South Sudan: April 30 attack on SPLM/A military base in Malakal, Upper Nile state

UPDATE - Thursday, May 06, 2010 - BREAKING NEWS: Malakal, Upper Nile - S. Sudan govt will not take any military actions against George Athor - GREAT NEWS just in from SRS (Sudan Radio Service) via email: Today, Government of Southern Sudan (GoSS) spokesman, Paul Mayom Akech told SRS that his government will not use force against George Athor or any of his followers. High level GoSS officials are in consultation with Mr Athor in order to resolve the issue amicably and peacefully.
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FULL STORY - Tuesday, May 04, 2010 - South Sudan, Malakal, Upper Nile State: GoSS to dialogue with armed SPLM/A defector George Athor Deng
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Saturday, May 01, 2010
South Sudan: April 30 attack on SPLM/A military base in Malakal, Upper Nile state

ACCORDING to a report published today at Sudan Tribune, southern Sudan officials on Friday (30 April) confirmed that George Athor, who recently contested as independent candidate for governorship of the region’s largest state of Jonglei, was behind yesterday's attack on an army base of the Sudan People's Liberation Army (SPLA) near the Upper Nile state’s capital, Malakal in semi-independent South Sudan.

In South Sudan, the ex-rebel group Sudan People’s Liberation Movement (SPLM) is the ruling party and political wing of the SPLA. Collectively, they are known as known as Sudan People's Liberation Army/Movement (SPLA/M) or SPLM/A. The SPLM has been criticised for alleged vote manipulation in the country's first elections in 24 years.

The attacked army base is in the town of Delab Hills (aka Doleib or Doleb) area located inside Upper Nile state, not far from Khorfulus, the home town of George Athor, where is he is currently based and situated on the other side of the border in Jonglei state. The base houses soldiers of the SPLM, some of whom are said to have taken part in the attack.

Reportedly, the attackers were trained soldiers and supporters of Mr Athor, an independent candidate who had campaigned against the reigning SPLM party to be governor of the state of Jonglei. Athor denied leading the troops but told the BBC he sympathised with them and said the polls were rigged.

The BBC's James Copnall in Khartoum says there have been intense negotiations for several days to avoid just this sort of problem in Southern Sudan and says it is too early to tell if this is an isolated incident, or the start of a much bigger problem.

Jonglei is one of the 26 states in the south to elect governors and legislators. George Athor ran unsuccessfully against incumbent governor Kuol Manyang Juuk.

Further details here below.



Click here to view a map of Malakal, Upper Nile State, southern Sudan. (Thanks to ReliefWeb)

Quote of the Day

Guys, Can we stop speculating this since it is a sensistive matter and still under "suspicion". Athor is denying it and Dominic Kuol Dim has not come out to tell us what happen and who is behind it. Are we going to war or do we want to apprehend those who carry out this heinous act. The argument here is political insufficient, and I advise that we all wait before we fueled with our rhetoric. "KEEP YOUR EYES OPEN AMD KEEP WATCHING EM".
- Maruon Ayiei, 1 May 2010

Source: Comment by Maruon Ayiei posted at Sudan Tribune on 1 May 2010 in response to the following article:

Defeated candidate launches destructive attack on South Sudan army in Jonglei
From Sudan Tribune, Saturday 1 May 2010:

April 30, 2010 (JUBA) – A defeated candidate and former Lt. General and Deputy Chief of General Staff for Moral Orientation in the Sudan People’s Liberation Army (SPLA), has launched a deadly assault on the army’s military barrack of Doleib Hills area near the Upper Nile state’s capital, Malakal.

Southern Sudan officials on Friday confirmed that General George Athor, who recently contested as independent candidate for governorship of the region’s largest state of Jonglei, was behind the attack.

The SPLA’s Head of Information and Public Relations, Colonel Malaak Ayuel Ajok, on Friday in a televised statement on Southern Sudan TV announced that the surprise attack occurred at around 1:30AM in the early morning of Friday.

Col. Malaak said many of the attackers were killed and five of them captured. He said the captured soldiers confessed that they were ordered by General George Athor to carry out the attack.

He said hundreds of soldiers loyal to General George Athor involved in the operation.

The defeated Gen. Athor denied ordering any attack. He told Reuters that soldiers in Doleib military barrack had mutinied after receiving orders to arrest him.

Col. Malaak said Gen. George Athor got angry after he was declared the loser in the Jonglei state’s gubernatorial elections. The independent candidate said he won the elections but the results were later on rigged in favor of Kuol Manyang Juuk, the incumbent governor and declared winner in Jonglei state’s gubernatorial election.

The first elected governor of South Sudan’s vast-populous Jonglei, the incumbent Gov. Kuol Manyang scored 165,387 votes. George Athor Deng (Independent) comes second with 67,639 votes as Joseph Duer Jakor (NCP) trails with 16,704 votes.

Senior government officials also confirmed the clashes, saying the cabinet for the semi-autonomous region was briefed on Friday by the minister of Internal Affairs, General Gier Chuang Aluong, about the developing situation.

Also, Jonglei elected Governor Kuol Manyang Juuk, held a closed door meeting with SPLA senior officers but there was no public statement.

The number of casualties was not yet confirmed as officials said more details were still emerging, but according to the security chief, among the dead SPLA soldiers included many SPLA officers in addition to a number of civilians who were caught in cross fire.

Military depots were also looted by the attacking force and among the weapons they captured included a number of anti-tanks and 12.7 artillery.

Eye witnesses in Malakal town said about six vehicles were packed with the wounded and taken to Malakal Hospital.

General George Athor, who confirmed the incidence, however told the BBC that he was not directly involved in the incidence, saying it was an internal mutiny within the SPLA forces.

He however added that it was an action against the “corrupt SPLM” system, saying he was sympathizing with the soldiers who carried out the attack.

The attacked military barrack is located inside Upper Nile state, not far from Khorfulus, the home town of General Athor, where is he is currently based and situated on the other side of the border in Jonglei state.

Officials suspected that General Athor was planning heavy attacks inside targeted locations within Jonglei state and that his initial attack on the barrack across the border in Upper Nile state was to snatch the weapons and ammunitions for use in his planned activities in Jonglei state.

Officials quoted General Gier Chuang as saying that General Athor has already coordinated his activities with other SPLA elements including in the Southern Sudan’s capital, Juba, and that he has about seven Brigadier Generals and several Colonels on his side.

General George Athor lost to the incumbent Jonglei state governor, Kuol Manyang Juuk, according to the declared results by the National Elections Commission (NEC) but earlier warned that he won the elections and the ruling SPLM party latter on rigged it in favor of Kuol Manyang.

Jonglei state is the largest state in Southern Sudan inhabited by about five different ethnic groups which population is pre-dominantly of the Nuer ethnic group. Both General George Athor and his rival, Kuol Manyang, are from the Dinka tribe, the largest ethnic group in Southern Sudan.

Officials said the government would take measures to control the situation before it gets out of control.

Col. Malaak Ayuel in his televised statement on behalf of the SPLA Chief of General Staff, Lt. General James Hoth Mai, warned General George Athor to stop attacking the SPLA forces, saying the army was capable of responding to the situation with full force. (ST)

BREAKING NEWS: discontented SPLA forces attack army barrack
From Sudan Tribune, Friday 30 April 2010:

April 30, 2010 (JUBA) – News reaching Juba have confirmed a military attack on SPLA barrack by suspected discontented army elements said to be under the command of an independent gubernatorial candidate who recently lost elections in the largest southern Sudan state.

