Mozambique attacks affect SA business

NOMPU SIZIBA: A terrorist attack in Parma, northern Mozambique, shut down oil, gas and construction projects altogether last month. Dozens of people are said to have been brutally killed and thousands have fled the area for security. UNHCR (United Nations High Commissioner for Refugees) warns that if the international community does not sprout a rebellion, about one million people could be evacuated by the middle of the year. Many enterprise businesses are affected, including Total’s business, which has spent billions of dollars on gas projects in the region. Italy’s Eni and US-based ExxonMobil will also be affected. And here at home, Sasol is affected. Tomorrow, an emergency SADC consultation will be held in Maputo, attended by the Department of Homeland Security and the Ministry of International Affairs, and the Government of South Africa.


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Now, Andres Vega, International Associate of the Centurion Law Group, will join us to enter into a broader theme of economic implications, the urgency of practical intervention, and what they look like. Andres, thank you for joining us.

Mozambique’s gas complex, in which several multinationals, including Sasol, have invested heavily, appears to be deliberately targeted by terrorists due to its economic strategic nature. That is despite the government’s designation of the complex as a safe haven to be protected. This is a very worrying development.

ANDRES VEGA: Yes, I’m really worried. In particular, as you said that the government is supposed to create a kind of boundary. When the attack happened, the rebels were inside the border, so it didn’t work after all. It seems that it was carefully planned.

NOMPU SIZIBA: Companies that have invested in the complex lose a lot of cash every day because they can no longer work on the project. Who is responsible for it? And even the Mozambique government, which is said to have guaranteed safety, is not in a position to compensate anyway.

ANDRES VEGA: I don’t think there is a really short answer about that. I think everyone will lose in this regard. For example, Total announced last Friday that everyone, like us, will withdraw. It affects us. The total investment is expected to be $ 20 billion over the next decade, which will of course affect the entire Mozambique economy and the South African companies working on the project. It was a real shame that even South Africans died in this attack last week.

So everyone loses. I don’t see a scenario where a company gets government guarantees and returns staff to a place that is suffering so much. The situation is not yet in control. The Mozambique government has announced that Parma has already been secured, but it took some time. There was no other confirmation or reassurance in that regard. And, of course, with Total, it’s also very expensive to stop and restart, attracting and pulling people in. It’s an investment. That is why I think everyone will lose, especially the Mozambique government. People lose all this investment because it can have a really bad impact on the economy.

NOMPU SIZIBA: Even catastrophic. SADC will have a meeting on this issue tomorrow. What can they legally do as a block to work swiftly to eliminate this ongoing threat in northern Mozambique?

ANDRES VEGA: Legally I wouldn’t be able to tell you. I don’t know what kind of contract Total has in the area. And I don’t think it’s a problem that has to be solved even by a single company or even a group of companies. It must be solved more by a regional approach. Even governments in the region should be coordinated to combat this threat.

NOMPU SIZIBA: And I think one of the big concerns is that obviously these militants do not always stop by causing death and mayhem in Mozambique alone. Other SADC countries need to work on the basis that they are still under serious threat if they become established in their own country.

ANDRES VEGA: Sure, sure. I think that’s why it’s important for these regions-and I would even say internationally. But let’s start with the area. Stop this now with a coordinated and planned strategy of neighboring countries to prevent this militant from moving to another country and causing more mayhem.

NOMPU SIZIBA: Perhaps how local governments deal with this situation is undoubtedly important to the region’s future investment outlook. Because, as you say, Total is already fed up, they are withdrawing personnel as we speak, and they know when they can return them at great cost. I will. Therefore, how the region addresses this issue is very important as it can impact future investments.

ANDRES VEGA: Yes, I fully agree. For example, if the Rovuma Basin project, the Eni and Exxon project – Total is gone and very close to the Eni and Exxon project, you should also think about what’s happening in the area. Something similar that is a chain of truly catastrophic events that may lead to no company wanting to invest in Mozambique.

If this fails and this gas is not produced, the South African economy will also suffer, so South Africa needs access, especially as South Africa wants to start decommissioning coal-fired power plants and start producing energy from gas to electricity. .. Also for that gas.

NOMPU SIZIBA: exactly. But the difficulty is that some of these companies put more than their big toes in the water. That is, they are investing very much, billions of dollars. So perhaps they will use all possible means to ensure that their government or someone is involved, as they are going to lose so much money. Obviously, their stakeholders-where they came from the United States, Europe, etc.-will not be very happy.

ANDRES VEGA: No, absolutely not. I think the most important thing for this company is to guarantee the safety and life of its staff. That should be the most important. And yes, I agree. They will try all the options they have available to secure their investment.

However, since Mozambique is an independent country, this is also a very delicate issue.It has the sun [??7:36] It’s energy, and you can’t just go into other governments and try to understand it. Mozambique needs help, but we need to make this help possible. Currently, they allow Portugal and the United States as advisors to their military, but not the actual military.

NOMPU SIZIBA: That was Andres Vega. He is an international associate of the Centurion Law Group.

Mozambique attacks affect SA business

Source link Mozambique attacks affect SA business

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