UNICER: Brewing corruption in Angola
In previous investigations I examined how members of the Angolan government went into partnership with the multinationals Castel Group and SABMiller in order to gain control of the drinks market in the country. This article looks at the case of UNICER, the main beverage manufacturer in Portugal.
The multinationals in the drinks sector have developed a keen interest in the Angolan market, which is the third biggest beer consumer in Africa. Foreign investors seeking a way into Angolan markets need to follow two fundamental rules. The first involves setting up business partnerships with powerful figures in the regime; the second involves ignoring the relevant legislation, relying on the impunity of government leaders.
UNICER’s business partners are the current Ministers of Industry and of Petroleum, respectively Joaquim David and José Maria Botelho de Vasconcelos, as well as the Governor of Benguela Province, General Armando da Cruz Neto and the former President of the National Private Investment Agency, Carlos Fernandes.
In an interview with the weekly paper O País, on 29 January 2009, UNICER’s representative in Angola, José Teixeira, announced that the new UNICA (United Angolan Breweries) factory would start operating in May 2011, and would produce 100 million litres of beer each year.
According to the interview, UNICER sold 125 million litres of beer to Angola in 2009, accounting for 70% of the imported beer market. In 2008 UNICER’s sales in Angola, led by Cristal and Super Bock brands, were worth 60 million dollars, making it second only to the Angolan brewery Cuca in the national market.
Partnership with political leaders
UNICER has set up a partnership with three Angolan companies to build a new beer factory in Bengo province. The Portuguese company holds 49% of the capital, while the Angolan companies Emprominas, Giasope e Imosil each have 17%, making a total of 51% between them.
The 84.6 million dollar investment, approved by the Council of Ministers on 23 March 2008, according to Resolution 80/08 of 22 September, has been made “in the context of efforts for the development of the country”. In the preamble to the document, the government declares its determination “to promote investment projects with a view to pursuing social and economic goals that are in the public interest, namely increasing national production, increasing economic and productive infrastructure, increasing added value for the country, increasing employment and professional training”.
Justifying the approval of the deal, the Council of Ministers stated that the investors were acting freely, “in good faith and in their own interests” in submitting the investment proposal. In terms of Article 33 of Law 11/03 of 13 May, the Council of Ministers authorised the National Agency for Private Investment (ANIP) “as a representative of the state, to enter into contracts with the foreign investors”.
This gave the then chairman of the board of ANIP, Carlos António Fernandes, a powerful mandate to enter into a contract, on behalf of the state, with UNICER and its Angolan partners.
However, one of UNICER’s partners is a company that belongs to Carlos António Fernandes. The company was created on 14 December 2005, with Mr Fernandes himself owning 94.4% of the shares while the remaining 5.6% of the shares belonged to his son, Ricardo Ngangula Correia Fernandes. The company’s headquarters is in Luanda, in a house belonging to the Fernandes family.
Bizarrely, Carlos António Fernandes represented both the state and his private business interests in the same contractual agreement. From a legal point of view, the then chairman of ANIP broke the Law on Crimes Committed by Public Office Bearers. Article 10 (2) of this law prohibits office bearers from entering into business deals over which they would have influence or decision-making powers in the course their official duties.
All the members of the Council of Ministers, under the leadership of President dos Santos, collectively bear responsibility for this crude act of corruption since they approved the project while fully aware of Carlos António Fernandes’s dual interests. Such cases have, however, become the norm when it comes to business deals involving the political elite and foreign investors.
As a prize for his behaviour while in charge of ANIP, Carlos António Fernandes is now the chairman of the board of Sociedade do Pólo de Desenvolvimento Agro-Industrial de Capanda (SODEPAC). This institution, created by the government to revive the agro-industrial sector, has an initial budget of 369 million dollars to invest over three years in Capanda and Pungo a Ndongo, in Malanje province.
UNICER’s second partner reveals the Council of Ministers to be a club of private investors and partly explains the complicity that permits the approval of corrupt projects. The Ministers of Industry and of Petroleum, respectively Joaquim David and José Maria Botelho de Vasconcelos, are the owners of Giasop – Sociedade Comercial Agrícola e Pecuária Limitada [Commercial Agriculture and Stock Raising Company], which owns 17% of the shares in the partnership with UNICER. Giasop was created on 17 July 1994.
The ministers in question were entitled to vote on the Council of Ministers in support of their private investment project, and enjoyed the institutional support of the President of the Republic, José Eduardo dos Santos, in his capacity as head of government, as well as the support of other ministers.
Thus Joaquim David and José Maria Botelho de Vasconcelos broke the Law on Crimes Committed by Public Office Bearers. Article 10 (2) of this law, as mentioned earlier, prohibits office bearers from entering into business deals over which they would have influence or decision-making powers in the course their official duties.
UNICER’s third Angolan partner displays the same tendency. Imosil – Engenharia e Construções Ltda is a business owned outright by the current Governor of Benguela province and former Chief of Staff of the Angolan Army, General Armando da Cruz Neto. Created on 15 November 2006 with three other shareholders, Imosil proceeded to change its shareholding structure on 8 July 2008, before the formal celebration of the investment contract on 22 September that year. The other three shareholders conceded all their shares to General da Cruz Neto and left the company permanently.
In this way the Ministers of Industry and of Petroleum and the Governor of Benguela personally and exclusively, gained 34 % of the shares in the investment contract with the state, in which UNICER was the major partner. Article 10 (2) of the Law on Crimes Committed by Public Office Bearers, referred to above, also applies to the Governor of Benguela.
UNICER, for its part, became involved in influence-peddling and active corruption as defined by the United Nations Convention Against Corruption. This international treaty is of particular relevance here since Angola and Portugal are both signatories to it. Angola incorporated it into its internal law through Resolution 20/06 of 23 June 2006, while Portugal ratified it on 28 September 2007. The UN Convention Against Corruption, Article 18 (a) (b) defines and establishes influence peddling as an act of corruption.
Apart from influence peddling, UNICER is also involved in the practice of active corruption involving Angolan office bearers, according to definitions established in the Angolan Penal Code (Article 321).
Partnerships of this nature not only break the law, as we have seen. They also serve to launder the money looted from state funds by members of the government. There is no other possible explanation for the origin of the millions of dollars that members of the regime have at their disposal as the country’s nouveaux riches and supposed entrepreneurial class.
At a Workers’ Day rally on 1 May 1987, President José Eduardo dos Santos condemned members of the government who demanded commissions to perform their public duties: one of the main forms of corruption in the country. At the same rally, Dos Santos noted that one of the main incentives for the abuse of power by members of his government lay in the fact that he, as Head of State, merely rotated ministers’ positions as a form of punishment. Dos Santos declared that from that date on, officials who were corrupt or incompetent or who abused their powers would spend “a long time without occupying senior positions of responsibility”.
In reality, José Eduardo dos Santos, who has been in power for 30 years, has done the opposite. Corruption is his way of governing, and whoever practises corruption – as long as this does not interfere with the personal interests of the Head of State – is guaranteed many years in government, with all the opportunities for enrichment that that involves. In this context, foreign investors are propping up the political economy of a predatory elite.