http://www.bloomberg.com/news/2014-12-23/somalia-questions-deal-giving-ex-u-k-soldiers-all-fish-rights.html
Somalia Questions Deal Giving Ex-U.K. Soldiers Fish Rights
By Ilya Gridneff Dec 24, 2014 6:40 AM ET
Somalia is seeking to renegotiate an agreement that gives a company
run by former British soldiers sole control over one of the world’s
richest fishing grounds off the longest coastline in Africa.
The deal, signed on July 25, 2013 with Mauritius-registered Somalia
Fishguard Ltd., provided the company with an “extremely high” share of
the revenue compared with similar agreements and failed to detail its
investment commitments, Somalia Fisheries Minister Mohamed Olow Barow,
said in a Nov. 21 letter obtained by Bloomberg. Barow also questioned
the length of the agreement.
The fishing contract adds to concern from United Nations investigators
that the country is entering agreements that are largely unscrutinized
or lack a competitive bidding process.
“The Somalia Fishguard deal is just one of several major contracts
awarded by the Somali federal government without a transparent tender
process and other forms of public scrutiny,” Matt Bryden, director of
Nairobi-based Sahan Research institute, said in an interview on Dec.
19.
The Somalia government announced a few months ago it would be
reviewing previously signed contracts to “ensure the interests of all
parties is protected,” spokesman Ridwaan Haji said in an e-mailed
response to questions yesterday. Haji said he was unable to comment
directly on the Fishguard agreement.
At least two e-mails and five phone calls to Barow seeking comment
went unanswered.
Valid Contract
The letter was addressed to Fishguard’s Chief Executive Officer, Simon
Falkner, who said the contract remains valid, in an e-mailed reply to
questions. The company will wait for the selection of a new cabinet
following the appointment of Omar Abdirashid Ali Sharmarke as prime
minister, before commenting further, Falkner said. Somali lawmakers
today voted to back Sharmarke, who said he would announce his cabinet
team soon.
Somalia is trying to attract investors as its army, supported by
African Union peacekeepers, pushes back al-Qaeda-linked militants from
the country’s main urban areas. Somalia has been at war since the
ousting of dictator Mohamed Siad Barre in 1991 and its institutions
have largely collapsed.
The $920 million economy is being undermined by illegal fishing and
underutilization of marine resources, limiting the country’s fish
catch to an estimated 10,000 metric tons a year against a potential of
300,000 tons, Fishguard said on its website. The waters off its
coastline, that runs 3,205 kilometers (1,991 miles), are rich in
species that include yellowfin and longtail tuna, Spanish mackerel,
sardines and lobsters, according to the UN’s Food and Agriculture
Organization.
Sea Piracy
The country’s fishing industry has also been hurt by the lack of a
central authority, which allowed piracy to flourish offshore. After
the number of ship hijackings off Somalia fell to two last year from
14 in 2012 as a number of countries deployed warships to keep the
shipping lane that passes the coast open, President Hassan Sheikh
Mohamoud in June established an exclusive economic zone, or EEZ.
It gives the government maritime jurisdiction over its coastal waters
as it seeks to accelerate commercial developments, including fishing
as well as oil and natural gas exploration.
The government signed a number of “secret contracts” and cooperation
agreements in 2013 and this year that may result in legal and
ownership disputes and raise concern about a lack of transparency, the
UN’s Somalia-Eritrea Monitoring Group said in a report in October. It
includes the fishing deal in a list of contracts.
Terms, Tendering
Somalia’s World Bank-backed Financial Governance Committee has
reviewed seven contracts, ranging from oil and gas to port and
fisheries management deals, that lacked clear terms of reference and
had no competitive tendering process, the UN said.
The Fishguard contract didn’t specify what equipment, training and
personnel the company must supply or performance targets, and makes it
responsible for both fishing licensing and conservation, which poses a
“potential conflict of interest,” Barow said. A copy of the contract
obtained by Bloomberg confirms that.
The Fishguard deal came with a 15-year exclusivity period, above the
three- to five-year industry benchmark, tax breaks, which the minister
who signed the deal didn’t have the authority to award, and unclear
cost-sharing, he said in the letter.
Former Soldiers
The accord was agreed on by then-Natural Resources Minister Abdirizak
Omar Mohamed, who was part of a former government. The Somali prime
minister’s office said it couldn’t immediately provide contact details
for Mohamed.
Fishguard is run by former British soldiers, Falkner and Chairman
David Walker, founder of London-based Saladin Security Ltd., a
security and risk management company that operates in Africa and the
Middle East, it said on its website.
“The government believes it would be best for both parties if the
service contract were replaced by a more tightly focused instrument,”
Barow said in the letter, without giving more details. The government
wants a detailed proposal from Fishguard for creating a Somalia
Fisheries Protection Force, which is provided for in the contract,
Barow said.
The Fishguard agreement should be independently scrutinized and
re-examined in light of Somalia’s new Fisheries Law, which was
approved by the country’s parliament in October, Steve Trent,
executive director of the London-based Environmental Justice
Foundation, said in an e-mail yesterday.
“There is a compelling and clear rationale for an open, independent,
scrutiny of this contract before any part of it is ever implemented,”
Trent said.
The government needs to bring more transparency into the award of all
contracts intended to help rebuild the economy, Barnaby Pace, a
Somalia researcher for Global Witness, a London-based anti-corruption
group, said in an interview.
The deals “need to be conducted openly so that the Somali people can
be assured that they will properly benefit from their natural wealth,”
Pace said.
To contact the reporter on this story: Ilya Gridneff in Nairobi at
igridneff_at_bloomberg.net
To contact the editors responsible for this story: Antony Sguazzin at
asguazzin_at_bloomberg.net Sarah McGregor, Antony Sguazzin, Michael Gunn
Received on Wed Dec 24 2014 - 07:49:34 EST