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www.africa-confidential.com 4 August 2000 Vol 41 No 16 AFRICA CONFIDENTIAL DIAMONDS II 3 DIAMONDS I Tracking Angola’s stones Masters of war The UN’s latest probe into the arms-for-gems trade is exposing the Angola has started registering the first of 300-350,000 garimpeiros, political and business networks behind West Africa’s wars the informal diggers who find The sanctions gumshoes are on the trail again. This time, they have Liberian and Burkinabè Presidents stones where the big companies don’t look. This is the government’s Charles Taylor and Blaise Compaoré in their sights. A United Nations’ panel of experts investigating latest move to convince the world links between diamond and arms trafficking in Sierra Leone is due to report back by the end of October. that it wants to stop corruption in It will look at Liberia’s and Burkina Faso’s compliance with UN Security Council Resolution 1306, its diamond business. which bans trading in diamonds from Sierra Leone’s rebel-held areas. Should it produce strong evidence of Taylor’s and Compaoré’s involvement, then their governments may face UN sanctions ANGOLA 4 At a public hearing of the Security Council’s Sanctions Committee on 31 July-1 August, speaker after speaker inveighed against Taylor’s and Compaoré’s fuelling of the war in Sierra Leone and their profiting War against peace from the diamonds smuggled out by the Revolutionary United Front. The plain language used by the finger-pointers and the public naming-and-shaming of Taylor’s and Compaoré’s South African, British, After months of government advances, the war is again Lebanese and Ukrainian business associates broke decisively with UN traditions of diplo-speak. This approaching stalemate with no surge of energetic diplomacy has shocked many Sierra Leoneans and others caught up in the country’s obvious end in sight. Accordingly decade-long war. the peace call is growing in This is a result of the coming together of several different commercial, military and diplomatic strength, finding a ready audience interests, not an overwhelming moral response to RUF murders and mutilations of civilians, which started among war-weary Angolans. about eight years ago. From Whitehall’s viewpoint, it is because British troops are at risk in Sierra Leone and may be so for several more years, that its military and civil intelligence agencies have been tracking CONGO-BRAZZAVILLE 6 the RUF and its allies. Britain and the United States, in particular, are committed to propping up the UN Mission in Sierra Leone (Unamsil). An ignominious UN failure in Sierra Leone would damage UK and Now the economic US diplomatic credibility, as the leading sponsors of the mission, as much as the UN. The human and battle financial stakes are growing: over 60,000 people have died in Sierra Leone’s war and Unamsil will cost some US$475 million over the next year. Already, unpaid contributions to Unamsil’s account total more Several hundred troops from President Sassou Nguesso’s ally, than $140 mn. Angola, ensure his regime’s security but he can do little to The mining houses join battle improve poor living conditions and pay. What is new is the attempt by business, particularly the bigger diamond mining houses and traders, to address criticism that their trade has been a major facilitator, if not sponsor, of the war. Their intervention, whatever the moral qualms that drive it, makes good commercial sense. The mining houses reckon that ZAMBIA 7 just 4 per cent of the current annual production of some $6.8 billion can be classified as conflict diamonds - that is, gemstones used to fund rebel wars. This definition includes all diamonds produced in Sierra Copper quarrels Leone which don’t come under the government’s new certificate of origin scheme, all Angolan diamonds Zambia’s ruling politicians had from the alluvial areas controlled by Jonas Savimbi’s rebels and stones from Kisangani and environs in hoped that selling off the Congo-Kinshasa. government’s ailing copper mines So diamond mining houses such as De Beers and representative bodies such as Antwerp’s Diamond would bring benefits in time for next year’s elections. High Council attended the Security Council hearing and presented, alongside Sierra Leone’s Mines Minister Mohammed Deen, their proposed scheme to certify all the country’s legitimately produced diamonds with an ‘audit trail’ (on security printed paper) that stretches from licensed digger to retail POINTERS 8 customer. Sierra Leone’s is a resource war. It has its roots in incompetent and corrupt governments that have UK/Sudan, Africa/ mismanaged the country’s resources and worsened social division. The RUF’s grip on diamond areas in Libya, Algeria and Kono District has bank-rolled its war but its motives and those of its sponsors are political as much as Nigeria commercial. Equally, the RUF could have financed its war through illicit coffee, cocoa, timber or gold exports. It happens that diamonds in Sierra Leone have proved the most lucrative and portable fuel. The US Ambassador to the UN, Richard Holbrooke, said that Taylor was taking increasingly large AFRICA CONFIDENTIAL commissions for his services as a facilitator of sales of diamonds smuggled out from RUF-held areas in Sierra Leone and for supplying arms. British diplomat Stephen Pattison estimated that 60 per cent of Please note that the next edition of Africa Confidential will be published Sierra Leone’s diamonds from RUF-held territory were smuggled through Liberia and 40 per cent on 30 August 2000. through Burkina. These accusations follow several blunt warnings to Taylor and Compaoré from the US 4 August 2000 Africa Confidential Vol 41 No 16

government after a meeting between US Under-Secretary of State diamond fields as their RUF allies come under growing military Thomas Pickering and Taylor in Monrovia last month (AC Vol 41 No pressure. Taylor has brought in a South African mining and trading 15). company, established in Monrovia as the Liberian Investment Unless Taylor ends his arms-diamond trade with the RUF and all Corporation with a subsidiary in Burkina employing RUF fighters. military support for the rebels within weeks, Washington says, it will Also from South Africa, a team of security specialists hired by Taylor sanction Liberia bilaterally as well as push for UN sanctions. Because is advising the RUF on how to fortify its defences in the Kono diamond of his access to the US Democracy Envoy, the Reverend Jesse fields, Pattison said. Jackson, and the leader of the US Congressional Black Caucus, Donald Payne, Taylor had been able to convince some Washington Video-taped surveillance officials that he could and did play a constructive role with the RUF. This is despite Taylor’s promise that he will persuade the RUF to leave Recent Western intelligence reports contradict that perception. the diamond fields peaceably, a promise made to the Economic Liberia’s urbane Foreign Minister, Monie Captan, who had Community of West African States which has commissioned an flown to New York