Making a Killing: How and Why Corporations Use Armed Force to Do Business

by Madelaine Drohan

Overview

A dramatic and compelling journey into the dark heart of globalization. What happens when multinational corporations decide that the use of armed force is just business by other means?

In Making a Killing, Madelaine Drohan looks at the shocking number of companies that have linked up with mercenaries, warlords, armies and private militias in order to make a profit. In a world where multinationals often rival national governments in size and clout, the implications of such partnerships are ominous. What leads respectable corporations down the path to violence? Drohan answers this question by examining the actions of several companies operating in Africa, such as Ranger Oil West Africa, which used the mercenary group Executive Outcomes to take on rebels in Angola’s long-running civil war; and Talisman Energy, whose security was provided by Sudanese army units conducting a scorched-earth policy in the oil fields.

Drohan traces the modern roots of corporate armed force, beginning with Cecil Rhodes’ British South Africa Company, which at the turn of the century built its own army. Also included is the stranger-than-fiction tale of ex-MI5 spymaster Sir Percy Sillitoe, who was hired by the De Beers diamond king to prevent the Soviet Union from acquiring smuggled diamonds in order to develop the hydrogen bomb. These accounts read like adventure stories in the tradition of Rudyard Kipling and Ian Fleming, but they are essential reading for anyone interested in the effects of unfettered multinational influence. Making a Killing provides a road map for corporations, policy makers and investors struggling to come to terms with their roles in today’s increasingly globalized world.

Product Details

ISBN-13:	9780307368997
Publisher:	Random House of Canada, Limited
Publication date:	08/06/2010
Format:	eBook
Pages:	384
File size:	3 MB

About the Author

Madelaine Drohan is an award-winning journalist who has covered business and politics in Canada, Europe and Africa during a twenty-five-year career. She was awarded a Reuters Fellowship at Oxford University in 1998 and the Hyman Solomon Award for Excellence in Public Policy Journalism in 2001. She has worked for Maclean’s, the Financial Post, and The Globe and Mail. Drohan lives in Ottawa.

Read an Excerpt

Introduction

We rocketed along the thin strip of pavement that passed for a highway in northeastern Angola, heading for a diamond mine located in what was, until recently, rebel-held territory. The drivers in our small convoy of cars and trucks were either extremely careless or terrified. Feet to the floor, they careened around potholes and washouts, their juddering vehicles protesting with metal shrieks and groans. We held on as best we could. At the front and back of our group were pickup trucks filled with men cradling AK-47 knock-offs. The men somehow managed to stay in place, despite being precariously seated on two rows of plastic lawn chairs lined back to back down the centre of each truck bed.

It was 1998 and Angola was at war, but we -- a motley collection of business journalists, investment analysts, potential investors and tight-lipped mystery men -- had been assured that this part of the country was peaceful, so peaceful that a number of mining companies had begun operations there. The company that had organized this investment tour, DiamondWorks Ltd., had wined and dined us the previous evening at the Sandton Hilton in Johannesburg and filled our heads with tales of giant gemstones just waiting to be plucked from the earth. This morning they had flown us on a Million Air charter jet to the Angolan capital, Luanda, and then on to Saurimo in the northeast of the country. We were now making the last leg of the journey by road, to the region near the Congo border that was famous for the quality of its diamonds.

More gun-toting men came out to greet us at the site. It was a mine in name only. Here and there, the buffalo grass had been scraped away by bulldozers to expose the iron-red earth of Africa. But the real action was on the Luo River, which ran through the property. There, miners were using a simple but effective machine to suck gravel from the riverbed and extract from it the alluvial diamonds that had travelled downstream on the current. DiamondWorks planned to divert the river from its course to enable a more thorough search.

A group of us were handed over to the care of a soft-spoken Angolan mine employee, who painted an impossibly bright picture of the area as he drove us around. Not only were there no human predators lurking nearby, there were also no crocodiles or hippopotamuses in the river and no large snakes in the bush. The investment analysts in our group nodded approvingly when told that three levels of security surrounded an iron cargo container that served as both a sorting area and a storage space for recovered gems. “Diamonds bring out the worst in people,” a DiamondWorks representative confided to us as he wrestled with the three massive padlocks on the container. “They are evil. They are the only thing in the world this small” -- he made a gesture with two fingers -- “that can pay for your family’s future.” The diamonds on the sorting tables ranged from brilliant white to dark brown. They looked like fish tank gravel.

That afternoon, we dined on lobster flown in for the occasion and on bread baked by the camp cook over an open fire. The food might have been appetizing were it not for the hordes of flies that rose when flicked away by the serving men, only to descend again. Still, the company had done its utmost to create a civilized atmosphere. And it all seemed rather peaceful until I excused myself to use the toilet facilities. Four men, one heavily armed, escorted me to a concrete cubicle in the bush. At the door, I was handed a padlock to secure it from the inside. I looked at the lock in my hand, puzzled. Why, if the area was so safe, was there so much emphasis on security?

At the end of the day we retraced our steps -- another hair-raising ride to Saurimo and then onto the Million Air flight to South Africa. It had cost DiamondWorks cdn$100,000 to organize our visit, but the company thought it was well worth it. They knew they could raise millions on the stock exchange back home if we -- journalists, analysts and money men -- reported to our various audiences that the mine was operating and secure. Which is what we did. Their methods may not have been the most sophisticated in the world, but they were finding diamonds with their giant vacuum, even if they were harvesting them behind a wall of guns.

