Anglo American: Homegrown Exploitation Gone Global

By Glenn Ashton · 26 Jul 2011

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Picture: magnusvk
Picture: magnusvk

During the peak of the anti-apartheid disinvestment campaign the Anglo-American Corporation took full advantage of the situation and snapped up disinvesting companies. By the 1990's Anglo American controlled 85% of the companies and over 60% of the wealth of the Johannesburg Stock Exchange, making it the biggest economic beneficiary of apartheid.

Through its diversified holdings it controlled vast sectors of the economy. Besides mining it was involved in forestry, paper, retail, car manufacture and assembly, steel, insurance, food processing, banking and property, the media and elsewhere. Today it has evolved into a prime example of a transnational neo-colonial monster with inordinate social and environmental footprints. Even its name is redolent of colonial times and perhaps more relevantly, its colonial roots.

Anglo American was founded by the Oppenheimer family amidst the Kimberley diamond rush of the early twentieth century. The Oppenheimers challenged the status of Cecil John Rhodes, that arch-colonialist and founder of diamond giant De Beers. Anglo was formally established in 1917, with assistance from, amongst others, American robber baron J.P. Morgan. The Oppenheimer's eventually absorbed De Beers, creating a diamond monopoly, which has endured for almost a century.

Anglo-American grew and diversified into gold mining, firmly establishing itself as a dominant economic force in South Africa during the heyday of apartheid. It actively participated in the racist migrant labour dispensations pervasive throughout the region. Mine workers were housed in hostels, infamous for their poor living conditions.

Even during the dark days of apartheid Anglo American was careful to portray itself as a benevolent employer. While it collaborated and benefited from its apartheid relationships, its ownership, particularly the Oppenheimer family, projected a liberal, even progressive line for the time. 

This was managed primarily through its ownership and control of large chunks of the print media. Yet when the Anglo-American controlled Rand Daily Mail upset the ruling Nationalists through exposing the Biko murder the plug was pulled on this leading progressive newspaper. This powerful corporation, offered boundless opportunities by a racist government, was not about to bite the hand that fed it. At least neither too early nor too hard. Anglo American continues to apply this pragmatic self-interest and real-politik even today. 

Anglo-American was never confined only to South Africa. Just as its diamond arm De Beers had global influence, the apartheid era Anglo American cultivated front companies to project its economic power. Minorco was established as its overseas arm to avoid the South African stigma. Its external persona was handled extremely carefully and sensitively. 

Like most large corporations Anglo American demonstrates psychopathic traits, neatly encapsulated in the 2004 award-winning documentary, “The Corporation.” Its true intentions are masked by apparently benign concepts like “corporate social responsibility” and “sustainable development.” Such portrayals are far removed from exploitative realities. Anglo American's most recent feel good catchphrase, “Real Mining. Real People. Real Difference.” should perhaps have the corollary “Real bullshit.”

Such careful image management belies the realities. While the company was amongst the first in South Africa to recognise unionised workers, it did not shy away from bringing down the might of the apartheid state on the unions when their demands were too costly. As labour costs rose, mechanisation was prioritised to reduce costs. Whenever there are industry downturns it is inevitably the labour force that is first to go. Corporate benevolence is an oxymoron.

Corporate leaders will argue that this all makes business sense. After all, the primary aim of a business is to maximise shareholder return. The corporate model cannot equate to social security, say the free marketeers. 

The problem is when corporations say one thing while doing another. This remains the case with Anglo-American. Its questionable practices have also been exposed in a 2007 report by the international NGO, War on Want. Their report titled, Anglo American: The Alternative Report, compares and contrasts the company’s corporate social responsibility rhetoric with its actual practices uncovering damning evidence of human rights abuses in Africa, including South Africa. On the one hand Anglo American claims to be a trendsetting model of corporate responsibility, while on the other, continuing to exploit workers and the environment. 

This is neatly illustrated in Anglo American's engagement with the then-banned ANC. Informed by the high road/low road model of its scenario planner Clem Sunter, Anglo recognised both the human costs of apartheid and the economic risk of operating within a failed state. While the liberal, primarily English speaking leadership of the company may have opposed apartheid they were never averse to profiting from its circumstances. It was a relationship reminiscent of the white population as a whole – just as it is impossible to find anyone who voted for the apartheid regime, it is equally impossible to identify a single quisling corporation!

