U.S. President Barack Obama made a frank declaration when he travelled to Kenya last summer that corruption in his ancestral homeland was rampant and needed to stop.
“It’s important that not only low-level corruption is punished, but folks at the top, if they are taking from the people, that has to be addressed as well,” he said in a rousing speech in Nairobi. But the recent crisis at Pacific Wildcat Resources Corp., a small Canadian company, suggests conditions haven’t changed enough.
In 2013, the company’s licence for its Mrima Hill niobium project was cancelled by the government under suspicious circumstances, prompting cries of corruption and an international arbitration case being launched against Kenya. But all that turned out to be a precursor to something much worse.
On May 5, Pacific Wildcat filed all its evidence in Washington for the US$2.1-billion arbitration case. Later that day, a director from its Kenyan unit was shot dead in Nairobi.
The murder of Jacob Juma, a high-profile Kenyan businessmen with interests in many industries, shocked the nation. The 45-year-old was an outspoken critic of President Uhuru Kenyatta’s government, frequently accusing it of corruption. No charges have been laid yet, and as details have trickled out, there have been more questions than answers.
The Pacific Wildcat case highlights the serious risk that resource companies take on in volatile emerging markets, particularly countries such as Kenya that have a limited history of large-scale mining. While this is an extreme example of what can go wrong, Canadian miners have fought arbitration battles in many other countries in recent years, including Venezuela, Mongolia and Ecuador.
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