©Somalia Report, all rights reserved
PMPF Training Base in Bosaso
After the London Conference on Somalia in February of this year, numerous private side meetings in the United Kingdom, United Arab Emirates (UAE) and Somalia have touched off a spate of rumors of who will emerge the winner in the push for a viable land-based, anti-piracy business.
The first rumor claimed US player Bancroft Global Development was in discussions with high-level UAE officials about an anti-piracy program to be based in Mogadishu’s old harbor. This is the same location Somalia’s Transitional Federal Government (TFG) planned to put up the original Saracen anti-piracy program.
Rumors of a Somali-based, UAE funded initiative between the UAE and Bancroft began in the late fall of 2011 and were sparked when Bancroft started their unofficial rehabilitation of a 7-meter skiff in the Mogadishu harbor last year.
Much of the discussion was that Bancroft might step in to take over the Saracen contracts that were cancelled by TFG Speaker Sharif Hassan Sheikh Aden. When Bancroft was asked to provide Protective Security Detail (PSD) training materials for TFG President Sheikh Sharif Sheik Ahmed, it was assumed they would be stepping into the cancelled Saracen contract. According to Somalia Report's sources, the owner of Bancroft Global, Mike Stock, returned from meetings in Abu Dhabi three weeks ago. The UAE was believed to be behind the Saracen contract and the sponsor of the current Puntland Marine Police Force (PMPF) program based in the port city of Bosaso.
Somalia Report contacted Mr. Stock who said his company was asked to provide coursework for Ugandan soldiers operating under the African Union Mission in Somalia (AMISOM) who trained up a protective detail for President Sharif. This was essentially the same program planned by Saracen but structured differently and via AMISOM and the TFG.
Bancroft Global Development is a fully authorized provider of services to AMISOM in support of the TFG, and Mr. Stock denied any involvement or interest in anti-piracy programs in Somalia.
“Bancroft has not signed any contracts with the TFG. Bancroft mentors AMISOM, and through AMISOM, mentors the TFG. Bancroft is not engaged in any anti-piracy or maritime operations, with the exception of helping the TFG repair and operate one unarmed boat in and around Mogadishu Seaport. That boat had been in country for approximately a year, inoperable, since it was delivered by an unknown donor,” he told Somalia Report.
Bancroft Global Development is a Washington, DC-based 501(c)3 non-profit organization that operates out of a $5 million dollar mansion on embassy row. They began quietly in Somalia by providing demining training and have expanded their services to assist AMISOM. Their funding is then reimbursed by the US and other donors.
Stock wanted to make it clear that “all Bancroft activity in Somalia is conducted in strict compliance with the Arms Embargo."
Bancroft’s IRS Form 990’s listed $9M in revenue in 2009 and $14M in 2010. Their beginning as a demining-focused charity and hiring of foreign contractors has expanded their role as a major training resource for untested African soldiers sent to fight in Somalia. Bancroft also gets revenue from their man camp/hotel near the Mogadishu airport. The UN’s Somalia Eritrea Monitoring Group (SEMG) recently investigated Bancroft's activities and found them in full compliance with the long-standing arms embargo.
Enter Halliday Finch
Halliday Finch is a Nairobi-based security and communications firm run by ex-British military officer, Sam Mattock. They have long touted a potential training and anti-piracy program with the TFG announcing a signed contract last month. The exact details are not known, but it appears this program is following a well-worn path of Somalia government fishery income collected and shared with an outside contractor. This model has not fared well in the past.
©Somalia Report, all rights reserved
Old Puntland Coast Guard SOMCAN boat
The first major commercial endeavor began in 1999 with Hart Security in Bosaso followed by SOMCAN in the early 2000’s. Some of today’s pirates, such as Garaad who was recently arrested by the Iranian Navy, were graduates of the Bosaso-based enterprise. Now Halliday Finch is attempting to replicate the model through a simple agreement with the TFG.
A December 19, 2011 contract between the TFG Minister of Defence Hussein Arab Essay and Halliday Finch International is much different. ‘Halliday Finch’ has been replaced by HFI, a company based in the British Virgin Islands, with any money raised going into an anti-piracy task force (APTF) joint venture fund.
The new Mogadishu-based joint venture will be called “Somalia Maritime Services” (SMS), according to their contract.
