SOUTH SUDAN – SUDAN: Fierce Oil Dispute

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  • COOPERATION ANDTRADE

    AFRICA CHINAThree-Nation Tour

    The continent is a golden groundfor foreign investors.

    China will, as always, attach impor-tance to Africas concerns and interests,visiting Chinese Foreign Minister YangJiechi said in Windhoek, Namibia onJanuary 5th, where he had arrived onthe 4th for a three-day visit, the thirdleg of his three-nation African tour,which also took him to Cote d Ivoireand Niger, Xinhua (6 1) reported.Yang hailed Africa as a goldenground for foreign investment, andvowed to work with Chinese rms toensure they comply with local labourlaws.

    Africa is a fertile place for foreigninvestors and it is a golden ground forAfrica to attract foreign investors,especially for infrastructure which isthe blood and muscle of a country,Yang said. The arrival of Chinesecompanies and workers has sometimesstirred conict with locals, with Nami-bians complaining that some Chineserms fail to respect the minimum wageand other labour laws, reports AFP(5 1).After his talks with Namibian counter-part Utoni Nujoma, the two ministerssigned a technical cooperation agree-ment that included a $3.2m loan forprojects that Namibia can decide uponlater.

    In December China and Namibiasigned a deal on animal health, whichwill allow Namibia to export sh andbeef to China later in 2012, and Chi-nese rms have also sought greaterstakes in uranium mining. China has inrecent years expanded its aid to Nami-bia, building roads, schools and hospi-tals in remote areas, although the costsare not made public. According to lat-est gures from the Business Journal ofthe Namibia Chamber of Commerceand Industry, 27 Chinese state compa-nies are active in Namibia in construc-tion, mining, engineering, informationtechnology and nancial services.According to a World Bank reportpublished in December, about 35,000Chinese nationals live in Namibia.

    Given the major changes in the inter-national situation and internationalrelations, to further enhance unity andcooperation between China and Africais of strategic importance. It will notonly serve the common interest of

    China and Africa, but also contributeto the development of developing coun-tries as a whole and make internationalrelations more democratic, Xinhuaquoted Yang as saying. The profoundand complex changes in the interna-tional landscape will also bring chal-lenges to China-Africa relations, henoted, but he said that China standsready to work with African countriesto remove interference from the outsideand address the various problems con-straining the development of bilateralrelations.

    Meanwhile, on January 11th, Nami-bias competition commission said ithad cleared the way for Taurus Min-eral, a subsidiary of state-owned ChinaGuangdong Nuclear Power HoldingCompany (CGNPC), to buy a control-ling share in Australia-based ExtractResources, which holds exploration li-cences for the massive Husab uraniumdeposit in west-central Namibia.

    The central bank governor of Sudan,Mohamed Khair meanwhile has askedChina to use the yuan currency andSudanese pounds rather than US dol-lars in their commercial exchanges.Beijing has been hoping for wideruse of the yuan in its internationaltrade but the dollar remains thedominant currency in global transac-tions.

    Energy-hungry China is the largest for-eign investor in Sudans oil sector, withtwo-way trade between the countries val-ued at $10bn in 2010, according to awebsite of the Chinese embassy. (sourcesas referenced in text) Records to be set p. 19331

    SOUTH SUDAN SUDANFierce Oil Dispute

    The Juba government warns of thehuge economic impact if Khartoumblocks exports.

    South Sudans Oil Minister said onJanuary 10th that Sudan was siphoningo his countrys oil, threatening toinstigate legal proceedings against anycountry or company involved in buyingthe allegedly stolen crude.

    Since landlocked South Sudan secededin July 2011 taking with it 75% ofSudans oil production of 470,000 bar-rels per day the two countries havefailed to negotiate a fee for the Southto export its oil using Sudans infra-structure. Crucial facilities including thepipeline and Red Sea export terminalremain in Sudan, leaving the two statesarguing over how much the Southshould pay to use the infrastructure,reports AFP.

    Sudans President Omar al-Bashir saidon the 4th that South Sudan was nego-tiating in bad faith with Khartoumover oil fees and was threatening toblock a pipeline transporting thecrude. Previous rounds of talks endedwith the parties still wide apart.In November Sudanese ocialsannounced the country would take23% of the Souths vital oil exports aspayment in kind, and Bashir on the 4thsaid that was being done on a monthlybasis.

