Thursday, June 11, 2015

OPEN LETTER TO THE AFRICAN UNION ON THE RESURGENCE OF XENOPHOBIC VIOLENCE IN SOUTH AFRICA

An image of the xenophobic attacks taken in 2008 being wrongly attributed to the 2015 attacks


Written by SALC/MARAVIPOST
We, the undersigned organizations, write to you as concerned organizations and citizens of the African continent to raise concern about the xenophobic attacks in the Republic of South Africa which have recently taken place against migrants and refugees predominantly from other African countries. We approach you as the body responsible for promoting unity and solidarity among African states. We also call on you as the body responsible for the promotion of peace, security and stability in Africa.
The objectives of the AU are inter alia:-

  • To achieve greater unity and solidarity between the African countries and the peoples of Africa;

  • To encourage international cooperation, taking due account of the Charter of the United Nations and the Universal Declaration of Human Rights;

  • To promote peace, security, and stability on the continent;

  • To promote democratic principles and institutions, popular participation and good governance;

  • To promote and protect human and peoples' rights in accordance with the African Charter on Human and Peoples' Rights and other relevant human rights instruments.

Between 2000 and March 2008, at least 67 people died in what were identified as xenophobic attacks in South Africa. In May 2008, a series of rapid large-scale attacks left 62 people dead and over 600 injured. Twenty-one of those killed were South African citizens, apparently because they were perceived as foreigners. The attacks were apparently motivated by xenophobia, [i] and have continued to occur every year since 2009. And more recently in 2015, another nationwide spike in xenophobic attacks against migrants and refugees occurred in January and again in April. The latter attacks which began in KwaZulu-Natal Province prompted a number of foreign governments to repatriate their citizens. The April 2015 attacks resulted in at least seven verified deaths, but the number is understood to be higher, and at least 5,000 migrants and refugees displaced.
We urge the AU to call upon the South African government to take concrete steps to end these attacks, prosecute perpetrators and protect migrants and refugees living in their territory from violations of their human rights, including the right to life. As organizations operating on the African continent, we are particularly concerned about the loss of lives, injuries to persons, damage to private property and the infringement of dignity of migrants and refugees living in South Africa, which are a grave violation of their rights protected under the African Charter on Human and Peoples’ Rights (the African Charter). The right to life, not to be subjected to torture, cruel, inhuman and degrading treatment, and the right to strict equality before the law are non-derogable rights – not dependent on a person’s status in a country.
South African President Jacob Zuma during a Freedom Day event in April made a statement that Mozambican national Emmanuel Sithole (aka Emmanuel Josias) who was brutally killed during these attacks was an illegal immigrant using a false name.[ii] The immigration status of foreign nationals who are victims of the attacks in South Africa is irrelevant. South Africa has an obligation to protect all persons within its borders.
We are concerned in particular about the situation of asylum seekers and refugees who should receive special protection but who are in a vulnerable and desperate situation following these tensions.
We are further concerned by comments made by persons in positions of authority and influence which may amount to incitement to violence and the role that these persons play in perpetuating xenophobia and intolerance. While some official statements have been made to condemn the violence, we are concerned that not enough concrete steps are being taken to prevent such attacks, prosecute perpetrators, protect migrants and refugees and prevent the mass coerced exodus of foreign nationals from the country. We call on the AU to ensure that South Africa holds leaders and persons in authority accountable for their role in inciting violence and intolerance, or for the systematic failure since 2008 to implement effective prevention and protection plans for migrants and refugees at risk of attack, property destruction and displacement.
We note statements of several governments, including the South African government, to provide assistance for individuals leaving the country. While those who wish to leave should be assisted to do so, the solution to the violence should not be to repatriate all foreign nationals, but to ensure an environment in the country in which their rights are protected. Furthermore, the acts of those carrying out attacks against foreign nationals should not be rewarded by assisting them to achieve their objective of ridding South Africa of foreign nationals.
Following the xenophobic attacks in April there have been nationwide police raids, with military presence on the streets, apparently intended to combat crime, but predominately involve arresting and deporting migrants alleged to be illegally present in the country. We call on the AU to alert South Africa to the unlawfulness of these actions. According to the Department of Home Affairs, 2767 foreign nationals have been repatriated since the April attacks began.[iii] This includes some 913 Malawians, 637 Mozambicans, 17 Tanzanians and 1098 Zimbabweans. There were also reports that an estimated 400 men and women from Lesotho were deported. These repatriations and deportations are ongoing. We are concerned about the mass raids, rounding up of foreigners and ongoing deportations which do not appear to adhere to any procedural safeguards[iv] such as investigations into immigration status; access to legal representation; ability to make representations to a court and steps taken to ensure that no refugees and asylum-seekers, to whom a duty of international protection applies, are not subjected to forcible returns. In this regard, we remind all States of the provisions of Article 12 of the African Charter which prohibits the mass expulsion of foreign nationals. We are also concerned by the heavy handed approach adopted by the South African authorities in carrying out raids and mass arrests with a view to deporting foreign nationals as a response to xenophobia. This was most recently highlighted in “Operation Fiela” which took place in Johannesburg during May. Despite Cabinet’s statements to the contrary this operation has targeted foreigners at a higher rate than citizens.
We refer the AU to the African Commission’s statement in its decision on mass expulsions from Angola[v] which continue to be highly relevant to the current situation in South Africa:

“The Commission concedes that African States in general … are faced with many challenges, mainly economic. In the face of such difficulties, States often resort to radical measures aimed at protecting their nationals and their economies from non‑nationals. Whatever the circumstances may be, however, such measures should not be taken at the detriment of the enjoyment of human rights. Mass expulsions of any category of persons, whether on the basis of nationality, religion, ethnic, racial or other considerations "constitute a special violation of human rights". This type of deportations calls into question a whole series of rights recognized and guaranteed in the Charter; such as the right to property (article 14), the right to work (article 15), the right to education (article 17 paragraph 1) and results in the violation by the State of its obligations under article 18 paragraph 1 which stipulates that "the family shall be the natural unit and basis of society. It shall be protected by the State which shall take care of its physical and moral health". By deporting the victims, thus separating some of them from their families, the Defendant State has violated and violates the letter of this text…

The Commission does not wish to call into question nor is it calling into question the right of any State to take legal action against illegal immigrants and deport them to their countries of origin, if the competent courts so decide. It is however of the view that it is unacceptable to deport individuals without giving them the possibility to plead their case before the competent national courts as this is contrary to the spirit and letter of the Charter and international law.[vi]
In a later case, the African Commission stressed the importance of due process and access to legal representation which are, in the current scenario, also of significant importance:

“Time and again, in communication 71/1992, Recontre Africaine pour la Défense des Droits de l’Homme v Zambia [(2000) AHRLR 321 (ACHPR 1996)], the African Commission held that the mass expulsions, particularly following arrest and subsequent detentions, deny victims the opportunity to establish the legality of these actions in the courts. In the present case, there is no indication as to whether the deportees were accorded the opportunity to contact their families, much less attorneys, thereby making the requirement of exhausting local remedies impracticable.”[vii]

It further stated:

“The African Commission is of the view that the actions of the respondent state as shown in the preceding paragraphs not only denied fair treatment of the victims with opportunity to challenge their deportation but also failed to allow them opportunity to deal with their belongings. The complainant argues and the African Commission concurs that the type of deportations involved in the present case (ie mass expulsions without due process) challenge a series of rights and protections afforded by the Charter, including the right to property, and, as such, the measures taken by the respondent state in its arrest, detention and subsequent deportation of the victims ‘called into question a whole series of rights recognized and guaranteed in the Charter’, including the right to property. While the right to property under the African Charter is not absolute, the respondent state has not provided evidence to prove that its actions were necessitated either by public need or community interest. Without such a justification and the provision of adequate compensation determined by an impartial tribunal of competent jurisdiction, the African Commission finds the respondent state’s actions in violation of the right to property under article 14 of the African Charter.”[viii]

We further draw the AU’s attention to the resolution of the African Commission in April 2015 condemning the xenophobic attacks in South Africa[ix] and request the African Union to call upon the government of South Africa to:

  • i. Protect migrants, refugees and other vulnerable foreign nationals from further attacks, including by increasing impartial and effective police presence in high-risk areas and immediately implementing conflict resolution initiatives in these areas involving the Department of Home Affairs;