The SPLA barrack at Doleib was attacked yesterday evening by forces that are suspected to be under the command of Major General George Athor, who recently lost against the incumbent governor, Kuol Manyang Juuk in Jonglei state.

A number of people are reported killed and wounded while four people from the attackers were captured and reportedly confessed that they were under the directive of Gen. Athor.

According to security sources, the attack occurred when the discontented forces surrounded the barrack and tried to break into arms and ammunition store in the barrack.

It was not clear why the forces wanted to take the arms, but sources were suspicious that they were planning for more attacks on other locations.

Maj. Gen. George Athor, the suspected leader behind the attacks, is currently based in his home town of Khorfulus, which is not very far from where the attacks were carried out across the border with Upper Nile state. (ST)

Sudan: Base Attacked in South
From The New York Times by REUTERS, Friday 30 April 2010 [Note from Sudan Watch Editor: The base referred to in the following report by Reuters, reprinted in the NYT, is located in Upper Nile State, not Jonglei State]:

South Sudan’s army said that armed men attacked one of its bases in Jonglei State on Friday, killing at least eight soldiers. A spokesman for the south’s army, the Sudan People’s Liberation Army, said it had captured five of the attackers, who said they were working under orders of Gen. George Athor, a defeated candidate for governor of Jonglei, an oil-producing region. General Athor, a senior officer in the south’s army, denied involvement in the attack, saying soldiers in the base had mutinied after receiving orders to arrest him.

Mutinous troops attack south Sudan army near Malakal
From BBC News at 5:16 GMT, Friday, 30 April 2010 16:16 UK - excerpt:

At least eight people have been killed when mutinous troops attacked an army base in south Sudan following this month's elections, officials say.

A southern army spokesman said the mutineers backed a former general who ran and lost in a Jonglei state poll.

George Athor denied leading the troops but told the BBC he sympathised with them and said the polls were rigged.

The ex-rebel SPLM party won a landslide victory to retain power in the south, amid widespread claims of intimidation.

The 11-15 April elections were the first in 24 years - and the first since the end of a two-decade conflict between north and south.

The BBC's James Copnall in Khartoum says there have been intense negotiations for several days to avoid just this sort of problem in Southern Sudan.

Several senior southern soldiers contested the elections as independents and all but one lost.

Mr Athor ran for governor of Jonglei state as an independent when he did not get the SPLM nomination.

'Weapons stolen'

The Delab Hill barracks, 12km (7 miles) south of Malakal, were attacked.

The army spokesman said weapons were stolen.

"We managed to push back the attackers, but there are seven dead and nine injured among the troops," southern army spokesman Malaak Ayuen Ajok told AFP.

"Several attackers also lost their lives."

Malakal was the scene of fierce fighting between rival militias in 2009, and in 2006, which left at least 150 people dead.

Our correspondent says it is too early to tell if this is an isolated incident, or the start of a much bigger problem.

He says the voting process itself was largely peaceful, but tensions rose, particularly in the south, as accusations of electoral fraud began to multiply.

From Earthtimes (press release) Friday, 30 Apr 2010 16:57:42 GMT
By dpa Nairobi/Juba, Sudan:

Violence in the wake of Sudanese elections earlier this month has left at least eight people dead in the southern Sudanese city of Malakal, the Sudan Tribune reported Friday.

The newspaper said that armed militants attacked the barracks of the South Sudanese Sudan People's Liberation Army (SPLA).

The attackers were trained soldiers and supporters of an independent candidate who had campaigned against the reigning SPLM party to be governor of the state of Jonglei.

The SPLM is the political wing of the SPLA and was criticized for alleged vote manipulation in the country's first elections in 24 years.

The SPLM won the bulk of the votes in semi-independent Southern Sudan, which is expected to vote to secede from Sudan in a 2011 referendum.

Soldiers Loyal to Failed Gubernatorial Candidate Attack Army Barracks in Southern Sudan
From Voice of America - Friday, 30 April 2010 c. 7pm GMT UK [Note from Sudan Watch Editor: The army barracks referred to in the following report by VOA News are located in Upper Nile State, not Jonglei State] - excerpt:

An official in South Sudan has confirmed an attack this morning on an army barracks in Jongolei State. Reports say that as many as eight people were killed in the attack, believed to have been led by supporters of Major General George Athor, an independent candidate for governor in last week’s elections.

The barracks, located in the town of Doleb, houses soldiers of the ruling Sudan People’s Liberation Movement, some of whom are said to have taken part in the attack. [...]

Jongolei is one of the 26 states in the south to elect governors and legislators. General Athor ran unsuccessfully as an independent candidate against incumbent governor Kuol Manyang Juuk. Mustafa Biong Majak, an official with the Government of South Sudan, said causalities were taken to the Upper Nile State’s Malakal hospital for treatment.

“Those who did it ran away,” he said, “and the security forces are running after them.” He says later today, an SPLM spokesman will make a detailed statement on the incident.

Listen to Biong Majak discuss the attack:

Sources of the Sudan Tribune say the assault was authorized by General Athor, who lives in the nearby town of Khorfulus in Upper Nile state. Reuters news agency says Athor has denied any involvement.

SPLM candidate and incumbent president of the south Salvia Kiir was re-elected with over 90 percent of the vote. His rival Lam Akol of the splinter group SPLM-DC has accused his party of harassment and intimidation. He rejects the election results and says he plans to take the matter to court for adjudication. South Sudan is gearing for a referendum early next year that will decide if they secede from the north.

South Sudan army accuses poll candidate of attack
From Reuters by Skye Wheeler Friday 30 April 2010 12:09pm EDT
(Writing by Andrew Heavens; Editing by Maria Golovnina) - excerpt:

(JUBA, Sudan) - South Sudan's army accused a defeated election candidate of ordering an attack on one of its bases that killed at least eight soldiers Friday, stoking tensions days after the contested poll.

George Athor, defeated in the race to become governor of the south's oil-producing Jonglei state, denied ordering any attack, telling Reuters soldiers in the base had mutinied after receiving orders to arrest him.

Any confirmed involvement in the attack by Athor, who is also a senior officer in the south's army, would be a serious escalation in violence in the region, already hit by drought and clashes between heavily armed tribal groups. [...]

Athor and other independent candidates accused the south's dominant party, the Sudan People's Liberation Movement (SPLM), of harassing their supporters and rigging the vote.

The south's Sudan People's Liberation Army (SPLA) said that armed men attacked the southern army base in Jonglei's Doleib Hill area, close to state capital Malakal, early Friday.

"We have full evidence the force was ordered by General George Athor," acting SPLA spokesman Malaak Ayuen told Reuters.

"He contested as a governor in Jonglei but lost," Ayuen said, adding that the intention behind the attack was unclear. "It was very surprising ... (We think) he became angry and is trying to create insecurity."

Ayuen said the army had captured five of the attackers who said they were working under Athor's orders.

Athor decided to run as an independent after failing to get the SPLM nomination. Speaking by satellite telephone from Jonglei, he denied having any forces in the area.

"They wanted to send a force to capture me but they refused to do this and now they were trying to arrest those officers who refused to go and attack me and so there was a mutiny," he said.

Athor said he did not know why they would want to arrest him. "You should ask Salva Kiir," he said, referring to the president of the semi-autonomous south. [...]

