Where countries are rich in natural assets, such as oil, timber, minerals or fish, the military or security forces can become closely or improperly connected with their exploitation. This nexus of defence/security and natural assets is common in conflict environments (for example, in Sierra Leone with diamonds, Angola with oil, etc.). It can also occur in peacetime circumstances, as in Nigeria or Indonesia. Such linkages can be prime drivers of subsequent conflict.

The power held by militaries, militia, or rebel groups often makes it easier for them to exploit a country’s natural resources for their own gain, fuelling or prolonging conflict. Several national militaries throughout the world possess business enterprises in a variety of industries, including the extraction and production of resources.

Traditionally, the rationale for the military engaging in economic operations has been that the government is unable to support the full scope of military operations, due to insufficient funds or the need to allocate funds to other elements of government spending. As a result, the military is often instructed to adopt a self-sustainability model and seek alternative means to fulfill its budget requirements. Military engagement in profit-seeking enterprises greatly comprises the primary role and function of the armed forces: to provide defence and security for its population.

Examples of Corruption relating National Assets and Defence

The pillage of natural resources such as diamonds, copper and coltan, oil, timber, and the use of revenues for arms procurement and the personal gain of warlords and generals alike, is well documented in the DRC, Liberia, Sierra Leone and Angola.

In Nigeria the notoriously corrupt cash-call system that operated in the state owned oil industry is thought to have funded Nigeria’s role in the Economic Commission of West African States Monitoring Group (ECOMOG) operations in Liberia and Sierra Leone between 1990 and 1999.  The figures for these ‘peace’ operations did not appear in Nigeria’s defence accounts, but are thought to have cost an estimated USD 12 bn (Adekanye 1999). In Angola it has been estimated that as much as a billion dollars a year of state oil revenues have been siphoned off into shell companies for use in a tangled web of corruption and back room arms deals (Global Witness 2004). In the DRC USD 80 m were appropriated from the state owned diamond mining company (MIBA), of which USD 20 m is thought to have been used to buy weapons from Ukrainian and Czech arms suppliers (Africa Confidential June 2004).  

Since the late 1990s, the UPDF (Ugandan People’s Defence Force) has been extensively involved in the natural resource sectors. According to a 2001 report by the UN, the military’s presence in Congo has proven to be a treasure trove for its military and governmental authorities who, with other civilian business partners, profited from smuggling and resource plunder.

The UPDF carries out smuggling operations of various precious minerals out of Eastern Congo. The 2001 UN report  accused the Ugandan, Burundian, and Rwandan military of plundering and smuggling timber, coffee, diamonds and gold. These opportunities for profit were a key motivation for the UPDF to expand its operations into Eastern Congo. Part of the transportation process also involved exploiting military privileges: According to a 2003 report by Tangri and Mwenda, a former Major-General (now General and the President’s military advisor) was heavily involved in the transportation of illegally mined gold from Eastern Congo to Uganda, and classified the gold as military cargo to avoid paying custom duties.

Commanders of UPDF’s military mission in the DRC were also involved in these corrupt operations, and several UPDF officers were involved with Trinity Investments Limited. The company was involved in the export of gold, timber and coffee without paying taxes. UPDF’s participation in the extractive industry was so extensive that that both Generals resorted to financing their business activities with funds meant for UPDF salaries. Consequently, the bank account of the 4th Division of the UPDF was almost empty, whilst the Commander’s personal account was profiting from the division’s funds being paid into it. Furthermore, it has been alleged that the commercial interests of various UPDF officers were an important factor behind clashes with Rwandan troops.

Case Studies of Corruption linking Natural Assets and Defence

Some examples From Global Witness regarding resources fuelling conflict are listed below:
•    Angola: Oil
•    Burma: Timber
•    Cambodia: Timber
•    Côte d'Ivoire: Diamonds, Cocoa, Cotton
•    Democratic Republic of Congo: timber, diamonds, gold, coltan, cassiterite, tantalum, and tungsten
•    Equatorial Guinea: Oil
•    Liberia: diamonds and timber
•    Republic of Congo: Oil
•    Zimbabwe: Diamonds

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