UNSC November 2016 on the South Sudan and the continued crisis!

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The United Nations Security Council have delivered a letter and also two statements on the situation and the level of crisis in the Republic of South Sudan. This is happening as the UNSC are discussing the mandate of United Nations Mission in South Sudan (UNMISS). The problem is continuation of the flaring skirmishes in July 2016.

The UNSC are now looking into crisis and fixing the lax mandate or the issues with the peacekeepers in the nation. This has to happen as the UNMISS has already come under scrutiny for their acts around the UN House in and around Juba. The proven skirmishes and the evidence of what went down and also what has gone on since. Also the interesting who has exported the arms to the Republic; which has given the fighting armies the needed ammunition and weapons to continue to fighting each other.

Mr. Mohamad of Sudan said this:

“The Cooperation Agreement laid a solid foundation for normalizing relations between the Sudan and South Sudan, enhancing cooperation in all areas between the two and achieving sustained peace. It covered the areas of oil resources, trade, borders, security arrangements, the status of citizens and other themes. However, our brothers in South Sudan have so far been enthusiastic only about the implementation of the oil agreement. They have overlooked the implementation of other agreements, particularly the Agreement on Security Arrangements between the Republic of the Sudan and the Republic of South Sudan, which includes provisions on ending the support for, and the harbouring of, rebel movements, the establishment of the Safe Demilitarized Border Zone and the establishment of the Joint Border Verification and Monitoring Mechanism (JBVMM)” (…) “On the deployment of the oil police in the Diffra oil complex, my delegation reaffirms the need for such a step, as the joint Abyei police has not yet been established. Another reason is that there are Sudanese rebel movement groups in South Sudan that can target those vital installations. That force is limited both in number and equipment” (UNSC 7810, 2016).

Mr. Malok of South Sudan said this:

“Cooperation between the two countries is crucial to any constructive and productive efforts in Abyei. Indeed, even the progress made by UNISFA could not have been possible without a degree of functional cooperation by the Governments of the Sudan and South Sudan. However, much more cooperation is needed if the efforts of UNISFA are to continue to bear tangible fruits that will benefit the two communities and help to facilitate continued improvement in the relations between the two countries” (…) “It is noteworthy that, as the report of the Secretary-General observes, the restrictions imposed by the Government of the Sudan on non-governmental organizations have limited the implementation capacity of humanitarian and development actors, especially in the northern parts of Abyei. As the Secretary-General also notes, in addition to a lack of adequate funds, other challenges include high implementation costs owing to security and logistical constraints, delays in the issuance of travel permits and restrictions on the movement of personnel and supplies by the Government of the Sudan.” (UNSC 7810, 2016).

Context:

“The armed opposition to Kiir’s regime is an increasingly multifaceted amalgam of forces encompassing dissident groups with diverse grievances, aims and approaches to the war. Many of these groups are either not under the direct control of SPLM/A in Opposition led by Machar, which was a party to the Agreement, or are only loosely affiliated with it. Nevertheless, Machar’s resilience, notwithstanding the government attempts to assassinate him in greater Equatoria, has seemingly provided more motivation for Equatorian armed elements to associate formally with SPLM/A in Opposition. The perception that the belligerence of Kiir’s Dinka-dominated regime is leading the country inexorably towards a devastating tribal war, coupled with a sense that the international community is failing to take the steps necessary to avoid a further escalation of the conflict, are providing impetus among non-Dinka opposition political and military forces towards greater coordination, if not complete organizational unity” (UNSC letter, P: 3, 2016).

“The SPLA Chief of General Staff, Paul Malong, remains a central figure in the perpetuation and expansion of the war, including the conflict in greater Equatoria, described in detail below. After the fighting in Juba in July, he oversaw the operation to hunt down Machar and the SPLM/A in Opposition forces in Central Equatoria” (…) “The extension of the war continues to pose an increasingly grave threat to the countries that neighbour South Sudan. For example, after a long series of skirmishes between SPLA and SPLM/A in Opposition in Central and Western Equatoria after Machar fled from Juba in July, Machar and some 750 soldiers and civilians entered the Democratic Republic of the Congo. The Panel has confirmed that, on 13 August, SPLA then launched an incursion into the Democratic Republic of the Congo. An estimated 800 to 900 SPLA troops from Division VI crossed the border and engaged in a battle with SPLM/A in Opposition. On 17 August, two MI-24 helicopters also crossed the border, travelling nearly 6 km into Congolese territory and again attacking SPLM/A in Opposition positions” (UNSC letter, P: 6-7, 2016).

