In a new report released today, the Enough Project exposes the main sources of conflict financing that have sustained South Sudan’s civil war over the past two years. The report details the elite interests that pose the most significant threat to peace and provides policy recommendations to counter these interests, focusing on economic leverage and creating transparency and accountability over the use of South Sudan’s natural resource wealth. The report also provides recommendations for supporting civil society efforts to hold their own leaders to account and providing the necessary resources to support implementation of the peace agreement.
“On the two-year anniversary of the start of South Sudan’s brutal civil war, a peace agreement has been signed and implementation is underway. Yet personal political and economic interests continue to threaten the prospects for peace in South Sudan, as well as the economic future of the country for its citizens. If those spoilers benefiting financially and politically from the continuation of the conflict are not countered, the peace agreement will remain imperiled.” – Deadly Enterprise: Dismantling South Sudan’s War Economy and Countering Potential Spoilers
Today, many South Sudanese are quietly reflecting on the countless lives that have been lost. Hopes that the unity government could be formed before important religious celebrations around the holidays have been replaced by increasing skepticism over the desire of the parties to implement the agreement in good faith. Meanwhile, the South Sudanese people continue to bear the brunt of the conflict. Millions of South Sudanese have been displaced from their homes and hundreds of thousands will celebrate the holidays on United Nations camps for the displaced around the country. Armed actors on the ground continue to obstruct the delivery of emergency humanitarian assistance and face few consequences for horrific attacks on civilians that have been carefully documented by the independent African Union Commission of Inquiry and human rights groups.
The peace agreement, and the transparency measures it contains, directly threatens elite interests that have benefitted politically and financially from the conflict.
“The power-sharing arrangement laid out in the agreement will inevitably result in some government loyalists having to step down from office. As a result, there is significant overlap between those hardline elements opposed to the peace agreement and those individuals who have benefited [most] from the conflict.” – Deadly Enterprise: Dismantling South Sudan’s War Economy and Countering Potential Spoilers
The report is based on extensive research and interviews conducted in Juba, Bentiu, and Malakal, South Sudan; Addis Ababa, Ethiopia; and Nairobi, Kenya between July and November 2015. Interviewees included government and opposition officials, government and rebel commanders, low-level fighters on both sides, civilians displaced by the conflict, civil society leaders, academics, economists, geologists, U.N. officials, and international experts on specific sectors of the war economy.
The report focuses on policy recommendations in five key areas:
- Holding Perpetrators of Financial Crimes to Account — The United States, United Kingdom, and other partners should increase their global efforts to trace, freeze, seize, and return the proceeds of corruption back to the people of South Sudan leveraging global criminal and anti-money laundering networks. The U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN) should issue an advisory to all U.S. financial institutions regarding the risk of possible money laundering activity and illicit transactions in South Sudan. At the same time, the U.S. interagency-supported Department of Justice-led Kleptocracy Asset Recovery Initiative should open its own investigation into grand corruption in South Sudan.
- Dealing with Potential Spoilers — Targeted sanctions must be more widely imposed at a higher level and more robustly enforced, targeting potential spoilers. The U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) should focus its investigations on politically and financially exposed individuals and their enablers and facilitators, including “war profiteers.” OFAC and FinCEN should also support efforts by regional governments and banks by providing training on sanctions enforcement and identifying potential money laundering activity.
- Prioritizing Specific Provisions of the Peace Agreement — Donors should ensure that the Joint Monitoring and Evaluation Commission tasked with overseeing implementation of the peace agreement has the necessary resources and technical expertise to fulfill its broad sweeping mandate, including financial forensic accountants and oil industry transparency experts to implement the ambitious reform agenda laid out in the agreement. Donors should also ensure adequate resources are available for troop cantonments and that a robust screening process is in place to identify fighters and prevent payroll fraud.
- Enhancing Civil Society Efforts to Hold Their Own Leaders to Account — Donors should amplify civil society voices by investing in public opinion polling and media training, and by demanding investigations into attacks on local journalists and civil society activists as a condition for the normalization of donor assistance to the government of South Sudan.
- Providing Incentives for Implementation Alongside Coercive Measures — Once significant progress on peace implementation has been made, donors should work with the government of South Sudan to assess the viability of physical infrastructure and rehabilitation projects alongside robust auditing and accounting practices to prevent the misuse of donor funds and spur reconstruction and development efforts. Donors must also reassess what kinds of technical support would be most appropriate in support of security sector reforms and strengthening legal and regulatory frameworks for investments and economic transparency.
Click here to read the report.