The Financial Feud Follows the Fish of Fury

For almost forty years, the United Kingdom and the Republic of Iceland have had a peaceful co-existence along the North Atlantic. The infamous Cod Wars - a parody of the term Cold War possibly emanating from the British press - that began in the 1950's, may rekindle their vicious feud because of the current financial crisis. There is a history of animosity between these two countries that could transform the latest exchange of insults between their Prime Ministers into another round of conflict similar to the Fish of Fury they engaged in almost 4 decades ago.

Iceland has declared bankruptcy, and its internet Bank Icesave had been closed. The UK sought assurances that equal treatment of British investors would be honored via a legal agreement. But Iceland was not prepared to compensate these investors; seeking to protect its domestic savers first. In retaliation the British Government iced all the assets of Icesave's parent company Landsbanki in the UK. Prime Minister Gordon Brown declared Iceland's actions to be "effectively illegal and unacceptable", while Icelandic Prime Minister Gier Haarde expressed annoyance at the UK's use of anti-terrorism legislation to seize the Icelandic Bank's assets. He feels perhaps insulted being in the same category as Osama Bin Laden.

The Cod Wars were a lot of fury over fish. It began when the new Icelandic law was implemented on the midnight of September 1, 1958, expanding the Icelandic fishery zone from 7.4 to 22.2 kilometers around the country. The rationale' was that with the diminishing fish stocks around the world, the scope for confrontation had increased, where incursions of a country's fishing fleet in the territorial jurisdiction of another - some of which being considered "protected" - would deplete the resources relied upon by the affected state. At the time, Iceland relied only on its fishing industry to support its 250,000 population. The British government did not recognize this claim on the grounds that it would set a precedent that could be followed by other nations in the North Atlantic, which would destroy the British fishing industry.

What followed was a series of confrontations at sea between British frigates and Icelandic gunboats, including tearing up of fish nets, ramming of boats, seizing of catch and countless intrusions in what became a battle of wits and endurance. The Icelanders however emerged slightly ahead. The 1958 clash was repeated in 1973, 1975, and 1976. Despite the protectionist efforts, fish stocks diminished nonetheless, and Iceland transformed its economy into manufacturing, finance and tourism. Presently, it has one of the world's highest levels of economic and civil freedoms; ranked one of the most developed country with a per capita income of over $58,000 for its 320,000 population. Fishing however, still accounts for roughly 40 % of its economy.

But just like the 50's, Iceland's response to the economic crisis is to protect its interests and its population. It does not intend to take over any of the nationalized banks' foreign debts or assets; and the domestic operation of these banks will be separated from its foreign transactions. It comes as a complete surprise to learn that the UK had invested so much money, through public and private investors, in Iceland. Should this feud escalate, we may see these two countries resurrect their old grudges and tit-for-tat petty political mischief. This is no longer just about about fish, but something "fishier". And the British government is making sure it does not slip away this time. The only thing they should avoid is formaline laced fish or melamine laced tea. Otherwise, they can bash each other to their heart's content.

Haaaarrrrwwwwwk...Twoooooooph...Ting!

Bakaasi and the Baptism of Blood Oil

As Cameroonians partied and celebrated on the beaches of the northern side of Bakaasi, some 300,000 Nigerian fishermen were forced to swallow the painful and bitter pill of eviction from the Bakaasi peninsula. The loss of their rich fishing culture as a result of the handover has destroyed their way of life. Some 30,000 of them had moved to a location set aside for them at Cross River state, but it has no access to the sea. Cameroonians will own the fishing resources, and look forward to reaping the benefits of the substantial oil fields believed to be deposited offshore, but remained untapped because of the dispute. This offshore resource could be their baptism into the realm of blood oil.

Nigeria observed its commitment to the rule of law, but challenged the ruling of the International Court of Justice against it based on a 19th century colonial agreement between Britain and Germany. Two years ago, it agreed to cede the peninsula to Cameroon – citing the bigger gains of its adherence than the pain of losing ancestral homes. The fisher folks feel however that the government abandoned its duties. The massive displacement of families from Bakaasi could provide a wealth of recruits for the “militants” who are in the business of “illegal bunkering”, and the way of life of these Nigerian fishermen may be transformed beyond what they bargained for because of their desperation.

