Ethiopia and the sovereignty over the Blue Nile

By Tecola W. Hagos

“Compromise makes a good umbrella, but a poor roof; it is temporary expedient, often wise in party politics, almost sure to be unwise in statesmanship.” James Russell Lowell Development and Sovereignty
Introduction

In General: The events of the last four weeks may as well have determined the future course of Ethiopia’s sovereignty and territorial integrity. On October 7, 2013 Prime Minister Hailemariam Desalegn made some remarks in a Press Conference that will resonate for years and make or break his political future, as well as the future of Ethiopian partisan politics. What I heard on video of the News Conference of October 7, 2013, is the most incredulous statement by Prime Minister Hailemariam Desalegn so far. He announced that he will welcome the participation of Egypt and Sudan in the construction of the Renaissance Dam and that his government and he consider the Dam to be “jointly owned” by Ethiopia, Sudan, and Egypt.

To make this type of statement at this early stage of the controversy by a Head of Government is unconscionable and the worst form of negotiation strategy I have ever witnessed or read about in our long history. Such fast retreat of leadership in front of a national controversy is unheard of in Ethiopia’s long political life.  However, to be fair to all concerned, let us examine the situation surrounding this sudden reversal of historic position, carefully and dispassionately. Mind you that there is no serious threat by anybody against Ethiopia except some habitual bullying by Egypt, and a few months ago by an errant Prince from Saudi Arabia (who was promptly removed from office) that the Prime Minister of the Ethiopian Government should be trembling with fear and trepidation and recapitulate so easily. Even if there is real military threat against the sovereignty and integrity of Ethiopia, is the statement by the Prime Minister within acceptable discretionary power of his office? I think not. The Prime Minister has far exceeded his duty and power circumscribed by the provisions of the 1995 Ethiopia’s Constitution: Article 55 (2) (a); 55 (17); Article 74 (6); Article 86, when he spoke of creating some kind of joint ownership of an Ethiopian asset that borders of surrendering sovereignty and territorial integrity of the Ethiopian State..

As a simple strategy of negotiation one does not show the hand that one holds at the initial stage of confrontation with a historically ever belligerent foreign national government. Egypt and the Arabs in general have been the relentless enemies of Ethiopia for centuries to this day. They have sought the destruction of Ethiopia despite admonishment of the Prophet Mohammad since the eighth century. They never heeded the words of their own Prophet. At this very moment they are busy mobilizing to halt the development effort of Ethiopia by throwing obstructionist threats. A type of prescription I have for my fellow Ethiopians is that when we seek peace and development we need  get ready for war.

The construction of the Great Renaissance Dam on the Blue Nile within Ethiopian territory is indisputably an act of Ethiopia’s Sovereign power.  Whether such construction was premature, too ambitious, problematic due to lack of technical expertise et cetera are issues that should not be confused with competence or sovereignty. Ethiopian successive Governments for almost a hundred years have openly stated their desire to take into account the national interests of both Egypt and Sudan in the effort to create an equitable use of the waters of the Nile and its Basin for all riparian states. Egypt has refused to recognize the fundamental sovereign rights of riparian states to use the waters of the Nile some of such states being originating/source countries. Currently, the Ethiopian Government seems to be committed in its effort to bring about fairness and equitable use of the Nile waters among riparian states to the extent of offering the Great Renaissance Dam in joint ownership to Egypt and Sudan. As I stated earlier, I am not convinced such generosity on the part of Ethiopia will help solve the greed of Egypt.

Issues to consider: Even though such unbelievably generous offer by the Government of Ethiopia may be applauded by some, I am much concerned not only with the future of the Dam itself but also with the continued existence of Ethiopia. Some of the most pressing issues are as follows: What is the meaning of “joint ownership”? What are the risks for Ethiopia sharing ownership of its natural resource with foreign sovereign countries and their governments?  Are there legal regimes and/or political modalities to insure the Sovereign right of Ethiopia on the Dam and the Water resource of the Blue Nile and its basin at all times?  What effect would such “joint ownership” have on other riparian States of the Nile River? What is the need for secrecy (lack of transparency) of the Ethiopian Government?