    Jubas Oil Minister, Stephen DhieuDau, said in December that any sale ofsouthern oil conscated by Sudanwould be an illegal act.

    Oil revenues make up almost all of theJuba governments income, while Khar-toum lost the vast majority of its exportearnings, which came from petroleum.

    The magnitude of the scal shock isexpected to signicantly increase in2012 as the full extent of the oil reve-nue loss will be felt throughout thewhole year. The loss of oil revenue willlikely roughly double in 2012, theWorld Bank says of Sudans economy.

    Rather than view the New Year as anopportunity for renewed cooperation,the government of Sudan unilaterallydecided to impose economic sanction[s]by blocking exports of our crude andstealing our oil, DhieuDau told journal-ists in Juba. According to Sudan Tribune(10 1), he accused Sudan of ve issuesrelated to the export of its crude oil:

    ordering foreign oil companies to divertSouth Sudans crude oil entitlement forDecember 2011 into reneries in Khar-toum and El-Obeid.

    diverting South Sudans monthly produc-tion of 550,000 barrels for December tobuyers of its own entitlement.

    beginning the construction of a new pipe-line to permanently divert 13% of what hecalled Dar Blend.

    preventing two ships carrying 1.6m barrelsof crude oil belonging to South Sudan, aswell as preventing one additional vesselfrom leaving Port Sudan.

    and preventing two other ships fromentering the port to take possession of1.2m barrels of Nile Blend Crude pur-chased from South Sudan by internationalbuyers.

    Macar Aciek Ader, an undersecretaryat South Sudans Oil Ministry told apress brieng in Juba the worlds new-est country would incur huge eco-nomic damage if Khartoum continuedits stance. South Sudan is one of thepoorest regions in the world, with oilaccounting for around 98% of the gov-ernments annual budget.

    Bidding Process

    Meanwhile, two days before the latesttalks between Sudan and South Sudan

    December 15th 2011January 15th 2012 Africa Research Bulletin 19367

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    Blackwell Publishing Ltd. 2012.

  • were due to open in Addis Ababa,international oil companies gathered onJanuary 15th to study six explorationblocks that Sudan opened for biddingahead of talks aimed at resolving thelong-running oil fee dispute. More than150 foreign and local industry represen-tatives as well as government ocialsmet at a Khartoum hotel to begin aprocess expected to conclude in Maywhen bid winners are announced, AFP reported (15 1).We are oering six blocks with verygood potential, Petroleum MinisterAwad Ahmed Aljaz told the gathering,where potential bidders received anintroductory brieng on each of theblocks, and on Sudans oil industry.

    We welcome all companies from allnationalities without any stringsattached, Aljaz said.

    Gregory Channon, a director of States-man Resources Ltd, a small rm listed onCanadas TSX Venture Exchange saidthe fee dispute between Sudan and SouthSudan was a matter of negotiationbetween the two sides and not relevant tothe bidding for the blocks in the north.

    South Sudans top talks negotiatorPagan Amum said that Juba believedits position in the negotiations hadbeen strengthened after it inked its rstdeals with foreign oil companies on the13th. The deals, which replace contractssigned with Khartoum under a uniedSudan, cover oil production in the twokey petroleum states of Unity andUpper Nile in the south. Amum, headof South Sudans ruling SPLM party,said the government of Sudan had nolegal, economic or commercial basisto charge the south anything more thantransit fees for its crude.

    At a news conference on the 15th,Khartoum ocials said they want $7bnin compensation, but South Sudan hasoered only $5bn.

    Sabir Mohamed Hassan, Khartoumschief negotiator on economic issues,did not say directly how much oilSudan had conscated nor what it isdoing with the seized barrels. (sources asreferenced in text) Oil: dicult talks p. 19355

    SOUTHERN AFRICARising Tide of Human Traffic

    Diculties in identifying the rootcauses and a lack of political willcontribute to this almost hiddenscourge.

    At any given time, an estimated130,000 people in sub-Saharan Africaare engaged in forced labour as a resultof tracking. It is a fraction of the

    global gure, which the InternationalLabour Organisation (ILO) puts at2.5m, but this highly lucrative and con-cealed crime is on the rise in Africaand trackers usually operate withimpunity.

    Southern Africa has many of the condi-tions trackers capitalize on: endemicpoverty and unemployment that createa demand for better opportunities, andhigh rates of regular and irregularmigration that mask the movements oftrackers and their victims. The regionhas no shortage of protocols, frame-works and action plans for dealing withhuman tracking, but the net result ofall these agreements has been no morethan a handful of prosecutions.

