Council Members

The LBBC Business Risk Advisor

Libya is experiencing a period of unprecedented transition. As the country embarks on a programme of national reconstruction and actively seeks foreign partners to supply the necessary products, services and expertise, the potential trade and investment opportunities for LBBC members are exceptional.

LBBC Business Risk AdvisorNevertheless, despite these positive developments, the political and security outlook for the country remains uncertain: the long-term stability of the new governing authority, socioeconomic pressures on the Libyan people, potential religious and ethnic tensions, and the continuing influence of armed militia on the democratic process - all of these factors and more may impact upon the Libyan business environment.

Understanding the current risks associated with doing business in Libya and being able to accurately forecast how the prevailing political and security situation may influence business variables, such as export payments and investment returns, are invaluable attributes for any commercial operation.

The LBBC's new risk advisory digest aims to provide our members and clients with access to relevant, current, and actionable information and informed opinions which they can draw upon when making commercial decisions.

The reports, extracts and links listed below contain strategic advice which will help LBBC members to manage their operational risk and minimize uncertainty with respect to their Libyan business interests and their commercial plans going forward.

This new online service also aims to highlight the broader range of products and services offered by LBBC members that operate in the fields of business intelligence and risk management and to showcase their expertise to an audience that may benefit from a more direct relationship.

We are confident that LBBC members - both experienced Libyan operators and businesses new to the Libyan market - will choose to explore further the strategic advice offered by some of the information providers contributing to this service.

Bloxtons

Bloxtons provides fully bespoke risk management and corporate intelligence services. Through our corporate intelligence services we allow clients to make the most efficient use of their time in country, enable access to interlocutors otherwise not possible and provide thorough screening and due diligence capabilities. In Libya we have established strong relationships with government entities as well as a wide range of non-governmental actors across all regions.

Operating in any fragile environment can be challenging; Bloxtons allows companies to go about their daily business with the minimum interruption whilst ensuring complete duty of care compliance. Some of the services we offer include: full in-country security analysis and briefing; bespoke research and analysis products; re-entry planning; country wide evacuation contingency planning; 24/7 emergency response and tracking; due diligence and investigations.

For further information on the risk management and corporate intelligence services Bloxtons can provide to you and your clients please email enquiries@bloxtons.com or call our UK office +44 (0)20 3239 3363.


Links:

Libya Weekly Strategic Update - 18 September 2014:

Whilst life and businesses return to normal in Tripoli this weeks' strategic Libya update from Bloxtons looks at the continuing high level developments impacting the country. In addition this week’s oil report (available on the Bloxtons website via the below link) explores the challenges faced by international oil companies and the distribution of oil revenues in Libya. Bloxtons have maintained a permanent presence in Libya and can support movements both in and out of the country, conduct advance re-entry planning, provide bespoke political and sector analysis, and act on behalf of clients in commercial matters. To discuss how Bloxtons can support your work in Libya please contact us by email at enquiries@bloxtons.com or call our UK office +44 (0)20 3239 3363 or Australian office +61 (0)3 9028 2873. If this email has been forwarded to you please visit www.bloxtons.com to subscribe directly.

Regional update

Tripoli and the West
Life continues to return to normal in Tripoli with the capital busy and businesses operating as normal. Power cuts have also continued and in some areas such as Tajoura they have been particularly lengthy. There appears to be some support for protests in Tripoli on Friday using the slogan “the HoR does not represent me”. The movement seemed to intensify after the bombings in Gharyan and has links with those in Beida who are calling for a new revolution to begin on 25 September.
Fighting continues in Warshefana however it appears that the Misratan militias are not engaged directly in the fighting and instead retain their focus on Tripoli. Due to the increase in flights to Tripoli and Misrata the fighting in Warshefana should have little impact on client moves in and out of the country as the overland route to Tunisia is now a less convenient route.

The East
The House of Representatives (HoR) in Tobruk rejected Prime Minister al-Thinni’s 18 nominations for a new cabinet and requested that he resubmit no more than 10 names to form a new cabinet by Saturday. Following Zeidan’s visit to Tobruk in recent weeks there have been rumours that he may once again have formal political involvement if al-Thinni is unsuccessful in forming a government.

Forces under the control of General Hafter (Operation Dignity) have continued their aerial booming campaign over Benghazi where fighting remains fierce. There are some indications that Hafter’s forces may be preparing a counter-offensive to regain control of Tripoli.

Political Analysis

While an international conference this week convened in Madrid to help Libya find a way out of its current quagmire, rival factions in Libya are digging in and reaching out, casting a shadow over the Madrid proceedings.

