Trading Slaves

Two hundred and seven years ago this week, William Wilberforce saw over two decades of impassioned zeal pay off.  With the patronage of The Right Honorable William Wyndham Grenville, PC in the House of Lords and The Right Honorable Charles James Fox, PC in the House of Commons, the Slave Act of 1807 was on its way to passage in the British Parliament.  While this moral victory was on the horizon in London, for the next 50 years over 1,600 slave ships were interdicted by the Royal Navy and over 150,000 African slaves were released.  Why?  Because a moral legal victory does not morality make.  And while many view slavery through the blurry bespectacled lens of nostalgic history books or the occasional condescending Hollywood film, two hundred and seven years later, we’re no less prone to enslave – we’ve just changed the manacles.  Rather than ships plying the seas, we’ve come up with the quite cunning enslavement of humanity in situ (Latin for “in place” or “in position””). 

Now before we go too far, let’s recall that slavery then as now, is a complex matter.  Driven by a consumer who wants to receive goods or services for less than their fair value, producers are seduced into examining how to ‘cut’ costs.  And, benefiting from the anonymity afforded by distance, whether you’re Apple Computer or WalMart you can look the other way when it comes to the labor conditions of people who you never think will have a voice or represent a market.  And if you think this is hyperbole, in the United States today the Securities and Exchange Commission requires companies to publicly disclose their use of “conflict minerals” from the Democratic Republic of Congo.  Remember that Apple and Intel were celebrated in 2011 for their announcement that they would “cease use of conflict minerals” directly acknowledging that they had done so in the past!  But, from the passage of §1502 of the Dodd Frank Wall Street Reform and Consumer Protection Act in July 2010, it is not until May 2014 that companies will actually have to comply with the rule!  Why?  Because We The People prefer the illusion of morality over genuine, authentic, conscious humanity.

Now, take some Dramamine® because the seas of this post are going to get a little choppy.  We’re about to circumnavigate the globe at warp speed and if you’re not strapped in with your seat belt low and tight across your lap, the unexpected loss of cabin pressure will trigger the oxygen mask above your seat but you’ll be too loopy to put it on!

The Parliament of Mongolia has been working for over four years to come to terms with a massive indebtedness that they acquired for the privilege of having their copper and gold wealth extracted from the Gobi Desert.  You see, in a transaction that was advised by a U.S. investment bank who had conflicted ownership interest but carefully circumvented legal liability by having their Asian subsidiary do the “advising”, Mongolia was allowed to take a 34% equity stake in Oyu Tolgoi – the massive copper mine acquired by Robert Friedland’s Ivanhoe Mines Ltd in 2000.  What the Mongolian government did not pay attention to was the financing charge that their equity stake would cost while the mine was not in production.  With mounting liabilities exceeding $1.7 billion at interest rates as high as 12%, the last several years have seen Mongolia slip further into debt while the public has traded on the debtor’s prison business model Friedland sold the former government.  Rio Tinto and its shareholders (and Friedland) are rolling in equity value while the indenture of Mongolia mounts.  At no point did the Mongolian people or their government realize that their “equity stake” was a carefully disguised money machine in which the international shareholders (including, for all you “ethical investors” PAX World Fund) would actually make more money financing the expropriation of Mongolian minerals than on the copper sales themselves!  In the most insidious and cunning fashion, the debtors prison – the colonial dynamic that fueled slavery – is now being presided over by the slaves themselves!

An isolated case?  Absolutely not. 

Japan’s Itochu, Japan Oil, Gas and Metals National Corporation (JOGMEC) and the JGC Corporation have teamed up with Robert Friedland on his Platreef Project about 275 kilometers from Johannesburg, South Africa.  This nickel, copper, platinum, palladium, gold, rhodium metals bonanza is thought to extend for over 30 kilometers and be another one of Robert’s storied “discoveries”.  And, as he did in Mongolia, several months ago he told the South African government that he’d allocate 26% of the project to a private company in South Africa – BBBEE SPV – and generously offered to finance the equity out of – you guessed it – Ivanplats (his company).  Like any banker, you can imagine who holds the lien on the equity until the citizens can pay off their debt!  Oh, that’s right, the banker!  The best part about the filing in South Africa is Robert’s commitment to insure that this equity stake benefits local communities, women, children, and employees!  He’s becoming so politically correct in these later years.  Ivanplats also opeates the Kamoa Project in, you guessed it, the Democratic Republic of Congo where he financed a 5% ‘non-dilutable’ interest for the government in a local company in which no other equity owner would ever be contemplated.

Robert Friedland is not the bad-guy in this story at all.  This former drug-convicted felon in the U.S. who now lives under the generous sanctuary of Singapore (ironically where his U.S. conviction could have earned him the death penalty), is evidence of a system that promotes faux values while demanding mercenaries to do the dirty work.  His sojourns with Steve Jobs in India and Oregon (I wonder where Apple got their comfort with conflict metals?) exposed him to multiple aspects of cultures – both those he valued in homage to his Hanuman inspiration and those for which he held contempt like the gullibility of corruptible governments.  And the fact that he continues to persist with the same model from the Gobi Desert to the Bushveld of South Africa is evidence that neither citizens nor politicians take the time to let simple diligence get in the way of their individual predation instincts on the citizens they govern.  While I have no idea whether his penchant for ‘discovery’ of gold, platinum, and copper would continue if he didn’t have a complicit system that follows his iron cudgel from the Milky Way (a cultural metaphor if you know the cosmology of China), I do know that it’s the ecosystem that sustains him, not the man, that needs to wake up.  As long as we value metals, we will value the divination proclivities of prospectors like Robert.  Unless we provide an alternative system of incentives, we’ll keep the enslavement going.

Which leads me to a glimmer of hope.  On Wednesday, Papua New Guinea Prime Minister The Honorable Peter O’Neill formally apologized to the people of Bougainville – the location of one of the world’s most storied and bloody copper and metals mines.  Stating that he was putting in process a mechanism to repeal the tyrannical, extra-constitutional Bougainville Copper Act of 1967 (a democratic action currently opposed by Rio Tinto) he punctuated the abusive practice of legislative corruption that persists in Mongolia, South Africa, the DRC, and numerous places around the globe.  Who knows?  Maybe a vision for a new humanity – one that sees minerals and their custodians as a service for the stewardship of humanity – may emerge from one of the oldest cultures on Earth!  Here’s to the emancipation of Bougainville and with it, the end of enslavement!  That would be Amazing Grace!

If you’d like to stand with me in this call for human liberty, share this post with 207 of your friends in honor of the anniversary we celebrate this week.  Maybe we can get Hanuman to give Robert a new dream!

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