The Administrative Technologies of Trade: Coordinating Private Priorities and Public Rules
As mentioned before, speed and fluidity are the major values governing the Copperbelt’s organisation of the flow of strategic minerals. But they cannot be achieved through good material infrastructures alone – they also require coordination between all the actors involved in these systems of movement. Public authorities in charge of controlling and taxing movements and private companies involved in the production and/or the export of minerals may pursue different objectives, which can cause delays in the pace of movement. To prevent conflict and avoid friction, soft infrastructures such as contractualisation rules, IT systems and standards are created at the crossroads between public and private spheres of action. These administrative technologies allow movements to have a regular rhythm and achieve fluidity: They grant ‘the integration, standardization and synchronization of customs and trade regulations.’
1 Cowen, The Deadly Life of Logistics, p. 65.In the Copperbelt’s mineral flow regime, soft infrastructures are generally constructed by the state to enable private accumulation around the fast and efficient flow of minerals. These infrastructures are used to limit stoppages where and when companies need them. Indeed, speed and fluidity paradoxically require stoppages and immobility, as long as they are precisely engineered and do not risk entirely contaminating the logistics chain.
2 Julian Stenmanns, ‘Logistics from the Margins’, Environment and Planning D: Society and Space 37, 5 (2019), pp. 850–67. For instance, immobility is vitally important to manage the fluctuation of prices on the global market.
3 Michael Simpson, ‘The Annihilation of Time by Space: Pluri-Temporal Strategies of Capitalist Circulation’, Environment and Planning E: Nature and Space 2, 1 (2019), pp. 110–28. All trading companies, like the Switzerland-based Trafigura,
4 Gregor Dobler and Rita Kesselring, ‘Swiss Extractivism: Switzerland’s Role in Zambia’s Copper Sector’, Journal of Modern African Studies 57, 2 (2019), pp. 223–45. store copper and cobalt in the Zambian Copperbelt to sell it at the best price and best time.
5 Nicky Gregson, Mike Crang and Constantinos N. Antonopoulos, ‘Holding Together Logistical Worlds: Friction, Seams and Circulation in the Emerging “Global Warehouse”’, Environment and Planning D: Society and Space 35, 3 (2017), pp. 381–98; Dara Orenstein, ‘Foreign-Trade Zones and the Cultural Logic of Frictionless Production’, Radical History Review 2011, 109 (2011), pp. 36–61. Immobility and fixity, if controlled by adequate soft infrastructures, can then also form the basis of profitability for private mining, logistics and trading companies.
This section will analyse two examples of administrative infrastructures historically developed by public actors to enable private accumulation thanks to the flow of minerals. Both have long-term territorial consequences. I will first analyse how contractualisation, as a technology of coordination between the public and the private sector, allows the ‘spatial fix’ of capital.
6 David Harvey, Spaces of Neoliberalization: Towards a Theory of Uneven Geographical Development (Stuttgart: F. Steiner, 2005). Contractualisation, which is a way of managing social and/or economic relations through contracts, is a commonly used coordination technology between partners collaborating on far-flung commodity chains.
7 Jennifer Bair (ed.), Frontiers of Commodity Chain Research (Stanford: Stanford University Press, 2009). Despite being an ontologically private form of organisation, the contract has a long history in the management of territory and trade in colonial Africa,
8 Catherine Coquery-Vidrovitch, Le Congo au temps des grandes compagnies concessionnaires 1889–1930 (Paris: Editions de l’EHESS, 2001). including, more recently, on territorial and planning matters. I will then present a specific form of contractualisation concerning space, time and taxes of movements, namely bonded warehouses. Once again, the long-term perspective of these two technologies will allow highlighting the historical continuity in the management of mineral flows in the Copperbelt through the infrastructures of the mineral flow regime.
Public-Private Contractualisation: The Public Organisation of Territorial Monopolies
Contracts were and still are widely used in the mineral flow regime. The contract has not changed over time – what has changed is the general ideology behind the use of this technology. This subsection will examine how public-private contractualisation in the Copperbelt’s history allowed for and supported the creation of state-sponsored monopolies.