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Arms dealings:

“In a meeting with the Panel on 28 September, the First Vice-President, Taban Deng Gai, refuted the presence of L-39 jets in South Sudan, which the Panel had documented with supporting evidence, including photographs and eyewitness accounts, in its report to the Security Council that month” (…) “The Panel has been provided with preliminary information on the weapons that the United Nations Organization Stabilization Mission in the Democratic Republic of the Congo took from the combatants who accompanied Machar into the Democratic Republic of the Congo in August 2016. The sources of the weapons are consistent with those previously documented by the Panel as having been procured in South Sudan, both before and after independence, including weapons and ammunition manufactured in the Sudan, China, the United States of America, Israel and various Eastern European countries” (…) “One weapon of note among the arms documented is a Micro Galil rifle manufactured by Israel Weapon Industries, bearing serial number 36100549. This is the third weapon of its type identified by the Panel, with two others (serial numbers 36100566 and 36100588) having been documented in Upper Nile in 2015. Each of the weapons was, according to interviews with SPLM/A in Opposition members, taken from South Sudanese government stocks either through battlefield capture or by defectors. According to information provided to the Panel by the manufacturer, as noted in the Panel’s report of January 2016 (S/2016/70), the three weapons are from a batch sold to the Ministry of Defence of Uganda in 2007. There is no provision in the end user certificate for their transfer to South Sudan” (…) “In September, the Panel received information from Spain regarding weapon trafficking to South Sudan that the Spanish police had obtained as part of a continuing investigation into money-laundering and racketeering. The information details communications between an arms trafficking network based in Europe and the leadership of SPLM/A in Opposition in 2014, in which the latter had requested the delivery, through an intermediary in Senegal, of an extensive list of small arms, munitions and light weapons. Further investigations by the Panel suggest that this shipment was at least partially delivered” (…) “Also in September, the Panel received information and documentation from a confidential high-level South Sudanese source that, in July 2014, a shipment of small arms ammunition and 4,000 assault rifles had been delivered by Bulgarian Industrial Engineering and Management to the Ministry of Defence of Uganda. According to the documentation, Bosasy Logistics, a company registered in Kampala and described in previous reports by the Panel, including its report of January 2016 (S/2016/70), acted as an intermediary in the transaction. The weapons and munitions were subsequently transferred to South Sudan. While the Panel is further investigating this transaction, it notes that recent arms transfers from Uganda to South Sudan, as described in its report of September 2016 (S/2016/793), are likely to be using the same modality as the earlier transfers from 2014, with Bosasy Logistics and its Chairman, Valerii Copeichin, facilitating the sales” (…) “The Panel has received multiple reports from various sources of arms shipments entering South Sudan by road through Uganda and by airlift to Juba and Wau since May. The content, according to two high-level sources with knowledge of the operations, was small arms and light weapons, ammunition and armoured vehicles. The Panel is in possession of a contract signed by SPLA in May 2015 for the provision of Panthera armoured vehicles valued at $7,187,500.50 The company contracted to provide the vehicles, Egypt and Middle East for Development, was represented by an Egyptian national, Mohamed Atta Jad. The company is registeredin Cairo.51 The Panel is investigating the possible connection between this contract and the recent airlifts to South Sudan” (UNSC letter, P: 18-20, 2016)

Budget:

“The Panel obtained data indicating that projected State budget expenditure for the 2016/17 fiscal year would exceed revenue by 149 per cent.62 Consequently, the government has laid out a proposal for financial austerity and external borrowings, which incorporates recommendations made by the International Monetary Fund (IMF) after its mission of May. The Chair of the Joint Monitoring and Evaluation Commission, in his address to the Commission on 19 October, said the following: “We commend the TGNU for the work that has gone into creating an ambitious budget, which has been commended by many analysts. Strong constraints on expenditures are central to the budget and a condition for stabilization.” Progress towards the implementation of this strategy will indicate the government’s seriousness in addressing the macroeconomic crisis” (…) “The draft budget for the fiscal year 2016/17 is estimated to be 22.3 billion South Sudanese pounds, half of which is allocated to the security sector” (…) “Revenue for the 2016/17 budget was calculated on the basis of oil production of 120,000 barrels per day, which is the lowest rate of extraction since December 2013. There is no indication that Deng Gai’s efforts in August to renegotiate the pipeline and transfer fees with Khartoum were successful, meaning that South Sudan will continue to pay $24.1 per barrel in fees to the Sudan, undercutting the revenue of the budget owing to volatile oil prices. The oil industry also shows no signs of recovery to the pre-war levels; the Unity fields were disabled in the early months of the war, and the continuing conflict will make it difficult to launch the long and technologically complicated process of restarting oil production” (UNSC letter, P: 23, 2016).

