Trading with Mugabe

It emerged on Sunday that six Tory MPs, including the new shadow home secretary, Dominic Grieve, have investments in firms trading in Zimbabwe. These firms include Shell, Barclays Bank, BP, Tesco, Rio Tinto, WPP and Anglo American. A senior manager at Imago, a Zimbabwean subsidiary of the communications firm WPP, even worked on advertisements for Mugabe's election campaign.

The Tory leader David Cameron told the Commons only last week that "businesses and individuals that have dealings in Zimbabwe must examine their responsibilities and make sure they do not make investments that prop up the regime". According to the Independent, "The revelations will embarrass the Tory leader, who has sought to take the moral high ground over the crisis in Zimbabwe." But will they? Many of these multinational corporations have been trading in the country for years, and only have relatively small operations there.

The fact that the Conservatives have been accused of involvement in unacceptable commercial dealings in Africa is nothing new. During apartheid, Margaret Thatcher notoriously failed to impose sanctions on South Africa, as British business supported the white regime with billions of pounds of trade. From Consolidated Goldfields to Barclays, Corporation UK raked in the money off the backs of exploited cheap African labour. Thatcher said at the time "sanctions would only hurt the poor black people". Bishop Tutu replied that "sanctions would be no worse than apartheid."

Cameron has since apologised for his party's stance on apartheid, and is clearly trying to make amends. However, Barclays should know better than to be supporting African despots again, especially as they may soon have to pay substantial reparations in an American court for their role in South Africa.

When the case against Barclays was first made, the bankers said it "had no legal merit," claiming they had "tried to be a positive influence for change" in South Africa. Lawyer Charles Abrahams said of the Barclays lawsuit in May: "This has the potential to change the relationship between states, individuals and multinational corporations with respect to human rights."

Barclays now owns two thirds of the shares in Barclays bank Zimbabwe, and last year the Observer reported that the company had helped to bankroll Mugabe. This all shows that the bank has a long way to go if it is to become an ethical investor.

Africa is better off now the likes of Tiny Rowland have passed into the history books. He was once referred to by Edward Heath as "the unpleasant and unacceptable face of capitalism." But as his former company Lonrho recently created a new investment vehicle called LonZim with a £100m to invest in Zimbabwe, it is clear that ethics come after profits for some companies.

Last week it emerged that the huge corporation, Anglo American, had a substantial investment in platinum mining in Zimbabwe. They mentioned their commitment to their 650 workers at the mine there, but avoided the question of whether their investment helps to sustain Mugabe. Rio Tinto, which owns a diamond mine in the country, used similar language, and spoke of having a "duty to our workforce and the community".

The former test cricketer Phil Edmonds has also been investing in Zimbabwe. Edmonds is allegedly associated with Muller Conrad "Billy" Rautenbach, a Zimbabwean who is wanted for fraud charges in South Africa, and who is believed to be close to Mugabe.

As George Bush announced a tougher sanctions package, these policies were immediately criticised elsewhere. "History has shown us that [sanctions] don't work because the leadership just dig in and dig in and feel persecuted," said Kenyan foreign minister, Moses Wetangula, ahead of the meeting of the African Union at Sharm el-Sheikh.

It will hurt the ordinary people of Zimbabwe, but a combined package of sanctions and disinvestment seems to be the only other option. There is a risk that such a move may pave the way for the sale of the rest of Zimbabwe's resources to the Chinese at bargain basement prices, but something needs to be done. Sanctions would be no worse than Mugabe. For multinational companies, failing to withdraw from Zimbabwe will ultimately jeopardise the work of their expensive PR machines and their boasts of a caring capitalism.