Militarization of Mining

Project Underground website, November 27, 1997

 

The two British men might have been mistaken for businessmen as they walked through the Peninsula resort just outside Port Moresby, Papua New Guinea (PNG) in February 1997. Few in that south Pacific country noticed them and no one would have guessed that the heavy suitcases they carried were filled not with business papers but with cash. Nor could one blame bystanders, halfway across the world at the small airport in Yopal in the Andean foothills of eastern Colombia, for overlooking two black boxes carried by another pair of Brits.

Like their colleagues in PNG, these men were not your average businessmen or tourists. All were former members of the Special Air Services, better known as the SAS, an elite British fighting force. Several had participated in covert assassination operations against the Irish Republican Army (IRA) in the 1980s.

These men are part of a growing number of slick new corporate security operations around the world linking former intelligence officers, standing armies, and death squad veterans. In unholy alliance, they go into battle for new bosses: the mineral industries, which range from multinational corporations to small oil and mining entrepreneurs. Elizabeth Rubin, a contributing editor of Harper's magazine, summed up this new phenomenon of armies for hire, recently in a radio interview: "It's not just a military machine. Behind it is the old colonial structure, only now it's dressed up in a sort of multinational corporation, with suits and Sat phones instead of Jeeps and parasols."

This militarization of the mineral industries is really a result of three phenomena. The advent of new technologies such as computer-aided satellite mapping and the use of cyanide to extract gold have turned formerly marginal operations into potential moneymakers. The collapse of the Soviet empire and the signing of the global free trade agreements have opened up countries like Angola that were previously offbounds to Western multinationals. And lastly, the availability of capital and the mitigation of risk have been ensured by the new push from the international financial institutions, such as bilateral and multilateral agencies including the World Bank and the US ExportImport Bank. They are eager to provide cash and political risk insurance for private resource extraction projects pretty much anywhere in the world.

Tim Spicer, one of the two former SAS men in the south Pacific, was soon to regret his quiet discussion at the Peninsula Hotel. He had met with two senior government officials about buying a copper mine owned by Rio Tinto, the AngloAustralian mining titan, on the island of Bougainville. Less than a month later, dressed in crumpled jeans, Spicer was led into a Papua New Guinea court. His suitcase, bulging with US$400,000 in cash, was produced as evidence of his contract with the disgraced government to provide a mercenary force to take over the copper mine. His mission had been to defeat a small group of freedom fighters who had shut down the copper mine for almost a decade. When news of Spicer's contract became public, ordinary citizens and local army officers took the law into their own hands. The rioting closed shops, banks and schools and sealed off major roads until truckloads of police armed with automatic rifles eventually dispersed the enraged populace with teargas and rubber bullets.

The two unnamed exSAS officers in Colombia fared better. Their black boxes full of guns and ammunition were waved through the checkpoint run by a colleague, Bill Nixon, a former British intelligence officer, whose new job is providing security at the private airport owned by British Petroleum (BP). All three mercenaries were on contract to BP to help train the Colombian policenotorious for their human rights abusesto protect the DeleB oil rig. The oil company interpreted security concerns broadly. According to a recently surfaced report commissioned by the Colombian government, BP collaborated with local soldiers involved in kidnappings, torture, and murder. The unpublished document alleges that the oil company compiled intelligenceincluding photos and video tapes of local people protesting oil activities, and passed the information on to the Colombian military which then arrested or kidnaped demonstrators as "subversives."

Most of the men running the mercenary-for-hire operations tend to operate behind the lines, preferring to employ other men local or imported hired guns to carry out ontheground operations. Both the Colombian and Papua New Guinean contracts were handled out of London offices run by yet more former SAS officers. Spicer's boss was ex-SAS officer Anthony Buckingham, the second man at the Peninsula Hotel meeting in February. Buckingham is one of the shadier operators in the security business, who runs a miniconglomerate of mercenary, oil, and mining companies out of discreet offices at Plaza 107, 535 King's Road in the up-market south London neighborhood of Chelsea.

