Port Company also prohibited from replacing DP World directors in joint venture Company.
DUBAI, United Arab Emirates, September 5, 2018 – The High Court of England & Wales has granted an injunction restraining Djibouti’s port company, Port de Djibouti S.A. (PDSA), from treating its joint venture shareholders’ agreement with global trade enabler DP World as terminated. The High Court has further prohibited PDSA from removing directors of the Doraleh Container Terminal (DCT) joint venture company who were appointed by DP World pursuant to that agreement. PDSA is not to interfere with the management of DCT until further orders of the Court or the resolution of the dispute by a London-seated arbitration tribunal.
PDSA is owned in majority by the Government of Djibouti and its CEO is the Chairman of the Ports & Free Zones Authority of Djibouti. Hong Kong-based China Merchants is the minority shareholder in PDSA.
The High Court’s order follows the unlawful attempt by PDSA to terminate the joint venture agreement with DP World and the calling of an extraordinary shareholders’ meeting on 9 September by PDSA to replace DP World appointed directors of the DCT joint venture company. This is the third legal ruling in relation to the Doraleh Container Terminal following two previous decisions from the London Court of International Arbitration (LCIA), all of them in favour of DP World. It recognises that although PDSA is the majority shareholder of the DCT joint venture company, it is DP World that has management control of the company, in accordance with the parties’ legally binding contracts.
The new ruling against PDSA, issued by the Court without PDSA’s participation, makes clear that PDSA:
If PDSA disobeys the Court’s order and seeks to replace DP World nominated directors of DCT on 9 September, it may be in contempt of court and face a fine or the seizure of its assets and its officers and directors may be imprisoned.
The Court has ordered PDSA to present its defence at another hearing on 14 September.
Meanwhile, DP World is notifying Standard Chartered Bank so that the bank will reject any instructions that may be sent to them after the 9 September meeting. China Merchants, who have been given operational control of the Djibouti Freezone in breach of DP World’s exclusivity rights, will also be informed given its minority shareholding in PDSA.
China is actively positioning itself as a major supplier of arms to the African continent and is stepping up its shipments of weapons to conflict zones through Djibouti in the Horn of Africa.
LONDON, United Kingdom, September 3, 2018 – EXX Africa (https://www.EXXAfrica.com) published a special report on the secret Chinese arms trade in the Horn of Africa.
Download the report: bit.ly/2PvgfDy
Beyond the commercial objective of increasing sales of Chinese manufactured weapons and military equipment, China also seeks to control a greater share of the weapons trade in Africa in order to protect its extensive infrastructure investments on the continent. On the back of the One Belt, One Road initiative, China has made massive investments in East Africa, including railway lines, hydropower dams, and new port projects in countries such as Kenya, Sudan, and Ethiopia.
Central to this strategy is China’s military logistics base in Djibouti, which China is preparing to facilitate large-scale shipments of weapons and military equipment to African countries, in particular Sudan and South Sudan.
Djibouti’s own strategically important port, which lies in a major shipping lane, is also set to move towards the centre of the regional arms trade.
Following a new investigation that included collection of intelligence from well-placed security sector sources in the Horn of Africa, we have found evidence that Chinese weapons are making their way from the Chinese PLA Support Base in Djibouti and the commercial Port of Djibouti towards African conflict zones that have been placed under an arms embargo.
For any further comment or a full copy of the report, please contact https://www.EXXAfrica.com/
EXX Africa published a special report on the arms trade in the Horn of Africa.
LONDON, United Kingdom, September 3, 2018 – EXX Africa (EXXAfrica.com) published a special report on the arms trade in the Horn of Africa.
Download the report: bit.ly/2CcF7hr
The trade of illegal weapons implicates senior government officials in Djibouti, which suggests that the Doraleh port terminal, which is now under government control and suffers from porous customs checks, will increasingly be leveraged as an arms trade hub. However, the most significant flows of illegal weapons will continue to be moved in smaller dhows via the fishing communities in the south-east coast and via the Garacad port project.
So far, and over the past few years, the DP World operated Doraleh terminal was not used for arms trafficking. However, local intelligence suggests that the terminal, which is now under government control, may in future be leveraged as a processing center for the illegal arms trade.
There is some evidence that the Doraleh terminal will increasingly be used for the weapons trade. The Chairman of the Djibouti Ports and Free Zone Authority (DPFZA), Aboubaker Omar Hadi, is a close friend of Ali Abdi Aware, who is a three times presidential candidate of Puntland, as well as a very prominent businessman. They are jointly involved in a venture where Aware is personally in charge of former Yemen president Ali Abdallah Saleh’s bank CAC International. This bank is headquartered in Djibouti. Local intelligence suggests that Omar Hade helped with the registration of the bank and owns shares in it (“part of the investment components”). Moreover, Omar Hadi has established a bank branch in Bosaso that can launder money for underground institutions dealing with weapon imports from Yemen, as the bank hails from Yemen originally.
Aware is also very well established in the Guelleh government and he was the one who set up Puntland’s assistance to Djibouti donating 900 camels to Djibouti when it had an armed dispute with its Eritrean rival over the disputed Doumeira Islands. He also helped Djibouti secure an investment commitment for road construction from the Saudi government back in 2009 when late General Adde Muse Hersi was Puntland’s president.
Indeed, the trade in illegal weapons in Djibouti stretches t the highest echelons of the government. Local intelligence confirms that one company, which in the public version of this report will only be names as Company Z, is owned by the Guelleh family and handles arms trade. Company Z only deals with weapons imports into Somalia. Those same weapons are then often distributed to political factions backed by the government.