  • ii. Provide humanitarian and other social assistance to those affected by the xenophobic attacks in the country, including counselling for trauma and access to information on services and on durable solutions for refugees and asylum-seekers;

  • iii. Bring perpetrators of violence against foreign nationals to justice. To facilitate such prosecutions the Department of Justice should set up special courts, as was done during the 2010 World Cup in South Africa, to deal with all cases of violence against foreign nationals in a bid to ease the burden on the courts. Information on accessing these courts should be widely disseminated;

  • iv. Investigate and bring to justice the instigators behind the perpetration of the violence;

  • v. Condemn unequivocally comments by persons in positions of authority and influence which may amount to incitement to violence;

  • vi. Effectively engage the broadest possible South African public, in order to curb and eradicate xenophobia and xenophobic violence. These messages should be repeated, constantly re-iterated and not only heard after crises moments. They should be accessible, in local languages, should be expressed directly to communities, and should involve local leaders;

  • vii. Advise and assist all those who have been victims of violence to seek redress;

  • viii. Assist refugees and asylum seekers who have lost their permits to have these re-issued and put in place concrete plans for their reintegration into communities.

As stated above, in 2008, the xenophobic attacks left at least 62 dead, hundreds wounded, and contributed to the displacement of 100,000 people or more. Following those attacks the South African Human RightsCommission (SAHRC) prepared a report with their findings andrecommendations[x]. We call on the AU to remind the South African government of this report and call upon the government and the SAHRC to immediately take steps to implement the recommendations found therein.
In addition, we request you to call upon governments of other countries to ensure steps are taken to prevent reprisals against South African nationals in their territories.

Tuesday, March 10, 2015

NIGERIA & SOVEREIGN DEBT NOTE PALAVER: A Petrol Scarcity Foretold


ENDLESS: Nigeria and its persistent fuel crisis

The latest fuel crisis should not have come as a surprise to the federal government as the ominous signs manifested a few months back, Ejiofor Alike reports in THISDAY newspaper.
When the federal government in April 2010 resolved to issue oil marketers with Sovereign Debt Notes (SDNs) as a security against any delay in payment of subsidy for imported cargoes, the measure, which effectively renewed the interest of marketers in importation of petroleum products, was intended to end the persistent fuel crisis that arose from the delay in the payment of subsidy claims.

Sovereign Debt Note, which is another name for government borrowing, is like Treasury Bills (TBs), a form of government securities, which can be discounted for cash.

However, while the Sovereign Debt Note is a short-term borrowing, Treasury Bills are for long term.

Following an assurance to marketers by the then Abiodun Ibikunle-led Petroleum Products Pricing Regulatory Agency (PPPRA) that they (marketers) would  be issued with SDNs as collateral or guarantee against any undue delay in payment of subsidy, there was sudden interest shown by the marketers, with a few of them trying initially to monopolize the fuel importation regime.

With these SDNs, marketers that do not get their payment within 45 days stipulated in the Petroleum Support Fund (PSF) guidelines, will take the instruments to their creditor banks as cash to pay for their loans, while the banks will get the cash-equivalent from the Central  Bank of Nigeria (CBN).

Prior to introduction of the SDNs, previous delay in payment of subsidy made
some marketers to shun the importation regime and rely on the Nigerian National Petroleum Corporation (NNPC) for imported fuel.

This development created the acute fuel crisis that hit the country between the last quarter of 2009 and the first quarter of 2010.

Most of the private marketers had imported little products in 2009 and this created the acute scarcity situation as only the NNPC could not meet the shortfall in supply.

Due to the delay in the payment of subsidy claims, these marketers had also requested for import permit from PPPRA for very little allocation in the first and second quarters of 2010.

But it as soon as information filtered in that the government would issue SDNs, these marketers were said to have influenced the withdrawal and review of the initial allocation issued for the second quarter  2010 to enable them get huge allocation.

The PPPRA succumbed to the pressure of the marketers and withdrew the already approved second quarter 2010 import allocation.

Under a fresh allocation issued to marketers, the number of marketers was reduced from 53 to 25 and the allocation of the marketers that did not make the new list was reallocated to less than five marketers, who wanted to dominate the subsidy scheme.