This here is lots of interesting collected information that usually would be left behind and not for-told to the media and the press, as even the press is suppressed in the South Sudan. As the Eye Radio and others has gotten harassed by the TGoNU. They don’t want the news of conflict spread and the initial reports from the nation. Peace.

Reference:

United Nation Security Council 7810th Meeting (15.11.2016)

UNSC – ‘S/2016/963: Letter dated 15 November 2016 from the Panel of Experts on South Sudan established pursuant to Security Council resolution 2206 (2015) addressed to the President of the Security Council’ (15.11.2016)

 

RDC: L’Assemblee Pleniere du Conseil Superieur de l’Audiovisuel et de la Communication (CSAC) – (17.11.2016)

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Statement attributable to the Spokesman for the Secretary-General on the Democratic Republic of the Congo [scroll down for the French version] (17.11.2016)

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The Secretary-General takes note of the appointment of Mr. Samy Badibanga as Prime Minister ahead of the formation of a transitional government of national unity in the Democratic Republic of the Congo (DRC), in line with the political agreement of 18 October.

The Secretary-General welcomes this first concrete step in the implementation of the political agreement, which is expected to culminate in the holding of credible elections in the country. He calls on the Government to be formed by Prime Minister Badibanga to create a climate conducive to upholding the fundamental rights and freedoms essential to political debate and credible, inclusive elections, as called for in Security Council resolution 2277 (2016).

The Secretary-General welcomes the mediation efforts led by the Conférence épiscopale du Congo (CENCO) and calls on political groups that did not sign the political agreement to remain engaged and work towards the peaceful resolution of their differences. He further calls on all political actors to continue working in good faith and in a spirit of compromise towards a political solution that paves the way for peaceful, credible, inclusive and timely elections in the DRC, in keeping with the Constitution and the African Charter on Democracy, Elections and Governance.

The Secretary-General thanks Prime Minister Augustin Matata Ponyo for his leadership over the last four years and looks forward to working with the Government led by Prime Minister Badibanga.

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Déclaration attribuable au Porte-parole du Secrétaire général sur la République démocratique du Congo

Le Secrétaire général prend note de la nomination de M. Samy Badibanga au poste de Premier ministre en vue de la formation d’un gouvernement d’unité nationale de transition en République démocratique du Congo (RDC), conformément à l’accord politique du 18 octobre.

Le Secrétaire général se félicite de cette première mesure concrète prise dans le cadre de la mise en œuvre de l’accord politique qui devrait mener à la tenue d’élections crédibles dans le pays. Il encourage le gouvernement qui sera formé par le Premier ministre Badibanga à créer un climat propice au respect des libertés et droits fondamentaux essentiels au débat politique et à des élections crédibles et inclusives, comme le prévoit la résolution 2277 (2016) du Conseil de sécurité.

Le Secrétaire général se félicite de la médiation menée par la Conférence épiscopale du Congo (CENCO) et appelle les groupes politiques qui n’ont pas signé l’accord politique à rester engagés et à travailler à la résolution de leurs différends de manière pacifique. Il appelle en outre tous les acteurs politiques à continuer à œuvrer de bonne foi et dans un esprit de compromis en vue d’une solution politique ouvrant la voie à des élections pacifiques, crédibles, inclusives et dans les meilleurs délais en RDC, conformément à la Constitution et à la Charte africaine de la démocratie, des élections et de la gouvernance.

Le Secrétaire général remercie le Premier ministre Augustin Matata Ponyo pour son leadership au cours des quatre dernières années et se réjouit de travailler avec le gouvernement dirigé par le Premier ministre Badibanga.