Despite not having a broad popular mandate and being unable to project power throughout Libya, the House of Representatives (HoR) is trying to comport itself as a government would. This week, Prime Minister Abdullah al-Thinni submitted his cabinet to the HoR for approval. The HoR, however, rejected the cabinet and requested a smaller cabinet of no more than ten individuals be submitted by Saturday. Further complicating the situation is that the HoR is often behaving undemocratically itself and having to contravene its own bi-laws in order to pass legislation. In particular, the HoR is weighing whether to implement the Political Isolation Law that was passed by the General National Congress (GNC), the HoR’s predecessor. The Political Isolation Law (PIL) bans individuals associated to varying degrees with the Qadhafi regime from holding public office. There were serious concerns about the conditions under which the GNC passed the PIL, but it nonetheless became law. The HoR, however, has allegedly expressed its intentions to revisit the PIL, but it may be getting ahead of itself and disregarding the PIL before it repeals it.

Meanwhile, the reconstituted GNC continues to lay claim to power in Tripoli. The last president of the GNC, Nouri Abu Sahmain continues to claim to represent the Libyan government, although he is only able to do so in a circumscribed territory within Libya and among a handful of foreign powers. There are rumours that the “GNC” may even appoint its own ministers.
The international dimension of Libya’s conflict continues to unfold as well. Following a visit last week by an HoR delegation to the UAE, GNC president Abu Sahmain allegedly visited Khartoum and two prominent Muslim Brotherhood leaders travelled to Ndjamena to meet with Chadian President Driss Deby. It is worth underscoring that while the Misrata-led alliance that is backing the reconstitution of the GNC is by no means uniformly Islamist, it does contain a strong Justice and Construction Party (JCP) component. One of the fundamental challenges in the run up to Libya’s civil war was that no one militia was capable of decisively knocking out another. All sides were relatively equally equipped, which meant that tensions simmered, but did not boil over. Now, each side is looking for an external catalyst that would augment its capabilities to the extent that it could militarily defeat its opponent (leaving aside the discussion of political legitimacy).

It is likely that the HoR will emerge from the sombre Madrid talks emboldened and encouraged by the support to its legitimacy, but at the same time, it is unlikely that renewed HoR confidence will translate into meaningful governance in Libya. The longer that the HoR is unable to project its authority throughout the entirety of the country, the less likely it is to be able to prevent the GNC’s reconstitution and the more likely it is that Libya will eventually fracture – along what lines remains an open question.

In this week's oil report we look at where Libya's oil revenue is going and the challenges faced by international oil companies operating in Libya. 
 

To discuss how Bloxtons can support your work in Libya please contact us by email at enquiries@bloxtons.com or call our UK office +44 (0)20 3239 3363 or Australian office +61 (0)3 9028 2873. 


Salamanca Risk Management

SRM has been delivering risk management services in Libya since February 2011.  Initial operations involved logistic support to media teams reporting on the Revolution.  From November 2011, SRM capitalised on the experiences of its Country Manager and consultants and assisted a number of major international companies to re-establish their businesses.  


SRM maintains a permanent footprint in Tripoli comprising the Country Manager, an experienced Arabist operations’ team and a number of Libyan facilitators.  A separate office is retained in Benghazi.  Long-term projects in Tripoli, Khums, Birak and Sebha enable SRM to maintain excellent coverage of the nationwide security environment.  Routine enabling support is provided for a wide range of commercial sectors across Libya, including management services, construction, energy, education, media, defence and NGOs.  

SRM is fully licensed to operate in Libya and is in partnership with a Libyan security and risk management company giving strategic reach and insight into key areas of the Libyan Government at national and regional level.  

Links:


Khalifa Hifter Briefing [Friday 23 May 2014]

1 Background 

Khalifa Hifter (‘Hifter’) was born in Benghazi and served as one of Gadhafi’s senior commanders during Libya’s disastrous conflict with Chad during the 1980s. He and several of his men were captured by Chadian forces in 1987 and subsequently disowned by Gadhafi, a policy adopted towards all Libyan prisoners of war. Hifter then went into exile in the US, where he lived for around 20 years in northern Virginia. His proximity to the CIA headquarters in Langley during this time has led to speculation he may have developed ties with the US intelligence community. 

In February 2011, Hifter returned to Libya to take part in the civil war. Although some sources named him as the commander of the rebel armed forces, the National Transitional Council, then the temporary governing authority, denied this and instead afforded the title to Abdel Fatah Younes. Hifter was nonetheless given the rank of Lieutenant General by the NTC, making him officially the third most senior rebel commander. Hifter did not play a significant role in the transitional governments following the revolution, instead returning to his tribal heartland in eastern Libya. 

