SOUTH SUDAN: AND THE WINNER IS... GLENCORE AG

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Neoliberalism is nothing more than the globalized takeover of the state by transnational corporations and the banks who own their shares. Every crisis becomes an excuse to reduce the bankers real enemy, which is a capable sovereign state. This is their MO all over the world.

It is not hard to see a pattern here.

(REUTERS) South Sudan forms oil joint venture with Glencore
Wed Jul 13, 2011

JUBA, South Sudan, July 12 (Reuters) - South Sudan has formed a joint venture with Glencore to develop its national oil company and market its oil, the information minister said on Tuesday.

South Sudan became Africa's newest country when it split away from the north on July 9 under a peace deal that ended decades of civil war. Some 2 million people died in the conflict, fought over religion, ethnicity, ideology and oil.

Officials are now eager to bring foreign investment into the new country to develop its economy, which is now almost entirely dependent on oil.

"This joint venture will help the Republic of South Sudan develop its national oil company through skills transfer and training, and be responsible for marketing the crude oil from July 9 onwards," Information Minister Barnaba Marial Benjamin told reporters.

The south produced about-three quarters of the united country's roughly 500,000 barrels per day of oil. (Reporting by Alexander Dziadosz and Jeremy Clarke; Editing by Kevin Liffey)

Now Glencore AG, owner of Zambian Mopani Mine, which is a criminal enterprise and has been caught money laundering ('transfer pricing') in order to cheat the Zambian taxpayer of revenues, in a country where 45% of children are stunted in their growth because of malnutrition. This is while at least $3 billion a year flees the country as copper and cobalt exports, untaxed and unshared as dividends, from a completely privatised mining industry.

Nat Rothschild (son of Baron Jacob Rothschild) on the corporate culture at Glencore AG: " “Rusal and Glencore are examples of companies that have gone from zero to 100 in a very, very short space of time,” Rothschild said. Glencore “has a kind of unique culture, a vibrancy. These type of organizations are very difficult to create.” "

This is the criminal enterprise, which engages in tax evasion and all kinds of exploitation. This is what they are doing in the DRC:

Contracts, human rights and taxation: How a
company exploits a country

The case of Glencore in the DRC

From Reuters, when Glencore AG publicly floated it's shares for the first time: (REUTERS) The Biggest Company You Never Heard Of:

Young, arrogant, and often brilliant, its staff dominate their market. The firm's top executives have forged alliances with Russian oligarchs and well-connected African mining magnates. Like Goldman, Glencore uses its considerable heft to extract the best possible terms in every deal it does.

Some might add that Glencore also fits the description that Rolling Stone magazine gave to Goldman: "a great vampire squid wrapped around the face of humanity".

Gee, it looks like South Sudan just had a drop in oil revenues. Guess how the new South Sudanese government is going to solve this particular crisis:

(Southsudannewsagency) South Sudan Approves Austerity Measures In Response To Loss Of Oil Revenue

February 19, 2012 (SSNA) -- JUBA, South Sudan 19th February–In response to revenue losses associated with the shutting down of South Sudan oil production, the Council of Ministers on February 17, approved an initial set of austerity measures aimed at immediately reducing government expenditures

From: Tanzania News - The Citizen

South Sudan future uncertain after loss of oil money
Wednesday, 29 February 2012 10:40

In an air-conditioned Toyota showroom packed with half a dozen off-road vehicles in South Sudan's capital, dealer Desmond McCue is wondering whether the shutdown of the country's oil production industry means the bonanza is over.The cars on sale range from a basic $50,000 pick-up truck to the lavish GXR V8 model that costs $84,000 -- plus an extra $10,000 to have it flown in.

"Everybody is worried, but at this stage I don't know how it will affect sales," said McCue.His Crown Auto Trade dealership has been selling between five and ten GXRs per month, mostly to top officials, who are said to be given an allowance of two cars each in a country the size of France with just 100 km (70 miles) of paved roads.

But seven months after declaring independence from Sudan under a 2005 peace deal, those days of lavish spending on cars may be over after Juba suspended its 350,000 barrels per day of oil production in a row with Khartoum over pipeline payments.

Having lost 98 per cent of its income overnight, there are fears the government may struggle to fund salaries or to pay for imports in the coming months, threatening the stability of the world's newest nation. "No one knows how long the government can hold out, but I don't know of any government that has smoothly shrunk its budget by 98 per cent in a matter of months," Jean-Baptiste Gallopin, an analyst at Control Risks, said during a visit to Juba.