for the hearings, dismissed the charges as allegations enquiry into the rebel war in Sierra Leone and the arms-for-diamonds without substance but pledged full cooperation with a special panel set trade. Britain’s charges are backed up by aerial photographs of trucks up to investigate links between the trade in smuggled gemstones and carrying arms from Liberia to Sierra Leone, as well as video-taped arms supplies to the RUF. Captan said that British and US officials surveillance and intercepts of conversations between Taylor and were score-settling for candidates who had been defeated by Taylor in Compaoré and their associates in the RUF high command. Neither the the 1997 election. He said Holbrooke’s accusations against Taylor photographs nor the intercepts were made available to the Sanctions were motivated by his ambition to be Secretary of State, should Committee or representatives from the Burkinabè or Liberian incumbent Vice-President Al Gore win November’s presidential governments. Members of the Committee’s investigating panel said election. they would hope to see at least some of the evidence gathered through However, both Britain’s Ambassador to the UN, Jeremy electronic surveillance. Greenstock, and Pattison made substantial reports to the Sanctions Burkina’s Ambassador to the UN, Michel Kafando, joined Captan Committee which it said were based on surveillance before and during in rejecting charges that his government was backing the RUF or the deployment of UK troops to Sierra Leone. Pattison said Taylor and profiting from the arms-diamond trade. In March, Compaoré was Compaoré had been directing strategy meetings with RUF commanders, accused by another UN sanctions panel, headed by Canada’s including Issa Sesay, Gibril Massaquoi, Morris Kallon and Augustin Ambassador Robert Fowler, of trading arms for diamonds with Gbow (all Sierra Leone-based); Sam ‘Masquita’ Bockarie and Savimbi’s União Nacional para a Independência Total de Angola. Edward Kanneh (Liberia); and Ibrahim Bah (Burkina). Bockarie, Kafando denied those allegations, too, on behalf of Compaoré. Given Massaquoi and Kanneh accompanied Taylor to meet Compaoré in that Ouagadougou’s trafficking operations have infuriated two of Ouagadougou on 5 June. Massaquoi carried diamonds to pay for Africa’s biggest oil producers, Angola and Nigeria (which is the Burkinabè support. biggest contributor of troops to Unamsil), Compaoré can no longer Five days later, Pattison said, Massaquoi was in Monrovia with rely on traditional diplomatic support from France, whose economic more diamonds for Taylor. These he traded for six trucks full of stakes in Angola and Nigeria far outweigh its commitments in Burkina. supplies which were driven back to RUF-held areas. Taylor and his Paris’s tolerance of Taylor’s and Compaoré’s regional gamesmanship advisors have played a key role in formulating RUF strategy: he is wearing thin also because of the increasingly precarious situation in proposed withdrawing RUF forces from the north and north-west, to Côte d’Ivoire, where dissatisfied oppositionists speak menacingly of strengthen the RUF’s grip over the diamond fields in Kono district and following the Taylor tradition. to continue with guerrilla attacks around Makeni, Port Loko, Masiaka Apart from the dramatis personae - both Taylor and Compaoré and Lunsar to wrongfoot the UN peacekeeping troops and the pro- have close links to UNITA and some of the apartheid-era South Kabbah forces. African soldiers it hires - there are similarities between Fowler’s investigation into the diamonds-for-arms trade in Angola and the RPGs for the RUF UN’s latest efforts in Sierra Leone. Some fear Fowler’s mistakes may Pattison also listed arms deliveries through Liberia to the RUF and the be repeated. His investigation was limited by UN politics: the draft despatch of back-up troops for the RUF from Liberia. From early report detailing the involvement of several heads of state and their June, ammunition and other materiel were sent by helicopter from business associates with UNITA was sanitised after heavy pressure Monrovia to Foya and then on to several places in Sierra Leone. Two from Gabonese, Rwandan and French diplomats. Fowler was lorry-loads of ammunition and food left Monrovia on 8 June for accused of failing to establish a critical distance from his hosts in Kailahun and other areas under RUF control. In late June, Taylor Angola, the government of President José Eduardo dos Santos. His authorised an arms shipment to RUF commanders which included presentation of video interviews with UNITA defectors in government rocket-propelled grenade (RPG) launchers, mortars and rifles. It was custody as evidence was questionable. transported overland and accompanied by Issa Sesay. Although leaders such as Compaoré and Togo’s President He said Bockarie had travelled from Monrovia to RUF areas in Gnassingbé Eyadéma were named and shamed for breaking UN eastern Sierra Leone several times since the resumption of wide-scale sanctions against UNITA, they faced no disciplinary action. Eyadéma fighting in early May. ‘At least 1,000 troops linked to Bockarie is the new Chairperson of the Organisation of African Unity, though crossed into eastern Sierra Leone during May and June. In the last Angola and its allies boycotted last month’s summit in Lomé. However, week of June, he led a mixed group of RUF, Burkinabè and Liberian industry experts say that the Fowler investigation has reduced the soldiers (some 400-500 troops) across the border into Sierra Leone. diamonds-for-arms trade to UNITA by forcing the traffickers to take They were armed with rifles, rocket-propelled grenades and new routes and because of the higher risks of detection, their agents flamethrowers.’ charge higher commissions. Taylor and Compaoré want to keep their grip on the Kono District Equally, Fowler’s investigations show the complexity of the ‘iron 2 4 August 2000 Africa Confidential Vol 41 No 16 triangle’ transactions: diamonds, arms and rebel fighters. Often more proved that corruption is not allowing UNITA diamonds to leak into than 30 separate parties are involved in one illegal arms shipment; in official channels. the diamond trade, the chain from illicit digger, through buyers, The Angolan government says it wants to register all diggers and dealers, exporters, traders, cutters, jewellers to retail customer can be their stones, and to install its own warranties inside the country. For longer still. Such complexities have prompted a second investigating that, it is launching a guichet único - a body with police, legal and panel under Fowler to produce more evidence: implicated governments judicial powers to tackle the shady intermediaries between diggers might then face sanctions and their business partners would face and official buyers. Bar-coded licences were introduced in June near exclusion from the legal diamond and arms market. the north-eastern town of Nzagi and should spread to the rest of the Few think that either Fowler II or the new Sierra Leone commission country by the end of 