New York, le 17 novembre 2016

RDC: The Easiest Policy by H.E. Joseph Kabila! (17.11.2016)

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Congo signs over potential $880m of royalties in Glencore project to offshore company belonging to friend of Congolese President (14.11.2016)

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RDC: Fleurette Group Statement “re: KCC Royalties” (15.11.2016)

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KINSHASA, Democratic Republic of Congo, November 15, 2016Fleurette Group notes the statement made by Global Witness today concerning the sale of royalties from Katanga’s KCC project by Gecamines to a Fleurette-owned entity. The Global Witness statement is highly misleading, based on factually inaccurate information designed to manipulate data in an effort to undermine a legitimate transaction.

Fleurette Group categorically refutes the allegations by Global Witness that the DRC economy has somehow lost money through the sale of the KCC royalty stream. The transaction between Africa Horizons Investment Limited (“AHIL” – which is a 100% Fleurette subsidiary) and Gécamines. With hindsight, Gécamines negotiated a highly lucrative transaction to the benefit of the DRC.

Additionally, Global Witness’s financial calculations are amateurish to the point of bogus. They do not follow even the basic valuation techniques used by all professionals in this field, and fail to include further discounts (such as withholding tax payments) that are both obvious and important. Global Witness has no excuse for making these mistakes. The manipulation of data seems wilful in nature, and designed to support a pre-ordained conclusion. It is difficult not to infer that Global Witness is trying to mislead journalists, the general public and other stakeholders at Fleurette’s expense.

DRC made net profit from deal, Fleurette a net loss

The transaction ultimately resulted in Gecamines safeguarding value for the DRC economy and Fleurette making a considerable loss due to the subsequent collapse in commodity prices and suspension of KCC’s operations. This is because Gecamines sold the royalty right before operations at KCC were suspended, meaning Fleurette had paid in full for a royalty stream that that ceased soon afterwards. While Fleurette was left unable to recoup its investment, Gecamines received full value for it.

This should not come as a surprise. Fleurette recognizes this as inherent industry risk in the mining sector. KCC, meanwhile, was well advised. It carried out its own verification, taking reasonable measures in accordance with its procedures to satisfy itself the sale was authorized by Gecamines and that there was an underlying basis for the sale. Independent international financial institutions advised both sides, and the transaction was priced in accordance with the valuations provided to the parties. Global Witness does not acknowledge these facts. Instead, despite these facts, it attempts to crititicize a deal which demonstrably and unequivocally benefited both Gecamines and the DRC.

Global Witness mistakes

Global Witness’ statement implies that KCC royalties were worth $880m to Fleurette. By referencing the Independent Technical Report of March 2012 prepared by Golder Associates, Global Witness was duty bound to provide an accounting and valuation in a bona fide manner, which they did not. Global Witness’ implication that the royalties were worth $880m shows a lack of understanding of the most basic business and accounting principles of Discounted Cash Flow and Net Present Value, used to value royalty streams (as well as a host of other assets that are expected to provide value into the future).

Even though Golder Associates provide a very conservative 10% discount factor to their valuation of the KCC project (including royalty cashflow streams they expected to be generated), Global Witness applied 0% discount when expressing the worth of the royalty stream in their statement. If they had applied an industry-standard 15% discount factor, the cashflow they misleadingly referred to would have determined a $245m valuation for the royalty right until 2030.

There is another valuation factor that Global Witness has omitted entirely, even though it hugely impacts the assessment of value for the KCC Royalty. Crucially, AHIL’s royalty right will almost certainly fall away in on 1 March 2019. As per the terms of the original KCC JV Agreement between Katanga, Gecamines and KCC (all publicly available), Gecamines has a “Replacement Reserves” obligation which requires it to deliver 4m tonnes of copper reserves and 200,000 tonnes of cobalt to KCC. If it doesn’t, under the terms of the agreement, Gecamines needs to pay $285 million to compensate KCC. If it is not able to do that, the JV Agreement requires the repayment to be made by way of set-off of the royalty, ie KCC will withhold the royalty until that debt has been paid. In short, the royalty that Fleurette paid for will not be paid to Fleurette from 1st March (assuming KCC is back in operation and paying royalties), but will be used to cover off a pre-existing Gecamines debt.

Global Witness also intentionally omitted the annual rental deduction of $1.2m from their calculation and 10% withholding tax on royalties.

