Experts warn companies against terrorism financing threats

Terrorism, banditry, militancy, inter-ethnic wars, and religious extremism are increasingly assuming a more worrisome dimension globally as more countries experience the challenges of insecurity posed by terrorists and terror groups, as well as groups promoting extreme activities.

The Institute for Economics and Peace, in its Global Terrorism Index 2023 report, stated that terrorist attacks became more deadly in 2022, with an average of 1.7 people killed per attack in 2022 compared to 1.3 deaths per attack in 2021, making it the first increase in lethality rate in five years.

GTI, which compiles comprehensive data on critical global trends and patterns in terrorism over the last decade, also stated that besides the number of deaths, there were also numerous terror-related incidents, including abductions, hostages, injuries, destruction of properties, and displacement of communities.

The report further revealed that Islamic State and its affiliates, al-Shabaab, Balochistan Liberation Army and Jamaat Nusrat Al-Islam wal Muslimeen, were among the world’s deadliest terrorist groups in 2022. Islamic State affiliate groups include Islamic State – Khorasan Province, Islamic State – Sinai Province and Islamic State West Africa  Province, which operates in the Sahel region, including Nigeria.

Terrorist organisations and allied groups often require funds to finance their activities, including the purchase of arms and ammunition and fueling their network of affiliates. Illicit mining of natural resources, such as gold, diamonds, and crude oil, is, therefore, one of the accessible sources of funds they exploit, as the sale of these commodities can serve as a funnel to launder the proceeds of illicit activities.

In addition, most terrorist groups and related organisations may exploit corporate entities by funnelling money through shell companies or engaging in illegal financial transactions, thereby helping to sustain their activities.

For example, in Sierra Leone, illicit diamond mining was one of the several factors that contributed to the prolonged civil war which lasted from 1991 to 2002  in the West African country. Diamond extraction was more prominent in financing rebel groups, particularly the Revolutionary United Front.

The rebel groups funded their activities by trading in ‘blood diamonds’ or ‘conflict diamonds’. These diamonds, often extracted illegally, were sold on the international market to purchase weapons and sustain their insurgency. Gold mining also occurred illicitly, though not as prominent as the diamond trade.

Coming home, terrorism, banditry and militancy enablement have also been recorded in Nigeria. Statistics and studies have shown that crude oil mining in the Niger Delta region accounted for the rise in militancy in the oil-rich South-South states. Continuous agitation for resource control has exacerbated the establishment of many illegal refineries and the theft of crude oil and refined products.

Zamfara State, in North-West Nigeria, is another reference where illicit mining of gold deposits has been identified as a source of funding for insurgents. This has also exacerbated the spread of insecurity in northern Nigeria.

London School of Economics Fellow Uche Igwe, in a write-up, stated that illicit natural resource extraction in Nigeria fuels violence and insecurity, citing crude oil exploration in the Niger Delta region and gold in Zamfara as references. He said further that criminal networks, including the locals, influential persons and foreign opportunists, often provide cover for those involved in the illicit mining of mineral deposits.

In recent times, there have been rising cases of corporations caught in the web of global terrorism enablement arising from questionable relationships, unethical or illicit dealings or transactions with organisations whose activities are terrorism-inclined.

Terrorist groups sometimes exploit corporate entities by funnelling money through indirect shareholding because they require funding. Corporations that are not diligent on due background checks may unwittingly become involved in money laundering for terrorists.