Global Alumina's proactive efforts to mitigate conflict-related risks in the Republic of Guinea

Abstract

"The Republic of Guinea is a developing nation endowed with rich natural resources, especially bauxite. Although the country itself enjoys relative peace, its neighbouring countries, in particular Liberia, Sierra Leone and Ivory Coast, suffer from heavy conflicts. Furthermore, Guinea is among the poorest countries in the world and presents important socio-political risks for investment (e.g. lack of governance, political transition uncertainties, economic inequalities, labour related problems and capabilities, refugees). In this context, the New York-headquartered company, Global Alumina, is currently constructing a US$3 billion alumina refinery in Guinea. This represents the largest foreign investment in the country and has a tremendous impact on the country’s economy. From the outset, the company has adopted proactive measures to mitigate socio-political risks associated with the project, in particular conflict-related risks. These risks relate on the one hand to the latent conflict potential in the country (exogenous risks), especially considering the conflicts in neighbouring countries, but on the other hand also to conflicts that may arise in connection with the project itself (endogenous risks). For instance, the resettlement activities associated with the project have been implemented in a rigorous and consultative manner, so as to prevent grievances from arising. The case study analyzes the company’s approach in preventing conflict and considers how these issues have been incorporated in the company’s decision–making processes."