Questions for Global Witness

Unfortunately for AHIL and KCC, the project ceased production in September 2015. AHIL does therefore not expect to receive any more royalties, and will have suffered a huge loss as a result – as royalties paid up to this point were far less than the amount AHIL paid for the royalties. This is an example of how industry risk can play a major part in the life of a DRC project in addition to the broader risks associated with operating in a country like the DRC.

Global Witness needs to be held to account on this occasion given the unnecessary damage this misleading report will do to the DRC’s extremely delicate economy and the reputation of Gecamines as well as Fleurette, which is leading the recovery effort following the collapse of global commodity prices. In essence, this was a good deal by Gecamines, independently verified by multiple stakeholders, which safeguarded value for the DRC, but a poor deal for Fleurette. It is deeply regrettable Global Witness is publishing such inaccurate information.

-Ends-

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Media enquiries

Powerscourt

+44(0)20 7250 1446

fleurette@powerscourt-group.com

About Fleurette – http://www.fleurettegroup.com / LinkedIn  / Twitter

The Fleurette Group of Companies (“Fleurette”) is an entrepreneurial business with significant investment in diverse sectors, including natural resources, infrastructure, agriculture and technology. Fleurette has substantial investments and operations in the Democratic Republic of Congo (DRC). The parent company of the group, Fleurette Properties Limited, a Dutch resident company, is owned by Line Trust Corporation Limited strictly and solely as trustees of the Ashdale Settlement, a trust established in 2006 for the benefit of the family of Dan Gertler. Mr Gertler is a citizen and resident of Israel and the DRC (and honorary counsel to the DRC) and is committed to developing the country’s natural resources and infrastructure, while investing in the Congolese people and their communities.

Fleurette has a proven track record of successful co-operation with diverse parties, including the DRC State-owned mining company Gécamines, and to date has brought more than USD $7 billion of investment into the DRC, on top of its USD $2 billion in private investment. As a result, Fleurette’s subsidiaries and partnerships support around 30,000 jobs in the DRC and are amongst the DRC’s leading taxpayers, contributing significant revenues to the State.

Fleurette is also a major contributor to social development in the DRC through the Gertler Family Foundation (GFF) and through direct investment in social infrastructure. The GFF is the largest charitable organization in the DRC, funding more than 50 programs and projects across the DRC, which help tens of thousands of Congolese every year. These include rebuilding key hospitals, notably the Kisangini “Hospital du Cinquantenaire”; supporting the Operation Smile campaign in Lubumbashi and Kinshasa; rebuilding Blaise Pascal School in Lubumbashi; and supporting the Lubumbashi Zoo.

RDC: Communique du Rassemblement (15.11.2016)

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RDC: La LUCHA condamne l’Assassinat du journaliste Marcel Lubala (15.11.2016)

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Thousands of Somali children displaced and out of school due to Galkayo fighting (15.11.2016)

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All schools in the town of Galkayo have been closed, affecting more than 20,000 children and young People.

MOGADISHU, Somalia, November 15, 2016 – More than 90,000 people, including at least 20,000 children who were in school, have been displaced by fighting between factions in the Galkayo region of Central Somalia, which began a month ago.

UNICEF Somalia is gravely concerned about thousands of Somali children who are missing school due to the weeks of fighting. All schools in the town of Galkayo have been closed, affecting more than 20,000 children and young people. Teachers have been injured, four schools in Galkayo were damaged, and five schools outside the town are closed as they are now used to house some of the displaced. Any schools still functioning are severely overcrowded.

UNICEF and partners are setting up safe temporary learning spaces for the displaced children to allow them to continue their education and are working to ensure that the teachers receive their incentive allowances.

“This is a very serious situation for the children of Galkayo and is bound to have a major impact on their education and their lives,” said Steven Lauwerier, UNICEF Somalia Representative.

“We must ensure that there are places for children to learn in a safe environment either in temporary spaces or in schools outside town. The children must be given catch up classes and their schools must be protected from further damage.”

Many of the displaced children who have fled Galkayo are particularly vulnerable, as a large number were already displaced from their original homes and were living in settlements. UNICEF and its partners are also concerned with the continuing physical and emotional stress the forced displacement and fighting may put children and their families under.

A child’s right to an education is enshrined in the UN Convention on the Rights of the Child, ratified by Somalia in October 2015.

RDC: “Communiqué de la Presidence: le premier ministre sera issu de l’opposition politique signataire de l’accord” (14.11.2016)

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