Much of South Sudan's stability depends on the morale of its bloated army, a constellation of former militia groups estimated by some officials to number 200,000 soldiers.

The government insists it will not cut salaries to the military though, apparently aware that any such move could be extremely dangerous. "There's so little cohesion in the army that it's only the pay that keeps them loyal. Security forces will be the highest priority. They'll cut ministers' salaries before they touch the army," said a defence analyst who asked not to be identified.Inflation, currently hovering around 50 per cent, is likely to jump further, possibly stoking unrest in a country where 2.7 million people - or one third of the population - already rely on food aid.

"Before independence, malaria pills cost 15 pounds. Now it's 35," pharmacist Simon Fal said, while sipping tea in a makeshift road cafe.

Like most others, Fal supports the decision to shut down the wells in order to stop Sudan seizing southern oil as part of an ongoing struggle by the mainly Christian and animist South to cement its independence from the mostly Muslim north.

"All people agreed in the shutting down of the oil because it's about dignity. If we maintain our freedom we will gain dignity," he said.But diplomats wonder whether Juba can survive longer than three or four months as talks stall over how much the landlocked South should pay Khartoum to use its pipelines and Red Sea port.

"The situation is very critical," said Eric Solheim, minister of environment and international development from Norway, which is advising both Sudans on oil issues."What is clear is if over time revenues will go down this way, they will have to make deep cuts," he said.

Social pressures could increase in the next few weeks with the return of 700,000 South Sudanese from Sudan where their legal status expires in April. Juba will have to find housing and jobs for the returnees, stretching resources at a time when the government is struggling to build up functioning ministries.

Even if both sides do strike an oil deal, South Sudan might need substantial aid anyway as it could take up to six months to restart oil production after pipes were flushed with water to avoid sludge forming.

Oil is the lifeline of both economies, but the South is more vulnerable because it has almost no other industries to fall back on beyond the oil sector. It also relies heavily on imported goods which are brought in for a hefty premium on unpaved roads from Uganda, Kenya and Sudan. More than 90 per cent of its goods come in that way.
No public data exists on dollar reserves. Juba has contracted oil sales worth $3 billion since July but has not said where the revenues have gone. No reserves were mentioned in the 2011 budget.

When Information Minister Barnaba Marial Benjamin announced austerity measures after a cabinet meeting last week, he refused to allow journalists to look at the 2012 budget draft in his hands.

The government says it is confident it can weather the loss of oil with an austerity programme and better tax enforcement. But the first signs of strain can already be seen.The central bank has roughly halved dollar allocations to local lenders and restricted money transfers to Uganda and Kenya, bankers say.

"There is a sense of panic among government and central bank officials who meet with private banks every day to discuss raising new funds," said a senior banker in Juba."They have little experience with financial tools such as treasury bills and now need to learn it the hard way," he said, declining to be identified.

The cabinet plans to cut non-salary expenditure by 50 per cent. But that might not be enough to make up for the loss of oil revenues as salaries make up roughly half the budget, meaning the total cuts only amount to 25 per cent in real terms.

The writers filed this analysis from Juba

(Southsudannewsagency) South Sudan Approves Austerity Measures In Response To Loss Of Oil Revenue

February 19, 2012 (SSNA) -- JUBA, South Sudan 19th February–In response to revenue losses associated with the shutting down of South Sudan oil production, the Council of Ministers on February 17, approved an initial set of austerity measures aimed at immediately reducing government expenditures

(The Citizen TZ) South Sudan future uncertain after loss of oil money
Wednesday, 29 February 2012 10:40

"There is a sense of panic among government and central bank officials who meet with private banks every day to discuss raising new funds," said a senior banker in Juba."They have little experience with financial tools such as treasury bills and now need to learn it the hard way," he said, declining to be identified.

" The south produced about-three quarters of the united country's roughly 500,000 barrels per day of oil." So South Sudan produces 375,000 barrels of oil per day. At $100 (using a round number), that is $13.68 billion per year.

And that's a lot of goats. The people of Sudan don't need to be sent goats, they need the proceeds of their own natural resources.

And Glencore AG needs to be shut down.

