Is UK firm Adam Smith International profiting at the expense of PNG?
A new report [pdf file] published by Aid Watch (UK) and Global Justice Now lifts the lid on the British based aid- entrepreneur, Adam Smith International (ASI).
ASI is no stranger to Papua New Guinea. With funding from the World Bank and the Australian government’s aid programme it has drafted controversial new mining laws [pdf file] in Bougainville, that deny landowners fundamental human rights. It is also strongly involved in advising the O’Neill government on extractive sector policy, in addition to transport, infrastructure and public administration.
Following an investigation into foreign aid contracts won by ASI in the UK, the Aid Watch report claims ASI’s work is cloaked in financial secrecy, big corporate profits and fat pay cheques for its executives.
The report observes, ‘despite the government’s repeated transparency pledges, it remains difficult to get a full picture and a detailed breakdown of how funds are actually spent’. As a result, ‘it is unclear how much of a certain contract will be consumed by transport and accommodation for ASI consultants, for example, or how much the company will pocket in fees and administration costs’.
However, it is noted, ‘a look at the company’s financial statements … show just how lucrative the “aid industry” has been for it. In 2014 ASI reported revenues exceeding £110m – up more than 20% from £90m in 2013, and 50% from 2012 (£72m)’.
The report continues:
“The rewards of ASI’s aid-funded business have been particularly rich for the company’s directors. ASI is owned by a holding company called the Amphion Group, which is in turn owned by Adam Smith Advisory Group. In 2014, the Adam Smith Advisory Group said its seven paid directors shared just over £1m in salaries and benefits, with the highest-paid receiving almost £250,000 which is far more than what DfID’s top official, or even the UK prime minister, takes home”.
The report also inquires into ASI’s past. It claims ASI’s origins lie in the similarly named Adam Smith Institute, a right-wing think tank that is known for supporting tax cuts for the most wealthy and the privatization of public assets. Both organisations, it is argued, have a strong overlap of personnel and objectives. They are also closely connected to the UK’s ruling Conservative Party, which has been slashing budgets while opening up new opportunities for the most wealthy to park their money in British overseas tax havens.
Perhaps not surprisingly given its status as one of the world’s leading aid entrepreneurs, ASI has strongly lobbied for more aid to be delivered through private companies rather than government agencies or the not-for-profit sector. ASI has also argued that particularly in countries facing instability, private contractors such as itself can help the UK government exert its influence over local policies through the exercise of ‘soft’ power.
Indeed, the report notes in 2011 ASI ‘told a House of Lords committee that using private contractors for projects in conflict environments better “allows the projection of soft power” by increasing the UK’s ability to influence policy in these countries’.
“Technical assistance is very much complementary to ‘harder’ exercises of UK power such as military force”’.
This prompts a range of questions for PNG and Bougainville.
Has ASI been funded by the World Bank and Australian government to ‘influence’ PNG and Bougainville policy, in ways that benefit foreign powers and companies, rather than the citizens of PNG and Bougainville?
And just how much money does ASI pay its consultants and contractors who come into our country to exercise ‘soft power’ on behalf of their paymasters, whether it be Australia or the World Bank?