Further reading
Click on Matip, Jarch, Heilberg, labels here below to view some eye opening reports in Sudan Watch archives, including the following reports:

Sudan Watch - April 16, 2009: Ex Wall St banker Philippe Heilberg - US Jarch mulling more land leases in S. Sudan

Sudan Watch - October 19, 2009: South Sudan: UN airlifts Paulino Matip’s forces to Juba

South Sudan: UN airlifts Paulino Matip’s forces to Juba

According to the following report, about 300 troops of General Paulino Matip were expected to have arrived in Juba over the weekend through the UN air operation which began on Saturday. 

From Sudan Tribune by James Gatdet Dak, Monday, 19 October 2009:
UN airlifts General Matip’s forces to Juba

October 18, 2009 (JUBA) – The United Nations Mission in Sudan (UNMIS) has begun airlifting hundreds of guards of General Paulino Matip to the Southern Sudan capital, Juba, from Bentiu, the state capital of the oil rich Unity state.

About three hundred troops were expected to have arrived in Juba over the weekend through the UN air operation which began on Saturday.

Last week, forces guarding the Bentiu residence of the Deputy Commander-in-Chief of the SPLA forces, Lt. General Paulino Matip Nhial clashed with another unit of the Sudan people’s Liberation Army (SPLA) in the town, leaving more than ten people dead, mostly soldiers.

The SPLA General Headquarters in Juba described the incident as a purely army affair and had nothing to do with politics.

Southern Sudan Vice President Dr. Riek Machar said the fighting erupted when the house of General Matip was attacked by heavily armed soldiers during which even tanks were used in the attack.

Authorities have been investigating the incident to establish its cause. However, in a public letter attributed to him and addressed to the international community, Gen. Paulino Matip accused the SPLA and its Commander-in-Chief, Salva Kiir Mayardit of plotting against him.

He stated that the attack against his guards was coordinated in conjunction with the state governor at the highest level of the Sudan People’s Liberation Army. Speaking from Bentiu, Governor Taban Deng Gai said there was no intention and there will never be bad intention to plan an action against General Matip because there is no reason that warrants such ill act against a member of the same government.

Machar said the removal of the forces from Bentiu was done with the consent of General Paulino Matip in order to defuse any further tension in the town that might arise because of their vicinity and probable contacts with the other unit.

He commended the positive attitude Gen. Matip has maintained by ordering his guards in the town not to retaliate and by not overreacting negatively to the incident.

He added that the Deputy Commander-in-Chief who is currently sick in Juba is ready to discuss and resolve the matter with his Commander-in-Chief after he recovers his health.

Former forces of General Matip, which officially fell under the description of Other Armed Groups (OAGs), in accordance with the 2005 North-South peace deal, joined with the SPLA in the Juba Declaration on unity of the ranks and file in 2006.

Matip was named Deputy Commander-in-Chief of the army and more than 50,000 of his forces were integrated into the SPLA and other organized forces.

However, some of his forces were reserved to continue under his direct command to provide for his security.

In a press conference he conducted shortly after the Bentiu incident, the President of the Government of Southern Sudan and Commander-in-Chief of the SPLA, Gen. Salva Kiir Mayardit said he allowed Gen. Paulino Matip to maintain a number of forces to guard his homes in the region for the purposes of building confidence after the Juba Declaration.

Gen. Matip already has several hundreds of guards at his residence inside Juba and in the outskirts of the town.

The government is currently planning to train and establish a special presidential guards unit in order to centralize providing security for the collective senior leadership.

Click into original article to view 64+ comments.  Click on Matip label here below for related reports.

Bentiu, Unity State, S. Sudan: 16 killed in fighting between SPLA troops guarding governor's building and Paulino Matip's offices

According to the following AFP report, sixteen people have been killed and several injured in a misunderstanding between the guards of ex-warlord Paulino Matip and the guards of the governor's building in oil-rich Bentiu, Unity State, south Sudan.   Currently, Mr Matip is deputy commander-in-chief of southern Sudanese forces and has a loyal following of troops.  Unity State provides an estimated 80 percent of all the oil currently drilled in south Sudan.  

Source:  AFP, Saturday, 3 October 2009.  Copy in full:
Clashes in south Sudan oil region kills 16: army

JUBA, Sudan — Sixteen people were killed and several wounded in clashes in south Sudan between forces loyal to an ex-warlord and an oil-rich state governor's guards, military sources said on Saturday.

Friday's fighting in Unity State resulted from a "misunderstanding between Paulino Matip's guards and the guards of the governor" in the state capital of Bentiu, south Sudan information minister Paul Mayom told reporters.

Unity State, which provides an estimated 80 percent of all the oil currently drilled in the south, was the scene of persistent attacks in early 2008 between the Sudanese military and the Sudanese People's Liberation Army (SPLA), the former southern rebel force that is now the southern Sudanese army.

Matip, a notoriously effective northern commander during the 1983-2005 civil war that claimed some two million lives, was integrated into the new southern Sudanese armed forces after the fighting ended.

He is now deputy commander-in-chief of southern Sudanese forces and has a loyal following of troops.

A military official said Friday's fighting involved SPLA troops guarding Matip's offices and those protecting the governor's building.

A senior SPLA source, speaking on Saturday on condition of anonymity, said 12 Sudan People's Liberation Movement (SPLM) members were killed and 17 wounded, and that four civilians died and four more were wounded.

Officials in Unity State earlier put the total number of dead at 12.

The military official said Bentiu was now calm, and that the SPLA had begun an investigation into the firefight.

Click on Bentiu label here below for previous report re unpaid East African teachers wanting to go home.  Also, see Sudan Tribune, 3 October 2009:  Fresh clashes erupt in Sudan’s Unity state: sources

Further reading

1. Sudan Watch: Former Wall Street banker Philippe Heilberg gambles ...

   Mr Matip fought with the Sudan People's Liberation Movement against the northern .... SeeSudan Watch 14 January 2009: South Sudan's proposed Land Bill will ...
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2. Sudan Watch: Ex Wall St banker Philippe Heilberg - US Jarch ...

   16 Apr 2009 ... 10, 2009 - Sudan Watch: Former Wall Street banker Philippe Heilberg .... In December 2006, JMG threw its support behind General Matip, ...
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   1. Sudan Watch: January 2009

      26, 2009 - Sudan Watch: ICC's case against Sudan's President Omar Hassan ...... Mr Matipfought on both sides in Sudan's lengthy civil war but became deputy ...
      sudanwatch.blogspot.com/2009_01_01_archive.html - Cached - Similar

   2. Sudan Watch: April 2009

      posted by Ingrid Jones at Sudan Watch Thursday, April 30, 2009 0 comments ...... PaulinoMatip, a figure now straddling a deep fissure within the Sudan ...
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   3. Sudan Watch: South Sudan militia threatens not to disband

      "The SPLM is not the only power in the south," Matip was quoted as saying by the .... posted by Ingrid Jones at Sudan Watch Tuesday, April 26, 2005 ...
      sudanwatch.blogspot.com/.../south-sudan-militia-threatens-not-to.html - Cached - Similar

   4. Sudan Watch: May 2005

      posted by Ingrid Jones at Sudan Watch Tuesday, May 31, 2005 0 comments ...... Similarly with the growing concern that Paulino Matip, a former Major General ...
      sudanwatch.blogspot.com/2005_05_01_archive.html - Cached - Similar

   5. Sudan Watch: April 2005

      posted by Ingrid Jones at Sudan Watch Saturday, April 30, 2005 0 comments ...... Also, Major General Paulino Matip, leader of a government-backed group of ...
      sudanwatch.blogspot.com/2005_04_01_archive.html - Cached - Similar

   Show all results from sudanwatch.blogspot.com »

3. SudanTribune article : Paulino Matip calls on US Nuer to re ...

   2 posts - Last post: 14 Apr

   Pualino Matip was the far runner when Bashir government started digging out the oil from the South Sudan, Gen. Matip fought without ...
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4. SudanTribune article : Paulino Matip arrives in Washington for ...