II. A. The Development Imperative and Sovereignty

The United Nations International Covenant on Civil and Political Rights of 1966, in Article 47 states that “nothing in the present Convention shall be interpreted as impairing the inherent right of all peoples may, for their own ends, freely dispose of their natural wealth and resources.”  Ethiopia ratified the Covenant on 11 June 1993, and Egypt signed twenty five years earlier on August 4, 1967 and ratified the document on 14 January 1982; Sudan ratified the Covenant 18 March 1986.  As of May 2013, the Covenant had 74 signatories and 167 parties. 

This section of the Covenant is what is claimed to be the basis of the concept of “permanent Sovereignty” on natural resources by members States of the United Nations. To me that concept has become part of the customary international norm and principle as customary international law. Thus, when we are discussing sovereignty over the resources of a country, we are not simply dealing with historical reality but also recognizing concepts in international law and relationships of States. Of course, the concept “permanent Sovereignty” over resources has undergone modifications and its own exceptional development, such as the idea of equitable use of shared resources, the new Sovereign Wealth Funds and State- Owned Enterprises et cetera.

World population prediction for 2050, i.e., in a mere thirty five years from the present time, draws a grim and alarming reality for Ethiopia. The estimate listed here under seems to be on the conservative side, for a fact we know the 2015 prediction for Ethiopia is too low since Ethiopia’s population for 2013 exceeds by almost ten million people the United Nations estimate for 2015. I believe the estimate for 2050 would be about 200 million for Ethiopia. We have now in our hands an ongoing population explosion—a disaster in the making unless we implement some creative and daring developmental programs. The harnessing of the power of the Blue Nile is one out of very many concerted steps to be taken by all states in the region. The increase in population means dramatic increase in the demands for services, food supplies, housing, schools, universities, infrastructure, et cetera. Putting to good use our natural resources is a matter of duty/right of acute necessity and not a luxury. One must take into account the enormity of population growth in all the nations of the world in order to understand our precarious existence in the next fifty years.   

1950	2000	2015	2025	2050
Ethiopia 18,434	62,908	89,765	113,418	186,452
Egypt 21,834	67,884	84,425	94,777	113,840
Sudan 9,190	31,095	42,433	49,556	63,530

[Source: United Nations Population Division]

How is Ethiopia going to feed that many people (almost two hundred million people) with its existing economic system and limited programs of farming and industrial involvements? Ethiopia has no choice in the matter but to develop its hydropower as a cheap source of energy in order to develop its agriculture, industry, education, democratic governance, and good relationship with its neighbors and the world at-large. A poor and devastated Ethiopia is a real danger and threat to the region. By contrast, a prosperous and engaged Ethiopia is the dynamo for the region’s much needed development and stability.

Mining Corruption in Ethiopia

by Alemayehu G. Mariam
The Shame of a Nation
In my seventh commentary on corruption in Ethiopia this year, I focus on the mining sector. For other commentaries on the subject, visit my blog site at “Al Mariam’s Commentaries”.