Under the Petroleum Support Fund (PSF) scheme, the PPPRA issues Sovereign Debt Instruments (SDIs) to marketers, whose imported products have been verified by the relevant agencies of government.

The marketers will in turn present their SDIs to the Federal Ministry of Finance, where they will be issued with Sovereign Debt Notes (SDNs), which are regarded as being equivalent to cash.

It is the SDNs that the marketers will present to the CBN to collect the cash- equivalent.

With the SDNs, Nigerians experienced relief as persistent queues disappeared from filling stations.

Resurgence of queues

Following the various subsidy probes, which revealed sharp practices in the administration of subsidy scheme, subsidy claims are being subjected to prolonged verification, which delays payment beyond the 45 days stipulated in the PSF guidelines.

After the verification of imported cargoes, the Federal Ministry of Petroleum Resources, through the PPPRA, will always claim that it has forwarded the verified claims to the Federal Ministry of Finance for payment.

The Federal Ministry of Finance will further subject the claims to further scrutiny before issuing the SDNs to the marketers, after which the subsidy claims are deemed to have been paid.

But the marketers argue that even though the SDNs are supposed to be as good as cash, they still find it very difficult to get the real cash payment, each time they present the instruments to the CBN for payment, causing further delays of over three or four months.

The long delays prompted the marketers to demand that the federal government should pay all the interest on subsidy claims that remained outstanding beyond the 45 days stipulated in the subsidy guidelines.

With the marketers’ failure to repay bank loans due to the government’s inability to pay the subsidy claims on verified cargoes within the 45 days, the banks also refused to finance imports, thus aggravating the fuel supply situation.

Special ministerial intervention

Indications that the unpaid claims were becoming unbearable to the marketers had emerged in September 2014 when the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke wrote an unusual letter to the Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala requesting her to pay the outstanding subsidy claims to the marketers.
Worried that queues would portray her ministry in a negative image, Alison-Madueke wrote to Okonjo-Iweala requesting that the outstanding claims be settled.

Before she wrote the letter, about 46 oil marketers were groaning under the yoke of heavy debts following the failure of the Ministry of Finance to pay them the outstanding verified subsidy claims and importation cost amounting to about N180 billion as at October 10, 2014.

As at that period, about N19 billion was outstanding for 2013, while about N161 billion was outstanding claims for 2014.

The marketers were also aggrieved over Okonjo-Iweala’s suspension of the payment of interest charges for delayed payment and foreign exchange differentials.

Consequently, most of the oil marketers slowed down on their third quarter 2014 importation while most of them also refused to import for the fourth quarter 2014.

The frustrated oil marketers had met with Okonjo-Iweala in September 2014, to demand for the immediate payment of the verified claims but the minister’s response was said to be unsatisfactory.

The marketers subsequently met with the Petroleum Resources Minister and pleaded with her to speak to the Finance Minister, on their behalf.

After the meeting, a letter was written to the  Finance Minister by Alison-Madueke, pleading with her to take urgent action regarding the unpaid verified claims to avert an end of 2014 fuel crisis.

The petroleum minister’s letter dated September 4 and addressed to Okonjo-Iweala was titled: “Re: Subsidy-related Payments – Release of 2013 Marketers’ Claims and Payment of Importation Cost.”

In it, Alison-Madueke stated: “CME (Coordinating Minister for the Economy) will recall that in 2014, Sovereign Debt Note (SDN) of N149,636,133,457.76 was issued to marketers as claims processed for 2013 discharges. Out of this amount, N19,043,957,655.42 for Batches U/13 and W/13 still remain as unsettled claims.

‘Total volume of 3,694,769,663.50 litres of PMS with an equivalent amount of N179,621,634,671.15 was verified by the Petroleum Product Pricing Regulatory Agency (PPPRA) for which SDN was issued to marketers for 2014 discharges. Out of this amount, SDNs for the sum of N19,307,882,666.50 were released to marketers while the corresponding SNDs for the sum of N160,313,752,004.65 are yet to be released by the Debt Management Office as at 29th August, 2014. A summary of 2013/2014 verified claims for other marketers for which SDNs are yet to be released stands at N179,357,709,660.07.”