Roger Casement's picture
Roger Casement
Joined:
Nov. 22, 2011 10:07 am

Comments

I knew that the whole 'white arab, black african' angle of what is going on in the Sudan was manufactured, when the local news showed an 'arabic' looking fellow on camelback, and this is what made it through the editorial process that claims to 'not be interested in what happens in Africa'. Nat Rothschild (heir to baron Jacob, and the future 5th Baron Rothschild) owns half a billion dollars of Glencore corporate bonds. Glencore is now in a joint ventire with the South Sudanese national oil company - in other words, they are the major partner in a national oil monopoly that has access to 75% of Sudan's oil. Nothing what is going on in the Sudan, Ethiopia, Somalia, Nigeria, etc. would be going on if it wasn't possible for any corporation to sponsor any militia or government, and take their people's natural resources for free. Natural resources must be protected, and should only be allowed to be sold to the state at uninflated prices, and sold by the state for the highest market price. That would end all wars, and it would certainly have prevented the invasions of Libya and Iraq,

Mineral Sovereignty is the key to actual economic development in developing nations. It should have been taken care of before 1960, which would have prevented the murder of Patrice Lumumba (of which De Beers and Lazard Freres employee Maurice Tempelsman was a part) and the reign of dictator Mobutu sese Seko in the DRC/Zaire. For a legal framework, also see: (UN) General Assembly resolution 1803 - Mineral Sovereignty

The Rothschild’s South Sudan Oil Grab
July 17, 2011 — Dean Henderson

On July 9, 2011 South Sudan became the world’s 193rd nation. Less than a week later violence has erupted in South Kordofan, an area on the new border between Sudan and South Sudan which is controlled by Sudan and rich in oil. Not content with the seizure of South Sudan’s oilfields, the Rothschild-led Eight Families banking cartel looks set to push the new border further north, grabbing yet more crude oil from the Sudanese people.

For decades Western intelligence agencies backed the Sudanese People’s Liberation Army (SPLA) in an attempt to lop off the southern half of Sudan for the Four Horsemen of Oil. The region contains 75% of Sudan’s oil reserves. What became Africa’s longest running civil war finally came to an end when Sudanese President Omar Hassan al-Bashir was pressured into ceding the southern part of his country to the IMF/World Bank vampires after the conflict they created left more than 2 million people dead. [1]

Within days of declaring itself a sovereign nation, South Sudan’s state oil company, Nilepet formed a joint venture with Glencore International Plc to market its oil. Glencore is controlled by the Rothschilds. The PetroNile joint venture will be 51 percent controlled by Nilepet and 49 percent by Glencore. [2]

On Friday South Sudan’s new President Salva Kiir Mayardit signed a law formally establishing the Central Bank of South Sudan. Sudan is one of five countries – along with Cuba, North Korea, Syria and Iran – whose central bank is not under the control of the Rothschild-led Eight Families central banking cartel. It is therefore no coincidence that the currency of this newest Rothschild oil fiefdom is called the South Sudan Pound. [3]

Already in 1993 Sudanese President al-Bashir had accused Saudi Arabia of providing arms to Johnny Garung’s Sudanese People’s Liberation Army (SPLA). The Israeli Mossad also supplied the SPLA for years through Kenya with CIA approval. In 1996 the Clinton Administration announced that military aid to Ethiopia, Eritrea and Uganda was to be used to arm the SPLA for an offensive on Khartoum. [4]

When that bloody endeavor failed, the Eight Families henchmen began arming rebels in Chad. Chad has long been an important country in both Exxon Mobil and Chevron Texaco’s North Africa oil production schemes. Chadian President Idriss Déby , who came to power in 1991, was cozy with Big Oil. He also ranked 16th on Parade Magazine’s 2009 World’s Worst Dictator list. [5]

The Chad-based rebels had two purposes. The CIA’s House of Saud paymaster provided support for the National Front for Salvation (NFS), which attempted to overthrow Libyan President Mohamar Qaddafi. In 1990, following a successful Libyan-backed counter-coup against the Chad government which was sponsoring the NFS, the US evacuated 350 NFS leaders with Saudi financing. The US restored $5 million in aid to the dictatorial Kenyan government of Daniel Arap Moi so that Kenya would house the NFS leaders, whom other African governments refused to take. Arap Moi later figured in CIA covert operations in Somalia, where the Saudis had also financed counterinsurgency. [6]

Western intelligence agencies then used the government of Chad to finance the Justice & Equality Movement (JEM). From bases in Chad, these terrorists launched forays into the Darfur region of Sudan, creating a massive refugee crisis, while opening a second northern front in Big Oil’s SPLA-led southern flank war against Sudan. [7]

Western media predictably blamed the conflict in Darfur completely on the Sudanese government and the liberal idiocracy was led along by their naive noses, ala Yugoslavia. In March 2009 the Eight Families’ favorite kangaroo court – the International Criminal Court (ICC) – charged Sudanese President al-Bashir with war crimes. There was no mention of JEM in the ICC charges.

