12 Jun 2012
June 12, 2012

ENRC AGM

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Le mieux est l’ennemi du bien.  The best is the enemy of the good. Perhaps Voltaire really did say that; I’ve no idea.  But when it comes to the really important stuff, the phrase resonates for many of us when trying to navigate the channel between the platonic ideal of an outcome and simply yielding to inertia by accepting the seemingly inevitable.

I’ve spent my dozen years in parliament learning as much as I can about  the Great Lakes Region of Africa.  I’ve visited extensively and met a lot of super people – and one or two less super.  I’ve written and blogged it at length and I won’t repeat it all here.  Suffice to say, a lot of terrible things have happened there and for a lot of people who live there there’s still little respite.  But right now, amidst the sexual violence and outright corruption in significant parts of the region, there is some hope on the horizon.  Tiny Rwanda, having come through a true genocide as recently as 1994, is firmly on a route to a better future for all its people.  Things are far from perfect, of course, as its own government accepts, but each time I go there I see life-changing improvements.  The Rwandans are appreciative recipients of development assistance but, much more importantly,  they have a proper plan for the future – middle income status by 2020; successive UK governments have viewed them as perhaps the best development partners of all. In the end, the Rwandans understand that transparent inward investment will dwarf aid in its benevolent effects.

Over the border, in the Democratic Republic of Congo, things are very different.  Unlike Rwanda, the DRC is huge and has almost limitless natural resources to exploit.  The problem is that corruption has been endemic there practically forever.  The UK government will spend £800m there over 4 years on commendable aid projects delivered by fantastic NGOs, yet true progress for the many is almost imperceptible.

A big part of the problem for the DRC is that few companies are prepared to invest there.  The government isn’t reliable and the reputational risk is usually too high, especially with the justly high standards they’re being held to account to by markets across the world.  For example, I’ve met senior executives from many mining companies who’d like to do business in the DRC but simply can’t justify the risk to their shareholders.  That means no jobs, no sustainable investment – decent people consigned to a horribly unecessary brutish, short life.

It’s true that a small number of operators have chosen to take a big risk with the possibility of fairly high returns.  There’s a lot of risk involved in that, of course. In the past, I’ve been deeply critical of a UK-listed company, ENRC, for getting some judgements wrong.  But it’s a fine line.  We should demand high standards of investors in places like the DRC, but we musn’t make it impossible for people to invest – there are literally millions of lives at stake. Last year, ENRC became a kind of anti-talisman for the risks of investment in the poorest parts of the world, so I’ve been watching that company’s response to ‘events’ very closely.  I’ve no axe to grind at all, except that I’m a little obsessed with the well-being of the people of the DRC – and I’m some way from perfect myself, so I make no claim to being the best judge you might talk to.  But like many people from both NGOs and, actually, the private sector, I do care a great deal, and that has to count for something.

Over the last year, I’ve had access to most of the key players in the whole ENRC saga.  From the Serious Fraud Office, to Chinese and other interests, to companies who have stayed out of the DRC,  to sometimes well-informed but often under-resourced journalists, to UK cabinet ministers and even UK prime minister David Cameron.  I think ENRC’s experience has been shocking for everyone, including ENRC itself.  It’s laid bare the difficulties of doing business in the DRC.  And yet, what should happen now – when what matters most is what benefits the people of the DRC most?  Well, this won’t make me popular with many folk I have great admiration for, but I think it’s important we cut ENRC some slack now.

Why?  Well, they’ve tacitly (and maybe soon more overtly) come clean about misjudgements made by some (but not all) previous  ENRC board members about how to tackle business in the Congo.  As a fairly recent FTSE100-ers they’ve put their hands up to failures in the recent past to engage with concerned interests and appointed a new chair and board.  In fact, they’ve done pretty much all the practical-minded then-SFO boss, Richard Alderman, demanded of them (that’s my judgement) and, to be honest, I have some faith that the new chair understands the demands placed upon any company listed at the London Stock Exchange. They haven’t answered all of the questions yet, and there are some for the future, but they’re making a decent fist of it.  And in the end, they really will create thousands of jobs and build much-needed infrastructure in the benighted Eastern Congo. And that is, actually, a good thing. Right?

I don’t work for an NGO – I’m not that pure, really.  Surprise.  But I do have a decent distance from all parties and it does seem to me that there’s a danger that putting ENRC at the centre of dialogue on the wrongs of the DRC is to miss the point.  What’s important now is that we put the future of the DRC first, and the folk there won’t benefit from deconstructions of the past – they’ll benefit from the constructions of the future. What the DRC needs is investment from world-class LSE companies who are prepared to play by the rules, however they’ve learned the latter.  And ENRC has unquestionably learned some new rules the hard way.

Which brings me to ENRC’s AGM.  Slighted but capable former non-execs I have myself been harsh about burrowing away. Former employees sticking the boot in for personal gain.  Campaigners seized of a proper zeal but sometimes with their own career structures in mind.  ‘Activist’ organisations putting their own interests before the well-being of the DRC by erecting supposedly ‘ethical’ barriers so high there’ll never be investment there. All closing in on the ENRC Annual General Meeting with the hope of doing a bit of damage.  I have a distinct sense of past grievances being nursed, or deployed, without thought for whether these actions are a fair response to the situation today – or whether such activity will genuinely help the people of the Congo.  Right now, there’s a genuine risk that we’ll miss the wood for the trees by putting our own purity, and sometimes competing interests, before decent progress against proper standards.

Everyone’s human, including those who make good money from understanding how the international economy works.  We should be careful not to take the short view when what we need most is the long one.  I’m not the man to preach forgiveness – that might just possibly sound like a personal plea in mitigation – but there is actually a place now for putting aside our organisational party lines, in the broadest sense, and getting on with what’s  best for the people of the DRC.