AEGiS-WSJ: Anglo Turns on the Lights

Important note: Information in this article was accurate in 2002. The state of the art may have changed since the publication date.

Anglo Turns on the Lights

Wall Street Journal - August 20, 2002

Barring any major reversal, the United Nations estimates that 70 million people will die of AIDS in the next 20 years -- mostly in Africa. South Africa can lay claim to being the country with the largest HIV-positive population in the world. So, with 5 million South Africans carrying the virus, you would think the disease would be the number one concern of the government of Thabo Mbeki, which is just about to host the U.N. conference on sustainable development. But as mining company Anglo American has learned, nothing is so simple in the murky world of HIV/AIDS politics.

Having announced that it would offer free anti-retroviral drugs to thousands of its employees in South Africa, Anglo was denounced last week by Mr. Mbeki's government and rival mining firms. For government and business leaders to criticize the provision of medicine by private companies to their sick employees is not only puzzling but raises large moral issues.

On closer inspection, we ought to be less surprised at the government reaction. South Africa has a lamentable record on matters relating to the AIDS epidemic. President Mbeki himself stood before an international conference two years ago and questioned whether the HIV virus is responsible for AIDS. His health minister called the only drugs available to sufferers "poison."

In response to Anglo American's policy announcement, the government snorted, "The correct thing that should have happened was for Anglo to have come and discussed [their intentions] with us so that they can understand our concerns." Those "concerns" are clearly government fears that if the Anglo American effort succeeds in ameliorating the effects of the disease, the state might come under heavy pressure to pay for drugs for other sufferers. Anglo's actions may intensify demands on Mr. Mbeki to end his refusal to provide anti-retrovirals through state health clinics.

Given the government's cost worries, it is unlikely that any "discussion" between Anglo and the government would have reconciled their assessments of the AIDS problem and how best to deal with it.

What Anglo has realized is that HIV/AIDS threatens every aspect of social and economic activity. Already, it is said that 20% of adults in the country live with the virus, and that average life expectancy has been reduced as a result. Vast mineral resources are the main source of the country's export earnings, but a healthy work force is needed to extract them. To date, most businesses in Africa have responded to HIV/AIDS by attempting to get rid of infected employees. The statements of Anglo's rivals demonstrate a combination of short-termism and denial. "Throwing drugs at it" won't help, says Brian Gilbertson, chief executive of BHP Billington.

Anglo did its own homework and concluded the opposite: Treating the infected population is essential if industry is to survive in South Africa. Anglo has calculated that HIV/AIDS currently raises the cost of producing an ounce of gold by $5, and will raise it by $9 unless the health of the workforce is substantially improved. Anglo's action isn't pure altruism; it believes that providing anti-retroviral drugs to employees makes good business sense.

A big part of the problem here is the ignorance about AIDS and its causes, which the Mbeki government is content to perpetuate, lest the real awareness create a powerful political constituency. This is a country in which some men believe that they can rid themselves of AIDS by having unprotected sex with a virgin girl. Instead of educating people, the government of the country that stands to lose most from this disease is doing less about it than almost any other government in Africa.

For the moment, President Mbeki's official policy is to keep South African's in the dark with vague statements such as "the greatest cause of ill health in South Africa is extreme poverty." A poorly educated society may readily take his word for it. But if AIDS wipes out billions of export earnings and spreads its debilitating effects to a larger percentage of the population, there may come a time when it will no longer be possible to dismiss the disease, and the efforts of forward-looking employers to deal with it, so easily.

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