By the end of August 2006, Chad’s President Déby had taken a left turn, calling for Chad to get a 60% stake of its domestic oil output after decades of receiving “crumbs” from the foreign companies which ran the industry. He singled out Chevron and Petronas for refusing to pay taxes totalling $486.2 million. [8]

In 2008 Sudanese President al-Bashir attended Déby’s re-election inauguration, signaling a warming of relations that would eventually end the Darfur conflict. With al-Bashir still sitting atop huge oil reserves, the Eight Families now cooked up a plan for South Sudan to cecede from Sudan. Reeling from the constant attacks on his people which had left two million dead, al-Bashir was forced into agreeing with the split.

With violence already flaring in Sudanese-controlled and oil-rich South Kordofan, it appears that the SPLA and their Glencore/Rothschild sponsors are not content to have stolen most of Sudan’s oilfields. The vampires want them all.

[1] “South Sudan: The World’s Newest Fragile Oil-Rich Petrostate.” www.oilprice.com. John Daly. 7-11-11

[2] “South Sudan’s Oil Company Forms Joint Venture With Glencore to Sell Oil.” www.bloomberg.com. Matt Richmond. 7-12-11.

[3] “South Sudan Establishes Central Bank As It Receives Its New Currency”. www.wireupdate.com. BNO News. 7-15-11

[4] “US to Aid Regimes to Oust Government”. David B. Ottaway. Washington Post. 11-10-96

[5] “The World’s Ten Worst Dictators”. Parade Magazine. 3-23-09

[6] “Mercenary Mischief in Zaire”. Jane Hunter. Covert Action Information Bulletin. Spring 1991.

[7] “Sudanese Warplanes Hit Darfur Rebels Inside Chad.” Sudan Tribune. 6-3-09

[8] “Petronas Disputes Chad’s Tax Claims.” Aljazeera. 8-30-06

www.deanhenderson.wordpress.com

Roger Casement's picture
Roger Casement
Joined:
Nov. 22, 2011 10:07 am

When Glencore came to Canada. More background on this corporations, it's founder Marc Rich and it's trouble over tax evasion in Zambia.

(MACLEAN'S) Glencore lands in Regina
The company set to remake Canadian agribusiness has a controversial past and reputation for risky bets
by Chris Sorensen on Friday, March 30, 2012 10:33am

Considering they work for an aggressive, risk-taking corporation with a history that reads like a Cold War thriller, the top brass at Swiss commodities giant Glencore International PLC can be a surprisingly sensitive bunch. At least, that’s what Oliver Classen discovered. Classen works for an NGO, the Berne Declaration, that handed Glencore a satirical “Public Eye” award in 2008—an attempt to draw attention to what it argued was opaque disclosure surrounding Glencore’s Colombian coal mines. Classen says he was shocked when an “emotional” Ivan Glasenberg, Glencore’s notoriously private CEO, phoned him to complain. “He’s the type of guy who is on a mission,” Classen says. “He feels personally attacked when you criticize his activities.”

That may help explain why Glencore, which trades everything from oil to cotton, spent much of its history avoiding the limelight. With a past that has been frequently dubbed “murky” or “secretive,” Glencore has spent 37 of the last 38 years as a privately owned firm that prided itself on doing business in developing countries where few others dared to tread. Many trace the high-risk, high-reward approach to founder Marc Rich, who fled U.S. authorities in 1983 after he was charged with tax evasion and illegal dealings with Iran during the hostage crisis. He was later pardoned by U.S. President Bill Clinton as he was leaving office in 2001, with critics pointing out that Rich’s ex-wife Denise, a songwriter and socialite, had donated hundreds of thousands of dollars to the president’s library foundation and US$1 million to the Democratic party.

These days, though, Glencore has its sights set on a less controversial locale: the Canadian Prairies. Last week, it struck a $6.1-billion agreement to buy Regina-based grain-handler Viterra Inc. as part of a strategy to build the company’s agricultural footprint in North America. Unlike BHP Billiton’s failed attempt to buy Potash Corp. of Saskatchewan two years ago, this latest deal has so far drawn relatively little angst—in part because Glencore carefully structured the transaction to make it as politically palatable as possible.