Several months later came news that put my armed escort to the lavatory in perspective. Rebels, thought to be from the National Union for the Total Independence of Angola (UNITA), had overrun part of the DiamondWorks operation, killing eight people and dragging another ten into the bush. The rebels looted the mine, and when they were done, government forces arrived and looted it again. The hostages were still missing and presumed dead.

I had first encountered DiamondWorks and its majority shareholder, Tony Buckingham, a former Special Services officer from Britain, three years earlier while I was working as a foreign correspondent in London for the Canadian newspaper the Globe and Mail. DiamondWorks was nominally Canadian -- it was registered in the Yukon and raised money on the Vancouver Stock Exchange -- and the newspaper wanted coverage of its activities. Specifically, my editors wanted to know if the rumours linking DiamondWorks with a group of mercenaries out of South Africa called Executive Outcomes were true.

Through my investigation, I learned that Tony Buckingham had been making a practice of introducing Executive Outcomes to weak and unstable governments in need of armed support. These governments often hired the mercenaries to retake prime resource areas in their countries -- diamond mines in particular -- from rebel forces. Once these areas were back in a government’s control, mineral concessions were awarded to multinational corporations. When it was revealed that some of these corporations were associated with Buckingham, he was accused of employing armed force to acquire mineral riches, much as the imperial chartered companies had done a century before. Buckingham never talked to the media, but his spokespersons insisted that there was no connection between the introductions Buckingham had made to the governments of Angola and Sierra Leone and the subsequent arrival of DiamondWorks in those countries.

Table of Contents

	Introduction	1
Chapter 1	Cecil Rhodes and the British South Africa Company	7
Chapter 2	King Leopold and the Rubber Companies	37
Chapter 3	Sir Percy and the Diamond King	67
Chapter 4	Union Miniere in Katanga	94
Chapter 5	Lonrho in Mozambique	134
Chapter 6	Shell in Nigeria	163
Chapter 7	Ranger Oil in Angola	189
Chapter 8	Rakesh Saxena in Sierra Leone	216
Chapter 9	Talisman in Sudan	243
Chapter 10	Salim Saleh in the Congo	290
	Conclusion: Perfectly Legal, Perfectly Immoral	320
	Acknowledgments	331
	Source Notes	333
	Select Bibliography	347
	Index	357

Editorial Reviews

Former foreign correspondent for Toronto's Globe and Mail, Drohan concentrates on Africa for this indictment of multinational corporations that forge ties with armies, warlords, militias and mercenaries. She traces the roots of corporate armed force to Cecil Rhodes and his British South Africa Company, describing even greater atrocities perpetrated in the Congo and in Sierra Leone during the 1950s. The efforts of Belgian company Union Mini re to secure an independent Katanga demonstrates the limits of corporations' ability to employ armed force in competition with effective governments and international organizations. The second half of the book shows what can happen given the absence of those countervailing forces. A single man, Roland Walter Rowland, shaped the history of newly independent Mozambique via politicized investment policies; in the early 1990s, Shell Oil worked hand-in-glove with the Nigerian government and ignored the consequences for human rights. In the Sudan, Talisman Energy, a Canadian oil firm, became embroiled in the north-south conflict that continues to wrack that country when Sudanese troops ostensibly guarding the oil fields practiced a scorched-earth policy in the surrounding communities. Though a comparative dimension incorporating South Asia and Latin America would have been valuable, Drohan's African case studies (and there are more here) are well researched, clearly presented and deeply troubling. Agent, David Johnston for Sideshow Media. (Oct.) Copyright 2004 Reed Business Information.

Publishers Weekly

Bloodless accounting crimes look like child’s play when compared to the ruthless and deadly corporate practices detailed in Making A Killing…. Drohan’s grasp of her subject matter is impressive.... How she managed to get interviews with some of the dubious characters she did is a marvel. And she writes well.”
—The Globe and Mail

“[A] compelling look at a very worthy subject.”
—Toronto Star

“[A] compelling case for corporations to be held accountable for their actions, particularly when those actions are harmful to local populations.”
—Winnipeg Free Press

“The dark side of adventure capital in Africa attracts a disturbingly intriguing array of characters, and Drohan brings them to life in all their Machiavellian wonder…. the overall impact of this fine study is to challenge the global corporate powers to understand and meet global human rights and humanitarian standards.”
—The Gazette (Montreal)

“Making a Killing is a good primer for readers concerned about the human cost of the unimpeded flow of oil and diamonds to their first-world markets.”
—Quill & Quire

“As an experienced foreign correspondent and award-winning researcher, she sets the stage knowledgeably in the global context of how little meaning there is to an international order when or where corporate interests are at stake. Although the book is ostensibly about the use of mercenary armies to protect foreign investments in the governance-poor, resource-rich parts of the world, she is able to bring the larger agonies of these countries to the centre of the narrative…. compelling.
—The Vancouver Sun

“A dramatic and compelling journey into the dark heart of globalization…. essential reading for anyone interested in the effects of unfettered multinational influence.”
—Canadian Institute of International Affairs

“…Drohan’s crisp and original reporting makes its point: Whether it is Shell in Nigeria or Ranger Oil in Angola, the abuses half-way around the world hit close to home.”
—The Ottawa Citizen

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