Lack of Oversight, Official Bias Led to China Winning the Aynak Copper Tender in Afghanistan
A report on the Aynak Copper tender in Afghanistan
shows that a Chinese firm won the rights to one of the world's most
valuable copper deposits in Afghanistan in 2007 through a flawed
process that made it impossible for Western companies to win the bid
against state-supported Chinese companies who include government aid
with their bid.
James R. Yeager, who served as an Advisor to the Ministry of Mines
in Afghanistan during the tender process, said no independent oversight
existed to insure true transparency of the process.
"Unless there is change in the process to make it open and
transparent and unless the U.S. government establishes a policy for
resource development to assist the private sector, China will continue
to gain undue influence on the Afghan economy and ultimately Afghan
society as a whole," Yeager said. "This will be harmful to everything
America is trying to accomplish in bringing stability, and a
self-sustaining market economy to Afghanistan."
Former Congressman Don Ritter, who has been engaged with Afghanistan
for 30 years, said something must be done so that the billions of
dollars and lives sacrificed by the U.S. in Afghanistan are given some
credit in the contract process.
"The bottom line is this: we need a policy on developing mines and
minerals and oil and gas in Afghanistan that allows an honest, open
competitive process," Ritter said. "Otherwise, the market economy so
crucial to the future of the Afghan people and the governance of the
country will be dominated by the Chinese way of doing business."
The 78 page report took 18 months to produce and details the
step-by-step process of how the copper tender was steered to the
Chinese firm. In addition to Yeager, a voluntary group of individuals
dedicated to the future of Afghanistan contributed to this report. It
outlines a series of recommendations Yeager says will insure that
future tenders are transparent and will benefit not only the businesses
competing but also the Afghan people:
There must be due diligence of the bidding firms. The track record of
firms in previous contracts must be considered. This was not allowed by
the Afghan Mines Ministry for the Aynak tender. Due diligence must
include independently collected background information.
The donor community must provide more support to the Afghan minerals
sector.
This is not happening now.
Both the World Bank and the donor community must be engaged in active
oversight of the tender process. In this case, the World Bank
instigated powerful government action and then removed itself from the
process, leaving it to the Mines Ministry alone.
The Transaction Advisor must be independent on the Ministry of Mines and
must be allowed to meet with officials outside the Ministry itself.
The
Minister of Mines prevented that in this case.
There must be local public participation in the process from start to
finish. In this case,
The Minister of Mines refused to initiate a
formal public information and outreach program.
Western embassies must be more engaged in the process and be better
informed of western companies' efforts.
"It is essential that western officials in Afghanistan understand
the influence that vast monies, operating under an 'Eastern business
model' framework can conflict with enlightened Afghan goals for the
country," Yeager said. "Otherwise, all the rest of their efforts,
military and economic, will go for naught."
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