USAID-FUNDED TRANSITION PARTNER ACCUSED OF VIOLATING

UNCLAS SECTION 01 OF 02 KHARTOUM 000100 SIPDIS AIDAC SIPDIS SENSITIVE STATE FOR AF/SPG, PRM, AND ALSO PASS USAID/W USAID FOR DCHA SUDAN TEAM, AFR/SP NAIROBI FOR USAID/DCHA/OFDA, USAID/REDSO, AND FAS GENEVA FOR NKYLOH NAIROBI FOR SFO NSC FOR PMARCHAM, MMAGAN, AND BPITTMAN ADDIS ABABA FOR USAU USUN FOR FSHANKS BRUSSELS FOR PBROWN E.O. 12958: N/A TAGS: EAID PREF PGOV PHUM SOCI UN SU SUBJECT: USAID-FUNDED TRANSITION PARTNER ACCUSED OF VIOLATING SUDANESE NGO LAW KHARTOUM 00000100 001.2 OF 002 KHARTOUM 91 -------------- SUMMARY -------------- ¶1. (SBU) Development Alternatives, Inc. (DAI),a USAID assistance partner, will close out its program in Sudan on January 31, 2008. After a week of negotiations with the Government of National Unity (GNU) Humanitarian Affairs Commission (HAC) over disposition of assets, DAI was told by HAC that it was in violation of Article 7 of the Organization of Humanitarian and Voluntary Work Act and will be prosecuted. According to DAI, HAC reportedly told DAI it is also gathering evidence against USAID with the aim of closing down USAID's programs in Sudan. End Summary. -------------- -------------- BACKGROUND OF DAI CLOSE-OUT AND SEIZURE OF ASSETS -------------- -------------- ¶2. (SBU) Development Alternatives, Inc. (DAI),an assistance partner under USAID's Office of Transition Initiatives' (OTI),was contracted to implement a small grants program in Sudan to help create space for peaceful political change and for longer-term development activities. Due to contractual issues, DAI is closing out its offices and scheduled to leave Sudan on January 31, 2008. Another assistance partner has been awarded a contract to carry out OTI's mandate in Sudan. ¶3. (SBU) For more than a week, USAID and DAI have been in negotiations with the HAC over disposition of DAI's assets, including vehicles and equipment. (Note: This issue has been a thorny one for NGOS throughout 2007 when closing out projects or programs). In 2007, HAC pressured NGOs operating in Darfur to include new language in technical agreements signed between the NGO and the government to turn over all assets to HAC at the close of a project. NGOs then sought donor advice, and USAID and other international donors coordinated their approaches in responding to this issue. End Note.) This marks the first time that a USAID implementing partner has had to deal with the HAC on asset disposition. Through these negotiations, USAID has sought to ensure that DAI's assets can be transferred to USAID's other implementing partners to continue USG-funded work as allowed by Sudanese law. However, the Sudanese government has held that it has the right to determine which organizations or government offices receive DAI's assets. ¶4. (SBU) On January 17, HAC in El Fasher refused to grant exit visas to DAI staff until DAI relinquished all of their assets in El Fasher to HAC officials. (Note: Exit visas are required to leave the country. End Note.) In order to get the remaining staff person safely out of Darfur, USAID authorized DAI to turn over all equipment. Assets are now with HAC in El Fasher. ¶5. (SBU) On January 19, HAC officials in Nyala entered the DAI residential and office compound, where USAID field staff reside and work, and informed USAID that it had been ordered to take DAI's assets in Nyala as well. Upon hearing that DAI in Nyala had already left the region, HAC officials said that they would wait for further orders from Khartoum. ¶6. On January 21, USAID/Sudan Mission Director Patrick Fleuret had a positive meeting with the HAC Commissioner in Khartoum, Hassabo Abdel Rahman, to agree on steps to avoid such an incident as in El Fasher in the future. On January 22, CDA Fernandez made the same points to the new Minister of Humanitarian Affairs and Hassabo (reftel). Although no agreement was reached on the disposition of the assets seized in El Fasher, the two sides agreed to send a team with representatives from both HAC and USAID to El Fasher and Nyala to survey the situation there. Hassabo also expressed his desire to enter into a technical agreement with USAID. USAID participants responded that they would be open to discussing a technical agreement, but urged that the current matter of the equipment seized from DAI would need to be resolved first. -------------- MEETING BETWEEN HAC's NGO DIRECTOR AND DAI -------------- KHARTOUM 00000100 002.2 OF 002 ¶7. (SBU) On January 22, DAI's Chief of Party, who is head of DAI in Sudan, was called into the HAC offices in Khartoum to discuss final close-out of activities with the HAC NGO Director, Moutassim Abulgassim (GOS Sources told Charge on January 23 that Abulgassim is a NISS official placed at the HAC). According to DAI, Abulgassim communicated three points: 1) DAI is in violation of Article 7 of Sudan's humanitarian law. This is based on the allegations that DAI has been providing large sums of money to non-governmental organizations (NGOs) without consulting HAC or establishing technical agreements (Note: Article 7 provides: "Donation and fundraising for the organization's programmes shall be undertaken though a project document to be approved by the Commission, as may be prescribed by the Regulations." End Note.); 2) the Sudanese government has "every right" to assume that DAI is supporting opposition activities aimed at destabilizing the government, as well as directing activities against the internal security of the state; and 3) DAI, as the implementer of these activities, can and will be prosecuted to the fullest extent of the law, including imprisonment. ¶8. (SBU) According to DAI, the HAC Commissioner requested that within 48 hours DAI resolve a labor dispute over severance packages to outgoing staff, provide proof of procurements of commodities for in-kind grants, write an official statement from DAI to USAID reporting that DAI has been informed that it has violated Article 7 of Sudan's humanitarian law, and that DAI be prepared to send staff to El Fasher and Nyala for handover of assets, if required to do so by the HAC Commissioner. HAC communicated to DAI that if these conditions were satisfied, then DAI would obtain exit permits from Sudan. ¶9. (SBU) DAI further reports that Abulgassim stated, at the conclusion of the meeting, that the Sudanese government is gathering evidence to support its allegation that USAID is illegally meddling in the internal affairs of the country with the intention to close down USAID programs in Sudan. Abulgassim reportedly also stated that the government was preparing a media campaign to that effect. CDA will raise these allegations with the next senior Sudanese official he meets. -------------- ONGOING DAI RESPONSE -------------- ¶10. (SBU) DAI is working to comply with all HAC requests within the 48-hour time period. DAI has a country agreement signed with HAC to implement its activities. As a matter of routine, DAI requires all of its grantees to obtain HAC approval, which is documented in its agreement with the grantee, of all events and activities that it supports. As of January 23, DAI has only handed over assets in El Fasher. ¶11. (SBU) Comment: We are very concerned over this escalation of the asset disposition issue and administrative close-out of the DAI program, and are working to ensure that the issue is resolved quickly. Although the HAC reportedly just extended the moratorium easing restrictions to humanitarian access (according to media reports) for Darfur, we expect that the struggle over access to Darfur will only escalate as UNAMID deploys more fully and western NGOs seek to assist with census and elections preparations. As is often the case in Sudan, the questions will be: how orchestrated is this campaign of petty harassment, how far will they go and how enshrined is it as Sudanese state policy? FERNANDEZ