Even so, some high-profile critics, like former finance minister Ralph Goodale, a Saskatchewan MP, are calling for a thorough review of the transaction since it involves a company that’s “virtually unknown in Saskatchewan” and is “not a stranger to controversy.” Though it’s not unusual for global resource companies to draw scrutiny over their operations in the developing world, several observers claim Glencore operates in a league of its own. “Glencore has a particular corporate mindset or DNA that stems from the Marc Rich era,” says Classen. In the book The King of Oil, author Daniel Ammann reveals that Rich supplied oil to apartheid South Africa and helped to set up a secret pipeline to pump oil from Iran to Israel. Rich was eventually charged by U.S. authorities in 1983 and fled to Switzerland, where he lived as a fugitive. He ultimately lost control of his company, then Marc Rich & Co., after trying to corner the zinc market in 1992, racking up US$172 million in losses. Glencore says the Rich years are ancient history, and that the company is now run just like any other. “We have strict standards and procedures in place based on our principles,” said Glasenberg in a statement. “Key to these are ensuring the safety and well-being of all our employees as well as minimizing the impact we have on the environment.”

But Glencore’s reputation for risky bets didn’t disappear along with Rich (who still lives in a mansion in Switzerland and has been spotted partying with the likes of supermodel Naomi Campbell in St. Tropez). The company does much of its business in hot spots like the Congo, Zambia and Iraq (Glencore was one of several companies accused of paying kickbacks to Iraq in 2005 during the United Nations’ Oil for Food program, but was never found guilty of wrongdoing), forging close political connections and scooping up key assets—mines, storage facilities and transportation infrastructure—in the process. Such prizes are a critical component of its business. Unlike traditional commodities traders, which buy and sell futures contracts, Glencore makes its money by purchasing raw materials from producers and delivering them to buyers, taking advantage of price differences across regions or periods of time. As part of this approach, Glencore is in the process of trying to merge with Swiss mining giant Xstrata (it already owns a 34 per cent stake), creating a global commodities powerhouse worth nearly US$80 billion.

Viterra is the latest piece of the puzzle. Glencore, which generated US$186 billion in sales last year, first became interested in Viterra last summer after learning that Ottawa planned to dismantle the Canadian Wheat Board. Wary of the political storm created when BHP tried to buy Potash Corp., Glencore relied heavily on its connections with Canadian operators while devising a strategy to scoop up Viterra. Calgary’s Agrium Inc. will buy most of Viterra’s retail agricultural products business while Winnipeg’s Richardson International will take 23 per cent of its grain handling business, leaving Glencore with 63 grain elevators and seven port terminals in Canada. Regina will become its new North American headquarters.

Glencore also went out of its way to promise to be a “strong corporate citizen” in Canada, perhaps anticipating a fresh round of scrutiny. The company was forced to fend off tough questions about its fugitive founder and operations in developing countries during its US$10-billion IPO in London last year. And not just from journalists and NGOs: the European Investment Bank said last year that it was withholding loans to Glencore pending an investigation into allegations that it failed to pay sufficient taxes to the Zambian government in relation to operations at its Mopani Copper Mines unit. Glencore has disputed the charges, which were contained in a preliminary report prepared for the Zambia Revenue Authority, arguing that the calculations were flawed. It said the report “contains fundamental factual errors,” and that the authors “did not take into account that almost half of Mopani’s copper output is third party ore processed in return for a small tolling fee.” Rainer Schlitt, a spokesperson for the EIB, says the investigation remains open, although he noted that neither Glencore nor Mopani has applied for any financing recently.

Adding to the PR headaches is a decision by the British Parliament’s international development committee to invite Glencore to testify next month alongside other resource companies about the issue of tax avoidance in the developing world, with a special focus on Zambia. (Glencore officials say the choice of Zambia as a case study is a coincidence, and that the company has invested hundreds of millions of dollars into the country over the years, building hospitals and schools.)

Craig Pirrong, a commodities expert and professor of finance at the University of Houston, says that while Glencore’s reputation may be tainted by its historical association with Rich, there’s no disputing the company’s hard-nosed approach to doing business. “They are more aggressive than others,” he says, adding that Glencore’s willingness to become deeply involved in commodity-producing countries, even those that are difficult to do business with, provides the firm’s traders with a wealth of intelligence about where prices might be headed, whether as the result of poor crop conditions or an impending strike by miners. “They can see what the cost structures are and what’s going on among producers upstream, and they have an eye to what’s going on in the transportation business,” Pirrong says. “They take that information and use it to make money.”

And now, like it or not, Canadian farmers are set to become part of Glencore’s colourful, money-making machine too.

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Roger Casement
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