Wednesday, April 07, 2010

On oil traders, transparency and delicate politics

The Swiss news organisation Swissinfo strives to appear balanced when discussing matters in the Swiss financial services industry - by quoting the defenders of bank secrecy, and then providing balancing quotes from those who support transparency. (This reminds us, a little, of a section in the funny but excruciating Daily Show edition last December when they interviewed the Swiss ambassador to the United Nations, and asked him what exactly it meant to be "neutral" in the Second World War half way between Nazi Germany and the Allies. He didn't look very comfortable answering that one. See here for an interesting overview of that era.)

By adopting this apparent sense of balance, Swissinfo gets itself tied into awful knots. One such knot has just cropped up in an article about secretive oil traders, who have taken to using the Swiss canton of Zug to provide them with secrecy and low taxes.

“Obscurity is a big part of the business. . . Transparency is not always a good thing when making a deal with a government because in many cases it is so closely linked to a delicate political situation.”

An interesting choice of words (admittedly the words of someone else, not Swissinfo). This TJN blogger, with long experience of researching oil-rich African countries like Angola and Nigeria, knows very well what he means by "delicate political situation" when oil trading companies meet governments (as a rule, the traders are far dirtier and more secretive than the oil producing companies themselves, though the latter do sometimes try quite hard to keep up).

Let's provide a translation for readers.

“Obscurity is a big part of the business . . . Transparency is not always a good thing when making a deal with a government because in many cases it is so important to pay a bribe.”

Secrecy - don't they just love it.

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