Anglo American and other business leaders arranged a quid pro quo between the corporate world and the incoming ANC. On the one hand it would be business as usual with no talk of nationalisation. On the other, corporates would bring the ruling elite into the fold, would support the incoming government and inspire business confidence. 

While Anglo was a major beneficiary of apartheid and the peaceful transition to democratic rule, its consequent behaviour was telling. Anglo was amongst the first of the large South African corporate entities – others being Old Mutual and South African Breweries – to shift their asset bases offshore, to London. It was remarkable the new government allowed this but the reality was the ANC was over a barrel. Refusal to allow this capital exodus would have shown up the new government as closed to transparent business practice as dictated by the Washington Consensus, with negative consequences for the country. The counter was that loosening exchange controls would hopefully attract foreign capital.

Anglo's relocation of its resource base protected it against possible future nationalisation. The sale of diverse, non-core assets was facilitated while reserves were accrued. Anglo American PLC returned to its roots to become a global mining player, involved in gold, copper, platinum, nickel, ferrous metals, coal, industrial minerals and diamonds, the latter controlled through close realignment with its historical fellow traveller, De Beers.

Anglo-American has subsequently copped significant media flak about allegations about poor corporate behaviour in South Africa, Ghana, Peru, Columbia and Zimbabwe and elsewhere. It has tried, and often managed, to spin its way out of trouble, using skilled PR and historical lessons in image management, portraying its best corporate face to the world while hiding its warts.

However there is no more telling indication of the nature of the beast that is Anglo American than its interest and continued participation in pursuing the controversial Pebble mine in Alaska USA. While the risks of extracting oil in the otherwise unspoiled spaces of the fragile tundra and boreal areas of the Arctic fringes are known, the risks of this mine are exceptional.

Pebble Mine is located above Bristol Bay in south-western Alaska. It is potentially the worlds richest mine. It would be the biggest mine in North America, two miles across and thousands of feet deep. It would require four massive earth dams, the largest the size of the Three Gorges Dam in China, all in an extremely seismically active area. The mineral deposits are in sulphate rich rock, which would result in acidification of the water filling these dams. The consequences of failure would be catastrophic. 

The mine drains into the world’s largest remaining spawning site for sockeye salmon. Even minuscule amounts of copper can disorient salmon, rendering them unable to locate spawning sites. The mine will almost certainly have massive impacts, both on the sensitive environment and the social structure of the area, dependent on fishing. The mine has already opened community rifts; some perceive it as an opportunity, others are bitterly opposed. Were it not for extensive lobbying, boosted by the endorsement of the controversial Alaskan ex-governor Sarah Palin, this mine may have already been shelved. 

In reality, nowhere in the world has a mining company been able to properly manage the full external impacts of its activities. If this were possible, the mineral extraction industry would have a benign reputation. Instead it is more accurately and correctly seen as socially and environmentally exploitative, despite the vast amounts spent on PR spin and green-wash. 

Anglo-American epitomises so much that is wrong with our world. It is a company deeply rooted in neo-colonialism. No matter how supposedly progressive its core values are, it has chosen to remain a major player within the most exploitative industry on earth – that of ripping apart the fabric of our ecosystem to extract what are euphemistically called resources. 

The real question Anglo American – together with its fellow resource extractors - must answer is: Whose resources are these and from whose world are they torn? The only realistic response must be that both the resources and the earth are collectively owned by us all, as so neatly analogised in James Cameron's movie Avatar. It is not their property – it is under our collective stewardship. The riches of the earth do not and cannot only belong to those who have accrued their power and wealth through nefarious and exploitative means, including being the primary beneficiary of apartheid. 

It is only through its power and legal clout that Anglo American has avoided reparations for its exploitative behaviour. Its social impacts are recognised; miners and workers abandoned with paltry pensions and the slow death of silicosis. It is equally culpable for the acid mine drainage problems now plaguing the Witwatersrand, together with the radioactive pollution of watercourses. The irony of extracting platinum for pollution control while releasing vast amounts of pollution to extract it apparently escapes it. It side-steps discussion of how De Beers wants to walk away from rehabilitating vast tracts of the north-west coast of South Africa from which it has wrung decades of obscene profit.

Anglo American can spin all it wants but the reality is it is our very own, homegrown neo-colonial exploiter, gone global.

Ashton is a writer and researcher working in civil society. Some of his work can be viewed at Ekogaia - Writing for a Better World. Follow him on Twitter @ekogaia.

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