    The key international framework forcombating this crime is the 2000 UNprotocol to prevent, suppress and pun-ish tracking in persons, also knownas the Palermo Protocol. Twelve of theSouthern African Development Com-munity (SADC) 15 member states haveratied the protocol, which committedthem to enact legislation to makehuman tracking a criminal oence.More than a decade later, only six havepassed comprehensive laws. Severalothers have partial laws or, in the caseof South Africa, bills waiting to bepassed, while ve countries lack anyspecic legislation.

    Ottilia Maunganidze, a researcher onthe International Crime in Africa Pro-gramme at the Institute for SecurityStudies in Pretoria says merely passinglegislation is not enough. Mozambiquehas passed legislation, but has neverprosecuted a case. Criminalisation hasto happen in practice, she told of ameeting of experts and government o-cials mainly from the SADC who gath-ered in Johannesburg, South Africa,recently to look at ways of turningcommitments to counter human traf-cking into action. This means develop-ing national action plans that involvesocial workers, medical professionals,public prosecutors and the police; estab-lishing a central anti-tracking unit;allocating resources to assisting victims;and signing bilateral and multilateralagreements with the countries victimsoriginate from and pass through.

    SADC countries adopted a 10-yearstrategic plan of action to combat traf-cking in persons in 2009 that incorpo-rates many of these measures. There isalso a protocol on gender and develop-ment with a deadline of 2015 to put inplace measures to eradicate tracking.Maunganidze says this is probablyvery idealistic, and cites the dicultyof identifying and addressing some ofthe root causes of tracking, as well asthe limited resources and political willso far devoted to responses.

    Tracking for forced labour is growingand is even more hidden than that forthe purpose of sexual exploitation,according to Bernardo Mariano-Jo-aquim, regional representative of theInternational Organisation for Migra-tion (IOM). Criminal syndicates areusually engaged in these activities, andmany people still lack a clear under-standing of what tracking is, addingto the diculty of detection and prose-cution.

    You have to connect the dots, youneed proactive intelligence and interna-tional cooperation, says Johan Krugerof the UN Oce on Drugs and Crime(UNODC). (IRIN 12 12)

    IN BRIEFAfrica: A slump in the amount of moneymigrants sent home during the global nan-cial crisis appears to have ended with o-cially recorded remittances to the developingworld reaching an estimated $351bn in 2011,an 8% increase from 2010.

    Growth of remittances in 2011 exceededour earlier expectations in four regions,especially in Europe and central Asia... andsub-Saharan Africa, write lead economistsat the World Banks Migration and Remit-tances Unit in a brief released in earlyDecember.

    Money sent home by migrants now repre-sents three times the amount of ocialdevelopment aid to countries receiving assis-tance and is crucial to alleviating poverty,according to the World Bank. But the newsis not all good. The ongoing debt crisis inEurope and high unemployment in manydeveloped countries is aecting employ-ment prospects of existing migrants andhardening political attitudes toward newimmigration, the World Bank economistsnote. (UN Integrated Regional InformationNetworks 6 12)Africa Turkey: Turkish exports to Africancountries have hit a record, according to theTurkish Exporters Assembly (TIM).Exports to Ethiopia were up 311%, to SouthAfrica 229%, to Angola 206%, to Nigeria199%, to Ghana 172%, to Kenya 142% andthose to Egypt were up 35%. (Anatolia newsagency, Ankara 1 12)Burundi: Burundi has received a Euro 27.5mgrant from Germany to help improve energyand clean water supplies in the coee pro-ducing nation. Burundis authorities say thelandlocked country needs an additional 270megawatts over the next ve years to meetthe high demand in electricity. (Reuters, Bu-jumbura 6 12)Cameroon, CAR, Nigeria: More than 2,000Nigerian cattle grazers migrated to Cameroonand the Central African Republic betweenJanuary 2009 and July 2011 due to the recur-ring conicts between farmers and grazers inthe North-East region. Dr Walia Hamman,the North-East Coordinator of the NationalLivestock Development Projects, told theNews Agency of Nigeria (NAN) combinedeorts by the federal government and theaected states to get them back had failed.

    Continental Developments19368 Africa Research Bulletin

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    Blackwell Publishing Ltd. 2012.

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