   3 posts - Last post: 11 Aug 2008

   May your love for the South Sudan Nation be used by the healing power of treatment and spirit to heal you faster and come back to watch with ...
   www.sudantribune.com/spip.php?article28240 - Cached - Similar - 
   

Ex Wall St banker Philippe Heilberg - US Jarch mulling more land leases in S. Sudan

Further here below is a copy of an Open Letter to the people of South Sudan from Philippe Heilberg, Chairman of Jarch Capital in New York, March 06, 2006 that says, though it is heartbreaking to see the people of South Sudan continue to suffer, Jarch's damages could exceed 10 billion dollars.

From Sudan Tribune, 16 April 2009:
New York investment firm mulling more land leases in S. Sudan

April 15, 2009 (WASHINGTON) – Jarch Management Group, Ltd., a US investment firm, disclosed that it is considering additional opportunities to lease large tracts of farmland in Southern Sudan.

This report follows the announcement in January of a massive lease agreement that prompted some tension within governing circles in Southern Sudan.

In an apparent change of course from oil investing to agriculture, Jarch Management took a 70% interest in the Sudanese company Leac for Agriculture and Investment and leased approximately 400,000 hectares of land claimed by General Paulino Matip, a figure now straddling a deep fissure within the Sudan People’s Liberation Army.

In a statement emailed to Sudan Tribune today the company disclosed that it aims to lease another 400,000 hectares of land by the end of the year.

“Since its January 2009 announcement that it had leased about 400,000 hectares, the Company has had a multitude of offers to buy and lease farmland from around the world,” said a statement from the management of the company.

“However, the Company is focused on frontier African countries and continues to look for opportunities in farmland and other natural resources in these countries. As such, the Company hopes to conclude more deals for more leased farmland. The Company is hopeful that it can lease at least another 400,000 hectares of land by the end of the year.”

South Sudanese law requires that large leases of land be approved by two local government bodies. Accordingly, a January statement from Leac Company noted that the acquisition would include dealings with local land authorities and stressed that “the state and local governments shall have budgets for development because of the cash flows from the agricultural schemes the two companies will operate.”

While U.S. companies are banned from doing business in Sudan, agriculture in Southern Sudan is exempted from sanctions provided that the national government does not have any stake in the business and provided that no imports or exports pass through non-exempt areas.

Jarch Management Group, Ltd, which is registered in the Virgin Islands, is managed by New York investor Philippe Heilberg, commodities traders and former State Department and Central Intelligence Agency officials, among others. (ST)

Photo: Philippe Heilberg, Jarch Capital (Source: nazret.com 01/09/09: US investor believes Ethiopia likely to break apart - see 94 comments)
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Further reading

Jan. 10, 2009 - Sudan Watch: Former Wall Street banker Philippe Heilberg gambles on a warlord's continuing control of 400,000 hectares of land in South Sudan (Update 1)

May 30, 2008 - Sudan Tribune:
Jarch oil group congratulates new governor of Unity State

JARCH MANAGEMENT GROUP, LTD.

JARCH CONGRATULATES DR. JOSEPH WEJANG ON HIS APPOINTMENT AS THE NEW GOVERNOR OF UNITY STATE

May 28th, 2008 — Jarch Management Group, Ltd. congratulates His Excellency, Dr. Joseph Wejang, former Minister of Health of the Government of Southern Sudan (GOSS) on his appointment as the new governor of Unity State. Dr. Joseph is well liked by his constituency and with the backing of local politicians and military, we expect him to accomplish great things for the state.

Unity State is an important part of South Sudan given its abundance of natural resources. It is one of the main production areas for the high quality oil sold as Nile blend. The state also has other important minerals including uranium. As part of the 2004 agreements signed with Jarch, Unity State would fall into the permit area. As such, we expect to lift the light, sweet crude from areas in the state once South Sudan secedes from Khartoum. In addition, we expect to mine the minerals in the region as well including the uranium deposits located in Bentiu and elsewhere. Dr. Joseph is a member of the Advisory Board of Jarch Management Group and we are honoured to have him as part of the team.

Jarch Management Group, Ltd. is a private company engaged in natural resources with a primary focus on hydrocarbons and other specific minerals in Africa.

JARCH MANAGEMENT GROUP, LTD.

- - -

Apr. 01, 2008 - zcommunications.org
Natural Resources in Sudan and Africa: What Nobody is Talking About
By David Barouski

For the United States (US), oil is a major part of their interest in Sudan, but it is not about Darfur's oil so much as it is South Sudan's oil. There is indeed oil in Darfur, don't get me wrong. The Chinese state oil company (CNOOC) already owns a concession on Block 6 that extends deep into Southern Darfur near the Central African Republic border. Rolls Royce Marine, a subsidiary of Rolls Royce UK, was even shipping diesel motors and pumps to Sudan for developing the field as the Chinese are interested in beginning test well drilling in Darfur. However, they are unable to do so because the Justice and Equality Movement (JEM) have been attacking the workers and preventing access to the site.

Sudan is China's largest overseas oil suppliers and China is also partnered with Iran in a major oil deal. In addition, they may partner with Pakistan and Iran if India backs out of their part in the deal. As China continues its exponential increase in oil-consumption, US foreign policy toward China has taken on a dimension that includes both slowing down development on China's foreign acquisitions and securing the rest of the major oil concessions before they do.

Sudan was declared a terrorist state by the US for harboring Osama bin Laden, who was accused of approving and financing the World Trade Center bombing in 1993 and an assassination attempt on Egyptian President Hosni Mubarak in 1995. Bin Laden collaborated closely with Dr. Hassan al-Turabi, a Muslim cleric who supported Omar al-Bashir's coup as a fellow member of the National Islamic Front (NIF). Upon being designated a terrorist state, a whole host of sanctions are instituted. For the US, it meant that US businesses could not operate within Sudanese borders under penalty of law. The US also could not import anything from Sudan, including oil. The only exception, thanks to lobbying from Coca-Cola, others in the food industry, and the pharmaceutical lobby, was gum arabic, of which Sudan has the largest supply in the world. The majority is currently harvested in areas under the Khartoum Government's control.

When South Sudan was given semi-autonomous status following the 2005 peace agreement, some grey legal area was created. Could a US business legally work only with the parallel administration in South Sudan, and still get away with it legally by being in sovereign Sudanese territory? Well, Marathon Oil decided to push the proverbial envelop, and signed up for Block B along with TotalElfFina and the Kuwait Foreign Petroleum Company. However, legal wrangling between Total and the UK-firm White Nile left the political situation in Block B unstable. Additionally, the divestment movement in the United States brought a lot of unwanted publicity to the oil companies operating in Sudan. Marathon turned over its shares to White Nile while Total still currently holds the majority shares over most of Block B. This is, in part, why the pro-American administration of President Sarkozy is supporting US efforts to get a UN and/or EU force into Darfur because the French desire a regional balance of power. The French currently maintains a quiet presence in Chad and Darfur. French soldiers are operating from the French military base in Bangui, Central African Republic.