Cecil Rhodes’s BSAC, responsible for the military and commercial conquest of Northern Rhodesia, was a chartered company, meaning it was under contract with the British Colonial Office and officially represented the Crown at the signing of treaties with African authorities. The fact that BSAC acted under a Royal Charter only made the company more powerful in organising its activities: it had no direct competitors in the trade and transport of minerals until 1968. The Company’s monopoly on the mineral trade – and later, through Rhodesia Railways, on all rail transport – was hence organised, permitted and supported by the colonial state. From 1924, when the Colonial Office officially took charge of the colonisation process and the organisation of the territory, the monopoly that Rhodesia Railways had over transport was reinforced, as public civil servants had no choice but to rely on the private railway for their administrative activities. During the Second World War, the British state was buying copper at a fixed and advantageous rate from mining companies in Northern Rhodesia to secure its supply to the army. This contract also benefitted Rhodesia Railways by securing it a high level of business even in times of war. This original form of contractualisation in which the development of public-private capitalism in Northern Rhodesia was rooted was subsequently passed on to successive governments.
After Northern Rhodesia became an independent Zambia in 1964, the close relationship between the government and mining companies through contractualisation did not drastically change. Miles Larmer describes the situation as follows:
an effective alliance between the UNIP government and the international mining companies that would ensure expansion of the industry, with both the companies and the government taking their
carefully negotiated share of what was assumed would be an ever-increasing cake of mining profits.
9 Larmer, ‘Historical Perspectives on Zambia’s Mining Booms and Busts’, p. 45; emphasis added. The UNIP government’s need for funding to achieve the social policies it envisioned required peaceful relationships with investors: the government sought to guarantee the development of new mines in order to secure more contractually negotiated royalties for the state. Based on the 1964 ‘Seers Report’,
10 The official title of the report is the ‘Report of the UN/ECA/FAO Economic Survey Mission on the Economic Development of Zambia’ and it was written by Dudley Seers. a United Nations economic assessment that framed the economic and social development policies for the newly independent Zambia, the country’s first National Development Plans called into question neither the importance of the foreign private sector in mine management nor the setting of copper prices by the London Metal Exchange. The Mulungushi and Matero reforms of 1968–69, often called ‘nationalisation reforms’, are usually seen as a complete turnaround of the Zambian economic situation in this regard. In practice, the government acquired only 51% of the shares in mining, industrial and financial companies,
11 Lise Rakner, Political and Economic Liberalisation of Zambia, 1991–2001 (Uppsala: Nordic Africa Institute, 2003). generously compensating the private companies’ losses according to international financial law, as stated in the contract between the independent government and those companies. During the Mulungushi period, the organisation of parastatal companies and public monopolies was justified by the ideology of self-development and Third-Worldist political traditions.
Kaunda’s proximity to socialist ideologies, regimes or parties – Angola’s Movimento Popular de Libertação de Angola (MPLA), Julius Nyerere’s regime in neighbouring Tanzania, South Africa’s African National Congress (ANC) – may have suggested that these ‘nationalisations’ were aimed at socialising the economy. The parapublic sector, through its two major parastatals (the Mining Development Corporation – MINDECO, and the Industrial Development Corporation – INDECO), grew by leaps and bounds, with the financial crisis hitting the Copperbelt in the 1970s and 1980s as private actors that were still engaged in the economy pushed the state to buy more and more shares during these times of difficulty. As a result, the Mulungushi reforms and the so-called nationalisation period of Zambian history can also be understood as the most advanced form of the public-private logic developed during colonisation – the development of monopolistic state capitalism adapted to the discourses of independence and redistribution, and based on contracts.
Parapublic conglomerates eventually unravelled in the 1990s as Zambia adopted liberalisation reforms following severe economic crises and the fall of the UNIP government in 1990. According to the conditions imposed by the International Monetary Fund (IMF) alongside its financial support, the new Movement for Multi-Party Democracy (MMD) government had to liquidate the public conglomerates. As early as June 1993, it started selling the government’s shares in small and medium companies. Between 1995 and 2002, the government sold its shares of the mining conglomerate. The MMD administration was nonetheless reluctant to fully privatise its infrastructures and transport networks: Initially, less than 50% of the shares were offered for sale in the ‘National Transport Company’, whose subsidiaries included freight transport (e.g. public companies called Contract Haulage and Freight Holdings) and the national airline, Zambia Airways. However, many of these transport companies went bankrupt between 1993 and 1995,
12 John Robert Craig, ‘State Enterprise and Privatisation in Zambia 1968–1998’, PhD Thesis, University of Leeds, 1999; Neo Simutanyi, ‘The Politics of Structural Adjustment in Zambia’, Third World Quarterly 17, 4 (1996), pp. 825–39, p. 837. paving the way for private competition, particularly in the field of road transport. The latter became increasingly central to the functioning of the Copperbelt economy as the economic crisis of the 1970s and 1980s hit the railway industry hard, jeopardising less profitable flows of goods, such as maize, which were entirely dependent on the low rates of transport by rail.
