Recently, United to End Genocide recognized the one-year anniversary of South Sudan’s historic vote in favor of independence and took a hard look at some of the serious challenges that face this new nation today. High among them is the development of South Sudan’s fledging economy.
Aerial view of an oil field in Unity State, South Sudan (UN Photo)
Investment by corporate actors, not just foreign governments, and the development of South Sudan’s industries will be critical to its long term survival. While security problems, issues of transparency, challenges of good governance and tensions with Sudan over oil transit fees make the country a difficult operating environment, investment by corporate actors will play a key role in South Sudan’s economic development.
At a December conference on investment in South Sudan held in Washington, D.C., President Salva Kiir pledged to implement the Extractive Industry Transparency Initiative (EITI). EITI is the global standard for transparency for natural resource revenue. Transparency in revenue reporting – by companies and governments – is critical for reducing corruption, poverty and instability. However, the South Sudanese government is still in the process of passing a petroleum bill and lacks the capacity to enforce EITI’s provisions.
Providing further challenges, the civil society component needed to ensure accountability doesn’t yet exist in South Sudan. Given this gap, corporate actors shoulder an increased responsibility to ensure transparency. Companies operating in South Sudan should publish all the payments they make to the government as well as conduct independent audits of all payments and revenues related to those operations. This will help ensure the people of South Sudan benefit from sale of their natural resources and create an environment that encourages healthy investment.
The United Nations Guiding Principles for Business and Human Rights call on corporate actors to exercise due diligence to avoid infringing on the rights of local communities, and to address adverse impacts as they occur. This means corporations must conduct environmental, social and human rights impact assessments before beginning operations in South Sudan. Doing so not only protects local communities, but it also helps corporations avoid the kind of unrest that they might encounter as a result of local resentment and increase the openness of communities in the south to further investment and development.
There is a longstanding connection between the oil industry and grave human rights violations in Sudan and South Sudan. This connection appears to be continuing with the fighting in the oil producing South Kordofan, Blue Nile and Unity states. Corporate actors have the difficult job of protecting their employees and operations in these areas in a way that does not infringe on the human rights and security of local communities. This requires companies to conduct rigorous risk assessments and develop and implement security measures that respect human rights. Commitment to the Voluntary Principles on Security and Human Rights would be a strong step towards balancing those demands.
More information on these, and other ways corporations should act to contribute to the development of South Sudan, is available at the Conflict Risk Network (CRN) website. CRN is a network of institutional investors, financial service providers and related stakeholders that calls on corporate actors to fulfill their responsibility to respect human rights and to take steps that support peace and stability in areas affected by genocide and mass atrocities.
