July 9, 2009

I. Summary

Since 1968, the year Equatorial Guinea gained independence from Spanish colonial rule, the country has been run by a succession of repressive dictatorships. Until the mid-1990s it was one of the more closed countries in the world; generally what little international comment it attracted was for its dismal human rights record. But that all changed when significant oil reserves were discovered off the country’s coast in 1995. As one of the world’s newest oil hotspots, Equatorial Guinea garners global attention as a valuable source of natural resources. Its government, however, is setting new low standards of political and economic malfeasance: billions of dollars in oil revenue have not translated into widespread economic benefits for the population or dramatic improvements in human rights, making Equatorial Guinea a classic example of an autocratic and opaque oil-rich state.

After a bloody coup on August 3, 1979, Equatorial Guinea has been for some 30 years under the control of President Teodoro Obiang Nguema Mbasogo, who, together with his family and close associates, maintains almost absolute control over the country’s economic and political life. The country has become the fourth-largest oil producer in sub-Saharan Africa (behind only Angola, Nigeria, and Sudan) and a magnet for foreign investment in the hydrocarbons sector. Gross domestic product (GDP) per capita is on a par with Italy and Spain. But the broader populationjust above half a million people—enjoys little of the benefit and has not been lifted from poverty, while the elite directs the country’s newfound wealth into its own pockets: the president’s son spent more than US$42 million between 2004 and 2006 on luxury houses and cars in South Africa and California, nearly a third of the total amount the government spent on social programs—including health, education, and housing—in 2005.

Dating back to before the oil boom, the current regime’s efforts to control the country’s political space and economic resources have fuelled a culture of fear marked by repression of the opposition and military purges. The main difference in recent years is that the stakes are higher: for a corrupt and nepotistic regime that has vastly profited from the oil boom, the incentives to open up the political space and become more accountable to the country’s citizens are few. But with political power in Equatorial Guinea now a prize of unprecedented worth, the country appears seriously unstable. There have been some 12 real and perceived coup attempts since President Obiang came to power; the real coup attempts often have been perpetrated by rival elites hoping to seize the state’s economic resources. In 2004 alone there were three alleged coup attempts, including one that involved South African mercenaries and the son of former British prime minister Margaret Thatcher. Court documents and other correspondence suggest that the coup was aimed at deposing the government in order to profit from Equatorial Guinea’s oil wealth.

Oil revenues have provided the Equatoguinean government with the money needed to do a much better job realizing their citizens’ economic and social rights. Government officials have been derelict in taking this opportunity, using public funds for personal gain at the expense of providing key social services to the country’s population, and squandering other potential revenues through mismanagement. The human toll of the continuing chronic underfunding in areas such as education and health becomes starkly apparent when comparing health and literacy levels over the past 10 years: where there was an opportunity for great advances on both fronts using the large oil revenues, the situation either worsened or improved only slightly and not in keeping with corresponding advances in other countries.

Government recognition of the problems and statements suggesting a willingness to improve this situation have yet to move from rhetoric to action. In 2005 the Equatoguinean government signaled to the international community that it wished to participate actively in the Extractive Industries Transparency Initiative (EITI), a voluntary initiative aimed at encouraging oil and mining companies to publish the payments they make to the governments of developing world countries in which they operate. Now, the momentum is questionable. Equatorial Guinea has stated a number of times its willingness to embrace greater transparency, such as in the ambitious plans drawn up during national consultation exercises in the 1990s that remain on paper. As this report shows, there is a serious policy disconnect between the official rhetoric and the reality on the ground in Equatorial Guinea. Indeed, the EITI board should quickly remove Equatorial Guinea from its list of countries if it does not make meaningful progress in implementing the initiative and allowing civil society to participate in it.

Equatoguineans have no way to hold their government officials accountable for their actions. Reliable information on government spending is largely unavailable. There is little meaningful or effective political opposition or independent press. In May 2008 Obiang and his allies won 99 of 100 seats in parliament in legislative elections that are known to have had serious flaws. Despite marking his thirtieth anniversary in power in 2009, Obiang has also indicated that he wants to seek re-election as president for a further seven years in the next presidential elections (scheduled for December 2009). Freedom of expression, assembly, and association are curtailed. This has severely hampered the growth of a domestic civil society capable of monitoring and challenging government action.

Arbitrary arrest and detention is common, the regular reports of coup attempts often providing the pretext. Detention is frequently accompanied by torture and ill-treatment. On June 5, 2008, his 66th birthday, President Obiang pardoned 37 people (25 of them prisoners of conscience) but many others remain in detention.

Since the discovery of significant oil reserves brought increased attention to the country’s situation, the Equatoguinean government has been under Western diplomatic pressure and pressure from nongovernmental organizations (NGOs) to improve its human rights record. Independent observers’ access to the country had been highly restricted in the past, but there has been only limited progress in recent years in allowing for any meaningful reporting on the human rights situation. International human rights NGOs, including Human Rights Watch, still find obtaining access to Equatorial Guinea a challenge.

