Lessons in Corporate Responsibility from the Scramble for Africa

Do our childhood experiences shape our future careers? To a greater or lesser extent, I believe they do. In my case, they certainly had an indirect influence. I was born an African, in the country known today as Zimbabwe, then still Rhodesia and named after the colonialist Cecil Rhodes in the late 1800s. Today, despite having travelled to over 50 countries during the course of my life and work, and despite living in the UK as I write this, I retain a strong and proud African identity.

Growing up in Africa, basking in her sunshine and breathing her dust, I cannot help but be acutely and painfully aware of the injustices and suffering that the land and its people have endured for centuries – exploitation by colonial conquerors, mercenary slave traders, corrupt politicians, military dictators and unhinged megalomaniacs. Could my immersion in the continent’s struggles have planted the seed for my own subsequent struggle against the injustices that communities and nature have endured at the hands of business?

Unbeknown to me while growing up, my country and hometown are both classic examples of the longstanding abuse of corporate power in the pursuit of wealth. I was born in a small town called Bulawayo, a SiNdebele name with the rather ominous meaning: 'a place of killing’. This is thought to be a reference to the struggle of Prince Lobengula to claim the throne of his father, King Mzilikazi, who founded Bulawayo in around 1840. But the town turned out to be part of a much bigger struggle – the so-called ‘scramble for Africa’: the rush by colonial empires to grab and control the continent’s mineral riches.

At the heart of this imperial quest in Africa was Cecil John Rhodes, English-born explorer turned entrepreneur and business magnate, who founded De Beers, the mining company which at one time controlled 90% of the world’s diamond trade. It all began when Rhodes joined the diamond rush and headed to Kimberley in South Africa in 1871. Over the next 17 years, financed by the private investment bank Rothschild, Rhodes succeeded in buying up all the smaller diamond-mining operations in the Kimberley area. His monopoly was entrenched in 1889 through a strategic partnership with the London-based Diamond Syndicate, which agreed to control the world supply of diamonds, and thereby maintain high prices.

It was also in 1889 that Rhodes established the British South Africa Company, which was empowered under royal charter to trade with African rulers such as King Lobengula, as well as to form banks, to own, manage, grant or distribute land, and to raise a police force. In return, the company agreed to develop the territory it controlled, to respect existing African laws, to allow free trade within its territory and to respect all religions. Four years later, the very same company recruited its own army and invaded King Lobengula’s territory in what became known at the 1893 Matebele War. The troops and white settlers occupied the town and Bulawayo was declared a settlement under the rule of the British South Africa Company. Rhodes ordered that a new town be built on the ruins of Lobengula's royal place.

Two years later, Rhodes used his company to hatch another dubious plot. In an attempt to bring South Africa under British rule, he planned to stimulate unrest among foreign workers (so-called uitlanders) and use the outbreak of open revolt as an excuse to invade and annex the territory. Unfortunately for Rhodes, what later became known as the Jameson Raid was prematurely launched in December 1895 and only managed to push within twenty miles of Johannesburg before superior Boer forces compelled Sir Leander Starr Jameson and his men to surrender. Jameson was subsequently tried in London, found guilty and sentenced to fifteen months imprisonment as a first-class misdemeanant. Rhodes managed to elude any charges of complicity.

For me, the lesson to learn from Rhodes and his British South Africa Company is clear: when companies have too much power – either political power or economic power by virtue of being a monopoly or oligopoly – they will tend to abuse that power to enrich themselves. The fusion of private economic interest with public political sanction is the ultimate toxic recipe for corporate irresponsibility. We see it in all the classic cases of business crimes against society and the environment, whether it is through the regressive political lobbying of the oil industry in the United States, or the majority ownership of Shell by Nigeria’s former military dictatorship government.

We also find echoes of this same lesson in the story of Rockefeller and his Standard Oil company, which I wrote up as a case study in The Age of Responsibility. Despite his latterly acquired reputation as a great philanthropist, Rockefeller was a businessman with highly dubious ethical credentials. In the process of building Standard Oil into a company that monopolised 90% of oil refining in the United States, he was involved in a variety of shady dealings, from cartel collusion and predatory pricing to excessive market aggression. For example, over a four-month period in 1872, in what was later known as the ‘Cleveland Conquest’ or ‘Cleveland Massacre’, Standard Oil performed hostile takeovers of 22 of its 26 competitors in the region.

Rhodes’s use of private military forces also reminds me of the lessons learned by BP in Colombia, where the company was accused of complicity in human rights abuses in 1996. As then-CEO John Browne later recalled, ‘BP entered that country ... seeking a tantalising prize of rich resources amidst violent insurrection, a polarised society and dark undercurrents in politics. ... Clearly, security was a challenge but we assumed we had the answer – a thick barbed wire fence with security personnel and, if necessary, the help of the Colombian Army. What we hadn’t realised was that a fence keeps you in as well as others out. ... The company’s brand, its reputation, and ultimately its value, had been laid on the line because of our failure to fully appreciate our human rights responsibilities.’

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Extract from The Quest for Sustainable Business: An Epic Journey in Search of Corporate Responsibility, by Wayne Visser