These “militants” were once armed militias of state governments, recruited to conduct large scale rigging of the 2003 elections. After being abandoned, they turned to oil theft to fund their activities. Most of these militants are gangs led by commanders, who are constantly battling each other for a larger share of their clientele’s business. Their tasks are to provide security to the barges and ships engaged in oil bunkering and neutralize all interference to the systematic theft of oil. They bribe the Nigerian military and coerce local leaders to allow the bunkerers to pass. They are also used by their clients to blow up pipelines to force the oil companies to shut down the flow, allowing them to install taps and valves in the pipeline. The installation is usually done by an expert formerly employed by the oil company.

The oil bunkerers who hire these militants have formed a cartel, and are operated by some of Nigeria’s powerful political kingmakers who brandish immense political influence. Nigerian President Umaru Yar’Adua likened the situation to the blood diamonds that resulted in brutal civil wars in West Africa, and has called on the international community to assist in ending this illegal trade. Some members of this syndicate may even be supporters and financiers of Yar’Adua himself. Going against them could induce a coup d’ etat, a civil war, or destabilization efforts that could bring the state to its knees. Yar’Adua is thus held hostage by the syndicates that affect his government’s efforts at eradicating corruption.

Less than a handful of the militant groups are genuinely inspired by nationalism. Most are engaged in selling their services to the cartel. This nationalist fervor is used as a cover by the cartel for the massive losses in oil supplies, attributing the theft to the cause of the pro-people activists. But militant assisted theft is just one method. Fake documents, excess loading of oil beyond what is allowed, or simply lifting oil from the dock and diverted to the cartel’s vessels; all with the connivance of oil company officials, ship’s captains and national oil state officials, are also carried out. Around 80,000 barrels of oil are stolen daily, bringing the cartel’s revenues to an estimated US $60 million a day. An amount they would kill for if this revenue stream were obstructed by anyone, including President Yar’Adua.

Nigeria has agreed to work with Cameroon to explore oil in the Bakaasi peninsula. This will involve officials and powerful political figures from two independent states. A partnership that may result in another oil bunkering cartel between the existing Nigerian syndicate and a new Cameroonian bloc. The potential for conflict exists in the essence of the greed and avarice underlying the illegal intent. And if suspicions on revenue undercutting occurs, the result could be bloody with overwhelming political repercussions – including war. Militants may be recruited from the displaced Nigerians, whose bitterness about their own country’s neglect could fuel their passions, but would suffocate their souls. Cameroonian hopes for a better life may be quashed by constant violent clashes with militants, or trapped in a savage war with their neighbors.

These events have not yet transpired but the elements for their fruition are already in place. It may take a couple of years or more for the actual oil production to take place in Bakaasi, if substantial oil deposits do exist. President Yar’Adua already feels his inability to eradicate the cartel as evidenced by his slowing down on reforms and corruption. Seeking assistance from the international community gives a global recognition to the problem, but it does little to impede the cartel’s operations. Either this is merely hand washing on Yar’Adua’s part, or a sincere and meticulous evaluation of the extent of efforts he is willing to take.

Being an intelligent and perceptive leader, President Yar’Adua perhaps realizes that the shadowy forces that lurk beneath and behind government and the aspirations of his people are serious threats to the progress and development of his country. Allowing them to operate unimpeded could return Nigeria to backwardness and despair. This is his Gethsemane. A confrontation with these shadowy forces is inevitable, but at a huge cost and sacrifice on his part – perhaps with his life. This would be the parameters by which his devotion to duty and love of country would be measured; together with the noble heroism by which he stands by his principles for the benefit of Nigeria and its people. Or, he can look the other way and be less than a mere shadow of himself, and the promises he has made for Nigerians. The forked road awaits him. Whatever path he takes, at the end of that road lies his destiny.

Haaaaarwwrrrrwwwk…Twooooooooph…Ting!