Business risks mount in Zimbabwe

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By Hugh Pym Economics editor, BBC News Barclays is among UK firms still operating in Zimbabwe

International outrage over Robert Mugabe's self-styled election victory in Zimbabwe has generated further debate about sanctions and wielding economic weapons against the regime.

Some major British firms are still trading there, including Barclays and Waitrose, but pressure on them to sever their commercial links with Zimbabwe is growing.

Back in 2003, Robert Mugabe's regime was facing strong international criticism, albeit not as intense as now.

I did some research then on British companies with trading links to Zimbabwe and was surprised to discover that 18 out of the 50 biggest UK firms said they had a presence in the country or trading relationships with Zimbabwean organisations.

A further 12 companies failed to respond.

This was just after England's cricketers pulled out of a World Cup match in Zimbabwe, following pressure for them to take a stand against the Mugabe regime.

A Foreign Office spokesman said at the time that it was felt that any block on commercial links would harm Zimbabweans.

But English cricket's ruling body, the ECB, said it was perverse and inequitable that, while businesses were trading with Zimbabwe, cricketers had been asked to make an isolated and symbolic gesture.

Five years on, as English cricket severs its bilateral links with Zimbabwe and cancels a tour here next year, the spotlight is turning once again on the conduct of companies – although it is not yet clear how many of them have pulled out in the intervening period.

On the defensive

The mining giant Anglo American was put on the defensive when news of its plans to develop a new platinum mine in Zimbabwe emerged. Some MPs argued this clashed with modern ideas of corporate responsibility.

The company said it was concerned about the situation in Zimbabwe but the project had been in development since 2003.

Critics ague that doing business in Zimbabwe is, in effect, supporting the Mugabe regime and should therefore be stopped.

Lord Malloch Brown said UK firms must be aware of changing conditions

Others point out that pulling the commercial plug would destroy jobs and further impoverish ordinary people rather than the ruling elite.

We contacted some of the leading British companies to have trading relationships there.

Barclays told us it had been there for almost 100 years, well before the current difficulties. The bank said it conducted its business in an ethical manner, providing vital services to 130,000 customers.

Tesco said that by trading with Zimbabwe, it was supporting hundreds of small farmers and not the Mugabe government.

BP said it had a tiny business running forecourts which didn't really make any profit.

Waitrose buys in some Fairtrade fish from Zimbabwe and argues that the venture supports hundreds of workers and their families.

All point out that they are acting lawfully and in line with EU regulations - current sanctions cover the defence trade and travel restrictions on some Zimbabwean officials.

But this debate won't go away in a hurry.

The Foreign Office minister Lord Malloch Brown has warned companies, "The game is changing," with tougher economic sanctions a possibility.

Companies will have to work harder to sustain the argument they are supporting jobs and livelihoods rather than propping up a discredited regime.