The Colombian deal was assigned to another security firm, Defense Systems Limited (DSL), a slightly more upscale operation with offices overlooking Buckingham Palace. DSL has a contract with British Petroleum's security division, which in turn is run by more former military types Mark Heathcote, a former British intelligence officer and Tony Ling, a former SAS commander. Heathcote, Ling, and Nixon, all worked undercover in Northern Ireland where the SAS specialized in assassinating Irish Republican Army guerrillas.

Today, men like these provide "security" services to companies and governments in Colombia, Guyana, and Venezuela in South America; to Guinea, Liberia, Nigeria, and Sierra Leone in West Africa; to Angola; and Namibia in southern Africa; to former Zaire in central Africa; to Sudan and Uganda in East Africa; to Papua New Guinea and Indonesia in the Pacific; and to Kazakhstan in Central Asia. Many of these recruits are veterans of South Africa's 32 Battalion and Civil Cooperation Bureau which were the most notorious units of the old apartheid forces until elections brought a multiracial government to power a few years ago.

There is little evidence (other than slick public relations material) that these men are any different from soldiers of fortune like "Mad Mike" Hoare, "Black Jacques" Schramme, and Bob Denard, mercenaries who drank hard, womanized, and wreaked havoc through Africa in the wars which followed independence from colonial rule. In the 1950s, for example, Harry Oppenheimer, the South African chair of De Beers, defeated his competitors in Sierra Leone by enlisting Sir Percy Sillitoe, one of Britain's top counterespionage agents during World War II. Sillitoe hired soldiers and launched an allout diamond war. The mercenaries laid booby traps, mined border crossings, and ambushed diamond traders until finally they were persuaded to sell their wares to the De Beers buyers.

Military action, private or public, to support mineral extraction is the history of the Americas. From the devastation of the Inca in Peru by Pizarro in his search for gold in the 1530s to the defeat of the Sioux warriors of the Black Hills of South Dakota in the 1860s by Gen. George Custer as prospectors swarmed into the region; from the forced march of the Navajo from Arizona to New Mexico at the same time to the 1960s when the Peruvian military bombed the Matses indigenous peoples in the Amazon on behalf of Mobil, the pattern remains consistent. Jeff Moag, from the Washingtonbased watchdog group National Security News Service, says that the financing of the mercenaries by the mineral industries amounts to nothing less than "a new colonialism."

And the men who enforce it, like their predecessors, are the prostitutes of war who sell themselves to any company, faction, or government with ready cash to pay. In fact, Martin Van Creveld, a war theoretician, believes that future armed conflicts around the world will resemble the old ones. He argues that conventional nationstates are disappearing and that future "warmaking entities" will look a lot like they did in the feudal past tribes, citystates, religious associations, private mercenary bands, and commercial organizations such as the East India Company in the time of the British empire.

"As used to be the case until at least 1648, military and economic functions will be reunited," Creveld writes. In such times, Van Creveld predicts, "much of the daytoday burden of defending society against the threat of lowintensity conflict will be transferred to the booming security business, and indeed the time may come when the organizations that comprise that business will, like the condottieri of old, take over the state."

The most infamous mercenary army contracted by the new colonialists is Executive Outcomes (EO) which provided Buckingham and Spicer with soldiersforhire in Papua New Guinea. But EO' most famous campaign was in Sierra Leone in May 1996, by Sierra Rutile, an Ohiobased titanium company, and Branch Energy, one of Buckingham's many companies.

The EO mercenaries arrived in Sierra Leone better equipped than most armies in Africa, with Russian helicopter gunships, a radio intercept system, two Boeing 727s to transport troops and supplies, an Andover casualtyevacuation aircraft, and fuelair explosives. Used with devastating results by the US in the Gulf war, fuelair explosives--one step below nuclear weapons in power--suck out oxygen upon detonation, killing all life within a squaremile radius.

The pilots, according to Martha Carey, an American who worked for Doctors Without Borders, "were racist killers with no interest in the country." Carey reported that during the early days of the mercenary presence in Freetown, she had only to see the EO helicopters flying over her house to know that it was time to rush to the hospital and prepare for an influx of wounded. The real mission of the mercenaries, she charged, was to gain control of Sierra Leone's substantial diamond wealth. And indeed, the operation left EO with a lucrative security contract financed by the profits earned by the diamond mines.