All this suggests that the Doraleh terminal will start to play a more prominent role in regional arms trafficking. Local intelligence suggests that the main port of Djibouti is not secure and that customs procedures are porous, which facilitates illegal shipments. Yet, since this terminal will remain one of Djibouti’s main import-export hubs, international scrutiny of cargo flows is high here, which will limit the port’s use as a weapons trade center. However, sources say that much of the illegal arms trade does not need to be moved through Djibouti’s main port. It is moved in smaller dhows via the fishing communities in the south-east coast.
Moreover, Djibouti is also now involved in the construction of Garacad Port. Djibouti became following a political disagreement with the Somali government with regards to the Eritrea-Ethiopia-Somalia rapprochement following the meeting between the Somali President and his counterpart Afewerki in Asmara. Djibouti are taking advantage of the Puntland disagreement with the Somali government here over the Garacad port. Prime Minister Hassan recently visited the region and was invited to the grand opening of the Garacad Project but refused to do so as the Somali government recently began the Hobyo port construction plan, only 90 km down the road.
There is a lot of tension between the Somali government and Djibouti over their involvement in this project. Local intelligence suggests that the Somali government is rightly worried about Djibouti using this as a base for moving weapons from the Gulf of Aden into Puntland and then onwards into Somalia proper (see previous comments on support for destabilising factions within Somalia such as al-Shabaab). Also, Garacad is a regional hotspot for weapons shipments landing, as it was pirate territory from 2008 – 2011. Boats disguised as fishing vessels still land there for smuggling purposes.
It is at Garacad that Djibouti plays its heaviest role in regional arms trafficking. The logistics, freight, and construction companies involved in the Garacad Port Project are often owned by senor Djibouti government officials and military officers. Most of the construction materials for the project will be transported overland from Djibouti or shipped to the coast off Garacad. There is ample opportunity here for weapons smuggling. Again, the UN Monitoring Group reports for this region include names of some entities which local intelligence suggests are still accurate.
Global trade enabler warns against violation or face legal action.
DUBAI, United Arab Emirates, July 12, 2018 – DP World (web.DPWorld.com), reiterated today that its concession agreement for the Doraleh Container Terminal (DTC) remains in force, warning that the government’s illegal seizure of the facility doesn’t give the right to any third party to violate the terms of the concession agreement.
DP World statement came in the wake of news reports on the opening of the first phase of the Chinese-built International Free Trade Zone, in violation of DP World’s exclusive management rights.
A DP World Spokesperson said:“This is yet another clear example by the Djiboutian Government of violating its contractual obligations and the rights of foreign investors.”
The spokesperson warns that DP World reserves the right to take all available legal actions, including claims for damages against any third parties that interfere or otherwise violate its contractual rights.
On 22 February 2018, the Government of Djibouti unlawfully seized control of the Terminal, forced DP World employees to leave the country and purported to terminate the Concession Agreement. DP World has commenced an arbitration against the Government of Djibouti before the London Court of International Arbitration and is awaiting the outcome of this process
The government of Djibouti had borrowed substantially from the World Bank to create a Center of Excellence facility, intended to address the problem of child malnourishment.
WASHINGTON D.C., United States of America, June 7, 2018 – This is a guest post by Jim Sanders, a career, now retired, West Africa watcher for various federal agencies. The views expressed below are his personal views and do not reflect those of his former employers.
Returning from an early autumn vacation in Acadia National Park last year, we exited I-95 near Waterville, Maine to grab a Starbucks coffee at a nearby mall. Seeking a second opinion on my theory that the Subaru station-wagon was the state car of Maine, I approached a total stranger who was climbing out of his Toyota Prius. After affirming that, in fact, he had owned one himself, the man identified himself as Dr. David Austin, a local physician. He also mentioned his upcoming tour in Djibouti, as a Doctors Without Borders (Medecins Sans Frontiers, or MSF) physician, and explained that he had previously served in Sudan (Darfur) and Congo.
Having recently returned from the four-month tour with MSF in Djibouti, Dr. Austin was eager to speak about his experiences there. He worked in a tent hospital in the capital, which focused on treating malnourished children. Mortality is particularly high in that segment of the population. (In Djibouti, MSF expected a large refugee influx, but the flow of refugees into Djibouti failed to materialize, and so it developed a program specifically for malnourished children.)
The government of Djibouti had borrowed substantially from the World Bank to create a Center of Excellence facility, intended to address the problem of child malnourishment, but while the structure was built, it did not become operational. MSF, whose mission centers on providing aid in emergencies, eventually began to close down their tent hospital. A handover to another institution never occurred, yet every month, Dr. Austin said, more kids appeared needing treatment. “On paper,” he said, “the government treats malnourished children, but in reality many children do not get treated.”
Yet, as in his other African assignments, Dr. Austin felt buoyed by the people themselves, having previously remarked that, “There is a strong spirit of joyfulness in many Africans that I consider priceless.” Djibouti’s slums are worse than India’s, he explained, where the poor hammer out tin cans and make nice shacks, and sweep the areas around them to keep them clean. In Djibouti, in contrast, the poor live in rag tents, amidst a sea of garbage. “If your child dies, MSF will provide you a ride home, with your dead child,” Austin explained. “I went with one family [to take their deceased child home], driving forever through slums, until we reached a shack in the middle of nowhere.”
But despite their circumstances, the people are “lovely, eager to talk, and full of energy.” “There’s a lot going on,” he noted. Not least, a mini-Arab Spring, which has prompted a heavy-handed government reaction.