NGOs attack Angola demining deal

Angola is one of the most heavily mined countries in the world Keystone

Anti-corruption campaigners have criticised a demining contract between a Swiss government-owned arms firm, Ruag, and Angola.

This content was published on June 13, 2008 - 08:54

The contract is linked to the return of allegedly embezzled funds to the African country. The Swiss authorities and Ruag both deny any wrongdoing.

The Swiss Agency of Development and Cooperation (SDC) is responsible for returning $21 million (SFr21.8 million) of frozen assets to Angola through humanitarian work. This includes the demining project.

The money in Swiss bank accounts was originally held in connection with an investigation into French businessman Pierre Falcone, who was suspected of helping Angolan officials embezzle part of the country's debt repayment to Russia. The case was closed in December 2004 and Falcone was cleared of all charges.

Non-governmental organisations the Berne Declaration, Aktion Finanzplatz Schweiz (AFP) and Global Witness on Tuesday criticised the SDC for awarding the demining contract to Ruag, the largest European manufacturer of small-calibre ammunition.

They claim Ruag does not have any demining capacity and "would earn a commission" by subcontracting another organisation to do the job.

"Why did Ruag get the contract?" asked Anne-Kathrin Glatz from the Berne Declaration.

"With a development project the aim is to ensure that the maximum amount of money arrives in the field. By subcontracting in Switzerland, less money will arrive in Angola and Ruag will earn something just for choosing another firm which would normally have applied if there had been a public tender process; it's very strange."

The NGOs are calling for the deal to be cancelled and opened for tender to ensure transparency in the restitution of the $21 million to Angola.

"The aim of returning the funds was to benefit Angolan civil society, so that it also got involved in the monitoring of the projects. A public call for tender, as is normal in such cases, would have guaranteed transparency," said Glatz.

Hot potato

But the SDC rejected the NGO charges, saying that Angola chose Ruag. It said it was not responsible for carrying out a call for tender.

"The SDC never commissioned Ruag for such activities... the competence to choose the partners lies exclusively with the Angolan authorities, which own the money. The role of the SDC is only a fiduciary (trustee) to assure that the funds are correctly used in accordance with the terms of the agreement," SDC spokesman Jean-Philippe Jutzi told swissinfo.

"If the SDC didn't commission Ruag, we'd like to know who did, as the agreement between Angola and Switzerland concerning the restitution of these funds is Bern's responsibility," said Glatz.

While awaiting final approval to begin the project, Ruag says it has a letter of intention signed by Ruag and the Angolan authorities dated May 2005. "The client is the Angolan government, which has checked various offers over a long process, and finally concluded a contract with us," Urs Breitmeier, the head of Ruag Land Systems, told swissinfo.

He claims Ruag is "significantly involved" in the test procedures for the demining systems: Ruag is the main contractor working together with the German firm MineWolf Systems.

To ensure certain standards are met, the SDC has commissioned two external audits and the Société Générale de Surveillance (SGS) is examining the contract for price and market conditions before a final go-ahead expected at the end of June.

Open-and-shut case?

The NGOs say that between 1997 and 2001, $774 million of Angolan oil revenues was paid into a UBS account belonging to a shell company run by Falcone and an associate, but only $161 million was later transferred to a Russian finance ministry account to repay debts.

The $21 million, part of the $774 million, was originally frozen pending a Swiss investigation into Falcone. The enquiry concluded that the restructuring of Angola's debt to Russia was a legitimate transaction and that no criminal offence was committed.

Geneva public prosecutor Daniel Zappelli closed the case in December 2004.

But a group of Angolan civilians has since contacted Zappelli twice to reopen the case, presenting a legal memo outlining new arguments. To date, there has been no further action on the part of the Geneva authorities.

Asking whether the $21 million accord between Switzerland and Angola was concluded "so that people forget about the rest of the embezzled funds", on Tuesday the NGOs again called on Zappelli to carry out a full investigation into the rest of the $774 million.

swissinfo, Simon Bradley

Key facts

The money was linked to the restructuring of Angola's $2.9 billion debt to Russia.
A Swiss investigation into suspected embezzlement of some of the funds was closed in December 2004 after it was established that no irregularities occurred.
The unblocked money is earmarked for the most disadvantaged people in Angola.

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In brief

Angola, a former Portuguese colony, became independent in 1975 after a 14-year guerrilla war.

The Portuguese transferred power to the Marxist-inspired MPLA, which received support from the Soviet Union. Shortly afterwards a civil war broke out between the communists and separatist rebels that killed at least one million people.

A peace accord was signed in 1994 but a ceasefire wasn't reached by the two factions until 2002.

Some eight million mines were laid in Angola during the war.

According to the International Monetary Fund, Angola's annual earnings from oil are around $15 billion. Despite this wealth, three-quarters of its citizens live below the poverty line.

The SDC has been operating in Angola since 1995. The humanitarian aid programme was discontinued at the end of 2006. Since then, the SDC has maintained a cooperation office in Luanda, supporting implementation of a joint socio-humanitarian programme based on a bilateral agreement on the return of Angolan assets previously frozen in Switzerland. 2008 budget: SFr1.3 million.

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