The contract claims that $52M will be invested over the next two years with a total estimate of $900M in revenue over the ten-year life of the project. HFI had three months from the signing of the contract to raise $25M. It is not known if that was raised, but the TFG did announce they signed another contract at about the time that the first contract expired.
Oddly the program seeks to reduce “Somali piracy activity” (not poaching) by 50% within the first year. The revenue split is 51% for Somalia and 49% for HFI to be generated from “Fishing Revenue and Maritime Offences Revenue”. Currently it is not known what licensing and penalty systems are in place since the TFG has yet to pass a law against piracy although there is a law awaiting a vote.
In speaking with Somalia Report, Sam Mattock, the CEO of Halliday Finch, made it clear they operate under legal guidelines.
“We have not deployed yet and will not without (UN) approval. We would be operating on land for the first 2 years. That said, we consider 12nm of sea from the coastline to be land, so there would be some maritime activity, but mainly for mobility and as part of the training programme.
The operation is predominantly an anti piracy operation in the early stages. This will quiet naturally develop as time passes and capacity increases to counter illegal fishing, smuggling and waste dumping. However, the critical point is to establish the basis from which to control in a professional manner the issuing of fishing licenses thus allowing revenue to flow into the exchequer.
We of course seek PL's and Galmadug's approval and cooperation to assist in their area and believe we will bring with us substantial investment and follow up development into the region to warrant that approval. This is a political negotiation and should be done by the TFG, which we would play no part in."
But with local player Halliday Finch waiting, Bancroft not interested, the PMPF proceeding under the UN Somalia Eritrea Monitoring Group’s (SEMG) scrutiny and no anti-piracy law in effect, it remains to be seen if any of these programs will be fully endorsed.
Meanwhile the increasingly aggressive anti-piracy efforts off shore have already resulted in three incidents involving Kenya, the US and an unknown nation in which fishermen were killed mistaken for pirates or al-Shabaab.
It seems that despite the overwhelming majority of experts, international members and the UN agreeing that a land based solution to piracy is imperative, the three most promising and professional providers are all saddled with archaic three-decade-old restrictions that will prevent elimination of piracy any time soon via compliant means, including the 1992 arms embargo.
In 2005 the TFG signed a two year $55M contract with New York based Top Cat Security that quickly fell apart due to US State Department International Traffic in Arms Violations (ITAR). In 2008, French PMC Secopex said they had signed a three-year, $75-$150M contract that included a bodyguard for then President Abdullahi Yusuf Ahmed. Two years later on August 11, 2010, CEO Svein Johnson of Dominica-based Clear Ocean signed a “Letter of Endorsement for the Implementation of Marine Resource Management in Somali territorial waters and its Exclusive Economic Zone” designed to secure income and develop the fisheries sector with Minister Yosuf Hassam Ibrahim. Nothing came of the ship-based program.
And last month Halliday Finch and TFG Minister of Defence, Hussein Arab Essay officially announced they had signed a contract to create a national coast guard. The press release states, “TFG Ministry of Defence Announces Creation Of A National Coastguard”.
The press release goes on to say that, “The TFG Ministry of Defence announced the establishment of the Somali Anti Piracy Task Force Coast Guard, in association with Halliday Finch International, a Nairobi-based private security company. The new force will be part of the Somali National Security Forces, and will consist of land, sea and air components.
Halliday Finch is seeking both national and private donors to fund the operation. Qatar, Mauritius, Nigeria and Angola have expressed interest, and the firm has already secured the $52 million required for the first year of operation. Halliday Finch has predicted that the 10-year project will cost approximately $900 million, and the organization hopes that some proportion of the funding will eventually come from domestic revenue streams, including the sale of fishing licenses.
This funding proposal is similar to the Hart Security program in which the company sold fishing licenses and conducted anti-piracy operations on behalf of the Puntland government in exchange for 51% of the revenue.
Halliday Finch may be mimicing the clan based construct of Somali politics. Toby Constantine, the director of Halliday Finch, is the brother of Sam Mattock's wife, Harriet, and is married to the daughter of Toby Moffett who is a Washington DC lobbyist hired by the Puntland government until September 2012 to work on oil related issues, specifically to see if Conoco will try to revive their 1980's era oil leases in Puntland. As of January of this year, Puntland announced the commencement of oil drilling in conjunction with Africa Oil.
