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 - 24 October 2014:

This week’s strategic update from Bloxtons looks at radical elements in the east of Libya and the role they will play in Libya’s future as well as the ability of the international community to act. In addition this week’s oil report (available here) looks at the upcoming OPEC meeting and output levels.

Regional update

Tripoli, the West and South

Tripoli has returned to almost complete normality, indeed in many regards it is quieter (in a positive way) than it has been since the revolution. Whilst most Western embassies have yet to return given the continuing split (and it must be noted the risk of further associated violence) there are positive indications that international flights will become easier. Basic but worthwhile attempts have been made to increase the capacity of Mitiga Airport and air traffic control systems are again fully functioning. The Libyan owned Afriqiyah Airways has developed on a pre-existing agreement with an Irish company to allow for the re-start of flights from Europe to Misrata. It is understood that London will not be an initial destination but that Dusseldorf will be. In addition it is likely that both Turkish Airlines and Air Malta will also soon resume flights.

Recent heavy fighting in Kikla (150km south of Tripoli) between Zintani militia and non-Misratan elements of the Misratan-led alliance underlines both the fragility and complexity of the current situation. Kikla is of strategic importance with its position at the beginning the major route between Jabal Naffusah towns and its relative closeness to Tripoli.

The East

Intense fighting has continued in Benghazi with forces loyal to General Hafter seemingly making some territorial gains in recent days. Tobruk remains peaceful and with relatively easy international flight access. Operation Dignity and the al-Thinni Government have suggested they are preparing for an advance on Tripoli, however this appears unlikely to materialise in the short term.

Political Analysis

There is a lot going on in Libya at the moment and aside from the calm in Tripoli much of it is going wrong. In the midst of the large questions regarding who is winning the battle between the loosely Islamist Operation Libya Dawn faction and the anti-Islamist Operation Dignity faction; whether oil exports collapse; and who is in control of the Libyan Central Bank, the fall of Derna in eastern Libya to salafi jihadis and attempts to establish an Islamic emirate there have been overlooked. But Derna is important, not necessarily as a bellwether for the rest of Libya, but because whoever is the victor in the struggle for power in Tripoli and Benghazi will ultimately have to deal with elements for which Derna is currently a stronghold. It is a city that refuses to recognize the authority of anything other than a state founded on extreme interpretations of the Quran and hadith and which is home to groups with links (and members) in radical organisations operating in the Iraq, the Sahel, Syria, Tunisia and Yemen.

The international community is however stretched thinly with Russia, ISIL and domestic political cycles all arguably staking a greater claim on limited capacity than Libya. There has, of course, been continuous and often low profile activity by the international community both politically and militarily in seeking to help support and stabilise Libya. However this has all been relatively low level with a sense of remoteness, whether it be the National Dialogue initiative (which frustratingly was usurped by events over the summer before it had gained traction) or the French action from Madama, Niger (with US and Spanish support).

A significant event that would necessitate immediate international intervention is judged unlikely given the limited possibilities for strategic or critical moral issues to develop (there is a UN mediation process in place; global oil prices are low; there are few Western nationals or business infrastructure projects that could be targets (except for those linked to Italy’s energy security); illegal migration is only a major concern to Italy (and to  lesser extent Spain) and the terrorist threat may be containable (via external choke points and remotely). The one additional lever left to the international community which would not be resource intensive would be to expand the sanctions regime which was already authorised in August by UN Security Council resolution 2174 (2014). The timing and identification of entities to list is complicated by the ongoing and ever in flux political situation, with Bernardino León the UN Special Representative to Libya recently indicating a preference to delay any expansion of the sanctions regime.

Over the course of the last several months the Shura Council of Islamic Youth, which is loosely affiliated with Ansar al-Sharia, has steadily increased its control over Derna as the anti-Islamist Abu Saleem Martyrs Brigade has weakened. Over the summer, the Shura Council organized a parade through the city in a blatant display of both its firepower and its staying power. It has subsequently sworn allegiance to the Islamic State in Iraq and Syria (ISIS), although its alleged parent organization, Ansar al-Sharia, has yet to officially do so (but has said that it may swear allegiance to ISIS soon). Most recently, the Shura Council established an ostensible “Islamic Court” in Derna to try individuals who have been arrested by its “Islamic Police.” While Derna has managed to attract some non-Libyans who support the establishment of an Islamist emirate in Libya, it has not become the kind of magnet for salafi jihadis that Iraq and Syria are. There is no indication that numbers are swelling in Derna to support the Shura Council’s initiative. This may be due to the fact that there is a relatively large number of salafi jihadi groups throughout North Africa – including al-Qaeda in the Islamic Maghreb, al-Mourabitoun, MUJAO, the Uqba ibn Nafi Brigade, Ansar al-Tawhid, and most recently Jund al-Khilafa fi Ard al-Djazair – and sympathizers are most likely to try to join ones closest to their homes. Those sympathisers in Libya are also in a very small minority, the country as a whole is overwhelmingly moderate albeit with a post-revolution vacuum of governance which has led to an increase in both political and ideological factions as well as space for minority groups to exert influence untamed.

It is important to remember that Derna has long skewed salafi jihadi. Derna was among the cities from which the largest number of foreigners fighting against coalition forces in Iraq had come between 2004 and 2006. It is thus not much of a surprise that Derna has been overtaken by salafi jihadis, especially given the failure of governance elsewhere Libya.

The bigger question is how the winner of the dispute between Operation Dawn and Operation Dignity will uproot salafi jihadi leadership in Derna once there is a definitive government in Tripoli and Benghazi. Were Operation Dignity and the House of Representatives to emerge victorious, this would likely lead to further military campaigns against Derna itself. If, however, Operation Libya Dawn and the Misrata-led Alliance (MLA) which encompasses some Islamist militias carry the day, this would pose a difficult challenge and pit Islamist against radical Islamist, a situation which would constrain both parties’ options and could lead to a protracted mix of clashes and negotiations. In either scenario, the establishment of the Shura Council of Islamic Youth in Derna means that portions of Libya will remain unstable and insecure even after current clashes in Tripoli and Benghazi are resolved.


Oil Sector 

This week’s oil report looks at the forthcoming OPEC meeting and Libya's current output.

The weekly Libya oil report is now a paid subscription service. To ensure continued access and to discuss subscription options and Bloxtons' range of bespoke services please contact Sarah Price: sarah.price@bloxtons.com

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