Global Policy Forum

By Steve Mbogo *

A simmering conflict is threatening to start another war in Sudan. This time, it is as much about oil as it is ethnicity. Unequal distribution of oil revenues, bungled oil contracts, and differences in ethnic power sharing are creating new fault lines in an already divided country.

The South Sudan Defense Front (SSDF), a former ally of the Khartoum government in its battle against the rebel Sudanese People's Liberation Army (SPLA), has threatened to attack SPLA positions once again. The group, formed by Riek Marchar, now vice president of the Government of South Sudan, or GOSS, complains that its people are not benefiting from oil revenues.

The Comprehensive Peace Agreement (CPA), signed in January 2005, ended a two-decade war between the SPLA and Khartoum. It requires Khartoum to channel 50 percent of oil revenues to the GOSS. The southern government must then commit 2 percent of the revenue to communities within the oil fields. But the SSDF says that is not happening. Most of the oil fields fall within areas formerly controlled by the SSDF and inhabited by a supportive ethnic group known as the Nuer.

The peace agreement may be part of the problem. When the CPA was being negotiated, the SPLA was recognized as a sole representative of the interests of southern Sudan despite the presence of other armed groups in the region, including the SSDF. According to Sudanese-based intelligence sources, the SSDF's attempts to join the CPA negotiations were thwarted when SPLA and U.S. delegates insisted that the rebel group was "part of Khartoum." It was understood that, once the CPA was signed, the SPLA-led administration would work to incorporate other armed and political groups into the government.

That process was disrupted in August, when John Garang, SPLA leader and GOSS president, died in a plane crash while returning from Uganda. The region's new leader, President Silva Kirr, continued the talks and, in January, got the SPLA and SSDF to sign the Juba Declaration. The declaration was meant to fulfill the CPA provision for taking care of "Other Armed Groups," and requires both parties to protect the peace by continuing to integrate their armed forces and political parties into the government.

Some SSDF officials, however, are not happy with the results of the negotiations. When senior SSDF military commander Paulino Matip joined the SPLA, the SSDF viewed it as a defection and blamed President Kirr. According to the SSDF external liaison office, that defection raised fears that dialogue would take a back seat in the new southern Sudan.

The SSDF-SPLA relationship is further complicated by the reality that each of the groups predominantly represents the interests of a single ethnic group. The SPLA (and, by extension, the GOSS) is dominated by members of the Dinka tribem while the SSDF is dominated by members of the Nuer tribe. Some smaller tribes have also joined the SSDF.

Dinka-Nuer ethnic conflict is not new and continued even as Khartoum was exterminating the black population in the south. According to Human Rights Watch, a 1999 peace agreement ending eight years of Dinka-Nuer cross-border raids has failed to end the animosity. These raids involved thousands of civilian casualties, large-scale theft of cattle, abduction of women and children, and destruction of hundreds of villages. In addition, says the human rights monitoring agency, the government in Khartoum only made this conflict worse by arming whichever faction or militia would fight the SPLA. "The Khartoum strategy of divide and destroy has worked extremely well in the past," said Human Rights Watch in a report published five years ago. They keep "southerners split -- Dinka from Nuer, and Nuer from Dinka."

The division can be seen in the current government. Within the GOSS cabinet of 22 ministers, four are Nuer. The peace agreement stipulates that 70 percent of the representatives of the southern government should come from the SPLA, 15 percent from the northern ruling National Democratic Party of President Umar al-Bashir, and 15 percent from other southern parties. In the eyes of some, this gives the oil-rich SSDF short shrift. What's more, the failure by the southern government to dedicate 2 percent of oil revenues to surrounding communities is seen as discrimination against the Nuer people.

David Chand, the deputy leader of the SSDF's political wing, said in an interview that while most of the oil fields are located in the Nuer land, the Dinka-dominated government is taking all the revenue. "Why should my people's resources be used to build up outsiders?" he asked. "How would you feel if your land was expropriated at your own expense? The war is not yet over. The SPLA has attacked us and we will respond accordingly. This is the bottom line."

