Geopolitical Risk, Terrorism, and Human Rights Abuses: The Case of TotalEnergies and Mozambique

The story this morning in Le Monde detailing TotalEnergies’ involvement in alleged ‘war crimes’ in Mozambique is perhaps one of the less-discussed aspects of the business of assessing geopolitical risk. The report is excellent and the link is here (https://lnkd.in/ev5rf27y)

Generally, it involves the detainment and torture of Mozambican civilians by soldiers guarding the company’s LNG site – soldiers that belonged to the Joint Task Force (JTF), which was a military unit created through an agreement between the Mozambique authorities and the French energy company.

The reading struck a chord in me: After leaving the academic world full-time in the late 90s, one of the first projects on which I conducted a risk assessment was the Antamina mine in Peru. The group that I was with was injecting around $2.2bn into the country – the largest in Peru’s history.

One of my key tasks was to consult with some of the local communities along the supply route.  At the time the Sendero Luminoso was carrying on their activities and had recently kidnapped and murdered the head of Peru’s mining association.

Along with a small group of armed ‘companions’ I had series of very informed discussions with the mayors of select towns, who told me about their concerns, especially given the impact previous mining activities had on the environment.  Slag heaps on the sides of the rivers produced levels of acidity that were worrisome. The consultations that had been performed to this point consisted of the delivery of a foot of documents – in English.

As in all investment, things can go awry, as we see in the Mozambique case.  In terms of political risk, it’s one and very real aspects of the business that goes beyond generalities. I think it adds a degree of realism to assessments, and indeed offers some very interesting reading, lessons, etc.

There are quite a few empirical studies that have used our ICRG risk data to shed some light on the connection between political risk, terrorism, human rights abuses, etc.  I think they are worthwhile to read. Just drop me a line with a literature review since documenting them here exceeds the character limit.

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