I continue to offer commentaries on corruption in Ethiopia to keep public attention sharply focused on the structural nature of the issue. In the past few months, the ruling regime has been grandstanding its “anti-corruption” efforts by corralling a few officials of the “Revenue and Custom’s Authority” and businessmen on charges of corruption. The kangaroo court corruption drama for those suspects is an amusing political theater staged for the entertainment of international loaners and donors who have recently intensified their pressure on the regime to show greater transparency and public accountability. For the domestic crowd, the regime’s grandstanding has been a cynical ploy to underplay, trivialize and cleverly mask the deep-rooted nature of official corruption with high profile prosecutions.
The fact of the matter is that corruption in Ethiopia is not a simple problem limited to a few rogue or crooked officials and their friends and cronies importing goods without paying customs duties. Corruption in Ethiopia is structural; it is a cancer that has metastasized throughout the whole Ethiopian body politic. It is no wonder that the World Bank (WB) titled its massive report “Diagnosing Corruption in Ethiopia”. It should have read “Diagnosing the Metastasizing Cancer of Corruption in Ethiopia”.
As I have demonstrated in my previous commentaries, structural corruption in Ethiopia manifests itself in terms of “state capture” (the chokehold powerful and wealthy individuals, groups, regime relatives, cronies and supporters, and internal and external corporate entities have in manipulating, distorting and  exploiting the legislative, administrative and regulatory processes  for their own advantage) and “administrative corruption” (systemic corruption in the bureaucracy and among a broad cross section of regime officials and functionaries abusing their authorities, distorting and manipulating existing laws, policies, regulations and practices  for their own personal benefit).
Ethiopia today is corruptocracy  (a political system operated and controlled by a small clique of corrupt-to-the-core vampiric kleptocrats who cling to power to enrich themselves at public expense). In its report, the WB documents in the usual arcane bureaucratese of international organizations that corruption in the Ethiopian mining sector is just as malignant and metastatic as in the land, education, telecommunications, construction and other sectors.
According to the WB report, the “mining sector in Ethiopia is relatively undeveloped” but the “country is rich with mineral resources.” A recent report citing official sources stated, “The Ethiopian government earned USD 419 million from the export of minerals supplied by artisanal miners operating in the country in the first 11 months of the current financial year.  Export of gold made up the largest proportion of minerals, generating USD 409.1 million in foreign currency, followed by gemstones and tantalum earning USD 9.3 million and USD 1.6 million. This income came from the export of 7878.3 kg of gold, 20,126.3 kg of gemstones and 32.95 tons of tantalum…. MIDROC Gold is the only company that is engaged in large-scale gold mining.” Other reports indicate the “export of minerals has become Ethiopia’s second largest foreign currency earner, contributing over 23 percent of overall export earnings.”
The WB report identifies “seven areas of corruption risk” in the Ethiopian mining sector” including the “three main risk areas” of “license issuing, compliance with license conditions, and mining revenues”. The other critical areas of corruption include fraudulent practices in “compensations and obligations to local inhabitants, contracts with contractors and suppliers to the mining companies, falsification by mining companies of product quality, and theft of mining products and equipment.”
In the area of “license issuing”, the WB report states that “officials may extort or be offered bribes by mining companies in return for issuing licenses, for issuing licenses more quickly, or for specifying less-onerous license conditions.” A related risk is that “officials may secretly have ownership stakes in companies to which licenses are granted; acquire land for which a license application has been made; demand a share in mining companies or in their profits; and manipulate license registration to give themselves or their associates prior registration.” In “license compliance”, “mining companies may deliberately breach mining conditions (for example, environmental, health, and safety regulations, as well as the extent or area of mining)” with impunity.
In the area of mining revenue, “mining companies may deliberately understate output and profit and overstate costs to reduce royalties and profit taxes.” The regime has no independent means of verifying the revenues of mining companies. “Collection of royalties and income tax apparently depends almost entirely on the mining companies’ self-certification of output and profit because of the lack of resources at the Ethiopian federal, regional, and city licensing authority levels. It would, therefore, be relatively easy for the mining companies to exaggerate their capital and operating costs and understate their output and profit.” When “license operation and mining revenue breaches are discovered, the mining company may also bribe inspectors to overlook the breaches.”
The catalogue of corrupt practices documented in the mining sector covers the entire spectrum of corruption ranging from bribes, falsification of records, shakedowns and takedowns of mining companies and stealing compensation designated for local inhabitants to criminal use of insider information and fraudulent shell corporations:
A mining company could be required to pay a large premium in return for a mining license. Senior officials and the mining company could keep this premium secret, and the officials could receive payment in offshore bank accounts.
An official may require the mining company to make a large donation to a charity if it wants the license to be issued more quickly. Although the charity may appear to be genuine, it may in fact be a front for a political party or for the official’s personal or family gain.
A mining company may submit a health and safety plan for a mining license in accordance with good practice, but an official may tell the company that unless it pays a bribe, he or she will impose additional and unnecessarily onerous health and safety conditions.
A mining company may submit an environmental management plan for a mining license that will inadequately control the leaching of poisonous chemicals into the water supply. Proper controls would [be costly]. The mining company may pay the official responsible for approving the license a bribe to approve the deficient conditions.
Officials may demand a share in the profits of a mining company. A mining company may agree to give an official’s relative a free share in the profits of the mining project if it receives a license on beneficial terms.