Part of the debate – in the House of Lords at 9:18 pm on 11th December 2002.

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Photo of Baroness Rawlings Baroness Rawlings Conservative 9:18 pm, 11th December 2002

My Lords, the House is most grateful to the noble Earl, Lord Listowel, for initiating this debate on Angola. The noble Earl spoke most movingly of his visit to that country for which we are grateful.

It is always a pleasure to follow the noble Lord, Lord Avebury. This is a timely debate as the noble Baroness, Lady Amos, has recently returned from her first official visit to Angola. It will be interesting to hear of the Minister's first hand experience. Like the noble Lord, Lord Avebury, I congratulate the Minister on all the good work that she does in Africa.

As we have heard from several speakers, Angola today is one of the world's poorest countries despite being blessed with outstanding natural resources. It was always said that Angola was the one African country that had great potential if only it could have peace. Now is the time, with the civil war over, to test that potential even though there still remains low intensity fighting in the small enclave of Cabinda, north of the River Congo, where disunited guerrillas demand separate independence. Although this is the key area of oil production, it had hardly affected the oil industry.

Angola has, at last, achieved peace. It was interesting to hear the Church's contribution from the right reverend Prelate the Bishop of Guildford.

The reconstruction can now be partly financed by Angola's oil and diamonds, by the assistance of 100 million dollars from the United States and by £15 million of aid from the United Kingdom. That money is vital for the reconstruction of Angola following, as we heard, years of civil war, which hampered the ability of international aid organisations to alleviate Angola's immediate serious problems.

According to a recent BBC report from the IMF, it was found that last year nearly 1 billion dollars had disappeared from Angola's finances. The sum is far greater than the value of humanitarian assistance sent to the country this year. The report adds that, over the past five years, a total of more than 4 billion dollars are unaccounted for. In the longer term, the lack of transparency in Angola's accounting systems threatens to jeopardise progress towards restoring the country to self-sufficiency and sustained peace. I agree with the noble Earl, Lord Sandwich, that it is wrong to press our form of government on Africa, but we all feel that transparency is needed world-wide.

Despite their potential wealth, millions of Angolans are now wholly dependent on aid for their survival. Seventy per cent are below the poverty line. This is a country that has a population of only 12 million people. It is the eighth largest supplier of oil to the United States. At present, seasonal rain threatens to prevent aid trucks from reaching their destinations. The outlook for those depending on the country's natural resources is poor. Few Angolans have any crops. Fighting has prevented them from planning for the future. They have the added problem of landmines, which still scatter the countryside—a sick reminder of the civil war, as pointed out by the noble Lord, Lord Joffe.

The Foreign Secretary supported the peace process. Therefore, can the Minister tell your Lordships what the Government are now doing to help to rehabilitate Angola? As many of your Lordships suggested, the potential for sustainable development is certainly present in Angola. I repeat: the oil industry is enormously lucrative. It is estimated that this year it will earn Angola £4.46 billion. Clearly that could offer the country a promising future. It has recently been estimated that oil production will peak at 1.8 million barrels a day.

Sadly, however, Angola's politics are such that the expansion of the industry is fraught with difficulty. Even if that were not the case, there is little evidence to suggest that the profits of the oil industry would do anything to alleviate the terrible poverty and famine that blights the country. Why?

We were all shocked to hear from recent reports that over the past five years more than 4 billion dollars remain unaccounted for in Angolan Government finances. The IMF report containing that information also noted that there had been little progress in terms of governance and fiscal transparency. I believe that that lies at the heart of the noble Earl's concerns, and it was also mentioned by the noble Lord, Lord Joffe.

The only way that the Angolan people can ever benefit from their country's resources is through the development of a fully transparent system of accounting. Oil companies working in the country suggest that the improvement of transparency in economic affairs is the responsibility of the Angolan Government. While acknowledging that improvements need to be made in terms of transparency and stamping out corruption, the Government deny all allegations of discrepancy in their accounts.

The multinational oil companies are wary of criticising the Government because they are involved in sustained negotiations over the right to exploit newly discovered oil fields. They are also obliged to work in partnership with the state oil company, Sonangol, which was named in the IMF report as being responsible for many of the problems in accounting in the oil industry.

Clearly, there are complex problems facing all those with an interest in the Angolan oil industry, not least the Angolan people. I should be grateful if the Minister could explain the current involvement of our Government in encouraging and assisting the Angolan Government, either independently or through the International Monetary Fund, to improve its record on transparency and corruption.

Like the noble Lord, Lord Avebury, I congratulate the new President and wish him well. President Jose Eduardo dos Santos, in his speech last month, said:

"Our government needs to face all these problems with determination and courage.

"A few days ago we formed a national commission in the fight against AIDS, which will centralise state actions aimed at reducing this disease. We are aware of our responsibilities, which are immense", as mentioned by the right reverend Prelate the Bishop of Guildford.

Angola was elected to the United Nations Security Council on 27th September with 181 votes; more than other countries elected for a two-year term; more than Chile, Germany, Pakistan and Spain.

The recent signing of the "Kimberley process" in Interlaken was most welcome. The new regulations will come into effect in the New Year, potentially bringing about the end to the trade in "blood diamonds". As your Lordships know, diamonds have fuelled wars all over Africa. During the final years of Angola's civil war, UNITA depended on diamond sales to fund its war effort. A recent UN report suggested that the UNITA rebels are still in possession of large quantities of illicit diamonds. However, there has been some concern over the stringency of the regulations. Diamonds are such a valuable commodity to warmongers throughout the world. They are an easy way of moving finance and there is little hope of a fully comprehensive tracking process ever coming into effect.

I should like to see a self-regulating diamond industry with effective ways of tracking the progress of diamonds from mine to the point of retail. I should be grateful if the Minister could explain to your Lordships how the UK is working within the context of the Kimberley process to ensure that illegal diamonds do not enter the United Kingdom. It has been estimated that 20 per cent of the industry is blighted by corruption. I should be reassured to know that this country is not contributing to the survival of that 20 per cent.

There have been achievements in Angola since April. I commend the efforts of the Chevron Texaco Corporation, the UN Development Programme and the Angolan Government in bringing about the Angola Enterprise Fund. That fund is intended to help small businesses and is precisely the kind of development that can contribute to the stabilisation of the economy in the long term.

As many of your Lordships have suggested, Angola is in desperate need of sustained peace in order that it might stabilise its economy and stamp out any remaining corruption. It is clear that corruption continues to kill by preventing the population from ever seeing its rightful income. For a country that could be so rich, the true extent of the humanitarian crisis is shocking.

I am confident that the Government are fully committed to working with the international community in bringing about peace and stability. I greatly look forward to hearing the Minister's comments.