Oil Revenue Continues To Fund South Sudan War

A new investigation into South Sudan’s violent conflict marred with famine and a trail of atrocities has revealed that Sudan’s political leadership is routing millions of dollars from oil revenues to fund the ongoing four-year civil war. Documents reviewed by Global Witness, an organisation that fights exploration of natural resources, discovered that South Sudan’s leaders are using oil revenues to grow their personal bank accounts and terrorize civilians. The investigation details how President Salva Kiir has direct control of the country’s state-owned oil company, Nile Petroleum Corporation, or Nilepet, which is directly linked to financing military operations, arms transfers to ethnic militias, and the financially benefiting Mr Kiir’s closest allies.

Nilepet acts as a vehicle through which South Sudan creates and maintains commercial relationships in the global oil industry. The report details how between 2014 and 2015, the oil company paid more than US$80 million to politicians, government agencies, military officials, and private companies in relation to the conflict. These hundreds of millions of dollars have been used to finance ethic militias, military operations and conceal the looting of millions in ‘letters of credit’ intended to help imports. This diversion of funds from oil fields into the conflict illustrates how Nilepet has become the vehicle of choice for politicians and connected elites to evade scrutiny of financial transactions and allow the South Sudanese government to drive cycles of violence and oppression. As it’s a private company, Nilepet has been able to finance military operations in secrecy. Nilepet has adamantly denied the allegations, suggesting that Global Witnesses’ evidence has been forged. President Kiir’s spokesman Atny Wek Ateny also rejected the reports, arguing that “such reports are only intended to further polarize the country. Nilepet and the oil in South Sudan are the only things that have helped the government to deliver its services.”

South Sudan has been plagued by an ethically charged civil war ravaging the new state since late 2013, with fighting predominately pitting opposing forces loyal to Kiir, a Dinka, against rebels linked to former vice president Riek Machar, a member of the Neur group. The United States and other allies have pressured South Sudan to halt the violent conflict, with the United States imposing sanctions on some South Sudanese leaders as well as implementing an arms embargo last month. United Nations reports identified more than 40 South Sudan military officers responsible for crimes against humanity and war crimes, including mutilations, killing of civilians, and sexual crimes. Erupting less than two years after the country declared independence from Sudan, the violent war has lead to tens of thousands of deaths and forced over 4 million South Sudanese civilians to escape their homes, instigating Africa’s largest refugee crisis since the 1994 Rwandan genocide. More than 7 million people are at risk of famine as a result of the war disrupting necessary food production and markets.

While innocent civilians continue to suffer a senseless and brutal war, Nilepet continues to finance military operations without scrutiny or oversight. In order to confront this rampant impunity and foster economic conditions for peace, there must be a renewed focus on the economic drivers of the South Sudanese conflict. As Nilepet is a critical component of the war economy, the international community and international organisations must implement appropriate sanctions to diminish the power of this company, and therefore prohibit powerful elites to use it as a vehicle to foster South Sudan’s war. Since Nilepet depends on commodity traders and international refineries to refine the fuel, and therefore sell the commodity, these commercial partners must hold Nilepet accountable. The campaign leader of Global Witness, Michael Gibb, argued that the partners’ indifference amounts to complicity in the face of this clear evidence of the company’s role in the war economy of South Sudan. International companies should use this opportunity to drive reform and transparency at this critical moment in South Sudan’s war.