Fishing Free for All
©Somalia Report, all rights reserved
Fishing Boats in Puntland
The most recent and reliable studies on potential fishing revenue were conducted in the mid 2000’s. Today there is no clear estimate of what riches remain under the Somali seas, despite efforts to raise revenue through fishing licenses. Rough estimates range of potential gross income from fisheries range between $100M and $300million but do not account for the mostly illegal fishing and rely on the creation of a massive EEZ stretching 200 miles out to sea. But there is no clarity on when or whether the 200 mile deep Somalia EEZ will be formalized and exactly how the foreign fishing fleets will be dealt with or how fines will be enforced except by seizing ships and crews until fines are paid.
Additionally there are overlapping and competing regional fishing agreements sold from regions like Puntland, Somaliland and Galmadug. Somalia Report has tracked foreign fishing vessels freely operating from Hobyo and much of Puntland's fish stock is picked up by Yemeni dhows. Armed European and Asian factory fishing fleets still operate off the eastern coast of Somalia but little is known of how much is lost via this commercial form of piracy.
The Halliday Finch program is to include all of Somalia including Puntland and Somaliland with the caveat that, “Puntland’s Administration is already on board, and has agreed to plans to locate the initial training camp in Bosaso.” In the first phase, 500 individuals (yet to be identified, but likely to come from the coastal communities) will be trained by international consultants and Somali security forces. Bosaso still has the abandoned SOMCAN patrol ships rotting away in the harbor.
According to source documents provided to Somalia Report, Halliday Finch signed a 90-day “Letter of Appointment” with the APTF run by the former dean of East African University, Professor Muhyadin Ali Yusuf, on September 27, 2010. The goal was to “identify credible and secure partners with the capacity to plan and execute an operation of this scale” and has “the financial resources to apply to such a strategy.”
The draft contract (which is different from the final signed document) is not dated or signed, provides for:
“In consideration of the Company providing the Services; and upon the Appointed Auditor’s receipt of the Funds and or the Fishing Revenue; the TFG hereby undertakes to pay the Company via the Appointed Auditor as follows:
i) The TFG shall pay the Company a Project Management Fee which shall cover all costs incurred by the Company to implement and manage the National Coast Guard Strategy. This fee shall be payable three (3) months in advance pursuant to the Company’s quarterly invoices sent to the Appointed Auditor (herein annexed at Schedule 4 is a Summary of the Estimated Budget for first twelve (12) months of the Project Management Fees); and
ii) The TFG shall pay the Company a fee equivalent to the sum of thirty percent (30%) of all Fishing Revenue for the duration of this Agreement pursuant to the Company’s invoices sent to the Appointed Auditor. Thereafter, that is, after the expiration of this Agreement, the TFG shall pay the Company a sum equivalent to two percent (2%) of the Fishing Revenue in perpetuity pursuant to the Company’s quarterly invoices sent to the TFG.
For the avoidance of doubt, the Parties agree that all the Fishing Revenue shall be deposited in an account managed by the Appointed Auditor. The TFG shall invoice the Appointed Auditor quarterly for the sum equivalent to seventy percent (70%) of the Fishing Revenue; and HF shall invoice the Appointed Auditor quarterly for the sum equivalent thirty percent (30%) of the Fishing Revenue; and after the expiration of this Agreement the Company shall invoice the TFG a sum equivalent to two percent (2%) of the Fishing Revenue in perpetuity.
The Parties agree that subject to the Company receiving its thirty percent (30%) portion of the Fishing Revenue; that the Company shall pay the operational costs of the APTF from its said portion for the duration of this Agreement, and that the TFG or the Ministry of Fisheries shall not be liable for the same.
Clearly HFI was able to drive a harder deal in their new contract.
Big Money In A Little Country
The contract surprisingly provides for damages of $72 million dollars if breached by the TFG, Ministry of Fisheries or the APTF. There is no sense of where the TFG would find that enormous sum when they can't even pay their own soldiers on a regular basis. The $900M in revenue or fines over ten years also seems to come from the same thinking process.
Professor Muhyadin Ali Yusuf was also the official that seized $3.6 million from Salama Fikira for ransom drop on May 24, 2011. The money was intended to free the MV Suez and MV Suez and MV Yuan Xian, but confiscated by the government and never returned although the official story is that the money was taken to the National Bank for safekeeping. The security contractors were convicted and fined in June 2011 and allowed to leave after a presidential pardon. It is not known where those funds went.
