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The black gold effect on South Sudan peace

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By Ben Oduor and Agencies

“The oil curse- how black gold makes countries more authoritarian, corrupt and violent,” screamed one of the headlines in Vox, an American multinational digital media company.

The story read: “Venezuela is in the throes of a massive popular uprising caused by an economic crisis. Russia’s deeply corrupt autocracy is threatening to invade another part of Ukraine. Iran’s authoritarian government is keeping the murderous Syrian regime alive, and oil-rich Saudi Arabia is safely funding extremists around the world.”

“What do all these countries have in common?’ The publication posed. “They’ve got a lot of oil. And oil, it turns out, can really screw your country up. Oil is far from the only reason these countries have the problems they do, and some oil-rich countries do okay.”

“But oil-rich countries, far from being happier, are more likely to be authoritarian, corrupt, and violent,” the publication noted.” It’s apparent some of the shortcomings pushed the United States to take war to the doorstep of some South Sudan oil firms.

On 21st March this year, the U.S State Department released a statement imposing sanctions on 15 South Sudanese oil operators that it said were important sources of cash for the government, in a move that was aimed at increasing pressure on President Salva Kiir to end the country’s prolonged conflict and humanitarian crisis.

Oil revenue for weapons

The statement said the South Sudanese government and corrupt official actors use the oil revenue to purchase weapons and fund irregular militias that undermine the pace, security and stability of South Sudan.

The U.S Department of Commerce said the groups on the list are involved in activities that are contrary to the foreign policy interests of the United States. The move implied that U.S as well as non-U.S companies would need a license to export, re-export or transfer exports of any U.S. origin goods or technology to the listed entities.

“By placing these entities on the U.S. Department of Commerce’s Entity List, the United States will impose a license requirement on all exports, re-exports and transfer of any US-origin to those entities,” said Heather Nauert, U.S Department spokeswoman.

“We call on the region and broader international community to join us in limiting the financial flows that fuel the continuing violence in the country.”

 

The U.S. Bureau of Industry, Commerce and Security placed South Sudan Ministry of Mining, the South Sudan Ministry of Petroleum, and state oil firm Nile Petroleum and associated companies among the companies on the Entity List.

It also included Dar Petroleum Operating Company, an oil and gas consortium led by China National Petroleum Corp and Malaysia’s state-run oil and gas firm Petronas- the two largest oil firms operating in South Sudan, as well as oil distributor Nyakek and sons; Greater Pioneer Operating; Juba Petrotech Technical Services; Nigeria’s Oranto Petroleum, and Sudd Petroleum Operating.

South Sudan, however, views the sanctions as counterproductive and a move aimed at frustrating efforts to implement a peace deal with rebel groups.

“These measures are viewed by the ministry of petroleum as counterproductive to the shared mission of the Republic of South Sudan’s and the United State’s governments to bring peace and stability to South Sudan,” the Ministry reportedly said in a statement, vowing to work with the US Department of Commerce to remove the restrictions and resume normal relations with the U.S.

According to the World Bank, South Sudan is the most oil-dependent country in the world, with oil accounting for almost all of its exports and around 60 per cent of gross domestic product. South Sudanese government said it planned to more than double oil production to 290,000 barrels per day (bpd) in fiscal 2017/2018.

Despite the natural resource wealth, the country has since 2013 been plagued by civil war, with tens of thousands losing their lives.

The Sentry report

In September 2016, The Sentry Report, commissioned by actor George Clooney, accused President Salva Kiir, his former deputy turned political rival Riek Machar and top army generals of profiteering from the South Sudan war.

Titled The nexus of corruption and conflict in south Sudan, the report exposed a chilling contrast between the lavish lifestyles of the country’s top bras including the military, and the poverty-stricken population thriving on humanitarian aid amid scaling civil unrest.

“Meanwhile, some top officials and their family members own stakes in a broad array of companies doing business in the country- and in some cases, these commercial engagements may in violation of South Sudanese law,” the report, whose authors are said to have taken two years compiling evidence, noted, adding:

“….Together, the Kiir and Vasili families have, according to these documents, held interests in almost two dozen companies operating in oil, mining, construction, gambling, banking, telecommunications, aviation, and government and military procurement.” Those implicated by the report haven’t since commented on the claims.

In February this year, United Nations High Commissioner for Refugees (UNHCR), Filippo Grandi, and Emergency Relief Coordinator, Mark Lowcock, launched a funding appeal for US$1.5billion to support refugees fleeing the ‘worsening humanitarian situation in South Sudan and for US$1.7billion for people in need in the country during 2018.’

“Conflict and insecurity has now forcibly displaced 1 in 3 of the country’s population – either within South Sudan or across borders. Inside the country, 7 million people are in need of humanitarian assistance,” said UNHCR.

“The number of refugees is projected to cross the 3 million mark by the end of this year, making South Sudan Africa’s largest refugee crises since the Rwanda genocide.”

To end the crisis for further spilling, Winnie Byanyima, Executive Director of Oxfam International, says renewed negotiations, guided by the people of South Sudan, can bring genuine and long-lasting peace to the country.

“The people of South Sudan and our region need renewed negotiations to begin, in order to bring genuine and long-lasting peace to the country. Peace may feel distant, but it is not unreachable,” the Executive director told Aljazeera in a commentary, after a visit to South Sudan early 2017.

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