Sudanese oil has increased interest for the French as their relations with Russia, the chief oil and (especially) gas supplier to Central Europe, have recently soured over Iran policy disagreements and France's pro-US relations. Europe still has the North Sea for some oil supply if need be, but it will not sustain Western Europe for too long and they need an outside source of supply. Sudan offers one such source. In addition, through their concession on Block B, the French will also expand sphere of influence and increase French access in the region. Total's operations in Africa have a longstanding history of acting as a front for the DGSE that goes back to the days of Jacques Foccart.

Additionally, the French are interested in the unexploited Uranium deposits in Darfur near the Central African Republic border. The French, as a result of not having any inherent petroleum supply of their own, depleting fossil fuel deposits in Europe, and stricter environmental laws through the European Union, have turned toward nuclear power plants as their primary alternative energy source and the uranium deposits would supply ample amounts of raw materials for the reactors in the future. However, some of the uranium deposits are located at the tail end of oil concession Block 6, which the Chinese own and wants to develop, as mentioned earlier.

In 2004, 79% of France's national energy production came from nuclear power, and in 2006, France commissioned the creation of a new high-tech reactor. France produces so much electricity from nuclear power that they export 18% of it to Britain, Germany, and Italy, which has kept electricity prices very low. Therefore, France's acquisition of uranium is not only important for them, but for other EU nations who import the France's extraneous nuclear energy as well. The German Government owns 34% of Areva NP through Siemans. Areva NP, a subsidiary of industry giant Areva, has the contract to build France's new nuclear reactor.

Officially, US businesses are out of Sudan. However, a company called Jarch Capital, based in New York City (on the 9th floor at 445 Park Avenue), bought a Block B concession back in 2003 from the SPLM/A before the 2005 peace agreement was signed. Jarch Capital is owned and chaired by an American named Phil Heilberg, also owner of Heilberg Management Group. He is also the manager of AIG's Hong Kong office. AIG, an insurance giant, has an African Infrastructure Fund. Don't be surprised if South Sudan will be a large recipient in the future after independence.

Back in 2003, before the North-South peace deal was signed, the legality could be debated because South Sudan did not have semi-autonomous status and any sovereignty they had was de facto. So due to sanctions, Mr. Heilberg could not do business in Sudan. However, he had a novel solution. He helped create Jarch Management Group LLC, of which he became Chairman. Jarch Management (JMG) was registered in the Virgin Islands:

Akara Building
24 De Castro Street
Wickhams Cay I
Road Town, Tortola
British Virgin Islands

As a result, since it was technically not an American company even though an American owned and ran it because it is not registered as a corporation on American soil. It is a time-honored trick, and as result, there are no problems doing business in Sudan, even with the de facto SPLM government, because such restrictions do not exist for British Virgin Island businesses. JMG would eventually buy the Block B concession from Jarch Capital. According to Jarch's management team the following individuals were aware of the original deal made in 2003: Dr John Garang (late leader of SPLM), Rebecca Garang (Minister of Transport and Roads for GOSS), Dr. Riek Machar (Vice President of GOSS), Kuol Mangyang Juuk (Minister of Transport GONU and board member of White Nile, Ltd.), Arthur Akuien Chol (Minister of Finance and Economic Planning of GOSS), Dr. Lual A. Deng (State Minister of State for Finance of GONU and non-executive board member of White Nile, Ltd.), Steven Wondu (North American representative).

As of 2006 JMG's Advisory Board included:

1. Mr. Saville Lau- Chairman of the Board of Advisers for Jarch Management Group and President of Jarch Management Group. Mr Lau is located in Hong Kong

2. Dr. David de Chand- Chairman of the South Sudan United Democratic Alliance (SSUDA) and Professor at the University of Nebraska. Dr. Chand is located in Omaha and is an expert on Sudan.

3. Dr. Amir Idris- Professor at Fordham University. Dr. Idris is located in New York and is an expert on the African region.

4. Commander Thowath Pal Chay- Chairman of Ethiopian Unity Patriots' Front (EUPF) and Commander in Chief of Ethiopian Unity Patriots' Army (EUPA). He is located in East Africa. This individual, who has called for an overthrow of the Tigray government in Ethiopia, cannot sit well with the US, a staunch ally of Ethiopia.

5. Mr. Peter Kueth Kor- Secretary for External Relations for the South Sudan Defence Forces (SSDF). He is located in Nairobi, Kenya.

One will notice the preponderance of members of the Sudanese Diaspora residing in the United States.

Note that Mr. De Chand was sacked in October 2006.

The SPLM, who has been backed by the US since their creation, gave Block B to White Nile, disregarding the previous deal with Jarch made back in 2003. Jarch threatened to sue the SPLM. They also forged ties with the South Sudan Defense Force (SSDF), who are primarily Nuer but are comprised of several groups that split off from the SPLM/A during the north-south war. The SSDF and the SPLA fought in the late 1990s until 2006. The SSDF has also allied with the Government of Sudan in the past. The SSDF and its political wing issued an exploration license to JMG in late February 2006. They said they would consider declaring their own independence and split South Sudan in two if JMG was not respected as the sole authority. However, on 27 February 2006, just 2 days after this announcement, the US said it wanted to build a military base in South Sudan to protect the oil. The SSDF's Brig Mohamed Chol al-Ahmar warned the Government of South Sudan (GOSS) not to approve it. In December 2006, JMG threw its support behind General Matip, angering some southern factions and causing tensions.

JMG sought to use the existing pipeline going to Port Sudan as a means of transport, but the Ministry of Energy in Khartoum refused to strike a deal. JMG and the SSDF were left to look for an alternative. While this situation has not been resolved yet, I postulate that they may be planning to persuade for an extension of the planned Uganda-Kenya-Rwanda pipeline into South Sudan. The pipeline is set to begin construction in May, but this is contingent on the Kenyan power-sharing agreement holding and peace returning to Kenya of course. Transport for the oil is taken care of. The Germans are financing a new railway line that will up Kenya, Uganda, and South Sudan, allowing for shipping to and from the port city of Mombasa. In addition, both Uganda and Kenya would profit handsomely from the transport fees (customs) and taxes during the shipping process. It would also help develop Uganda's budding petroleum sector, currently being exploited by Heritage Gas and Oil, Tullow Oil, Neptune (Tower) Resources, and Dominion Petroleum.

The reader should realize just how much of a stake the US has in the Kenyan pipeline project. The contract to build, operate, and transfer the oil was awarded to the Uganda-based Tamoil East Africa Ltd. This firm is a subsidiary of Tamoil Africa Holding, based in Libya. In June 2007, US private equity firm Colony Capital LLC bought out the majority shares in Oilinvest and Tamoil Africa Holding (TAC) for 5.4 Billion dollars (US). Colony was founded and is currently run by Mr. Thomas Barrack Jr., the Deputy Undersecretary of the Department of the Interior for President Ronald Reagan. Therefore, the US has the contract to build, operate, and maintain the new pipeline. This is, in part, why the US pushed so hard for the power-sharing deal in Kenya to stop the violence, but at the same time ensuring President Kibaki, whose administration approved the contact, remains in a prominent position of power. In fact, Nexant, a subsidiary of Bechtel, completed the cost-benefit analysis of the pipeline project. It was, in large part, their recommendations that allowed the pipeline extension project to be approved. But there is more. Only months after their acquisition, TAC acquired an exploration licenses in Chad for the Irdiss 1, Idriss 2 and Wadjadou 1 blocks near the Libyan border, the same relative area the US has quietly built a military base in Libyan territory under the guise of the Pan-Sahel Initiative.