The petroleum minister further pleaded with Okonjo-Iweala to reverse the order suspending reimbursement associated with the payment of interest charges and foreign exchange differential to the marketers.

Alison-Madueke said: “The PPPRA has brought to my attention, a letter issued by the DMO conveying the approval of the CME for the suspension of payment to marketers in respect of interest charges and foreign exchange differentials on claims outside the 45-day payment cycle.

In the said letter, the CME directed the DG-DMO to notify the PPPRA that no more payments of interest and foreign exchange differentials shall be entertained by the Ministry of Finance.”

“In view of the foregoing, I wish to draw your attention to the approval granted by the Federal Government in 2010 guaranteeing the payment of all additional cost of importation outside the 45-day payment cycle. This, by implication includes both interest and foreign exchange differential cost.

“Furthermore, CME may kindly note that over time, government has not been meeting its financial obligation for processed claims within the 45-day cycle as provided for in the PSP scheme. For example, processed BatchesU-13, V-13 & W-13 for year 2013 imports and Batches B-14 to h-14 (for year 2014 imports) amounting to N179,357,709,660,.07 are yet to be paid. The CME/HMF may which to note that Batch U-13 is 150 days old.”

The petroleum minister subsequently pleaded with Okonjo-Iweala to ensure the immediate release of marketers’ claims in order to avert hiccups in the Premium motor Spirit supply chain, “especially as we approach the high demand period and upcoming political activities.”

She further urged her to approve all costs of importation (interest charges and foreign exchange differential) arising from delay in payment of subsidy outside the extant 45-day payment cycle.

Finance Minister’s Position

Okonjo-Iweala had responded promptly to the Petroleum Minister’s letter with an assurance that the federal government was committed to continue to pay all verified subsidy claims to the marketers.

She also assured the marketers that the government was then awaiting the report of the committee set up by her ministry and the oil marketers to verify the additional claims arising from accumulated interest on delayed payment and foreign exchange rate differentials.

The Finance Minister had told THISDAY that though the government was indebted to the marketers, the marketers were also being paid varying amount, which had been published.

She also admitted receiving a letter from the petroleum minister, requesting her to pay the marketers their outstanding claims, adding that she responded appropriately to the letter.

On the issue of the accumulated interest and foreign exchange rates differential arising from the delay in payment of subsidy claims, the minister stated that her ministry and the oil marketers had met in Lagos and agreed to review the claims due to the marketers.

She confirmed that at the meeting, which she personally attended, a committee was set up between her ministry and the marketers to carry out the review.

“On the letter, yes, there was letter to which I responded. We have set up a committee between the ministry of Finance and the oil marketers to agree on the interest rate and exchange rate differentials. In the meeting, we agreed to do the review together. We decided that we will review it in such a way that it will be fair to the ministry of finance and the marketers to arrive at a balanced position,” she said.

Speaking further on the issue of subsidy, the minister stated that her ministry had agreed that it would pay a part of the claims every month to reduce the balance.

She, however, stressed that against the backdrop of the falling crude oil prices at the international market, the ministry of Finance cannot manufacture money as the federal government depended on oil revenue and non-oil revenue.

“So, it is not that the Ministry of Finance has refused to pay anyone. We are committed to paying whilst we wait for the outcome of the report of the committee that is reviewing outstanding payments on exchange rate differentials and interest rate,” she added.

Special Adviser to the CME on Media, Mr. Paul Nwabuikwu, had also said in a statement that N336 billion was paid to the marketers from December 2013 to September 2014.

This figure includes N7.7 billion arrears owed five marketers that were not referred to the Special Fraud Unit for further investigation for alleged subsidy fraud.

Nwabuikwu acknowledged that the payment processes was very rigorous but added that it was in line with the wishes of Nigerians for transparency and accountability in the management of the subsidy regime.

“That is why we publish the details of amounts paid along with the names of marketers whenever payments are made. The marketers are, of course, are very important in this process. That is why the Coordinating Minister for the Economy and Minister of Finance, Dr Ngozi Okonjo-Iweala, met with them some weeks ago to discuss their concerns about delays in payments. At the meeting, the minister in her characteristic forthright manner, explained the revenue constraints facing the country and reassured them that government will continue prioritize and make payments as funds are available,” he explained.