13 Interview, manager of an industrial milling company, Mufulira, 2017. International financial institutions (IFIs) played a key role in legitimising road transport and worked tirelessly to liberalise it in order to lower the costs of freight transport.
The IFIs also endorsed the superiority of the private sector in managing the economy and its logistics component. Hence, contractualisation gained new legitimacy with these new supporters and took the form of public-private partnerships (PPPs). They were and remain very important for the management of infrastructures that the state does not want to privatise in their entirety. They tend to benefit the most financially powerful companies, already well established in the field of infrastructure management. For instance, Zambia Railways, administering the North–South corridor, was subject to a 20-year concession won by a South African consortium in 2003 under the name Railway Systems of Zambia (RSZ). Similarly, the infrastructure at the Kasumbalesa border post was privatised in 2010 on both the Congolese and the Zambian side. The Israeli company that was awarded the contract (Baran Investment Ltd), established two ‘single-window facilities’
14 Jeroen Cuvelier and Philémon Muamba Mumbunda, ‘Réforme douanière néolibérale, fragilité étatique et pluralisme normatif: Le cas du guichet unique à Kasumbalesa’, Politique africaine 129 (2013), pp. 93–112. and completely redesigned border infrastructures to reduce crossing time. However, the PPP behind the Kasumbalesa infrastructure is regarded as a failure from the state’s perspective.
15 Interview, civil servant working in the Zambian PPP Unit, Lusaka, 2017. This infrastructure is now completely privatised, similar to the administration of the US $200 fee imposed on trucks and vehicles crossing the border between the two Copperbelts.
The Kasumbalesa PPP failure is explained inside the administration by the fact that no institutions had managed any PPP contracts before 2012. A ‘PPP Unit’ was subsequently created but only became fully operational after 2016, when it was put under the direct authority of the State House. Nevertheless, PPPs proved not to be as much of an antidote to capitalism’s monopolistic tendencies as this free-market tool was supposed to be. On the contrary, the way they are implemented in Zambia’s infrastructure sector reinforces the dominant position of major multinational companies. First, most of the implemented Zambian PPPs are ‘unsolicited projects’: they are infrastructure projects proposed to the government by major companies that need a specific facility. Because the administration’s expertise in this area is limited, it has no other choice but to trust the company regarding the potential for new infrastructure development.
16 Ibid. Second, the Zambian Development Agency (ZDA), one of the agencies looking into infrastructure development through PPPs, admits that ‘non-traditional exports’ are not a priority because they are seen as the realm of ‘small-scale players’. The Agency only supports ‘big players’ that ‘already know what they want’ and ‘have already done their homework’ about the kind of infrastructures they need.
17 Interview, civil servant working in the Infrastructure Development Department, ZDA, Lusaka, 2017. Besides limiting the government’s financial support to a small number of companies, the current PPP framework does not push back against the development of profit-oriented mining infrastructure, and consequently tend to exclude projects that would benefit commodities other than copper.
As the history of public-private relations in the mineral flow regime shows, contractualisation has been one of the preferred administrative tools to manage the relations between those two categories of actors. Contracts that bear the seal of the administration give the companies a particular legitimacy that can then turn into the consolidation of monopolies. Contracts represent a 100-year-old administrative infrastructure for commercial traffic in which practices and ideologies linked to trade have become sedimented. This section showed the continuity of public-private cooperation over the decades. What has changed are the ideologies legitimising the forms and the recipients of the contracts. In this regard, the period of independence marks nothing more than an ideological reversal of the management of public-private relations in a short period of time. The public-private cooperation built up during colonisation and reinforced during the liberalisation period remains intact.