Jarch Oil Contract

Civil conflicts in Africa -- especially those related to equity in national resources -- usually feature a foreign element. Groups like Global Witness have noted this in profiling the main actors of wars in Liberia, Sierra Leone, and Angola. In Sudan, that presence is Jarch Management Group, a firm based in the British Virgin Islands and Hong Kong. For Jarch, however, it is not about resource plundering, but rather the recognition of a legitimate oil exploration contract signed by southern Sudan leaders. Those leaders have disowned the contract.

Phil Heilberg, an American investor and the chairman of Jarch, says Paulino Matip Nhial, a former SSDF and current SPLA leader signed numerous agreements with Jarch for oil and gas exploration on March 1 and 7, 2004. He says that several ministers, in addition to John Garang, were present. Further, according to Heilberg, the agreements included a provision stating that they "shall remain in force and survive if the SSDF joins forces with other groups in southern Sudan to form the GOSS." Heilberg notes that "Mr. Paulino and the GOSS have not enforced this clause, contrary to assurances from Mr. Paulino that he would, with the current president of the GOSS, Mr. Salva Kiir.

Both the SPLA and the SSDF signed the agreements under the "right of self-determination" clause of the CPA and 1997's Khartoum Peace Agreement. Heilberg believes that, because of this, Jarch's contracts are valid. According to the documents held by Heilberg, in February 2003 the SPLA signed a contract with Jarch Management Group and its partners to allow exploration in an area called Block B. In addition, this contract gave Jarch exclusive rights to all commodity contracts until 2009. Further, the SPLA was required to contact Jarch prior to any commodity deals.

"Eighteen months after the signing of our agreement," lamented Hielberg, "the SPLM/A signed a contract with a public company called White Nile Ltd." "Jarch Capital," he continued, "considers the signing of this new deal a violation of the representations and warranties given by the SPLM/A, and a violation of the agreement as a whole." He estimates that damages could exceed $10 billion.

The Block B area in southern Sudan is also claimed in whole or part by Total, Petronas, White Nile, Moldova's Ascom Group, and Edge Petroleum.

Jarch's expanding relationships with regional rebel groups is a factor to watch as reports emerge of armed clashes between the SPLA and the SSDF. The company has strong relations with an Ethiopian rebel group known as the Ethiopian Unity Patriots' Army (EUPA) which operates from Sudan's eastern border with Ethiopia. Thowath Pal Chay, the EUPA's commander, sits on the newly constituted board of Jarch Management Group. Also on the board is David Chand, leader of the SSDF's political wing and professor at the University of Nebraska.

The SPLA has dismissed Jarch's claims, but is now retreating. According to media reports, the SPLA has asked Heilberg to bring his documents to the National Petroleum Commission so they may examine them to determine their validity.

Internal GOSS Conflict

In addition to oil, representation, and ethnic disputes, internal conflicts within the GOSS are resurfacing and threatening to erode what stability there has been. Paulino Matip, who joined the government from the SSDF, has threatened to remove his 3000 fighters from the government if they are not given eight months of back pay before the end of the month.

The SSDF's political office also claims that both Matip and current vice president Riek Marchar are negotiating a defection to the SSDF. Analysts say such a move would weaken the GOSS.

SSDF has asked Khartoum to stop oil revenue transfers to the GOSS and the international community to suspend $4.5 billion in pledged aid until further negotiations can take place. The group, which has threatened to attack oil companies, says such moves are needed to avoid war in southern Sudan. For now, however, the SSDF is only waging propaganda war, printing t-shirts, and caps calling on oil companies to vacate their land.

About the Author: Steve Mbogo is an investigative journalist based in Nairobi, Kenya. He writes on Africa's terrorism and security trends, socio-economics, international relations, politics and biotechnology.

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