This is one of the many reasons why Americans should pay attention to Africa. Whether through a foreign aid and development approach, a military approach, or a business approach, the United States is pulling levers in countries all over the world. As citizens, it is often hard to know what is being done in our name by our government, or under our watch by our corporations.
Corporations, many based in the United States, have been grabbing so much land in South Sudan that by the date of independence for Southern Sudan, nearly 10% of the land was already in foreign hands. According to one of the new MPs, in referring to the years of bloodshed that won their independence, “At the rate we are losing land, soon there will be no where left to bury the dead.”
Land Giveaway in Southern Sudan
In March of 2008, Texas-and-Delaware-based Nile Trading and Development, Inc, purchased a 49-year lease on 600,000 hectares (about 1.5 million acres) of land in South Sudan, with the option of expanding that to 1 million hectares if they choose.
Included in this lease is pretty much everything. They have the right to all mineral development (mining, petroleum, etc), timber production, carbon offsets generated by tree farming, agriculture, biofuel plant production and on and on. The price tag for this incredible bounty? About $25,000 dollars. The price of a low-end Prius. For a forty-nine year lease on a piece of land larger than Delaware.
Who in South Sudan would enter into what seems like such an unfavorable deal? The Mukaya Payam Cooperative, supposedly led by a “Paramount Chief.” Unfortunately,
The lease agreement between NTD and Mukaya Payam includes revenue sharing, starting at 60% of profits to the company and 40% to the cooperative, with a shift to 50/50 over time. But what does that mean if the Cooperative doesn’t actually exist?
Now you have, potentially, 1 million hectares of land taken out of smallholder agricultural production. Let’s say an average family in South Sudan could survive on what they produce from 1 hectare. That means one million families could be supported (albeit barely) by this same piece of land. Will that many families benefit from the revenue-sharing through the Cooperative?
I also don’t see any revenue-sharing structure with the government of South Sudan beyond paying taxes. If oil is discovered, which is not unlikely in this part of the world, it seems like the income generated will be shared by the Company and the Cooperative, and not by the government that is expected to provide services to its people.
Let’s Partner with Warlords Instead of Fake Cooperatives
New York-based Jarch Management entered into a joint venture with the son of General Paulino Matip, a Nuer warlord responsible for many of the atrocities we have heard about in South Sudan in the past two decades to buy up between one and two million acres in Sudan.
Led by Phillipe Heilberg, Jarch Management has been investing in Sudan for years, and seems to have made an intentional decision to “go with the guns” – ie. work through warlords rather than government entities.
South Sudan Land Deals are being Investigated
The way I see it, international corporations have taken advantage of the instability in Southern Sudan over the last ten years and have used their power to negotiate deals that will hamstring the nascent country for decades to come, separating the people from their resource base and making it even more difficult for the country to provide for its people.
Norwegian People’s Aid and other international rights groups are investigating these and other land deals. It may be that the new government could nullify some of the deals that were negotiated under the pre-independence administration.
Nile Trading and Development, Inc, is an affiliate of Kinyeti Development. Feel free to e-mail them and let them know you will be watching to make sure they give the people of South Sudan a fair shake.
You can contact the Jarch Management Group to let them know that you think they should now be sure to work through the legitimate government of South Sudan.
All land deals in South Sudan are supposed to involve consultation with the local people who will be affected. However, only two out of the last 28 have actually gone through that process.
Foreign investment can help move South Sudan and other countries along the development path if it is used for that purpose. Let’s make sure that our corporations keep that in mind when they negotiate deals around the world.
Mark D. Jordahl
Great to see you still have your finger on the pulse of East Africa Mark!
Everyone’s talking about the opportunities in S Sudan these days. Glad to hear some investigations are being made into the land deals. These people deserve so much better.
It’s an exciting and precarious time! I hope they come through it ok.
Therefore what? Emailing the investment fund or Nile Trading will accomplish pretty much nothing.
Since the article doesn’t mention anything about payoffs to officials (in defiance of US laws), we can’t project that the US firms did anything illegal. If there is proof or even allegations to the contrary, I can’t find anything.
Therefore, I’m left with the thought that the outrage should be the bad deals the South Sudanese government officials entered into. Whether the company is in Texas or not is irrelevant.
If I’m a gov’t official and I took a bribe, that’s bad and the company (US or otherwise) is wrong to pay. But, assuming that’s not the case, then I as a gov’t official want the maximum amount because why wouldn’t I? It’s not in my interest to take anything less (assuming no bribe and they never mention one) unless I just want to unload it and go home early. Therefore, I put the land out to bid on the open market for firms or governments from many countries to compete for.
Let’s say everyone emails Nile and the investment company and are successful in restricting their and any other evil US corporation from buying land rights in South Sudan. Does that mean the selling stops? Of course not, it just means the Chinese (or other large buying interest in Africa) get it and at probably a lower price because there are less potential buyers at the auction. By removing the US buyers without putting the pressure where it appropriately should be placed (South Sudanese officials), how did this change anything?