Violent scenes like the ones that horrified Carey accompany the mercenaries wherever they go. But to understand the forces behind these operations, it may be better to travel back a quarter century to visit three distinctly different men, whose lives have been shaped by their singleminded pursuit of three minerals gold, oil, and diamonds.

The first man, a quiet, urbane, Cambridge graduate, left Britain to study business at Stanford in the late 1960s. John Browne grew up in Iran and other countries where his father worked for BP. "It was a colonial existence more than anything else. People lived in these strange expatriate camps, and everyone was connected with the oil business in some way," he later said, recalling that he loved the excitement of the foreign travel. Over the last two decades, Browne slowly but surely worked his way up to in BP, based first in Alaska and then the North Sea. In 1989, he became head of exploration for BP, steering the company to successful oil strikes in the Caspian Sea.

The second, Robert Friedland, a charismatic young student from Chicago got an early start in dubious trafficking at Bowdoin College in Maine in the late 1960s where he ran an LSD smuggling business out of a college dormitory until he was busted by local undercover cops. He later moved to a hippie commune in Oregon where he found an abandoned mine. "I crawled in and I was scared because it was wet and cold, and here and there the walls had caved in, and all I had was this funky old flashlight. But I grokked it immediately Gold!" he once told a reporter, describing his first infatuation with the yellow metal. Two decades later, another of Friedland's mines in Colorado was the site of the most expensive cleanup in this country's mining history as the cyanidelaced waste from one of his mines killed all life in a 17-mile stretch of the Alamosa river.

The third man was a Mauritianborn diamond buyer, JeanRaymond Boulle, who was working for De Beers, the South African multinational, in Sierra Leone and the Congo at the end of the 1960s. The Congo, which had just been renamed Zaire (and had since taken the name the Democratic Republic of the Congo), was being run by the iron hand of Mobutu Sese Seko. The USbacked dictator had taken over the country in 1965, after a bitter war fought by South African mercenaries recruited and paid for by the CIA.

Meanwhile Browne climbed the corporate ladder, the other two men led more colorful lives. Friedland spent time in India, Switzerland, Canada, Singapore, and finally Australia while Boulle lived in Belgium, Texas, Minnesota, Arkansas, Belize and eventually Monaco. In the course of his travels, Friedland befriended the families of the rich and powerful. In Indonesia, he established joint ventures with the sons of Indonesian dictator Suharto; in Burma, he linked up with Reggie Tun Maung the vice president of his holding companies who just happens to be married to the daughter of Maung Maung Khin, deputy prime minister of th current military junta; and in China, Friedland donated a tenth of the assets of his joint venture to a disabled peoples organization run by Deng Pufang, the son of Deng Xiaoping, the late Chinese premier.

For his part, Boulle also courted power. During his stay in Arkansas, when he was beginning to explore in the Crater of Diamonds State Park, he met with the governor. "I spent a little time with Gov. Clinton explaining to him that this could be important to his state and to the nation," he says.

Boulle and Friedland had met through a common interest in prospecting for diamonds off the Atlantic coast of Namibia. They struck it big time in January 1994 when they staked out what they originally thought was a major diamond property in Labrador. A year and a half later, Friedland and Boulle sold this propertywhich turned out to have a huge nickel deposit to Inco, the world's largest nickel producer for $4.3 billion Canadian. In the next 12 months, the two parted ways but by then, each was the richer by several hundred million dollars. Meanwhile, in April 1996, Browne was appointed chief executive of British Petroleum under chairman Peter Sutherland, the former Irish head of the World Trade Organization.

As they gained wealth, the three mineral barons had more to protect. At about the same time, they all started hiring men like Buckingham, Spicer, and Nixon to put down local protests that might interfere with their exploitation of gold, oil, and diamonds.

