MEETING WITH PRESIDENT-ELECT GUEBUZA ON OPIC-

UNCLAS SECTION 01 OF 02 MAPUTO 000025

SIPDIS
STATE FOR AF/S, AF/EPS, EB/IFD/OIA
MCC FOR BRIGGS AND GAULL
STATE PASS OPIC FOR WATSON AND SHORE
SENSITIVE
E.O. 12958: N/A
TAGS: EINV MZ OPIC
SUBJECT: MEETING WITH PRESIDENT-ELECT GUEBUZA ON OPIC-
SUPPORTED NYATI BEACH LODGE INVESTMENT

Refs: A) 2004 Maputo 1446; B) 2004 Maputo 1539

Sensitive but Unclassified - Business Confidential
Information. Not for Internet Distribution


1. (SBU) Summary: OPIC-supported investor Dave Herbert
continues to be under threat from a claimant to the land on
which his Nyati Beach Lode is located. It appears that
plans by the claimant to take possession of the lodge and
evict guests on December 31 were frustrated when the
Minister of Interior told the provincial police not to
enforce a recent court order. On January 4, Charge, OPIC
Senior Advisor to the President and Director of African
Affairs Marysue Shore, and Herbert informed President-elect
Armando Guebuza of developments. Guebuza was sympathetic
but noncommittal. Herbert expects that until the High Court
(currently on vacation until March) rules, the plaintiffs
would continue to attempt to take possession of the lodge.
End Summary.


2. (SBU) Reftels describe background of the case involving
OPIC-supported investor Dave Herbert. On December 30,
Herbert learned that the plaintiff who is seeking to obtain
control of his Nyati Beach Lodge had received an order from
an Inhambane judge allowing him to use the provincial police
to enforce an earlier judgment that gave the plaintiff
rights to the land on which the lodge stands. This order
was issued even though in late November the Attorney General
made a formal recommendation to the High Court that the
judge's earlier ruling be overturned. Herbert understood
that the plaintiff planned to use the police to evict guests
from the lodge and take possession on December 31. Herbert
alerted OPIC, which alerted post. Charge informed Foreign
Minister Leonardo Simao, who expressed concern and promised
to call the Attorney General and the provincial governor.
The following day, Herbert told post that as a result of his
own team's efforts, the Minister of Interior had told the
Inhambane police chief not to enforce the judgment. Herbert
expected the situation to remain calm for a few days but
that, until the High Court ruled, the plaintiffs would
continue to attempt to evict him.


3. (SBU) On January 4, Charge, Shore, and Herbert met with
President-elect Guebuza to bring him up to date on Herbert's
difficulties and OPIC's concern. Shore opened the meeting
by saying that in his meetings in Washington last summer,
Guebuza had asked to be kept informed about the progress of
OPIC-supported investments. Guebuza appeared to be familiar
with some of the issues involved. Herbert explained the
situation and emphasized his interest in following the law.
He stated that the law had not been followed in the process
to date, but that the Attorney General recognized the
problems and supported his side in the case. He
particularly cited the Attorney General's recommendation to
the president of the High Court that the Inhambane court
judgment be overturned (ref b). Herbert also noted the
damage an eviction would do to tourism in Mozambique,
emphasizing that he employs 70 Mozambicans at Nyati Beach
Lodge and a total of 300 at his properties in Mozambique.
Shore highlighted the importance of a quick High Court
decision and expressed concern that the president of the
High Court had apparently not seen the Attorney General's
recommendation over a month after it had been sent to the
court. She also explained that OPIC had suspended new
lending projects in Mozambique.


4. (SBU) Guebuza was sympathetic but noncommittal, saying
that he was sorry to hear about the situation but that he
was not sure what he could say. He said he had some
information but did not think he had it all, especially the
details of the various court documents. He advised Herbert
to be patient, and he noted that there were different
interpretations of the law, which was why courts existed.
He cited his limitations as not yet being in office but said
he would "go through" the matter. He also told Shore that
he was very interested in having OPIC investment, which he
said sent a good signal to other investors.


5. (SBU) Herbert and Shore met on January 4 with lawyers
representing Nyati Lodge, the Vilanculos Coastal Wildlife
Sanctuary, OPIC, and Minister of Environment John Kachamila,
who is on the Sanctuary's board. Herbert told post on
January 5 that his legal team planned to file additional
appeals to increase the pressure on the Attorney General,
but he acknowledged that it would not be appropriate to
pressure the High Court directly.
DUDLEY