At the same time, TAC reportedly received exploration permits from the Moroccan Government to explore in Western Sahara, a disputed territory that is not recognized as a state, making any such exploration highly illegal under international law. Colony Capital spokesman have vigorously denied that they received any such deal in W. Sahara. TAC also has oil concessions in Mail and Niger, where battles with the Tuareg militias have been raging. The US has been training and supplying the Mali and Niger Governments' armies under the Pan-Sahel Initiative. They have even dropped supplies under fire to government troops on the battlefield. The President of Mali visited President Bush in Washington D.C. shortly before he left on his recent official state visit to Africa recently. The natural resources in the area cannot be developed while the Tuareg conflict rages on. The French are interested in the uranium stores in the region as well. Areva, a firm mentioned earlier, owns vast concessions in Niger to mine for Uranium and the EU's planned Trans-Sahara Gas Pipeline from Algeria to Nigeria will go right through Niger.

Uganda needs to procure the land to build the pipeline on, which may be a part of the reason for the ongoing Buganda land ownership debates. They also need peace in North Uganda and South Sudan. Consider this: Why is it now that there is such a political push to get a lasting agreement with the Lord's Resistance Army (LRA)? They are currently in South Sudan around Juba and in the Central African Republic and are destabilizing the area and slowing the development of infrastructure in Northern Uganda, including the border with South Sudan. The US in particular, including President Bush himself, has pushed for a final peace agreement. Why such an aggressive and concerted effort to get this particular armed group to end its insurrection? Why not make put this high-level of pressure on the earlier? After all, the LRA was armed by the Khartoum Government as a way to get back at Uganda for arming the SPLA. All parties with a stake in the project want lasting peace and stability in Uganda so they can develop the land in the northwest and LRA was supported by the Khartoum Government for a long time as a way to get back at Uganda for arming the SPLA.

JMG has not sat idle in the meantime. In January 2007, Jarch Capital named Mr. Joseph Wilson as the Vice Chairman of Jarch Capital. Yes, this is the same Ambassador Joseph Wilson, who has a wife, Mrs. Valerie Plame, that was exposed as a covert Central Intelligence Agency (CIA) agent by Mr. Karl Rove and certain members of the Bush Administration following Ambassador Wilson's revelation that the Niger 'yellowcake' claims make in Pres. Bush's State of the Union address in 2003 were utterly false and the administration knew this when they included the information in the speech. Ambassador Wilson served as the Senior African Affairs Advisor at the National Security Council (NSC) under President Clinton's NSC Advisor Anthony Lake in 1997 during the time period the Khartoum Agreement was signed. Mr. Lake was originally nominated to be the Director of Central Intelligence (DCI), but was rejected by the Republican-controlled Congress. Mr. Wilson rotated into the NSC as Ms. Susan Rice was rotating out of the NSC's African Desk and into the State Department's Bureau of African Affairs. Working under him at the NSC's East African Desk was John Prendergast. Ambassador Wilson was also the chief planner for President Clinton's trip to Africa in 1998.

Ambassador Wilson dealt with the SPLM/A in his capacity as an NSC advisor. In 1997, the north-south civil war was in full swing and was a major issue at the NSC African Desk. He was also a seasoned diplomat who had served in several African countries, including as the Ambassador to Gabon and Sao Tome and Principe. His negotiating skills and knowledge of the region were incredibly valuable to Jarch and it did not take long for them to pay off. White Nile's legal claim to Block B was rejected by a decision adopted by the Sudanese National Petroleum Commission on 17 June 2007. In August 2007, President Salva Kiir and General Matip confirmed JMG's 2003 agreement claims in exchange for 10% following months of meetings. In order to gain full political support for their claims, JMG began appointing members of the SPLM/A to its advisory board. In November 2007, General Matip was appointed as an Advisor and Vice President. At the same time, in an official company release, JMG urged GOSS to declare South Sudan's independence. In late February 2008, Joseph Wejang, the Minister of Health of the Government of Southern Sudan also joined JMG's advisory team as did Ambassador Emmanuel Touaboy, the Ambassador of the Central African Republic to the US. With support from both the Dinka and Nuer sides through their diversified advisory board, JMG has strengthened its political position and tempered potential SPLA-SSDF skirmishes over the oil fields. Since JMG is essentially acting as a holding company, it follows to ask: just who are they holding it for? Perhaps they are waiting for South Sudan's independence referendum in 2011 so they can sell it legally to a U.S.-registered oil company. Only time will tell.

Sep. 14, 2006 - Sudan Tribune:
Jarch Management Group announces its Board of Advisers

Jarch Management Group, Ltd
Press Release

September 13, 2006 — Jarch Management Group, Ltd. announces its Board of Advisers. We expect this board to grow over the next year.

Below are the members of the Board of Advisers for Jarch Management Group:

1. Mr. Saville Lau- Chairman of the Board of Advisers for Jarch Management Group and President of Jarch Management Group. Mr Lau is located in Hong Kong

2. Dr. David de Chand- Chairman of the South Sudan United Democratic Alliance (SSUDA) and Professor at the University of Nebraska. Dr. Chand is located in Omaha and is an expert on Sudan.

3. Dr. Amir Idris- Professor at Fordham University. Dr. Idris is located in New York and is an expert on the African region.

4. Commander Thowath Pal Chay- Chairman of Ethiopian Unity Patriots’ Front (EUPF) and Commander in Chief of Ethiopian Unity Patriots’ Army (EUPA). He is located in East Africa.

5. Mr. Peter Kueth Kor- Secretary for External Relations for the South Sudan Defence Forces (SSDF). He is located in Nairobi, Kenya.

Mar 07, 2006 - Sudan Tribune:
US Jarch Capital accuses SPLM of violating oil deal on Block B

JARCH CAPITAL, LLC
445 Park Avenue
9th Floor
New York, NY 10022

March 6, 2006
AN OPEN LETTER TO THE PEOPLE OF SOUTH SUDAN

Dear Ladies and Gentlemen:

In February 2003, the SPLM signed a contract with Jarch Capital, LLC and its partners to explore and exploit oil in an area called Block B. In addition, this contract gave Jarch Capital, exclusive rights to all commodity contracts until 2009. Furthermore, the SPLM was required to contact Jarch Capital prior to any commodity deals.

Eighteen months after the signing of our agreement, the SPLM signed a contract with a public company called White Nile, Ltd. Jarch Capital considers the signing of this new deal a violation of the representations and warranties given by the SPLM and a violation of the agreement as a whole.

The following people were directly involved in the Jarch deal or were made aware of this deal prior to an agreement with White Nile, Ltd.- Dr John Garang (late leader of SPLM), Rebecca Garang (current Minister of Transport and Roads of GOSS), Dr. Riek Machar (Vice- President of the Government of South Sudan), Kuol Mangyang Juuk (current Minister of Transport GONU and board member of White Nile, Ltd.), Arthur Akuien Chol (current Minister of Finance and Economic Planning of GOSS), Dr. Lual A. Deng (State Minister of State for Finance of GONU and non-executive board member of White Nile, Ltd.), Steven Wondu (North-American representative).

This contract was approved and we have supporting documents including pictures and emails to prove this. Since the SPLM and now the GOSS have violated our agreement, Jarch is exploring legal options.