Bonded Warehouses and Seals: Contractualising Space and Time of Commercial Traffic
Public-private contractualisation also applies to the spaces and times of mineral flows. Bonded warehouses are a case in point. Created by state administrations in the Copperbelt since the time of colonisation, these technologies allow companies to settle and store goods on tax-free state-demarcated parts of the territory. They are zoning technologies: state administrations delineate a portion of their land where common fiscal law does not apply. Goods entering a bonded warehouse are motionless but are still considered as being in transit, which allows the company owning the goods to avoid paying import duties or other taxes. Bonded warehouses are akin to a no-interest credit on import duties by the public administration to private companies:
A customs bond is an oath that is signed after duties are assessed but before they are paid; it is a promise to fork over duties when the goods are reclaimed from storage, in three days or three years … if the goods are transferred out of the facility and out of the [country] … then their owners avoid tariffs altogether.
18 Orenstein, ‘Warehouses on Wheels’, p. 650.In a 2018 article, Dara Orenstein runs through the history of bonded warehouses: inspired by the functioning of a free port such as Hamburg or Hong Kong, bonded warehouses are an invention of nineteenth-century US capitalism. It is unclear how they were transplanted to Southern Africa. The first mention of bonded warehouses in the Copperbelt is made in the annual report of 1931 published by the British Colonial Office in Northern Rhodesia. It notes the existence of five bonded warehouses on Northern Rhodesian territory, described as ‘major public works’ undertaken in the colony.
19 Colonial Office, ‘Annual Report on the Social and Economic Progress of the People of Northern Rhodesia, 1931’ (London: His Majesty’s Stationery Office, 1932), p. 87. They were situated in Ndola, Mokambo, Livingstone, Fort Jameson (now Chipata) – four major border cities that the office described as ‘free warehousing ports’
20 Ibid., p. 27. – and Broken Hill (now Kabwe), a mining town in central Zambia located on the line-of-rail. The locations of these five bonded warehouse show the will of Northern Rhodesia’s British colonial government to encourage not only mining but also the movement of goods on its territory, as bonded warehouses are ‘site[s] of circulation, not of production’:
21 Orenstein, ‘Foreign-Trade Zones and the Cultural Logic of Frictionless Production’, p. 51. Livingstone was the point of entry/exit for goods coming from or going to South Africa on the North–South corridor. Fort Jameson, situated close to the Nyasaland (now Malawi) border, was used as a gateway for commercial traffic going east on an alternative route towards the ports of Nacala and Beira in Northern Mozambique. As for Ndola and Mokambo, they were directly looking at the Congo as the two towns sit on the border splitting the Copperbelt in two. They were strategically set on the trajectory of the roads mentioned in the first part of this chapter: Material and immaterial infrastructures appear to be complementary. Those bonded warehouses were most likely used to store goods to be exported, such as copper, obviously, but also maize and tobacco: Here we see that the infrastructures created for copper can be used for the trade of other goods. The storage of such goods allowed investors to wait for the best time to sell their products according to international market prices. They thus contributed to and exacerbated the commercial specialisation of Northern Rhodesian territory and its polarisation around borders and the line-of-rail.
Bonded warehouses were still in use during the nationalisation period and were aimed at supporting private investments in Zambia. The 1986 Investment Act, for instance, included several incentives for investors such as the ‘access to any existing free trade zones’ and additional tax breaks for investors.
22 Saasa, Zambia’s Policies towards Foreign Investment, p. 35. Nowadays, the vast majority of logistics, mining and trading companies in the Copperbelt use bonded warehouses. Bolloré Logistics, Trafigura and Reload Logistics are among the major companies moving Copperbelt minerals across space, and all their storage installations are equipped with bonded warehouse technology. Their proliferation in the Zambian Copperbelt is worth emphasising. Businessmen and -women involved in cross-border economic activities and trade in the Copperbelt always refer to Zambia as a much safer place for people and goods than the DRC. Thus, bonded warehouses contribute to the image and the functioning of Zambia as a ‘structured platform’
23 Interview, Congolese trader involved in cross-border trade in the Copperbelt, Kitwe, 2016. for traders and companies wanting to benefit from the riches of the DRC without being based in the country. For instance, Bolloré Logistics has built a 70,000 square metre
warehouse in Chingola, including an 18,000 square metre bonded warehouse ‘dedicated to the transhipment of copper, cobalt coming from the Katanga region in the DRC, as well as chemicals … brought to Chingola through the southern and eastern corridors’
24 Bolloré Logistics, ‘Transport et Logistique en Zambie: Focus marché’, www.bollore-logistics.com/fr/Pages/FOCUS/Zambia.aspx (accessed 12 March 2020); author’s translation from French. for the services of a single mining company in the DRC. The installation of this facility is justified by the insecurity in the Congo: close enough to the border but outside the DRC, the Bolloré warehouse constitutes a free-of-charge ‘buffer stock’
25 Interviews, Bolloré warehouse’s managers, Chingola, 2016 and 2017. for the mine in case of border closure or political instability.