MB
I think “illegal” is murky in this case given the instability in southern Sudan when these deals were brokered, and I agree that probably none of these firms are doing anything technically illegal. I just think “legal” is a low bar in situations like this. Unethical is more the issue, and since money has no ethics, the only way to get many corporations to act in an ethical way is to make sure that the public is watching what they are doing. Many legal things are still wrong.
It isn’t the government officials selling the land, so saying they “want the maximum amount” doesn’t really apply here, unless they are accepting bribes (which you know as well as I do that they probably are, even though there is no “proof” or mention of it in the articles). In the case of NTD, it is the Cooperative selling the lease and, if they don’t actually exist in the form they say they do, it is the Cooperative, not the US company, breaking the law. If this is the case, do you honestly believe that NTD doesn’t know about it? Also, if it is true that 26 out of 28 land deals did not do a consultation with the local people, that does seem like the law is, at least, being skirted.
You are very right to mention China, and that is a big issue globally, not just in Sudan. How do we hold our corporations or our government to a higher standard when China is happy to step in wherever we step out? If our government tells Uganda, for instance, that we will only give aid dollars if they improve their human rights, of course they will just look to China for investment dollars instead since they don’t care. How do we deal with this?
And do we drop our own standards to make sure we are on par with China just to keep them out? If our corporations knowingly enter into deals with warlords, are we a “better” option? Maybe it’s better to have China in there, since they are more up-front about their motives and aren’t quite as sneaky in their dealings. It might be easier to monitor.
And you are right that it would be good to put pressure on (or give support to) the South Sudan government to think about their long-term interests in land deals and tighten their laws, but I honestly don’t know how to do that.
You are also right that the issue is the deals more than the fact that the deals are with American corporations. However, I am here in the U.S., as are most of the people reading this, and I think it is often difficult for people to see why they should care about Africa since it is so far away and we don’t realize how much involvement our country actually has there on many levels. Norway sounded the trumpet on this, and I hope there are people in other countries that are buying up land there who are also shining a spotlight on it.
Thanks, as always, for thinking deeply about these issues!
Interesting points as usual.
I guess my ultimate point is that there are unintended consequences of barring or shaming NTD to the exclusion of South Sudanese pressure to change the system (not just 1 player).
You bring up an interesting question, which would make a good expanded blog post, which is “enter into deals with warlords, are we a “better” option?”. My answer is yes. While I emphatically disagree with your assertion that China is more transparent than the US and our multi-national corporations (another good blog topic), the fact remains that you have to have a seat at the table in order to have any influence at all.
For now, let’s assume there are warlords and someone is going to do business with them. If you say “no one should”, then you’re being unrealistic as it’s the same as saying “no one should visit prostitutes, buy illegal drugs, or make war”. So, assuming at least 1 party in the world is going to deal with them, I have to rank who I trust more and who I, as an American, will be able to influence the most to change the interaction between the 2 parties.
1.China
2. South America
3. Europe
4. Japan
5 US
Your rankings might be different than mine, and that’s fine, but as an American citizen my levers of change are much higher (even if it’s still low) on the US than on the first 4. Even if my trust in the ethical dealings is near zero in the US, it’s still frankly higher than my other choices. If you believe Europe is higher in ethical standards and transparency (gov’t and private), I’ll share with you sometime my European business experience in 2004/2005–it was not pretty and not the “Europe is wonderful” marketing campaign. Beautiful to visit, I want to retire there probably, but I trust their gov’t and private less than the US. But, I’m off on a tangent.
Your other questions about how to effectuate systematic change, etc. are good ones. That, in my humble opinion, is where the discussion should be and the article should have highlighted.
That’s it for now. As usual, thought provoking.
MB
But what’s the point of having a lever if you choose not to use it? You say that your ability to effect change is greater in the US, but you say not to bother trying to influence a US corporation and instead to focus on trying to influence the South Sudan government. I think we should pull as many levers as possible, and one of the main things that has changed corporate actions in the past is public pressure (think the Nike sweatshop campaign).
As far as “being at the table,” you might notice that in no place did I say that NTD or Jarch should get out of Sudan. I said that NTD should be encouraged to be fair to the people of Sudan in their dealings there, and that Jarch should work through the legitimate government of South Sudan now that there is one.
And I have to say that while I agree that if one person refuses to work with a warlord another will likely move in, I don’t agree that that justifies doing business with (and therefore funding) warlords. Southern Sudanese have suffered unspeakable horrors at the hands of warlords, and I wouldn’t want my money to be supporting those activities, even if the end result is that they get the money from somewhere else. There are certain things in this world that I just don’t want to be a part of, and saying that “if I don’t do it someone else will” just isn’t a good enough excuse for me.
I don’t think China is more transparent overall, just that their motives are on the table more than ours.
And regarding where the conversation should be focused, systemic change certainly needs to be part of it. However, awareness is the first step, and I see my job as awareness and opinion more than answers since most of these things are way over my head.
This is fun – we should figure out a joint blog post to write sometime!
