreme weather events in a single year can bring about price spikes comparable in magnitude to two decades of long-run price rises: in Chad, food prices in 2012 increased by an average of 40% more than in the pre-crisis period. Like many women in the village, Adoaga has had to resort to looking for seeds in anthills, an important sign of serious food insecurity. On foot, it is a five-hour round trip from Louga to the anthills. “When I dig the anthills, I search for the grains of wild grass that the ants have collected and stored away. I collect them and boil them in a pot for a long time until the dirt goes to the bottom and the grains are left floating on top.”
The stark situ
ation of food insecurity in the Sahel is part of a bigger picture in which climate change and extreme weather events are jeopardising the lives of the most vulnerable people around the world. A 2011 report from UNEP, OCHA and others indicates that temperatures in the Sahel already rose by up to 1.3°C in the 20th century, and it warns that climatic conditions in Africa will continue to worsen as a consequence of climate change. Both of Africa’s staple crops, corn and sorghum, are expected to be badly hit by increasingly severe weather, and it is small-scale farmers who will bear the brunt of these negative impacts.
Máxima Acuña Atalaya, Peru
Máxima Acuña Atalaya, a 42-year-old Quechua woman, lives in the small Andean mountain village of Tragadero Grande in the Cajamarca district in northern Peru. She is a spinner and weaver, the mother of four children, and her husband – Jaime Chaupe Lozano – is a farmer. Their house is the only one left in the community. All the other families sold their houses and land to the Conga mining project, but Máxima resists selling the family’s “chacra” and house. Máxima has become the symbol of the farmers’ movement that struggles protect the El Perol and Azul lakes which form part of a typical – and fragile – highland ecosystem in the Andes: the wetlands.
The Conga mining project is owned by Minera Yanacocha SRL, a joint venture between the American Newmont Mining Corporation and the Peruvian Compañía de Minas Buenaventura. The Conga mine, which consists of two giant pits, 1.5 km wide and 600 m deep, is an extension of the Yanacocha mine, the largest goldmine in Latin America and the second biggest worldwide. Developing the project infrastructure will entail destroying several lakes, which will be drained either to give access to the ore-bearing rock, for use as waste pits, or to provide water for the mine’s operations. The site will affect 32 communities of small farmers.
In 20 years of exploitation the Yanacocha mine produced more the 20 million ounces of gold. In 2011 it produced an astonishing 1.3 million ounces, worth US$ 2 billion. The Conga mine is expected to yield almost 12 million ounces of gold and 3.1 billion pounds of copper over its projected 17-year lifespan. Mining companies in Peru pay 30% tax on their profits, and although a large proportion of this tax is redistributed to the producing communities, the department of Cajamarca remains one of the poorest in Peru, with 56% of the population in living poverty, a number considerably higher than the country’s average (35%).
Many problems have been linked to Yanacocha in the last 20 years, most dramatically a mercury spill in 2000 leading to the poisoning of more than 900 people in a village. Shortly after the incident an internal audit showed 20 serious environmental violations at the mine. In 2004 more than 10,000 people protested against the extension of the Yanacocha mine, and the project was forced to suspend its activities. An environmental impact assessment (EIA) was carried out by Newmont, and in spite of controversies over the quality of the analysis a new Conga project was approved in 2010. An estimated 80% of the population of Cajamarca and the neighbouring communities oppose the new project. At least five people have died during protests in recent years, and several farmers and social leaders have been charged with causing disturbances and are awaiting trial.
Although the Conga project has recently been adapted, local farmers are continuing to protest against it. The local community argues that it has not been adequately informed about the project’s environmental impact: the consultation process has been confined to just one meeting, and the basic requirements of consultation based on the principles of “free, prior and informed consent” have not been met. On several occasions Máxima and her family have been intimidated and abused by members of the security forces contracted by the company.
This case of Máxima Acuña Atalaya, her community and the Conga mining is just one example of a trend of private sector investments in extraction of natural resources that has devastating impacts on the livelihoods and development potential of local communities. To curb this trend, strengthening corporate social responsibility and accountability will be paramount. With regard to European companies, the EU must ensure that its approaches to reporting requirements on EU-listed companies, and to conflict minerals, are fully coherent with development objectives.