PAUL BIYA HAS SELL CAMEROON FOR $12

Why there are no consistent tax-treaties between Cameroon and some of its very strategic economic and financial partners is quite open for interpretation. The fact of the matter is that it is a huge disservice to Cameroon and could be the difference maker between stagnating and eternalizing itself in the column of Heavily Indebted Poor Countries, or changing course towards economic development and communal prosperity. Integral to a sensible and acceptable rerouting from its current catastrophic path is the role of the civil society. It has to beware of its social responsibilities as well as demanding same from corporations in respective communities.

Tax Evasion and Shelters by Foreign Companies:
Tax shelters occur when a parent company chooses to locate a subsidiary in a low (or no) tax country, then, uses the subsidiary in doing business without paying taxes to its original country or any host country.
For instance, Hydromine, Inc., a legitimate U.S. business that introduces the aluminum mining business to the government of Cameroon. In order to avoid paying 35% of corporate federal tax and 12.5% New York State tax, it rents “a table, chair and telephone business without employees” in the British Virgin Island where the corporate tax rate is 0%! This gives rise to Hydromine Global GMBH, Ltd. In Cameroon, they form a joint venture with the government of Cameroon called CamIron. As “foreign investors” they will repatriate up to 100% of their profits from the (CamIron) joint venture into the British Virgin Island where corporations pay 0% in taxes.
The same formula applies for Geovic Mining Corporation (U.S.) = Geovic Ltd (Cayman Islands) + 60% Geocam joint venture (Cameroon) = 0% tax in Cayman Island!
In the absence of a tax treaty between Cameroon and U.S., U.K., Canada, Australia, South Korea, South Africa etc, foreign mining companies, experts project a leakage of approximately U.S.$ 15 billion in net profits to be repatriated to various worldwide corporate tax shelters in the next 20 years.
Some experts agree that a remedy worth pursuing to close the loop-hole is for the government of Cameroon to immediately consider tax treaty agreements that would reciprocate tax payments with the countries of origin of the respective foreign companies.
At the local level, it will be commonsensical and patriotic for the government of Cameroon to increase the tax rate to 90% on the windfall profits of individuals like the Cameroonian individual shareholders of Geocam. They (Paul Biya - a.k.a Jean Marie Aleokol, Jane Ndiforchu - a.k.a Achidi Achu, Anicet Guessou and Mary Guessou) claimed false ownership of state property minerals and auctioned them to foreign mining companies.
Tax shelter transactions are generally operated under code-names such as “economic development” or “job creation” opportunities. As such, the onus on, and duty, of the government of Cameroon is recapturing income from expatriates through the promotion of an atmosphere that would enhance the development of sectors such as the hotel and leisure industry. This, in turn, will be a booster to the job market and a direct curtailing of the crippling unemployment. Outsourcing skilled Jobs to Korea: A top executive of a Korean joint venture partner with CAPAM told the Korea Times that: “C&K plans to bring in rough diamonds into Korea for cutting to meet domestic demands. We will be able to export diamonds and expect promotion of domestic jewelry markets to a great extent.”
While the government of Cameroon is given the impression that about 4,000 jobs will be created from the gold mining project, its Korean partner has developed the following strategy:
“The mining equipment and laborers will be moved directly to Cameroon, while the mined gold deposits will be shipped to Korea where they will be processed and circulated accordingly.”
The disarray and the inconsistencies of the government of Cameroon have resulted to the fact that neither the Ministry of Labor nor the National Employment Fund are requesting the “human resource plan” from the foreign companies that will ensure specific job related training for the Cameroonian youth.
The challenge for the government of Cameroon is to replicate the Botswana technology transfer model in which foreign companies were required to provide job training and equipment in diamond polishing, thereby securing jobs and adding value to the precious metals.
Corporate Social Responsibility:
After more than ten years following completion of the Tchad-Cameroon pipeline project, corporate social responsibility is measured by the degrading life expectancy, accelerating poverty, lack of clean drinking water, increased air pollutants, higher school drop-outs and massive unemployment of local inhabitants.
While bureaucrats continue to receive bribes - $400,000 from Sundance for the purchase of CamIron) - and foreign mining companies disguise such payments as ‘all and sundry” expenses, it is incumbent upon the government of Cameroon to distinguish for instance, between "charitable” donations and ordinary corporate expenses. Otherwise, foreign companies will continuously exploit tax loopholes.
In order to ensure sufficient funding and greater accountability of their corporate social responsibility, the government of Cameroon should request that foreign companies donate 10% of their after tax profits and publish quarterly reports of their charitable activities.
The country is beyond the watershed moment for Cameroonians to know the locations, costs, and dates of operation of schools, hospitals, drinking water sources, electricity/solar energy, etc… that foreign companies will be contributing in exchange of developing natural resources from those localities.
It is an aberration of historical proportions that every child from the geographical area known as the South West Province, the seat of Cameroon’s Oil refinery (SONARA), is not getting free education, from kindergarten through University, with proceeds from such tax profits. Or, every resident or citizen of the said area should be entitled to a monthly allowance of an agreed amount for the as long as SONARA fires up its oil rigs that can be seen off the coast of Limbe. Idem for the Mining projects in East Regions or in the “Grand North” Regions. Their residents / citizens are supposed to have special, palpable, long term and sustainable benefits that reflect vision versus short term gains.
Some more observations and thoughts on What to Do... State actors involved in negotiating these deals have either shown an utter disregard for the public good; have been absorbed in schemes of self-enrichment; or are totally incompetent and are getting emasculated by their counterparts representing the multinationals.
If the latter, that there is little match for their counterparts representing the multinational corporations, then the State has to go back to its drawing board to rethink and remap its educational system. We have quite established in the various pieces that knowledge of Cameroon’s wealth in the area of mining predates independence. Cameroon the independent is turning 50 in 2010 / 2011. In human years, many are considered grandparents, and are supposedly wise.
Wisdom may as well demand retooling. There is no reason for Cameroonians not to be in-charge of the refining and mining processes from the beginning to the end. In the hay day when Cameroon was offering scholarships to its young high school graduates to study in the most prestigious Universities in Europe and America, common sense would have implored that some of the brightest minds be oriented in this direction.
Whether or not it was done is self-evident: Chinese geologists are discovering diamond mines in our back yard and we are settling for a miserly 10% of the cut. The University of Buea is incapable of sending Geology students on a field trip to Limbe, 20 miles away, or even to sponsor dignified trips to its active volcanic mountain located at a stone’s throw. Ask me what I think and I would say SONARA ought to have a scholarship program for the brightest minds in the department of geology at the University of Buea, as well as other community tools to attract students into the field.
The same errors that were committed in the SONARA deal (an area we will revisit when we seek to know who Prime Minister P. Yang is) are playing out in the recent mining deals. Thanks to their shortsightedness and glut, President Biya’s mission in France was to canvass the Diaspora with poison-laced deals of Dual Citizenship and Voting Rights in the hope of raising sufficient funds from the civil society. The money would allow Cameroon to proceed with some key projects that are stagnating in the Mineral sector. Biya and his cronies could raise the money, but the eyes of the world are on them with demands that they declare their assets. They have been warned against using HIPC funds.
Cameroon’s minister of Energy, Michael Tomdio has rightfully suggested that Cameroon needs to revise its mining code (again) to attract more local and foreign firms to invest. Meantime, he needs to persuade us on two issues: Firstly, that he has leverage to renegotiate existing government’s ownership interest to a minimum 49% against 51% for foreign companies. Secondo, that the government could poise itself to trigger plan B- NATIONALIZATION OF ALL MINING RIGHTS!