Latest petrol scarcity

Though the country escaped fuel queues by the whiskers at the end of 2014, the tightness in supply snowballed into full crisis recently as all the private marketers stopped importation and relied on the NNPC for supply.

By the time Okonjo-Iweala met with the marketers in Lagos and promised to conclude the payment of the N264 billion outstanding claims by the end of March, it was too late the correct the distortion in supply..

Executive Secretary of Major Oil Marketers Association of Nigeria (MOMAN), Mr. Obafemi Olawore, had confirmed to journalists that with the minister’s assurance, the marketers would play their own part to ensure that any form of scarcity of products at this period was averted but it was a forlon hope as queues were already building up.

“We have outstanding subsidy and outstanding foreign exchange and interest. You recall that last year, the federal government, through the Ministry of Finance paid us about N345 billion, which was mainly for 2013 and part of 2014. However, we still have some outstanding claims for 2014 and early part of 2015. The total invoices already sent and processed are about N164 billion on subsidy. On foreign exchange and interest combined, the total amount is around N100 billion now,” Olawore said.

He confirmed that Okonjo-Iweala met with the marketers, where she gave them a schedule of payment, which was acceptable to the marketers.

“This means that we believe her and we may only have cause not to believe her if at the end of March, nothing happens. But we believe her. So, the product supply that was actually going to go down will have to pick up, which means that we need to assure ourselves that even if we notice any tightness in product supply anywhere, for the sake of Monday meeting, it is a temporary tightness. Therefore, there will be products,” he added.

Olawore said the minister also promised to pay interest on subsidy claims that are delayed beyond the 45 days stipulated in the Petroleum Support Fund (PSF) guidelines, but these belated assurances and promises could not stop the fuel crisis.

How CBN policies fuel the petrol scarcity

The marketers also blamed their woes on the recent devaluation of the naira, which made it impossible for them and other Nigerians to enjoy the relief arising from the drop in the international price of crude oil.

According to Olawore, as the international price of crude oil was dropping, the value of the naira was also declining, thereby hiking the price of products.

“For example, petrol the exchange rate for bringing products before the devaluation was N171.36 per dollar. At that rate, the landing cost of petrol was N90.67 per litre. There was a time the exchange rate rose to N188, that is, N188 was the interbank rate, while the Central Bank of Nigeria (CBN) gave us N171.36. But when it went to N188, the landing cost of petrol rose from N90.67 to N98.36. As at today when the exchange rate has gone to N199 (there is no window again), the landing cost rose to N103.45. So, you see that the main factor here is the exchange rate. If it moves to N215 per dollar, the landing cost will move to N110.84,” he explained.

Olawore said once the exchange rate moved, especially the way it moved by N10, N20, N30, it would erode the gains the marketers and Nigerians would have derived from the fall in the price of crude oil if the rate had been retained at N171.36.

Indeed, two recent directives of the apex bank were said to have fueled the crisis in petrol supply.

One of the directives, according to the marketers, was issued around the end of December 2014, where the CBN directed the banks to reduce their transactions with oil companies to curb the challenges of meeting the huge funding demand of these companies and also address other liquidity issues.

The CBN’s directive, it was learnt, stemmed from the result of an earlier risk-based supervision exercise carried out by the apex bank, which revealed a huge financial exposure of the banks to the oil and gas sector.

The apex bank was said to be concerned about some risk management deficiencies, and was determined to take necessary steps to ensure that banks have sufficient capital buffers to mitigate escalating risk-taking activities.

The second directive of the apex bank was the recent closure of the retail Dutch Auction System/wholesale Dutch Auction System (rDAS/wDAS) segment of the foreign exchange market.

With the closure and the quoting of an exchange rate of N198 per dollar, the marketers said the CBN’s action was an indirect devaluation of the Naira at the interbank forex market.

As a follow-up measure to stop naira speculation, the CBN also banned commercial banks from re-selling CBN dollars to other banks.

Under this measure, the apex bank scrapped its window of direct sale of foreign exchange to end users, and directed that all foreign exchange needs should be sourced from the interbank market, with rate ranging between N197 and N198 per dollar.
According to the marketers, the CBN’s actions prompted them to take precautionary measures by relying on inadequate supply from the Pipeline Products Marketing Company (PPMC).