The Halliday Finch agreement references $97,520 in expenses and salaries that occurred on or around November of 2010 for a trip to Kuwait. The costs included $14, 500 in “cash expenses to refurbish the offices of the APTF and pay for staff salaries”. There is an additional cost generated by Halliday Finch $ 80,000 for the CEO (Sam Mattock,) three staff members and legal advisors. There are $3,020 in airfares with hotel accommodations provided free of charge by Ability Logistics, according to the initial agreement.
The Mogadishu-based Saracen PSD contract may have been cancelled but the Bosaso program, now managed by a new company called Sterling Corporate Services, is still on track to remove pirate bases in coastal Puntland. The Puntland Marines were renamed as the Puntland Marine Police Force (PMPF) last year and even has their own website which clearly says that the program is funded by “international donors, including the UAE”.
In August 2011 the TFG called for the creation of a Somalia Marine Force which sought to combine the training program in the north and south into a nation wide program. Approximately 150 Somalis from the TFG will be sent to Bosaso for training with the PMPF in the next few weeks. The TFG has also notified the UN of their support for the UAE sponsored program.
The UN Arms Embargo prevents companies and even the TFG from training or supplying equipment. The decades old arms embargo was designed to stop the flow of weapons to Mogadishu-based militias but has been at odds with recent TFG efforts to stabilize the country and fight piracy using foreign contractors, most of whom want to train and equip Somalis to patrol their waters, manage what is left of the fisheries and fight piracy.
Puntland On A Roll
Puntland Marine Force on Fox News
Meanwhile further north in Bosaso, the PMPF received another large shipment of supplies and equipment from the MV Noora Moon, according to their website. This was the second major delivery to the Puntland-based effort. The PMPF aim is to remove pirate sanctuaries by late summer using a combination of local troops, professional mentors, impressive equipment (including helicopters, ships and large overland vehicles) and providing a robust program of follow-on development.
Last month the PMPF moved into Eyl, the home of Puntland President Mohamed Farole, and is beginning to establish forward operating bases along the northern and eastern coast of Puntland.
They appear to be on track to remove pirates from Puntland before the SEMG releases their next report this summer, which could be another
potentially embarrassing situation for the UN which pushes for Somalia to solve their own problems yet manages to hinder them using the thirty-year-old arms embargo and the threat of potential financial sanctions and travel bans.
The PMPF, recently featured on Fox News, was featured negatively in two of the SEMG reports and has been a lightening rod for criticism despite its high profile and deep-pocketed sponsor.
In addition to the UN efforts to stall non-compliant programs, the media has also not been friendly to contractors in Somalia. The New York Times and Associated Press chose to feature Bancroft Global's Roger Rouget as a colorful former mercenary, rather than the less sensational job of training Ugandan soldiers to fight in urban environments. The same media outlets also wrote negative stories about Saracen with the inference that there was some negative aspect of the anti-piracy program.
Halliday Finch and their TFG counterparts have escaped the same scrutiny by hiring the former head of the UN’s anti-piracy program, John Steed, who confirmed to Somalia Report that the company has kept relevant agencies informed including the SEMG and will continue to do so in order to meet all guidelines.
Puntland and the TFG have officially notified the UN of their intent to support the PMPF but the UN still considers the PMPF non-compliant because the yet to be confirmed donor has not officially notified the UN Security Council of their intention to support anti-piracy operations. Since Puntland is not a member of the UN, it cannot notify the UN. Although Somalia is a member of the UN, the TFG is not an official government and cannot notify the UN either, according to officials who spoke to Somalia Report, leaving the notification process hanging. The notification, the UN official said, must come from the donor nation.
Despite the UN’s call to regional authorities in Somalia to establish “a system of governance, rule of law, and police control in lawless areas where land-based activities related to piracy are taking place.” The UN has also spent an inordinate amount of time investigating the very firms that have been hired by the Somali government to follow that lead. The UN ban has been continually ineffective in deterring major violators like al-Shabaab, Ethiopia, Kenya, their proxy militias and pirate groups.
The next UN SEMG report is due in July, just before the TFG is transitioned into a permanent government and the deadline President Farole has given the PMPF to end piracy in his regions.