In Zambia today, the opening of a bonded warehouse is subject to the procurement of an annual ‘customs area licence’. Customs officials keep the keys to the bonded space and are entitled to inspect those warehouses anytime to ensure that no goods are leaving them (otherwise, taxes would have to be paid), although unannounced inspections are uncommon. Bonded warehouses are, therefore, delineated spaces where private ownership and public rules combine, and where public and private logics meet and intertwine. However, the bond no longer requires geographical fixity, as the bonded warehouse technology has been expanded to goods in motion. This is what Dara Orenstein calls ‘warehouses on wheels’: thanks to a unique seal numbered by customs administrations, bundles of copper cathodes can travel, in transit, for several days without paying any duty, as they did not officially or administratively cross the border and enter Zambia. The border itself is moving along with the seal: ‘the customs border [is] not so much a riparian line comprised of latitudinal and longitudinal coordinates as a process enacted in a sequence of spatially circumscribed transactions’.
26 Orenstein, ‘Warehouses on Wheels’, p. 654. The contract between customs administrations and the company managing the movement of copper cathodes allows partners to negotiate when and where the goods will effectively cross the border – if they ever do – and taxes will be due.
This functioning has been further expanded in the form of temporary import/export procedures. They allow a mining company, for example, to import a machine without paying any duty on the basis of a promise that it will be sent back to its country of origin before the end of the 365-day period fixed by administrations. This happens frequently between the two sides of the Zambia–Congo border, as the same mining companies (Glencore, First Quantum Minerals) and logistics companies (Bolloré Logistics, Reload, CML) are settled in both countries. Thanks to temporary exports and imports, they can share costly mining equipment between their own subsidiaries. Temporary exports and imports can be extended beyond 365 days with a simple request from a reputable clearing agent, which can pave the way for longer and longer exonerations.
27 Hélène Blaszkiewicz, ‘La formalisation inachevée des circulations commerciales africaines par les infrastructures de papier: Cas de l’industrie logistique zambienne’, Politique africaine 151 (2018), pp. 133–54. By pretending goods did not enter its territory, thanks to the contracts’ administrative technology, the state is depriving itself of the right to tax these movements. Consequently, these types of contracts open profit opportunities to mining and logistics companies that they would not have been able to access without public intervention and rule. It entails close cooperation between customs administrations, which enable, certify and control these zones, and private companies managing copper and cobalt circulations in the Copperbelt. Zones are now presented as the liberal tool par excellence as they represent a way of attracting private investment through loosened fiscal constraints. They are the direct heirs of their colonial counterparts: they mark the deepening of the private accumulation logics developed around the flows of minerals allowed by the state’s administrations. Bonded warehouses represent a key infrastructure technology for ‘efficient’ (i.e. profitable) commercial traffic and are central to the Copperbelt’s mineral flow regime. Today, they meet the state’s objectives of industrial development and take the form of another liberal zoning technology that has been implemented in the region: special economic zones.
The ‘infrastructure-isation’
28 Hélène Blaszkiewicz, ‘La mise en politique des circulations commerciales transfrontalières en Zambie: infrastructures et moment néolibéral’, Géocarrefour 91, 3 (2017). of the Copperbelt started during colonisation, which means the complete organisation of the territory around infrastructures allowing mineral exploitation and exporting is not limited to physical infrastructures. ‘Soft’ infrastructures were also created and took the form of administrative technologies given the state’s importance in their creation and management. Their goal was to coordinate the priorities of the private sector, which was dominant in the first decades of colonisation, with the actions of the state, which created rules to ensure private accumulation. Among those soft infrastructures, contractualisation played an important role as it allowed monopolies to form and strengthen. In the same way, bonded warehouses as a public technology gave mining and logistics companies control over the rhythms of their movements. Those two administrative technologies work on the question of resolving, through the contractual organisation between actors, all aspects that could constitute obstacles to the fluidity and regularity of traffic – from the organisation of relations with partners and competitors to space and time. This section has also shown the historicity of these two administrative technologies. It underlined the long-term influence of private logics in the organisation of the territory of trade and how public administrations have enabled a certain level of accumulation around flows of minerals.