The leadership in South Sudan is using oil revenues from Nile Petroleum Corporation - NilePet, the national Oil & Gas Corporation of South Sudan to fuel the ongoing conflict, a new investigative report by Global Witness indicates.
The report titled Capture on the Nile shows that the state-owned oil company has fallen under the direct control of President Salva Kiir and his inner circle, and is being used to funnel millions in oil revenues to the country's brutal security services and ethnic militias, with limited oversight and accountability.
"While South Sudan's population continues to suffer a senseless war and economic crisis of their leaders' making, Nilepet is failing its true constituents, serving instead, the interests of a narrow canal, and being used to prolong the brutal conflict," Michael Gibb, a campaign leader for Conflict Resources at Global Witness said.
The report draws on secret documents and first-hand testimony to detail the means by which one of South Sudan's most significant economic institutions has been co-opted to serve the personal aims of President Kiir.
In one of the documents, the managing director of the Nilepet received a letter requesting a payment of over $1.5 million, for expenses incurred by South Sudan's security services.
The letter was accompanied by an itemised list which includes hundreds of thousands of dollars for transportation, accommodation, and food for ISB personnel and South Sudanese army (SPLA) troops deployed "in and around the oilfields," including the conflict areas of Wau, Paloch, and Malakal, in Upper Nile State.
The bill also includes over $900,000 for vehicles taken by the SPLA in the same areas, though supposedly during earlier operations in 2013/14. A few months before the letter was sent, a fresh military offensive had engulfed Upper Nile.
The report alleges that Nilepet appears to have become the vehicle of choice for connected elites wishing to evade scrutiny of financial transactions worth millions, linking the company directly to arms transfers and the patronage system at the heart of the conflict.
It adds that Nilepet's role in bankrolling South Sudan's security services and conflict not only takes it well beyond its intended role as a commercial oil company but has significant consequences for democratic and civilian oversight of South Sudan's security.
"This is not the function Nilepet was meant to serve. But like many of South Sudan's institutions - like South Sudan itself - it has been captured by powerful elites that have enlisted it in service of their own aims, rather than those of the South Sudanese people," the report reads.
It says Nilepet's successful capture has made it a critical component of the war economy. As a private company, Nilepet is able to operate in near total secrecy. The report details how this secrecy has been used to finance military operations, arms transfer to ethnic militias, and conceal the looting of millions in 'letters of credit' intended to help imports of essential goods as South Sudan's economy deteriorated.
"South Sudan's security forces are able to operate with alarming impunity, driving cycles of violence and oppression," said Michael Gibb.
Global Witness is recommending a renewed focus on the economic drivers of South Sudan's conflict; including its oil sector, and increased engagement with the international companies and traders that connect Nilepet to international markets.
They say that while South Sudan is a producer of crude oil, it lacks capacity and infrastructure to refine this into the fuel its population relies on. As a result, Nilepet is deeply integrated into global oil supply chains, including international refineries and commodity traders, without which it would be unable to raise revenues.
The report says the international trading partners could play a key role in challenging and holding it accountable. Gibb also emphasized that the international companies that Nilepet deals with have a responsibility and opportunity to use their influence to drive reform and transparency at this critical moment in South Sudan's conflict.
He says indifference tantamount to complicity in the face of clear evidence of Nilepet's role in the war economy. A separate United Nations panel of experts report found that Nilepet provided financial authorisation for the purchase and transfer of small arms and ammunition to the Pandang Dinka, one of the local militias recruited to fight with the government in Upper Nile state in 2015.
They report that these militias often operated in concert with the government's SPLA troops, though outside of the official military command structure. Their weapons and ammunition were supplied by the ISB under the command of Akol Koor.
The Republic of South Sudan is yet to officially comment on the Global Witness report. Kiir while attending the EAC Heads of State Summit in Kampala last month said foreign agents were using the conflict in his country to target its oil.