2000, says Carlos Sumbula, deputy Minister will be able to shut down the determined arms or diamond traffickers. of Geology and Mines. Sumbula runs the ministry: his boss, Yet such investigations can sharply raise the cost of trafficking and figurehead Minister Manuel António Africano, represents only a stop rebels and their business partners from inserting their contraband breakaway splinter of UNITA in Luanda, sustaining the government’s diamonds into the mainstream diamond market. That will be possible fiction that it is still working under the long-dead Lusaka protocol. if the latest proposals to clean up the diamond trade get widespread In turn, Sumbula, a former Elf-Aquitaine employee, answers to political backing. The diamond trading organisations meeting in people at the presidency and to the cunning and powerful Noé Belgium last month and planning to attend the British-Russian Baltazar, head of the state company Sodiam, which holds 51 per diamond summit this autumn insist they will back moves to outlaw cent of the diamond-trading consortium, Ascorp. conflict diamonds. And they will expel any of their members caught dealing in conflict or uncertificated diamonds. A credible certificate Of plots and plotters of origin scheme would have to operate in all diamond producing Sumbula says there is an international plot to trick people into countries, not just Sierra Leone. So substantial resources and technical thinking Ascorp’s diamonds are dirty. Without naming any one, he assistance have to be channelled into countries such as Angola, complains that those opposed to Ascorp are powerful. He says the Guinea, Liberia and Congo-K to make it work. new system is working well and welcomes the idea of outside Before that can happen, there is one major obstacle, pointed out by observers in the diamond regions. He also says tax receipts since Liberia’s Captan. President Ahmad Tejan Kabbah’s government January have been running at US$4 million a month, with a $7 mn. controls just a fraction of the country’s diamonds: the bulk are still take in May - equal to a year’s tax take before the changes in Ascorp. under RUF control. Until the Kono diamond fields are brought back Yet the IMF does not yet intend to submit the diamond accounts to under government control, the certification system will remain a well- serious scrutiny and the government can claim to be tightening its meaning irrelevancy. The rebels will continue to use the subterranean grip on the industry simply by puffing up its numbers. routes to market their illicit gems, albeit at increasingly heavy discounts. Receipts have been boosted by an additional 3.5 per cent advance payment on future taxes, which Sumbula says will make up for the fact that Catoca (the only firm with stones entirely from kimberlite DIAMONDS II pipes) has been the only foreign diamond company to declare decent taxable profits. The recognised diamond-buying firms before this year’s changes included RDR, LKI, Dian Limited, Codiam (from Tracking Angola’s gems which De Beers withdrew last year), Tirotex and Matos and Jean. RDR was a tough competitor, with tax and other privileges, and A scheme to register diamonds and diggers excellent connections with Isabel, daughter of President José may help to regulate the trade Eduardo dos Santos. The mining companies complain that high Angola has started registering the first of 300-350,000 garimpeiros, security and transport costs have made profits hard to come by. the ‘informal’ diamond diggers who find stones where the big Smuggling has been hard to prove since, at present, anyone in companies don’t look. This is the government’s latest move to Angola can own a diamond. Under the new licensing system, only convince the world that it wants to stop corruption in its diamond registered diggers, buyers, runners and other specially authorised business and to squeeze out of official channels the ‘conflict people will be allowed to own stones. Monopoly rights to buy diamonds’ (AC Vol 41 Nos 11 & 13), sold by the rebel União diamonds have since January belonged to Ascorp, in which Sodiam Nacional para a Independência Total de Angola. In April, the holds its 51 per cent stake alongside Belgian dealers and an Israeli- International Monetary Fund agreed on a programme of economic Russian, Lev Leviev. He is said to have links to Arkady Gaidamak, reforms, monitored by its own staff. At that time, the Luanda an arms dealer. The government, anxious that arms purchases government accepted a full audit of the notoriously murky oil should not show up in the IMF-scrutinised budget, sometimes accounts but the diamond accounts were left aside as, in the words prefers to pay with licences rather than cash. of one official, ‘just too much of a lost cause’. Ascorp’s buying offices will be allowed to buy stones only from Angola is worried that buyers might boycott its stones. Traders, diggers whose bar-coded licences will keep computerised track of anxious that their goods should not be tainted by ‘blood diamonds’, who is digging where, along with a history of each digger, whatever plan to introduce a chain of warranties or guarantees ‘between his or her nationality. Many tens of thousands of diggers, mainly miner and ring-finger’, which would squeeze diamonds mined by from Congo-Kinshasa, will be entitled to continue working in rebels such as UNITA out of reputable channels. De Beers, which Angola, selling to the government agency instead of to UNITA. The dominates the world’s diamond trade and leads the drive to clean big idea is not to fight the garimpeiros but to recognise their it up, now issues guarantees that the diamonds it sells are free from existence and legalise their status. the taint of conflict. Luanda needs to show that its own stones are Equally, nothing need be done about the activities of the Angolan clean; Britain’s Minister for Africa, Peter Hain, has emphasised generals and politicians with interests of their own. Once legalised, that he does not advocate buying Angolan diamonds until it can be some may find it easier to invite in reputable and effective new 3 4 August 2000 Africa Confidential Vol 41 No 16

