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Compliance and Capacity International, LLC The sanctions practitioners and due diligence advisory group

Phone:+1 212 864 2206 110 West 94 Street Mobile:+1 610 390 9541 New York, NY 10025 Email: rico.carisch@comcapint.com USA

www.comcapint.com

Sanctions for Peace in Sudan Enrico Carisch, Partner 12/9/2010 Irrespective of the outcome of the forthcoming referendum in South Sudan and Abyei, or whether they will actually take place, and regardless of the future relationship of the parties to the Comprehensive Peace Agreement, the needs of South Sudan will continue to be great. The Government of South Sudan has already identified, in collaboration with the UN Peacekeeping Mission UNMIS, its mid- and long-term support requirements from the international community. The list includes assistance with strengthening the executive leadership; security sector reform; rule of law and law enforcement; fiduciary management; public administration; and management of natural resources. No doubt, the billion dollar reconstruction budgets of international donors already allocated to South Sudan will be in demand for years to come to meet these capacity needs. And no doubt, the international community and agencies such as USAid, will work to fund and to facilitate these efforts. In the end, however, the actual implementation will fall to the specialized private sector, and the aid and peace community; and they will face an extraordinary task. South Sudan has always been in varying degrees a challenging place for peacemakers; and as witnessed in the Eastern DRC, peace can sometimes be as treacherous as war. In the first place, until security provisions are more adequately addressed, the billions of future aid dollars will only add to the region’s insecurity as cash infusions make aid projects more vulnerable to extortion and its workers more likely to be kidnapped. Perhaps the most corrosive long-term challenge for the peace industry will be Sudan’s well-known and pervasive corruption. Transparency International’s Corruption Perception Index ranks Sudan’s public services among the bottom group of 11 countries with the worst corruption profile. Khartoum’s all-powerful and omnipresent members of the National Intelligence and Security Services (NISS) and the National Congress Party sit at the tip of this pyramid of crime. Former and current NISS officials control all major Sudanese companies, including the automotive conglomerate, GIAD; the leading air cargo companies, Azza Transport and Green Flag; the Sudan National Petroleum Corporation, which controls the State’s entire oil- and gas industry; the Military Industry Corporation with a total of eight major subsidiaries; and most of the major national banks and insurance companies. Of course, security and protection should come from the government’s own forces, but they are mired in corruption and in dire need of assistance themselves. Thus, the job falls to the UN peacekeeping mission, UNMIS, whose mandate covers all of Sudan but whose capacity is barely enough to protect its own personnel and installations. The AU-UN hybrid mission, UNAMID, is mandated only to cover the three Darfur States and has proven incapable of maintaining an independent and effective protection role for Darfurians. In other words, the UN peacekeepers will not be of much help either, even if North-South violence can be contained and even if the many smaller tinderboxes of proxy or so-called tribal fighters do not erupt in new atrocities. But the international community still owes the Sudanese people assistance in establishing and ensuring peace and security. This is clearly the job of the UN Security Council – never mind that by sending two barely effective peacekeeping missions to Sudan the Council hasn’t exactly lived up to its responsibilities. In fact, the Security Council has barely tapped the potential of its international

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peace and security arsenal. Sudan stands as the best example where the Security Council’s conflict intervention mechanism has been fed a steady diet of carrots while failing to use the stick. The Security Council indulged in a half-hearted and short-lived phase of terrorism-related sanctions ten years ago. The arms embargo on Darfur which has been in place since 2004 exists on paper only. Successive reports of the UN Panel monitoring the embargo - including my own in 2009 - describes a sad tale of flagrant and consistent violations reported to a divided and beleaguered Security Council. Despite the fact that Sudan has witnessed one of the worst cases of widespread carnage in the recent history of Africa, only four individuals have been put under targeted UN sanctions, which have never been enforced. Letting the past be the past, we could now ask the Security Council to demonstrate new leadership by using its most powerful non-military intervention tool -- sanctions -- to protect the peace in the South. Establishing sanctions for peace over all of Sudan, the Security Council could now threaten and impose targeted measures (such as an assets freeze and travel ban) against any actor who undermines the peace process, threatens or diverts international aid, or extorts companies or workers serving the peace process. Sanctions will thus be made to assume a preventive role: instead of coercing belligerents to modify their behaviour, potential troublemakers will understand the price for turning belligerent. The benefit of such an undertaking by the international community is obvious. Companies who want to contribute honestly to peace and security will not only be protected, but their unfair, illegal or violence-prone competitors will be severely constrained. Even if such a clear-cut decision were to be taken by the international community, the private sector would still face some hard choices. The forces of global commerce have created some awkward situations in conflict zones. Peacekeepers typically travel in 4x4 trucks equipped with mobile and satellite phones and protect themselves with military gear, arms and ammunition. Commercial cargo transporters move this material into the deployment zones regardless of the humanitarian, military or dual use nature of the equipment. Militias and other belligerents also use 4x4 trucks (sometimes stolen from legitimate sources) that they modify into “technicals”, the ideal fighting platform for desert warfare. The belligerents rely for command and control on the same commercial mobile and satellite phone services as the peacekeepers do. Their military gear, arms and ammunition also arrive through the same commercial cargo transporters and sometimes originate from the same manufacturers. No one claims that the companies that manufacture, sell, or distribute these goods and services in Sudan’s conflict zones supply belligerents or engage with them knowingly. It is abundantly clear however, that they should practice due diligence so as not to inadvertently contribute to fueling conflict or the commission of atrocities. From recent efforts in the Congo come instructive lessons of how the private sector can and will cooperate to deny the negative forces’ sustenance while supporting peace and security. The Congolese and global mining and mineral trading industry responded cooperatively when faced with the threat of possible UN sanctions and confronted with extensive disclosure requirements resulting from the US Conflict Minerals Act. The affected trading chains are making reform efforts and are implementing improved steps. There is no reason why the Security Council, the international donor agencies, and the private sector cannot also come to the understanding that cooperating and establishing a framework in support of peace in Sudan will be in everybody’s best interest. Companies from all over the world will be grateful for tangible assurances that competitors who oppose or obstruct the peace business will face consequences from the international community.

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