One week after the launch of its report on the lack of transparency in the oil revenue sharing agreement between north and south Sudan, campaign group Global Witness has welcomed a public commitment by the Government of Southern Sudan to support a full, independent audit of oil revenues.
Oil revenue sharing was the basis of the Comprehensive Peace Agreement (CPA), signed in 2005, which brought an end to Africa's longest running civil war. Global Witness' report, Fuelling Mistrust, the need for transparency in Sudan's oil industry, launched on September 7 in Nairobi, warns that lack of transparency in the oil sector could destabilise the CPA ahead of a key referendum in 2011.
Global Witness campaigners Rosie Sharpe and Gavin Hayman travelled to Juba last week and briefed the Southern Sudanese Council of Ministers on Friday 11 September. Following the meeting, the Minister for Information told journalists that the Council had decided to back a full, independent audit of the oil revenues, possibly at an international level. He said that the government would follow up on the issues raised in Global Witness report.*
Rosie Sharpe, who leads Global Witness' work on Sudan, said: "This is a good first step and an important signal of willingness to move towards greater transparency in the oil sector in Sudan, which is crucial if the wealth sharing agreement is to work. An independent, third-party audit was one of the main recommendations of our report. The audit should go back to 2005 and its results should be made publicly available."
The report highlighted discrepancies between the oil production figures reported by the Khartoum government in the north and those published in the annual report of the Chinese company CNPC, the main operator of the working oil blocks in Khartoum. The discrepancies ranged from 9-26%, with the company consistently reporting higher production.
Although most of the working oil blocks in Sudan are in the south, it is the government in the north which markets and exports the oil, and reports on how much has been produced. Global Witness said it was not possible to conclude that the north was underreporting in order to avoid paying the full amount owed to the south. However, lack of adequate reporting, and the fact that the south had no way of verifying the figures, was fuelling suspicions.
Rosie Sharpe said: "Global Witness wrote to the government in Khartoum before we published our report, but we did not receive any response. We would welcome a dialogue with them about our findings and recommendations. Our report clearly calls for reforms to the way in which the oil wealth is managed, including a more active role for the south in marketing and selling the oil. We plan to travel to Khartoum later this year to formally present our findings to the authorities."
Importantly, trilateral talks between the US special envoy to Sudan, Scott Gration, and representatives from the National Congress Party of the north, and the SPLM of south also recently concluded with an agreement to commission an independent audit of oil revenues. Global Witness is calling on the US to do all it can to ensure that the audit goes ahead.
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For more information, contact Amy Barry on +44 (0)207 4925858, +44 (0)7980 664397
*The Information Minister's remarks were published in the Sudan Tribue on 12 September: http://www.sudantribune.com/spip.php?article32433