On April 30, 1996, BP finalized a deal with DSL to dispatch trainers to Colombia to help the local police "defend" the company oil installations and beef up BP's existing contracts. The oil company's contracts with the army for protection eventually became a minor political sensation in Britain.

Meanwhile, in the US, Boulle put up US$10 million in early April 1996 for Sierra Rutile, an Ohiobased company that was struggling to reopen the world's largest rutile mine in Sierra Leone. The west African facility, a major source of titanium dioxide, had been shut down by rebels in January 1995. The company used this cash, plus money it had borrowed earlier from the World Bank, the Londonbased Commonwealth Development Corporation, and two US federal agencies the Overseas Private Investment Corporation and the ExportImport Bank to pay for EO to quell the troubles.

The other major backer of EO in Sierra Leone was Branch Energy, headed by Anthony Buckingham. Already an old Africa hand, the Brit had spent the previous ten years helping the Canadian company, Ranger, run oil exploration operations in Angola.

Michael Grunberg, Buckingham's financial adviser, introduced his boss to Friedland just before Friedland began to withdraw from active partnership with Boulle. In September 1996, Buckingham and Friedland announced that they had set up Diamond Works (see boxes). That collaboration set the stage for the new mineral extraction colonies in places as far-flung as Angola in southern Africa and Sierra Leone in west Africa, the Venezuelan Amazon and southern China.

Some of the stories of the many military campaigns currently being waged around the world on behalf of these three men and industries they lead are told in the country studies below. But they are by no means the only major players. There are at least a few dozen others in the mineral industries, men like "Jim Bob" Moffett, the maverick excollege football player from Texas, who runs the biggest gold mine in the world, and Brian Anderson, the outgoing chief of Shell Nigeria, who are responsible for some of the worst environmental and human rights abuses committed in the world today. Indeed, Millius Palawiya of the Londonbased non governmental organization International Alert, says that mercenaries today, cast themselves in the respectable mold of free market businessmen championed by former British prime minister Margaret Thatcher. "They use the Thatcherite language of private enterprise, efficiency and investment," he says.

And now the governments of the new free market driven world have even begun to court them. No less a luminary than Kofi Annan, the United Nations secretary general, has consulted DSL on how to protect the refugees on the border between Zaire and Rwanda, while the Defense Intelligence Agency (DIA), the Pentagon=s spy arm, invited Tony Spicer and other EO figures to a major conference about private armies on June 24.

Many activists, however, have taken the opposite stance. In June, the Londonbased Africa Research and Information Bureau (ARIB), launched a campaign against new mercenary operations in Angola, Sierra Leone and Sudan. "Mercenaries are a serious threat to stability in Africa. We must get rid of the mercenaries from the face of Africa," says Kayode Fayemi of ARIB. Indeed, if history is anything to go by, inviting private armies into Africa will only serve the interests of those who hire them: the extraction of resources for profit by any means necessary and with little regard for the human or environmental consequences.

Other activists say that those concerned by cultural, economic, and environmental devastation wrought by the mineral industries need to become more aware not only of those exploiting the planet's wealth, but of those consuming it. Danny Kennedy, an activist with the Berkeley-based Project Underground, an environmental and human rights group, says: "As people in consumer countries drive more and buy more oil, or wear more gold and diamonds, indigenous peoples will continue to be killed and pristine places will be destroyed. Only by building a movement of affected communities and educating these consumers can we hope to reverse this terrifying phenomenon."

The task is enormous not only because of the wealth and power of the mineral industries, but because the privatization of their security functions on the international scene is only one part of a much larger phenomenon. Here in the United States, prisons, policing, and even welfare are being turned over to corporations. Wealthy people around the world are hiring private security firms which use everything from brute force to sophisticated electronic surveillance systems to keep the unemployed and the poor away from their enclaves. Meanwhile, idiot economists argue about the merits and demerits of free trade, forgetting that the debate cannot simply be restricted to cheaper minerals, food or clothes it is also about the trade in everything from guns to death itself. Increasingly and openly, governments and corporations are joining together to pillage public resources. When both are armed to the teeth and obsessed by profit, war, inequality and environmental devastation becomes inevitable.


Home Page