foreign partners (but if registering stones means declaring income system fails or has to be modified. UNITA produced $100-$150 and paying tax on it, most generals are against it). There is little mn. last year, depending on whom you believe. sign of a clean-up though a few out-of-favour dealers have been Diamond dealers are being warned of the dangers of the ‘clean expelled, reportedly for contravening the new rules, and António diamonds’ message not getting through. ‘It is clearly important Souza, a Portuguese businessman who owns the Sol Dourado that legitimate trade is publicly understood as Angolan,’ said a company and has wide business interests, was arrested in May. confidential document sent to Sylvain Goldberg of Omega Foreign companies operating in Angola are angry. Previously, diamonds, a shareholder in Ascorp. ‘This is where highlighting the companies such as SDM, owned by Australia’s Ashton Mining reduction in UNITA’s territories and conflict diamond export (subject of a hostile takeover bid by De Beers on 31 July), Brazil’s receipts is useful.’ Yet those who want to tarnish Angola’s official Odebrecht and Angola’s state diamond company Endiama (Empresa diamond sales would prefer to see the higher figures published. At Nacional de Diamantes de Angola), could guarantee that their present, Angola supplies just one-tenth or so of the world’s rough stones were clean and sell them to any customer. Their stones will diamonds but could certainly do much more, given the potential for now be mixed up in the Angolan diamond soup, through the single discovery of new kimberlite deposits. ‘We view Angola and marketing channel, Ascorp. If Angola loses the propaganda battle Congo as the most prospective countries in the world,’ Ashton’s and its diamonds remain suspect, the official miners’ stones will be chief, Douglas Bailey, told an international rough diamond suspect too. conference in Israel in March. Further, the government is pressing ahead with its plans to carve some of the larger mining concessions into smaller parcels of 3,000 square kilometres each. Instead of expelling the garimpeiros, as ANGOLA usually happens, incoming companies will have to recognise those working on their concessions and treat them as employees. Just as state oil company Sonangol is Angolanising the oil industry, Sumbula argues that the same should happen in the diamond War against peace industry. Newly arrived foreign companies will have to train The peace movement is gaining support but Angolans and, eventually, transfer mine operations to them. This not from the politicians involves breaking contracts in a way unthinkable in the oil industry and could involve favours to well connected Angolans. A congress for peace held at Luanda’s Catholic University on 18-21 Endiama, which previously oversaw the diamond sector and has July might sound like a bland affair. Yet by bringing together over 20 debts of over $170 mn., will become merely a holder of government churches with politicians and non-governmental organisations, the equity in various mining companies, while trying to reorganise Congresso pro Pace went to the centre of Angola’s biggest controversy: itself as a mining operator through a new company, Endiama whether or not the government should ever again to talk to Jonas Exploration and Production; its President, Agostinho Gaspar, Savimbi, the wily leader of the União Nacional para a Independência will soon seek approval from the Council of Ministers, which Total de Angola. (under the presidency) has ultimate control over the diamond An ecumenical peace committee formed in April, the Comité sector. The Ascorp buying offices and many of their active staff are Intereclesial para a Paz em Angola (Coiepa), articulates the common the same as those in RDR, the biggest buying office before the theme. Because past negotiations between the ruling Movimento changes. Isabel dos Santos, formerly involved in RDR, is now Popular de Libertação de Angola and UNITA have all failed, supporters involved in Ascorp (as well as in telecommunications and, indirectly, argue, a full national dialogue is now needed, involving the main in Elf’s legendary Block 32 oil licence). protagonists and also the churches and other members of civil society. The official mining companies would like to market up to one- This call is supported by opposition figures such as the often-harassed fifth of their stones directly, to ascertain the effective market price. writer and human rights advocate Rafael Marques and the elderly Anecdotes from the diamond regions indicate that Ascorp is using Holden Roberto of the once-powerful but faded Frente Nacional de its monopoly position to pay some diggers up to 20 per cent below Libertação de Angola movement. Pope John Paul II chimed in with the going rate, arresting those who refuse to sell on the grounds that an appeal for reconciliation that will mean different things to different it would be illegal to sell to anyone else. This could drive some people. The government’s nervousness showed at the beginning of the sales underground, even into the arms of UNITA. Congress when the state newspaper published a front-page article The murky figures record that, last year, Angola officially about what it said was a signals intercept of a conversation involving produced diamonds worth $614 mn. Of that, $125 mn. came from General Paulo Lukamba ‘Gato’, UNITA’s Secretary General who, the giant Catoca kimberlite mine; $110 mn. came from ITM mining in contrast to earlier statements, reportedly said UNITA did not want and its partners at the Chitotolo, Mufuto Norte and Calonda to negotiate. concessions; $55 mn. came from SDM; and an unspecified amount After months of government advances, the war is again approaching came via generals and other unaffiliated diggers. All the large stalemate, with no obvious end in sight (AC Vol 41 Nos 6 & 9). The official mines have big plans for expansion, if the legal environment Chief of Staff of the Forças Armadas Angolanas, Gen. João de permits. Matos, tacitly admitted as much in a newspaper interview in Portugal Dealers reckon that official buying operations brought in some in June. With little hope that things will get better and no obvious $300-$320 mn. last year (in addition to production, with some alternative in view, the peace call is growing in strength. Its overlap). Many buyers whose contracts have been broken rest their unambiguous goal finds a ready audience among ordinary Angolans, hopes on Sumbula’s vague promise that they will be granted tired of endless war and corruption. A march for peace organised by mining concessions instead. LKI’s George Sherill, Dian’s Helder Coiepa in Luanda in June attracted 5-10,000 people, by far the largest Milagre and others are still in their offices in Luanda, not buying turnout for any demonstration since the last elections in 1992. stones but perhaps looking for new opportunities if the Ascorp The churches, in all their varieties, have great influence and are the 4 4 August 2000 Africa Confidential Vol 41 No 16 only organisations that reach into the homes of many poor Angolans. President Thabo Mbeki, to promote dialogue. A local politician The grand old Archbishop of Luanda, Cardinal Alexandre do noted that Angola’s foreign policy is dictated by oil; it has a Western Nascimento, was nominally the keynote speaker but he was a prisoner diplomacy but not a serious African diplomacy. The peace movement’s of UNITA in Jamba in the 1980s and now only timidly opposes some greatest weakness is that it has an attractive goal - peace - but no clear of the MPLA’s uglier policies. He is eclipsed by more outspoken strategy for getting there. The government’s militarist argument may prelates such as Bishop Francisco da Mata Mourisca of the northern appear ugly but is serious and forceful. town of Uige, President of another peace movement formed last year, The peace movement’s enormous appeal spreads through the Pro Pace, and a key Congress