Bashir’s decision, a material breach of the oil agreement
By Justice Deng Biong
June 15, 2013 – After its ratification by the National legislatures in both South Sudan and Sudan States, the Cooperation Agreement [CA] (Oil Agreement included) signed on September, 27th, 2012, technically became an international agreement, certainly not in the eyes of fugitive Bashir and his NCP henchmen, but in the eyes of South Sudan as well as peace loving Sudanese and international community.
The Agreement came as a result of lengthy negotiations of what was known, first, as post Referendum issues which later became post Independence issues after the independence of South Sudan on July, 9th, 2011.Chief among those issues were matters related to citizenship and oil. It is an agreement for cooperation and management of bilateral relations between the two Sates. According to its Article 5(1) and to ensure its effective implementation, the Parties agreed to establish and sustain mechanisms including through regular Summit Meetings of their Heads of State as well as through cooperation at Ministerial and technical levels.
In anticipation of a dispute that may arise in relation to interpretation of a provision in the Cooperation Agreement, its Article 5(2) provided for the agreement of the Parties to establish viable mechanisms for settling any dispute or difference that might arise between them and prevent such dispute or difference from undermining their peaceful relations.
On March, 12, 2013, the Parties signed an Implementation Matrix to be followed on April, 23rd, with the signature of an Agreement titled: “Mechanisms for Implementation, Monitoring, Evaluation and Dispute Resolution Relating to the Cooperation Agreement”. Both documents form part and parcel of the Cooperation Agreement (See Article 3 of the Matrix and Article 12 of the Mechanisms).
On June, 8th, this year and in a heated mobilization rally in Khartoum North, the fugitive President Bashir of Sudan announced a unilateral termination of the Oil Agreement and indeed the entire Cooperation Agreement! The reasons, according to him, were that South Sudan continues in its Khamaj (reckless behavior) by supporting the military operations of the Sudanese Revolutionary Front (SRF), the main Sudanese armed opposition against his NCP regime. Today the question which certainly carries legal significance will be: Under the terms and provisions of the CA, was Bashir entitled to pass the above stated decision? If not who should bear the consequences or financial losses that might emanate from his crazy decision?
When you thoroughly examine the Cooperation Agreement, there is no exit clause governing the procedure when a Party would wish to exit, suspend or terminate it. However, the Oil Agreement provided for its duration as three and half years (Article 22(1)) and a lengthy procedure for its suspension or termination (Article 6). Also, there is no clause that the CA will be suspended or terminated due to a dispute or implementation difficulty related to any of the 8 thematic agreements contained there-in, nor is there any clause conditioning the implementation of any of the 8 agreements on the successful implementation of the other.
In the light of the picture painted above, it is clear that Bashir or the Government of Sudan (GoS) has committed a material breach of the CA in general and of the Agreement on Oil and Related Economic Matters, in particular, for the following reasons:
1) The Government of the Republic of South Sudan (GoRSS) did not fail to carry out its obligations and undertakings under the Cooperation Agreement. As stipulated in the Oil Agreement, there are two instances where GoRSS could default. One is when it fails to pay the processing and transit fees, transportation tariffs and the Transitional Financial Arrangements (TFA) transfers. GoRSS so far did not fail to pay because these amounts will be due in 40 days when GoRSS’ oil is lifted at the marine terminal on board vessels at Port Sudan from the dates of respective bills of lading (Art.5.1 and 5.2). Sudan made its decision a day before GoRSS’ oil could reach Port Sudan! Therefore the payments are not yet due. The second instance could be when GoRSS suspend or terminate oil production, which as a matter of common knowledge, did not so far happen.
2) GoS based its decision on a ground not related to the Oil Agreement. The allegation that GoRSS militarily supports SRF/SPLM-N relates to the Agreement on Security Arrangements and should have been raised and tackled through the already existing JPSM (Joint Political and Security) Mechanism.
3) If they have a complaint, GoS failed to observe its obligations under Art.10 of the “Mechanisms …for Dispute Resolution in Relation to the Cooperation Agreement” signed on April, 23rd, 2013. In particular, Khartoum should have observed the provision of Art.10.1 which says:
“ The Parties shall, promptly, make every effort to resolve any difference or dispute that may arise in the course of their bilateral relations and the implementation of the Cooperation Agreement, in the first place, through discussion, dialogue and negotiations between themselves.” And Art.10.8, which says:
“The Parties shall conduct their relations in good faith and shall strive to reach an amicable, expeditious and fair settlement of any dispute that may arise between them. In case the two Heads of State fail to resolve any dispute relating to the implementation of the Cooperation Agreement, they shall have regard to article 4 of the Constitutive Act of the African Union, as well as articles 2(3) and 33 of the Charter of the United Nations, which provide for, among others, recourse to third-party dispute resolution mechanisms.”
4) Above all, GoS’ decision undermined the provisions of Article 2(1) of the Cooperation Agreement, 2012, in which the GoS and GoRSS affirmed their commitment to respect the principles of the African Union Constitutive Act and the United Nations Charter concerning relations and cooperation between States and shall respect each other’s Sovereignty and territorial integrity.
Finally, while we should thank the AU HIP (Chaired by former President Mbeki) for having successfully mediated the Cooperation Agreement and further assisted the Parties to work out the necessary implementation matrix and mechanisms including mechanisms for dispute management and resolution, I personally, think they should stop here and rather concentrate on the settlement of the outstanding CPA issues of Abyei and Border. The third-party referred to under Art.10.8 cited above is most likely the AU Peace and Security Council or the UN Security Council.
Justice Biong is a member of GoRSS’ Legal Cluster in the ongoing negotiations with GoS. He can be reached at [email protected]