2 Operation Libyan Dignity 

2.1 Background 
In February 2014, Hifter returned to the public spotlight when he made a televised announcement calling for the suspension of the General National Congress (‘GNC’). However, this action did not garner widespread support; Ali Zeidan, then the Libyan Prime Minister, dismissing his statement as “ridiculous”. However, on 16 May, Hifter re-emerged, this time with 
the backing of several Libyan army units as well as at least two Mirage air force jets, and announced the commencement of Operation Libyan Dignity. 

2.2 Benghazi Assault 
Hifter initially framed Libyan Dignity as a military operation targeting extremist groups in Benghazi - principally Ansar Al Sharia and the February 17 Brigade. The GNC quickly denounced the operation as illegal and called on all army personnel not to take part. It became apparent that the operation had broader aims when on 18 May, Zintani militia brigades stormed the GNC building and captured seven representatives who they claimed were supporting eastern extremists. Although these Zintani militia denied they were acting under Hifter’s direct orders, they did express solidarity with Operation Libyan Dignity. Over the past few days, various government and military officials have pledged their backing for Hifter and Libyan Dignity, whilst the Libyan Muslim Brotherhood has predictably condemned his actions as a military coup. 

2.3 Hifter’s Intentions 
On 20 May, Hifter gave an interview to the Washington Post in which he claimed that Operation Libyan Dignity had been planned over the past two years in response to the assassination and kidnapping of various military and security officials in Benghazi. Hifter added that the aim of Libyan Dignity was to re-establish security in the country, and that he intended to create a unified national army and police force. 

On 21 May, Hifter outlined his plans for a political transition, calling for the GNC to be dissolved and the current government dismissed. He indicated that Libya’s top judicial council should appoint a temporary government to oversee the next elections, with the 60-member constitution committee acting as the government’s legislative arm. On the same day, Habib Lamin, the Minister of Culture, announced his support for Hifter’s plan and stated he no longer recognised the GNC’s legitimacy. Similar announcements by other ministers and GNC delegates are possible over the coming days. 

2.4 Government Response 
As noted above, the government and most delegates within the Islamist and Misrata-dominated GNC have condemned Operation Libyan Dignity as illegal. However, there appears to be a recognition that the GNC in its current form is unsustainable, given the substantial public backing for Hifter. Accordingly, on 20 May, the GNC held an emergency meeting at the Radisson Blu Hotel in Tripoli to seek a solution to the political crisis, resulting in proposals to hold 
elections at the end of June for a new interim legislature and a rerun of the controversial prime ministerial vote won by Ahmed Maetiq. However, after these proposals were announced, it was reported that the GNC meeting failed to reach quorum, and it is unclear whether the measures will be enacted. 

For his part Maetiq has refused to step down, stating in a press conference that “Libyans don’t want to return to having a military body rule them”. 

2.5 Possible Consequences 
Operation Libyan Dignity has yet to develop into a large-scale conflict, despite the clear risks involved in attempting to overhaul the country’s political process. In particular, the restraint exercised so far by the Misratan brigades in not retaliating against the recent Zintani militia movements has prevented widespread clashes from occurring in Tripoli. However, the potential for further violence remains high, particular as Hifter has employed divisive rhetoric in outlining 
his vision for the political transition. Hifter has accused Islamists in the GNC of supporting extremist groups in Benghazi and fuelling the current instability in Libya. 

Hifter’s statements highlight the clear parallels with Egypt’s recent political transition, where General Sisi deposed Mohammed Morsi, the elected President, following widespread public dissatisfaction with the government, before launching a crackdown on Egypt’s Islamist groups. In an interview with an Egyptian newspaper on 22 May, Hifter praised Sisi’s actions and the Egyptian military coup, adding further credence to comparisons between the two men. 

In Egypt, Sisi’s anti-Islamist stance led to violent clashes between security forces and Muslim Brotherhood-led protestors – in Libya the Muslim Brotherhood has not yet mobilised significant street protests, however there remains the potential for future clashes. At the very least the Islamist factions in Libyan politics, led by the Misratan brigades and the Muslim Brotherhood, are unlikely to simply accept Hifter’s suggested steps for the political transition. 

2.6 Contact Details 

Tom Crooke Forward Deployed Analyst 
(Libya Office) 
Tel: +44(0)7551 154247 

Salamanca Group Libya Office 
Tel: +218(0)91 954 2006 

If you would like to contribute to this section of the LBBC website, in the first instance please contact the Secretariat at: secretariat@lbbc.org.uk or call +44 (0) 20 7152 4051