organiser. estimated 700 or more churches in Angola and over 100 registered The peace movement is anathema to the government, whose position political parties. There is fertile ground for the MPLA to do what it is since the collapse in late 1998 of the Lusaka Peace Accord is well best at - using oil money to buy off its poor opponents. Elections are known: that Savimbi used Lusaka and the previous failed 1991 due next year or the year after; the MPLA has started buying in Bicesse peace agreement as tricks, to provide a shield of peace Brazilian public relations experts for its recent, effectively low-key allowing him to dig diamonds and rearm, then emerging reinvigorated relaunch of the hitherto plodding daily Jornal de Angola. The MPLA and dangerous enough to threaten even the heavily defended oil loves Brazilian PR companies, another one of which, before the 1992 facilities. Under a new peace agreement, this could happen again and elections, staged ‘the doves of peace’ event. One was handed to Dos Western oil interests do not want new peace talks; they back the Santos, one to Savimbi, for release before a large crowd. Dos Santos’ government’s hard line and back efforts by people such as United bird flew away happily but Savimbi’s bird could not fly properly Nations diplomat Robert Fowler and the NGO Global Witness to because, it was said, it had had its wings tightly bound for hours strengthen UN sanctions against UNITA. It can be argued that the beforehand. campaign to ban UNITA’s diamond sales is driven by oil. The MPLA and its friends contend, persuasively, that Savimbi is not to be trusted Dos Santos considers his options or talked to. The MPLA’s powerful Secretary General, João Lourenço, Until lately, Dos Santos was thought to be wearily undecided about severely criticised what he called the ‘false prophets’ of peace. whether to stand for re-election. His resolve seems to have stiffened, The peace Congress was a political setback for the government but perhaps because of the Pinochet factor (the risk of facing trial in it managed to wriggle out of appearing too war-like by calling for retirement) perhaps by signs that rivals, notably João Lourenço, were peace and dialogue. This peace is to be won by attacking UNITA and trying to groom themselves to take over. The political scene is eliminating Savimbi, while pursuing dialogue with a discredited and hopelessly split, not least by petty personal quarrels. Abel feeble UNITA faction in Luanda led by the party’s former Secretary Chivukuvuku, a UNITA defector with a populist touch and friends in General, Eugenio Manuvakola. Peter Hain, Britain’s Minister for the United States and Western embassies, would like to bring together Africa, dived headlong into this controversy on a visit to Angola in diverse opposition groups. Some see him as a potential third force, early July. He came partly to try to influence the government in its rejecting both Savimbi and the MPLA, but he is thought arrogant by final decision, expected soon, as to which companies will get equity others such as Holden Roberto and even his nominal ally Jaka Jamba, stakes in the fabulous ultra-deep oil Block 34, which will be operated a respected UNITA member in Luanda, just elected as Second Vice- by the state oil company Sonangol, in partnership with Norway’s President of parliament. Jamba, who had unifying hopes of his own, Norsk Hydro. These two should take 50 per cent of the Block; the rest was irritated by what he saw as Chivukuvuku’s high-handed moves to is up for grabs. promote Armindo Cassessa’s successful bid to become UNITA’s Hain’s big success was an air-services agreement between London Chief Whip in parliament, replacing Anaceto Hamukwaya of the and Luanda that should allow British Airways, after a year of trying, discredited Manuvakola faction. to enter this lucrative route and carry many oil executives who now Former Premier Lopo do Nascimento, another moderate Western have to travel via Lisbon, Paris, Brussels or Johannesburg. Foreign favourite who quit as MPLA Secretary General when the party Minister João Miranda explained on state radio that the air deal and turned to a hard line as the Lusaka peace deal collapsed in late a woollier investment promotion agreement were direct results of 1998, is another possible centre-left candidate; he is moderately London’s support for Luanda’s refusal to speak to Savimbi. wealthy and gets his support from a small section of the Luanda elite. Other established opposition groups, such as the Frente de Who are we fighting for? Libertação do Enclave de Cabinda or the Partido de Renovação The next edition of the independent Folha 8 newsletter, run by Social (PRS) in the north-eastern diamond territories, rest on controversial businessman and journalist William Tonet, carried a narrow regional bases, while the articulate but uncharismatic front-page photo-montage of Hain with two balaclava-clad tank Filomeno Vieira Lopes of the Frente para Democracia (FPD) has commanders under the headline: ‘Is he also a criminal?’ Other little grass-roots support. The government has split the northern- opposition figures at a meeting at the British Embassy in mid-July based FNLA by promoting the discredited Lucas Ngonda as an criticised Hain loudly and to his face. ‘Who are we fighting for?’ asked alternative candidate to Roberto. The regional parties tend to agree one senior, non-UNITA, opposition figure. ‘Is it the MPLA? Foreign with UNITA that decentralisation could help to solve the country’s economic interests? Or is it the people of Angola? If it is the latter, ills but squabble about how to go about it. then we should all sit down and talk’. None of the small parties or their candidates has the money to The government’s position remains firm. President José Eduardo mount a serious grassroots challenge if and when elections take dos Santos has said that all those zwho repent could be pardoned and place. This leaves the MPLA and the main faction of UNITA. If ‘Perhaps Savimbi himself will repent’. Though some saw this as the widely hated Savimbi survives, which seems entirely possible, evidence of a subtle shift in the government’s position, it was no such he would almost certainly be excluded from the elections. The thing. It remains true that, as one diplomat observed last year, Savimbi result would be, in effect, an unopposed referendum on the MPLA would have to walk naked into Luanda to be pardoned. The government - once venerated but now so despised that it could fail even in this has rebuffed efforts by other African leaders, notably South African attempt. 5 4 August 2000 Africa Confidential Vol 41 No 16