China and the United States are increasingly active in competing for oil investments and influence in Equatorial Guinea, and President Obiang has sought maximum benefit from both. A rapid upgrading of US relations since 2003 culminated in the arrival of a resident US ambassador in Malabo in November 2006. Military and security training by US private military company Military Professional Resources, Inc. (MPRI), is ongoing in 2009, and the Equatoguinean government wants it to expand its human rights training. The US focus on strengthening relations with Equatorial Guinea appears to have blunted efforts to press the Equatoguinean government on reporting human rights abuses and meeting human rights benchmarks. Notably, the US embassy itself is rented from an official alleged to have tortured opposition supporters.

A 2004 US Senate probe into Equatorial Guinea’s dealings with the US-based Riggs Bank (now part of PNC Bank) threw light upon how Equatorial Guinea has in the past managed its funds from the oil industry. The role of US oil companies in Equatorial Guinea also came under official investigationan important development, as it signaled to them that even in Equatorial Guinea they will not escape scrutiny of their business dealings. According to statements by Senator Carl Levin at a 2004 hearing on the matter, some companies, such as Marathon Oil Corporation and Hess Corporation, “fully cooperated” with the investigation. However, Levin noted that ExxonMobil Corporation had “not been as forthcoming” as the other companies.

The Bush administration largely failed to hold the government of Equatorial Guinea accountable. Despite a damning investigation by Senate staff and the imposition of some of the largest fines in history against a US bank because of its business with Equatoguinean government officials, the administration welcomed President Obiang to Washington. Any protestations the United States might have made about human rights or any condemnations of government corruption were effectively negated by the high-level support the administration showed for the Obiang regime.

The new Obama administration has an opportunity to show that energy security does not have to come at the expense of human rights and good governance. It should determine whether there are assets in the United States obtained through corruption by senior officials in the Equatoguinean government and work to repatriate those assets to their rightful owners: the people of Equatorial Guinea. It should ensure through new or existing laws and regulations that US companies do not become complicit in the corruption and abuses that mar resource-rich countries like Equatorial Guinea.

The government of Equatorial Guinea is clearly in a position to invest more toward the progressive realization of its citizens’ economic and social rights, as well as those rights associated with due process. The 2006 and 2007 national budgets passed by parliament allocated increased expenditures to education and health. But beyond that, greater transparency, accountability, and freedom of expression and association, coupled with the political support for the building up of credible institutions, are what Equatorial Guinea needs if it is to break out from its cycle of political instability and authoritarian responses to internal crisis. This should be in the interest of the Equatoguinean government, its international partners, and the multinational oil companies operating in the country.

Methodology

Between 2004 and 2008 Human Rights Watch interviewed Equatoguinean political prisoners, government officials, and oil company representatives, analyzed statistics pertaining to socioeconomic indicators and government social spending in Equatorial Guinea, and reviewed countless publications addressing a wide range of issues related to corruption, financial mismanagement, and political instability in the country. This report is based on that research.

In August and September 2003 Human Rights Watch traveled to Bioko Island,Equatorial Guinea, to collect information for this report. We interviewed threepolitical prisoners, five government officials, and four representatives from six companies operating in Equatorial Guinea. The identities of most of these persons have been withheld to protect their privacy and safety. From 2004 through 2008 additional in-person and telephone interviews were conducted with 15government officials, deportees, and refugees in the United States, United Kingdom, Spain, Cameroon, Côte d’Ivoire, Ghana, Nigeria, Angola, and South Africa. All interviews were conducted in English or Spanishby a Human Rights Watch researcher.

Human Rights Watch also obtained several hundred pages of official documents from the US government detailing its 2004 investigation into allegations of money laundering and corruption at the US-based Riggs Bank. We reviewed these documents as well as documents providing supporting evidence of corrupt practices by the Equatorial Guinean president and his family members, including US court and property records and South African court records detailing assets held by Equatoguinean officials in that country. We also analyzed Equatoguinean social indicators in relation to economic indicators and government social spending data provided by the International Monetary Fund (IMF). All documents cited in this report are either publicly available or on file with Human Rights Watch.

In the interests of fairness and accuracy in our reporting, we sent letters to each of the six oil companies probed in the US Senate’s 2004 investigation. We asked the companies for an update on their practices since 2004 in relation to any payments to, or business ventures with, Equatorial Guinean officials, their family members, or entities they control. We also asked them to update us on the status of any pending investigations into their operations in Equatorial Guinea. All but one company, Vanco Energy, replied at this writing. For those companies that did respond, we have incorporated the responses we received into the text of this report and appended their replies in full.