Weird, don’t know why I wasn’t notified you responded to me.
Yes legitimate gov’t versus warlords, if possible. Regarding your money with warlords instead of someone else’s? I probably don’t agree,but I’d have to think about it a little more. My first inclination is that you feel better (your money not involved) but the overall goal of effecting change is hurt because you’re not there to effect change from within or with engagement. This boils down to a belief I have that change for system is best accomplished by those involved in it (like from within a corporation, NGO, gov’t, etc.) not from without or detached engagement. But I have to admit I’d have to noodle that a little more.
MB
Ahhh…I think I see where our basic assumptions differ. If I am reading you correctly, you seem to be coming from the assumption that companies at the table will WANT to affect positive change, and therefore it is beneficial to have them at the table. I’m not sure I accept that. I come from the assumption that without outside public or legal pressure, most companies will want to set up the deals that will make them the most money.
So yes, I agree that change from within is better, as long as there is some motivation for positive change.
I appreciate you clarifying. Close, but not exact, but since our conversation morphed in many directions, it’s my fault as my points were getting swallowed up but sub-points.
It’s a hierarchy of choices.
If the choice is between
1. Irritation and pressure on a US company vs. Sudanese cooperative, I choose the latter (although the first might make you feel better which I’m not interested in)
2. Having a US Company deal with Sudan vs. a non-US company, I choose the first, although not having the US Company deal at all might make someone feel morally superior, I think the unintended consequences are greater and I’m not interested in how someone feels. It’s not about you it’s about the ultimate action you want and the world is a dirty place
I think you’re just more negative on companies than I am. For every example of a misdeed in a private company filled with imperfect people, I can give an example of a misdeed of a government entity filled with equally imperfect people. But, that is definitely another conversation.
MB
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In 1947 British hopes to join South Sudan with were dashed by the to unify North and South Sudan..It is estimated that South Sudan region has a population of 8 million but given the lack of a census in several decades this estimate may be severely distorted. The results for that referendum were released on 30 January 2011. Those living in the north and expatriates living overseas also voted.
Overview The newest nation in the world officially born July 9 2011 is the Republic of South Sudan which seceded from the larger nation of Sudan after decades of civil war that took millions of lives and severely retarded the Souths development.American sports fans may recognize the names of professional basketball players and both of whom were born in what is now South Sudan and starred in the NBA…..Basic Information..Lay of the Land South Sudan is a landlocked country in North Africa.As its name implies South Sudan was once part of and only recently as of July 9 2011 seceded from Sudan and became a sovereign and independent state.South Sudan is bordered by Sudan to the north to the east and to the south and to the west.With an area of 248 776 square miles a little smaller than the state of Michigan South Sudan took about one quarter of Sudans former total area and roughly 20 of its total population…..The geography of South Sudan is dominated by the slow-moving White Nile which creates large flood plains on both its eastern and western banks capable of sustaining substantial agriculture and population.The Nile creates as well the enormous Sudd swamp which is the size of and the worlds largest swamp.The swamp and its environs as well as Boma National Park west of the Ethiopian border and Southern National Park near the border with Congo support numerous and varied animal life including large herds of elephants zebras hartebeests lions buffalo giraffes bongo giant forest hogs Red River Hogs chimpanzees forest monkeys and several species of antelopes and gazelles.Some conservationists believe that the number of animals in South Sudans wild areas rivals the Serengeti and other well-known game parks in neighboring Kenya and .The southeast quarter of the country contains large rainforests where tropical woods for the world market are harvested.The capital and largest city is Juba a fast-growing town of at least 250 000 on the White Nile in the countrys mountainous southern region where peaks with elevations above 9 000 feet are not uncommon and South Sudans highest point Mount Kinyeti Imatong rises near the Uganda border to 10 456 feet above sea level…..Population 8.26 million 2008 Sudan census ..South Sudans population is hotly disputed however and when the official 2008 Sudanese census put it at 8.26 million Southern Sudanese officials that number and claimed a population of between 11 and 13 million.Nevertheless the first and second published by the South Sudan government in 2009 and 2010 set forth a population of 8.26 million.Given the fluidity of the situation and the likelihood of both emigration and immigration the population of South Sudan probably will not be precisely known for several years.In fact during the six months leading up to independence more than 360 000 Sudanese were displaced and the movements of population will certainly continue…..Religions Academic and U.S. State Department researchers believe that a majority of South Sudanese follow traditional indigenous beliefs while Christians constitute a minority.It should also be noted that many South Sudanese blend their Animist beliefs and their Christian beliefs which makes drawing a bright line between the two groupings problematic…..Ethnic Groups South Sudan is inhabited by three main ethnic groupings the Nilotic communities in the Upper Nile and greater Bahr El Ghazal the Nilo-Hamitic communities who occupy Equatoria and the Bantus who also live in Equatoria and Western Bahr El Ghazal…..Languages The official language of Sudan is Arabic but South Sudan has dropped Arabic in favor of English which is widely spoken as the official language of education and government business.
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