Sassou’s Cobra militia. The case for winning over donors by CONGO-BRAZZAVILLE political generosity has been pressed by former party ideologue and current presidential advisor Pierre Nzé, and by Gérard Bitsindou, head of the President’s private office. The doves may also include Information Minister François Ibovi, notably conciliatory at a Now the economic battle Paris press briefing late last year, and ministers exposed to Western Despite all the killing, the government has to opinion, such as Finance Minister Dzon and Forestry Minister worry more about money than politics Henri Djombo, who has sought deals over the past year with some opposition leaders. Some of Djombo’s discussions have been Several hundred troops from the President’s old ally, Angola, hosted by the well known writer and Ambassador in Paris, Henri ensure his regime’s security; the Congo of Denis Sassou-Nguesso Lopez. Compromise might also be encouraged by Gabon’s Mark II is still far from salvation. The 1,300 staff of Marien President Omar Bongo, who is married to Sassou’s daughter Edith Ngouabi University in Brazzaville have been striking in protest at (a cheerleader for her father) and linked by kinship to Lissouba. their dismal conditions and pay. Thousands of refugees from Libreville may have sent up to US$3 million over the past three Congo-Kinshasa (AC Vol 41 No 12) strain the resources of the years, to sustain the former President in his London exile. poor and isolated north. Relations with Kinshasa have got worse, since President Laurent-Désiré Kabila suspects Sassou-Nguesso Broken olive branches may be sheltering Mobutist soldiers and may also have had Given the determination with which Sassou has imposed his power connections with northern rebel leader Jean-Pierre Mbemba. In and the bitterness against Lissouba that fuelled his creation of the return, Brazzaville suspects that Kinshasa shelters many fighters Cobra private army, he may not offer an olive branch on 15 August from the opposition Ninja militias, mainly Bakongo people from or, indeed, ever. A public relations initiative could bring profits, the coastal regions of both countries (AC Vol 40 No 21). though. The IMF’s post-conflict package is supposed to be decided The much mistrusted government’s main hope of revival, at on technical criteria; other donors set openly political conditions. least of international relations, lies with a team from the International Almost all the opposition militias have suffered defeat or accepted Monetary Fund, due to arrive later this month to negotiate a an amnesty: some 800 Lissoubiste Cocoye fighters, cornered around programme of post-conflict support. Finance Minister Mathias Mossendjo near the Gabon border, recently laid down their arms. Dzon wants to secure approval from the IMF Board before or Foreign aid, plus the present high oil price, could pay for a start on shortly after its annual meeting in late September, when he will recovery and development. However, investors other than oil have a chance to meet Horst Köhler, the Fund’s new Managing companies will not move until donors signal the country’s Director. Köhler has been German junior Finance Minister and acceptability by putting in long-term development aid. Without a head of the European Bank for Reconstruction and Development, commitment to pluralist democracy, Congo will get little more than set up to work with ex-East Bloc states. short-term humanitarian aid and some support for social Congo-B’s huge difficulties are increasingly those of many programmes. more peaceful African states - public sector pay and refugees from The United Nations humanitarian coordinator for Congo, other people’s civil wars. To survive, the government must defuse William Paton, was sufficiently encouraged to organise a donor international donors’ scepticism; Sassou may use the 30th meeting with the government in Geneva recently but it was a get- anniversary Independence ceremonies on 15 August to make some to-know-you affair, not a pledging session, aimed at preparing help announcement to catch their eyes. Just possibly, he might relax his for the 810,000 Congolese displaced by the war (the total population attitude to the men he ousted from power in the 1997 civil war, ex- is around 2.5-2.7 mn.). Some 600,000 of the displaced people have President Pascal Lissouba and former Premier Bernard Kolélas, gone home from the bush, from Brazzaville city or from Gabon and both from the centre-south, which has far more votes than Sassou’s Congo-K. They have found wrecked homes and a ravaged northern political base. They have been kept safely out of domestic countryside, with lawlessness still rife; many young men have been politics by threats of prosecution for human rights crimes. killed, the survivors have been uprooted from education and work, Instead of risking an amnesty for his rivals, Sassou could and HIV infection has been spread by rape. simply firm up the timetable for a return to democracy. Having This human catastrophe has persuaded the European Commission scrapped the previous multi-party constitution, he rules with the (despite the misgivings of some European parliamentarians) to consent of a transitional council, the Conseil National de Transition, relaunch a long-suspended 40 mn. Euro ($36.4 mn.) aid package. which he has nominated, but has promised a referendum on a new The Commission still needs the assent of member governments; democratic constitution by the end of the year. Alternatively, he France is keen to see EU aid restored and to step up its own limited could freshen up the offers he has been making to his opponents, reconstruction funding but Paris sources insist it will move only home-based and exiled. There are unconfirmed reports that with other EU partners. Despite President Jacques Chirac’s much Brazzaville has been lavishing its limited resources on gifts for publicised personal support for Sassou, Lionel Jospin’s Socialist- exiles willing to come home and endorse the Sassou regime; led government keeps its grip on aid policy and backs the EU’s several former opposition politicians have used airport press ‘common position’ on linking aid to democracy and human rights. conferences for weepy recantations of their support for the pre- Sassou knows all that and may move far to accommodate it. As 1997 government. a first sign of movement, pro-Lissouba politicians have been Sassou’s team has been debating its stance towards Lissouba allowed to give a press conference in Brazzaville, calling for the and Kolélas for at least a year. Those strongly against compromise dropping of prosecutions against their old leader. In February, the include Interior Minister and veteran security boss Pierre Oba, Fédération Internationale des Ligues des Droits de l’Homme Defence Minister Lekoundzou Itihi Ossetoumba of the ruling (International Federation of Human Rights Leagues) condemned Parti Congolais du Travail and Jean-Marie Tassoua, head of numerous detentions and disappearances but in April, it praised the 6 4 August 2000 Africa Confidential Vol 41 No 16 end of the civil war and the regime’s new talk of human rights - American, which under the name of Konkola Copper Mines again adding that the government must now match its words with action. owns a sizable chunk of the Copperbelt and has negotiated swingeing Financial disaster has been averted by the revival of oil prices, concessions. ‘We’ve got back what we lost because of plus a new find by TotalFinaElf. Exxon Mobil’s new