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New Report Exposes South Sudan’s War Machine, Offers Steps to Target Financial Interests and Counter Potential Spoilers

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New Report Exposes South Sudan’s War Machine, Offers Steps to Target Financial Interests and Counter Potential Spoilers

Posted by Enough Team on December 15, 2015

Tenuous Peace Deal at Risk as Youngest Nation Marks 2-Year Anniversary of Conflict Outbreak

Today, on the two-year anniversary of the start of South Sudan’s civil war, a new report by the Enough Project exposes the political and financial interests that continue to pose the most significant threat to peace. DEADLY ENTERPRISE: Dismantling South Sudan’s War Economy and Countering Potential Spoilers, argues that networks of political and business elites have profited from the war must be effectively targeted and dismantled in order to save South Sudan’s imperiled peace deal.

“Deadly Enterprise,” by Enough Project policy analyst Justine Fleischner, suggests a number of policy tools and interventions to strengthen financial pressure and support accountability, and transparency efforts key to ending impunity for economic crimes.

Justine Fleischner, report author and Enough Project Policy Analyst based in East Africa, said: “The losses for South Sudan’s people have been too devastating to simply allow a return to the governing status quo. If South Sudan’s leaders fail to undertake the necessary political and economic reforms laid out in the peace agreement, it is hard to imagine how there will ever be real stability. South Sudan’s leaders owe it to their own citizens to finally deliver on the promises made at independence.”

The war, sparked in December 2013, has cost countless lives, displaced hundreds of thousands from their homes, and has been characterized by widespread human rights atrocities documented by the independent African Union Commission of Inquiry. The peace agreement provides a starting point for bringing the parties back together in Juba, but so long as hardliner interests remain intact, the country risks a return to full-scale civil war.

John Prendergast, Founding Director of the Enough Project, said: “How does anyone think the status quo of corruption and conflict will change in South Sudan without creating real consequences and breaking the cycle of impunity? The international community must deploy whatever tools it has at its disposal to ensure stolen assets are returned and economic crimes prosecuted. Regional and global asset freezes and travel bans should target those individuals that pursue their own political or economic gain at the expense of the South Sudanese people.”

Report recommendations include global asset recovery efforts, investigations by the U.S. Department of Justice-led Kleptocracy Asset Recovery Initiative, steps to ensure space for civil society to hold their own leaders to account, and tools to combat black market currency trading and potential money-laundering activity.

The in-depth report is based on extensive research and interviews conducted between July and November 2015in Juba, Bentiu, and Malakal, South Sudan; Addis Ababa, Ethiopia; and Nairobi, Kenya. 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.

Selected report revelations:

  • Officials with access to the hard currency brought in as oil revenue are in some cases able to leverage the difference between the official and black market exchange rates to turn huge profits on the dollar. At the time of publication, the official exchange rate was 2.9 SSP to the U.S. dollar and the black market rate was 17 to 18 SSP to the dollar, giving a 586 to 620 percent return on the dollar.
  • Without a transparent system in place for managing oil revenues and a single oil account, it is difficult to track the money that comes in as oil revenue. In addition, those officials with access to the hard currency brought in as oil revenue are in some cases able to leverage the difference between the official and black market exchange rates to turn huge profits on the dollar. At the time of publication, the official exchange rate was 2.9 SSP to the U.S. dollar and the black market rate was 17 to 18 SSP to the dollar, giving a 586 to 620 percent return on the dollar.
  • Some sources have estimated that the government currently receives around $60 million a month in oil revenues, although the actual total oil income is unknown… Opaque financial arrangements between the oil companies and traders and the government of South Sudan further obscure the use and transfer of oil funds.

Selected report recommendations:

  • Potential spoilers, including politically and financially exposed individuals at the highest level, should be the primary target of asset investigations and financial audits to curtail the damage they are able to inflict on the implementation of the peace agreement.
  • Opaque business deals and financial transactions should be scrutinized and carefully investigated. These include transactions involving well-known war profiteers with long-standing ties to the opposition and government leadership. The U.S. should also investigate deals involving firms, accounts, and individuals based in the United States. All business transactions, concessions, and bidding processes must meet the minimum requirements laid out in South Sudan’s own laws. Ensuring war profiteers do not cash in on the destruction and loss of life they helped sustain should be a primary concern of JMEC, the United States, and donors during the transitional period.
  • Levying and implementing sanctions that effectively target the South Sudanese actors who most threaten peace and security requires attention to sanctions enforcement at the regional level. To prevent potential South Sudanese spoilers from seeking state sponsors in the region, the United States and other international partners must maintain diplomatic pressure on regional states, including Kenya, where significant South Sudanese assets are held.

Link to full report.

For media inquiries or interview requests, please contact:
Greg Hittelman, Director of Communications, +1 310 717 0606gh@enoughproject.org

About THE ENOUGH PROJECT
The Enough Project, an atrocity prevention policy group, seeks to build leverage for peace and justice in Africa by helping to create real consequences for the perpetrators and facilitators of genocide and other mass atrocities. Enough aims to counter rights-abusing armed groups and violent kleptocratic regimes that are fueled by grand corruption, transnational crime and terror, and the pillaging and trafficking of minerals, ivory, diamonds, and other natural resources. Enough conducts field research in conflict zones, develops and advocates for policy recommendations, supports social movements in affected countries, and mobilizes public campaigns. Learn more – and join us – at www.EnoughProject.org