It is our belief that the damages could exceed US$ 10 billion. Though it is heartbreaking to see the people of South Sudan continue to suffer, the leadership cannot be allowed to operate outside international law. Jarch will donate 10% of its proceeds of any legal action back to the people of South Sudan.

Sincerely,
Phil Heilberg, Chairman
Email: pheilberg@jarchcapital.com

- - -



Image source: International Land Coalition, 09, January, 2009:
US investor buys Sudanese warlord’s land

Former Wall Street banker Philippe Heilberg gambles on a warlord's continuing control of 400,000 hectares of land in South Sudan (Update 1)

Laws on land ownership in south Sudan remain vague and have yet to be clarified in a planned land act.

[UPDATE: Tuesday 13 January 2009: I have added four new reports here below and highlighted some text in red for future reference]

Financial Times report by Javier Blas and William Wallis in London January 10 2009:

BUYER SEES PROFIT IN WARLORD'S LAND

A US businessman backed by former CIA and state department officials says he has secured a vast tract of fertile land in south Sudan from the family of a notorious warlord, in post-colonial Africa's biggest private land deal.

Philippe Heilberg, a former Wall Street banker and chairman of New York-based Jarch Capital, told the Financial Times he had gained leasehold rights to 400,000 hectares of land - an area the size of the emirate of Dubai - by taking a majority stake in a company controlled by the son of Paulino Matip.

Mr Matip fought on both sides in Sudan's lengthy civil war but became deputy commander of the army in the autonomous southern region following a 2005 peace agreement.

The deal, between Mr Heilberg's affiliate company in the Virgin Islands and Gabriel Matip, is a striking example of how the recent spike in global commodity food prices has encouraged foreign investors and governments to scramble for control of arable land in Africa.

In contrast to land deals between foreign investors and governments, Mr Heilberg is gambling on a warlord's continuing control of a region where his militia operated in the civil war.

"You have to go to the guns: this is Africa," Mr Heilberg said by phone from New York. He refused to disclose how much he had paid for the lease.

Jarch Management Group is linked to Jarch Capital, a US investment company that counts on its board former state department and intelligence officials, including Joseph Wilson, a former ambassador and expert on Africa, who acts as vice-chairman; and Gwyneth Todd, who was an adviser on the Middle East and north Africa at the Pentagon and under Bill Clinton at the White House.

Laws on land ownership in south Sudan remain vague and have yet to be clarified in a planned land act. Some foreign experts on Sudan as well as officials in the regional government, speaking on condition of anonymity, doubted Mr Heilberg could assert legal rights over such a vast tract of land. The deal is second only in size to the recent lease of 1.3m hectares by South Korea's Daewoo from the government of Madagascar.

Mr Heilberg is unconcerned. He believes that several African states, Sudan included, but possibly also Nigeria, Ethiopia and Somalia, are likely to break apart in the next few years and that the political and legal risks he is taking will be amply rewarded.

"If you bet right on the shifting of sovereignty then you are on the ground floor. I am constantly looking at the map and looking if there is any value," he said.

He was also in contact with rebels in Sudan's western region of Darfur, dissidents in Ethiopia and the government of the breakaway state of Somaliland, among others.

Mr Heilberg said Jarch had no agricultural expertise but would seek joint-venture partners to cultivate the land, which is in one of the remotest parts of Sudan, in a region bordering the White Nile and with no tarred roads.

- - -

FRONTIER SPIRIT EMBRACES RISKS OF SOUTH SUDAN
From the Financial Times by Javier Blas and William Wallis 10 January 2009:

There are few regions in Africa as remote and undeveloped as southern Sudan. Unity state, where Philippe Heilberg says he has secured a huge tract of arable land, is inaccessible even by south Sudan's standards.

Aside from AK-47s, it is deprived of most of the trappings of the modern world. Even a road network that has been under construction since 2005, when a peace agreement ended the long civil war between the predominately Muslim north and the Christian and animist south of the country, has yet to reach it. But Unity state does border the White Nile and its flat, arable land could, with billions of dollars of investment in irrigation and roads, be transformed into a world-class breadbasket.

As commodity prices spiked last year, Gulf countries poured hundreds of millions of dollars into securing land in the fertile Nile valley farther north to grow food crops for exporting home.

Mr Heilberg is convinced that demand for land is now gravitating south. Other experts say investors are scouting out opportunities in the south, albeit on a far less ambitious scale. That is despite imprecise land laws and the risk of a new civil war should the oil-rich south vote for independence in a planned referendum in 2011.

Mr Heilberg has experience in commodities markets on Wall Street and in Asia. To help him as he looks for opportunities in Africa, he has pulled together a board at his US-based investment vehicle, Jarch Capital, that includes Middle East, Africa and security experts with years of experience at the Pentagon, CIA, White House and state department.

He is of a resurgent class of western businessman drawn to the potential of Africa's remaining frontiers, who have been energised by Asia's appetite for the continent's natural resources.

Sudan experts familiar with his business strategy liken him to buccaneering capitalists such as Sweden's late Adolph Lundin, who acquired mining and oil concessions in Congo and Sudan while civil wars were still raging and turned huge profits when he sold them on.

In both countries, however, legal wrangling has often prevented mineral concessions from becoming productive. Mr Heilberg has experience of this problem after being embroiled in a dispute with the south Sudan government over oil exploration rights also claimed by other companies.

Some experts on Sudan believe his 400,000 hectares will face a similar fate and that his ultimate strategy is to trade whatever claim he can sustain over the land to investors with a greater capacity to develop it. He says the land has great potential for biofuels and food crops and is looking for joint-venture partners.

He insists the law is less important to his deal than the clout he has bought into by associating with a former warlord, Paulino Matip, whose family says it owns some of the land in Mayom county, in Unity state.

"I never understood why the oil industry could spend $1bn drilling dry holes but they do not want to take a single dollar in legal risks," Mr Heilberg told the FT.

Mr Matip fought with the Sudan People's Liberation Movement against the northern army before gaining notoriety during a bloody civil war episode when he switched sides to form his own militia, with backing from parts of his Nuer tribe and the Khartoum regime. "I am sure Paulino has killed many, but I am sure he done it in protection of his people," Mr Heilberg says.

Following the 2005 peace agreement his forces were appeased when he was brought in as deputy commander in the army of the autonomous south.

Mr Matip's son Gabriel, who controls the company in which Jarch has bought a majority stake, said he had negotiated with tribal leaders to secure access to more land. He said the company also had the agreement of the ministry of agriculture in south Sudan for the development of the land.

- - -

U.S. INVESTOR LEADS SOUTHERN SUDAN LAND LEASE DEAL
From Reuters (New York) by Megan Davies 12 January 2009:

A U.S. investor who previously worked for insurance firm American International Group Inc (AIG.N) has led a deal to lease a substantial amount of farm land in Southern Sudan, where he sees ripe opportunity for investment and development.

Philippe Heilberg, chairman and CEO of New York-based investment firm Jarch Capital, told Reuters on Monday he expected high returns from the approximately 400,000 hectares of land in Mayom county and anticipated Jarch being involved with the land for "decades".

He declined to say how much had been paid for the lease.

Jarch said in an emailed statement that agriculture in Southern Sudan is exempted from U.S. sanctions provided that the Government of Sudan in Khartoum does not have any interest and no imports or exports pass through nonexempt areas. Jarch said it will only deal in Southern Sudan.