Africa Vice- nationalisation’, senior Anglo executives have been heard muttering President, Ken Evans, has paid court to Sassou, as the majors - but not in Zambia, where the company has learned tact since, last scrabble for shares of West Africa’s deep offshore reserves. year, it caused an upset by advertising jobs in international, but not TotalFina’s test-drilling of 7,000 barrels per day (bpd) on the Mer Zambian, newspapers. Anglo stands widely accused of wanting it Très Profonde-Sud concession offers hope that Congo, like Angola, all, but not just yet. will find new deepwater oil, although the $1 billion Nkossa field, Anglo was apparently piqued when, at the last minute, the tiny regarded a few years back as the nation’s saviour, has turned out a First Quantum Minerals persuaded Swiss trader Glencore disappointment. With declining output of about 260,000 bpd, the International to back its bid for the Nkana mine. Anglo had left this government lives hand-to-mouth. It recently scraped together 44.4 out of the package at the eleventh hour (although it manages the mn. CFA francs in overdue pensions for retired civil servants in Nkana smelter) but held a veto over its sale on the ground that Pool Region but mainly because that region usually supports Nkana’s ore concentrates are crucial for blending with those from Kolélas. the Nchanga mine. Insiders believe that Nkana still has good Sassou wants long-term aid, debt relief and private investment, reserves and a 20-year lifespan. But it needs a huge cash injection particularly for the vital Brazzaville-Pointe Noire rail link. and Anglo’s priority is the massive Konkola Deep Mining Project. Personally, he would probably also enjoy the international Anglo has been scathing about the attempt by First Quantum, set legitimacy of full democratic endorsement. Yet he must choose up by two ex-Rhodesian brothers, Matt and Philip Pascall, to join whether to cut off Kolélas and Lissouba from their supporters or to the big boys. Some say Glencore holds the purse strings in the compromise with them; it is rumoured that Kolélas visited hurried Mopani partnership, which has not always gone smoothly. Brazzaville for secret talks earlier this year. The donors are not A close look at the pithead revealed unexpected problems and likely to do much either for Kolélas - whose Ninja war was brutal output in the first two months slumped to an all-time low. We hear and who has now moved his exile base from Washington to that mud was slung at the first tumultuous board meeting in June. Bamako, Mali - or for Lissouba, viewed as naive and politically Following a telephone call while he was fishing on the Vaal River inept. in South Africa, the former boss of South Africa’s Goldfields For now, the IMF negotiations are handled by Senegal’s former company, Tom Dale, now heads the operation. It is thought, and Finance Minister Papa Ousmane Sakho, Advisor to the Fund’s hoped, that the venture will survive. Africa Department. His team has put together sufficient statistical The floundering Luanshya mine remains a tinderbox. For a few data to begin drafting an economic recovery strategy and thinks the months it was led by Ian Stoker, credited with turning around government has the skills and personnel to administer it. Dzon’s Ghana’s Ashanti Goldfields until last year (when it fell victim to big problem is public sector wages, in a country whose economy a disastrous attempt to hedge the price of gold). Stoker’s sudden has been founded on the civil service since Brazza was the capital departure hasn’t helped UK-based Indian businessman Gokul of French Equatorial Africa. The payroll was trimmed by over a Binani to win over the enemies he made during his Binani Group’s quarter in 1995, when Lissouba’s government began to implement controversial takeover in 1997. Binani dismisses the importance of an IMF-supported austerity programme. On 31 July, Dzon Stoker’s departure and insists he will soon complete a US$78 announced more curbs on the state wages bill, supposedly at the million financing deal (with $56 mn. from institutions) which IMF’s behest. There are some things that Sassou cannot change. would jack up the mine and develop the Muliashi North greenfields (new) project. Financial sources ask when these funds will appear. Binani is withholding more capital until the government grants ZAMBIA his company, Ramcoz, concessions equivalent to those granted to Anglo, including a reduction in mineral royalty tax from 2 per cent to 0.6 per cent, exemption from consumables duty and a much Copper quarrels lower power tariff - concessions the government can ill afford. Government and business still argue despite the long awaited copper sell-off Visit our website at: www.africa-confidential.com Published fortnightly (25 issues per year) by Africa Confidential, at Zambia’s ruling politicians had hoped that selling off the 73 Farringdon Road, London EC1M 3JQ, England. Tel: +44 20-7831 3511. Fax: +44 20-7831 6778. government’s ailing copper-mines would bring benefits in time for Copyright reserved. Edited by Patrick Smith. Deputy: Gillian Lusk. next year’s elections (AC Vol 41 No 14). The slow and piecemeal Administration: Clare Tauben. privatisation of the mines, finally achieved on 31 March, shows signs of stirring the once prosperous Copperbelt from its deep Annual subscriptions, cheques payable to Africa Confidential in advance: UK: £278 Europe: £278 depression - but not fast enough for President Frederick Chiluba Africa: £258 US:$697 (including Airmail) and his team. Rest of the World: £361 Amid acute economic and social problems, the new owners, Students (with proof): £79 or US$126 Konkola Copper Mines and Mopani Copper Mines, are edging All prices may be paid in equivalent convertible currency. We accept American Express, Diner’s Club, Mastercard and Visa credit cards. forward cautiously. The new owners of Zambia’s copper mines do Subscription enquiries to: Africa Confidential, PO Box 805, Oxford OX4 not love each other. Old Copperbelt hands say they are jealous over 1FH England. Tel: 44 1865 244083 and Fax: 44 1865 381381 who got what when the cake was finally cut up. Rival mining Printed in England by Duncan Print and Packaging Ltd, Herts, UK. ISSN 0044-6483 houses complain about the arrogance of South Africa’s Anglo

7 4 August 2000 Africa Confidential Vol 41 No 16

spotted include Mohammed el Fayed, the Pointers Egyptian owner of Harrods, to whom Colonel NIGERIA El Gadaffi has awarded three oil concessions. Even more interesting is Jörg Haider, boss of UK/SUDAN Austria’s far-right Freedom Party, who is Transparency test looking to boost his home province of Kärnten (Carinthia) with Libyan business. Following Not much is going right in the government’s Intimidation Haider’s visit to Gadaffi in June, Austria’s Die efforts to relaunch licensing of prime oil Presse reported that the Libyan Arab Foreign exploration acreage: it had cancelled many awards ‘Some of the questions we ask may be too Bank would soon transfer 350 million Schilling made under military rule. The present round of personal but our aim is to ensure that you will (US$24.5 mn.) for investment by Hypo Alpe bidding, involving 22 oil blocks, nearly collapsed not become a burden on the British taxpayer’. Adria Bank, a Klagenfurt-based regional in June because of local legal proceedings and This daunting message, posted up in Arabic, mortgage bank. A Libyan trade delegation is controversial decisions to leave some prime blocks greets visa applicants at the British Embassy, expected to visit Carinthia this month. for separate discreet negotiation. Eventually Khartoum. More worryingly, applicants must President Olusegun Obasanjo had to intervene sign a declaration that they will not apply for ALGERIA personally. political asylum in the UK. They are also asked Inconsistency in the presidency has also dented whether they have ever been questioned by the confidence. Obasanjo decided not to implement police or security, arrested or tortured. There is New frontiers all recommendations by Christopher Kolade’s a widespread assumption among applicants that panel investigating the last round of exploration those replying ‘yes’ will be refused a visa. President Abdelaziz Bouteflika has taken a contracts. Against Kolade’s recommendation, A Foreign and Commonwealth official told lead in wooing new partnerships in the Middle Malabu Oil & Gas was allowed to keep Block 245, us he knew of no such procedures but if they East and Africa and his senior officials are perhaps the most prospective. The company is existed, they would not apply only to Sudan. following up to secure lucrative deals. linked to some senior officials, including Attempts to speak to relevant Home Office There has been controversy over Qatar being Environment Minister Hassan Adamu, a kingpin officials failed. But asylum lawyers told us used as a conduit for British defence sales in in the present government despite his role as such a promise not to apply for asylum would the form of £4.6 million-worth (US$6.9 mn.) of Ambassador to the United States for the late not be legally binding and was against the spirit, Land Rovers and other materiel. This points to General Sani Abacha’s government, when he had at least, of international law. A government the Algerian military looking to new allies in to fend off US criticism about Abacha’s detention immigration specialist agreed, describing the the Gulf to help buy equipment (whose sale is of Obasanjo. Now Malabu is in talks with Texaco. declaration as ‘unacceptable’ and ‘not consistent not banned in the West but is frowned on by Bids were opened in July; most oil majors with British obligations under the 1951 United those concerned by the government’s human (except British Petroleum Amoco) had made Nations Convention on Refugees.’ rights record). The Chief of Staff, Lieutenant submissions, including Chevron, Exxon, Texaco, With oil and other contracts in view, Britain is General Mohamed Lamari, has twice visited Shell, Marathon, Phillips, Conoco and Statoil. courting Sudan’s National Islamic Front Qatar and is in touch with other potential Yet there are few mega-bids. Most American government. Lawyers are asking how many other suppliers, including South Africa. companies cautiously tried to avoid an Angolan- embassies or governments are using similar The powerful state oil company Sonatrach, type auction, so many prospective bonuses offered deterrents. under a close Bouteflika aide, Abdelhak by bidding companies were below expectations. Bouhafs, backed by another Boutef The government may not scoop the largest AFRICA/LIBYA appointee, Energy and Mines Minister bonus on offer, the US$210 million bid by Houston- Chakib Khelil, is looking to Africa and the based Ocean Energy for Block 250. Shell offered Gulf to become an international major. $200 mn. but the Anglo-Dutch major shrewdly Look who’s here! Already working with Italy’s Agip in linked this to a bid for Block 322, offering $300 Yemen, Sonatrach, officials confirm, has held mn. for both. If it fails on one, it drops the other, Investment in Africa has become a feature of talks with Iraq on exploration acreage and depriving Abuja of $300 mn. Saudi Arabian Prince Al Walid bin Talal’s wants to move in as soon as sanctions permit. Two deepwater blocks of major interest, 249 business, suggesting that the Arab world’s Sonatrach could work with several partners, and 244, are embroiled in lawsuits. The former preeminent multi-billionaire sees the continent as including Russia’s Lukoil and Malaysia’s owners have taken the Petroleum Resources a ‘recovery play’, where investors can win recovery Petronas. Department to Court, trying to overturn the or new success. Al Walid has put money into Sonatrach surprised observers by bidding revocation of their licences. These are, for 249, ailing corporations - including, most visibly, for Angola’s Block 34, where Western majors Indian entrepreneur Ramesh Kansagra, who America’s Citibank - that have then gone back expect to spend hundreds of millions of closed the deal with the assistance of the son of the into profit. dollars on signature bonuses but where previous head of state, Gen. Abdulsalami His company Kingdom Holding has been busy Algeria hopes to call in some old political Abubakar; and for 244, Brigadier Anthony Ukpo, buying up hotels and other businesses south of the debts from the Movimento Popular de head of Abubakar’s Policy Committee. Sahara, including Nigeria’s United Bank for Libertação de Angola government. Even before the licensing round, two blocks Africa. His company Silcnet is to offer internet Sonatrach has also, we hear, been talking were excluded because of legal proceedings: 248, services across the region. Now he is looking at to Sudan and Niger. It could step in to which had been awarded to Leno Adesanya’s the north, leading the group which bought the replace Talisman Energy should the Zebra Oil & Gas, and 247, previously assigned to privatised Nile Hilton, and backing other Egyptian controversy over the Canadian company’s Uche Uche’s Heritage Oil & Gas. The projects and a tourism complex in northern Sudanese development (with the Chinese commitment to oil licence transparency may not Morocco. He has also been courting Libyan National Oil Corporation, Petronas and Sudan amount to much. The bids will really be determined leader Moammar el Gadaffi. Al Walid sees big government) force it to pull out. Sonatrach in the current ‘evaluation phase’: this means the potential in tourism, an associate says, and will and Talisman know each other well: the Department of Petroleum Resources, which invest in a much needed international hotel in the Calgary company’s Algerian Menzel Lejmat supervises the bidding, can reject bids with which Jamahiriya. permit - with the United States’ Burlington it is unhappy. Obasanjo’s Special Assistant on Companies large and small are looking for a Resources and Sonatrach - has just entered a Petroleum Affairs, Funsho Kopulukan, is likely stake in post-sanctions Libya. Stake-seekers $150 mn. first development stage. to be very influential in the final outcome. 8