Heilberg said Jarch felt comfortable investing in Mayon and that the local politicians and population would be accepting of the investment.

"With risk, you have to look at risk and reward together -- this is why we pick our areas very carefully," he said.

Africa's biggest country has suffered decades of strife. Its north-south war -- separate from the conflict in its Darfur region -- was Africa's longest civil war and claimed the lives of some two million people.

A north-south peace deal was struck in 2005 and a semi- autonomous south Sudan government was then formed with the right to vote on secession by 2011.

The United States has imposed sanctions on Sudan since 1997. In October 2006, U.S. President Bush signed an act that lessened restrictions on the government of Southern Sudan. The United Nations Security Council imposed an arms embargo on rebels and militia in March 2004 but not on Sudan's government.

"There's always an issue of instability," Heilberg said. "There's no perfect scenario. We're not investing in the U.S. This is more frontier land. Its also extremely fertile land."

LEASE DEAL

Under the deal, Jarch Capital's related company Jarch Management has agreed to lease about 400,000 hectares of prime farm land and buy a 70 percent interest in South Sudanese company LEAC for Agriculture and Investment Co Ltd.

Jarch Management, based in Hong Kong and registered in the British Virgin Islands, said it was buying the stake from Gabriel Matip, the eldest son of General Paulino Matip Nhial, Deputy Commander-in-Chief of the Sudan People's Liberation Army (SPLA). The SPLA is the the armed wing of the southern Sudan People's Liberation Movement (SPLM).

Under the deal, it is leasing the land from Paulino Matip. In addition, Jarch expects to acquire more farm land within Southern Sudan.

LEAC has the right to grow cereals, oil seeds, vegetables, fruits and flowers and can process these products for both local and export use, Jarch said in the statement.

Heilberg, who studied at Wharton, worked for the foreign exchange trading department of Salmon Brothers Inc -- now part of Citigroup Inc (C.N) -- before working for AIG during the 1990s as a partner in its commodity division, according to Jarch's website.

Heilberg said the deals had actually been agreed in summer of 2008, but that Jarch had waited until now to make them public. (Editing by Andre Grenon)

- - -

RHODES REDUX
From the Financial Times 13 January 2009:

Land is not in short supply in south Sudan, where Philippe Heilberg, a US businessman, has laid claim to 4,000 sq km of fertile territory in a deal with the family of a notorious warlord. But then neither was it when Cecil Rhodes extracted mineral rights from King Lobengula of the Ndebele and used these to push the frontiers of the British empire beyond the Limpopo river. Some 120 years later, Zimbabwe is still struggling to overcome a legacy of unequal land distribution.

Mr Heilberg is a former Wall Street banker whose private investment company, Jarch Capital, counts former CIA, State department and Pentagon officials on its board. He may be no Rhodes - his recent forays into Africa have yet to bear much fruit and include an acrimonious dispute over claims to an oil concession in south Sudan. His latest venture does, though, have a decidedly 19th-century flavour to it.

It is the largest private land deal in Africa yet - involving the lease of a huge tract of remote territory bordering the Nile. Because ownership laws remain vague in south Sudan, Mr Heilberg concedes that the deal depends as much on control exerted by Paulino Matip, the warlord whose son's company claims rights to some of the land, as it does on legal title.

As such it could set a dangerous precedent. A certain class of businessman has thrived on a high-risk, high-reward formula in African conflict zones. Where state authority has crumbled, rights of ownership are murky at best but staking claims can prove lucrative.

Since the days of Rhodes, speculators have often been drawn to the minerals in which so much of Africa is rich. The scramble for their control has fuelled recent conflicts, while legal wrangling has often rendered valuable assets unproductive for years after conflicts end. It would be a tragedy for Africa if land, perhaps the greatest of all its resources, became a victim of the same dynamic.

Foreign investor interest has been sparked by the spike in commodity prices last year and the global concern about future food supplies that has followed. There are vast expanses of arable land in Africa lying fallow. Gulf and Asian countries as well as western businesses are taking note.

There is a need for investment if the continent's full agricultural potential is to be achieved. At a time of growing shortages, there is also an obvious need for African governments to prioritise domestic supplies. If the continent is to avoid repeating history, the big deals and speculation should come later.

- - -

SELLING AFRICA BY THE POUND
From Reuters blogs by Matthew Tostevin 13 January 2009:

The announcement by a U.S. investor that he has a deal to lease a swathe of South Sudan for farmland has again focused attention on foreigners trying to snap up African agricultural land.

A few months ago, South Korea’s Daweoo Logistics said it had secured rights to plant corn and palm oil in an even bigger patch of Madagascar - although local authorities said the deal was not done yet. Investors from Asia and the Gulf are looking elsewhere in Africa too.

Investor interest in farmland – not only in Africa – grew sharply after food prices shot to record highs last year. Although commodity prices have fallen since, there is still anticipation of long term demand growth once the world emerges from its current economic troubles.

Philippe Heilberg, chairman and CEO of New York-based investment firm Jarch Capital, told Reuters he saw ripe opportunity for decades in south Sudan’s Mayom county. The deal covers land nearly twice the size of the Indian Ocean island of Mauritius.

Land is being leased from General Paulino Matip Nhial, Deputy Commander-in-Chief of the Sudan People’s Liberation Army (SPLA) - the armed wing of the ruling Sudan People’s Liberation Movement (SPLM) in semi-autonomous South Sudan. Jarch Management is also buying an interest in a local company from Matip’s son.

But should Africa be handing out its land to foreign investors and will the local people and countries involved be the ones to benefit?

This commentary in the Financial Times made comparisons with the colonial grab for Africa’s resources and points out the damaging legacy that remains.

“There is a need for investment if the continent’s full agricultural potential is to be achieved. At a time of growing shortages, there is also an obvious need for African governments to prioritise domestic supplies. If the continent is to avoid repeating history, the big deals and speculation should come later,” it said.

Is it wise to discourage such investment, though, if investors are willing to bring big money to put the land to more efficient use than is currently the case? While some areas of Africa are densely populated and every scrap of ground is farmed, other hugely fertile areas are barely used.

Investors argue that they can bring jobs long term and will improve local infrastructure - perhaps more so than if they were taking land for less emotive mining or oil concessions - as well as increasing food supplies and foreign exchange earnings. Elsewhere in the world, mechanised agriculture and bigger farms have led to major productivity increases - although environmentalists argue they can cause damage too. Despite their best efforts, African governments have not always proven themselves the best at managing agricultural resources. Might Africa miss out on development that has helped fuel broader economic growth in countries such as Brazil?

Land ownership could also prove contentious. In the distant past, it was often held by communities as a whole or vested in traditional authorities. State officials now often have the greatest say. That opens the potential for official abuse of yet another valuable resource. Since governments can come and go unpredictably that also means an increase in risk for investors and can only be a further encouragement to cut costs for a quick return.

Heilberg said Jarch felt comfortable investing in Mayom and that the local politicians and population would be accepting of the investment.

“With risk, you have to look at risk and reward together - this is why we pick our areas very carefully,” he said.

So is major foreign investment in land a danger to Africa or is it an opportunity that the continent cannot afford to miss? Is there a way of making it work for everyone’s benefit? What do you think?

- - -

Note from Sudan Watch Ed.
I find these reports deeply disturbing and depressing. More on this matter later.
- - -

UPDATE
See Sudan Watch 14 January 2009: South Sudan's proposed Land Bill will deny Sudanese ownership of their own land by granting foreigners 99 year leases