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.
Nevertheless, 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 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 email@example.com or call our UK office +44 (0)20 3239 3363.
Libya Weekly Strategic Update - 28 August 2014:
In this weeks' strategic Libya update from Bloxtons we consider whether the ghibli has passed in Tripoli or if it is merely the eye of the storm with more conflict to come. Whilst all parts of the country remain fragile we advise against travel to Libya. Bloxtons have however 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 firstname.lastname@example.org 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.
Tripoli has been far quieter in recent days following the Misratan led alliance successes, not least in taking control of what is left of Tripoli international airport. There has been a noticeable reduction in both small and heavy weapon fire in Tripoli in comparison to the previous two weeks. There is also a corresponding increasing in the number of people on the streets, although the pattern of life is still far removed from normal.
The Misratan led alliance have given Warshefana three days (from Wednesday) to hand over fighters and other individuals perceived to have committed crimes. Given their recent successes it appears that the Misratan led alliance are now looking to open other fronts such as against the Honourable Tribes (based in Warshefana and with close links to the former regime). Some of the individuals could move across the border to Tunisa but it is unclear how any escalation would pan out given the geographical and logistical complexity of fighting the Warshefana over such a large area.
On the back of recent losses in Benghazi it seems likely that Benghazi airport will be completely lost by forces loyal to Hafter in the coming days. There are some signs of a drive to push Islamist aligned fighters towards Tobruk. This would raise interesting questions given Tobruk’s relatively benign state (which includes continuing international flights) and could be a tactic formulated in order to increase Egyptian involvement (given Tobruk is only 150km from the Egyptian border, compared to 280km for Benghazi).
Dependent upon the perspective of those reporting recent events in Tripoli the forces that this week successfully took over what is left of Tripoli International Airport cover the full gambit of characterisation including Misratans, Islamists and revolutionaries. The reality is far more complex and without an agreed, accurate and simple label to describe them. The group is certainly comprised in large parts of Misratan brigades but by no means wholly. Although there are Islamist elements they fight alongside Misratan forces who in the main could not be descried as Islamist, and some quite far from it. The term revolutionaries is also not accurate, for example the elements from Khoms and Zawiyah (two of the last towns to support the 2011 revolution) cannot easily be described as revolutionaries. Whilst this could easily be seen as a semantic argument it is symptomatic of the highly complex tribal, regional, and ideological relationships in Libya. For our part Bloxtons currently refers to them as the Misratan led alliance (MLA) which aims to strike a balance between being accurate and not overly complex. Please do let us know your views however.
As discussed there is no overriding ideological tie between many of the elements that form the MLA and thus there is a concern that it will struggle to remain cohesive if the hostilities in Tripoli continue to reduce and their grip on power in Tripoli increases. In the short term opening new fronts (i.e. Warshefana) may both strengthen their gains so far and act as a short term glue to keep the elements coalesced but the medium term is less clear. Which leads to the question, are we in the eye of the storm or has it passed? Whilst impossible to predict with any certainty, the underlying political stability and lack of cross-country dominance by any single group will render it difficult for any form of sustainable and positive solution to develop. The solution must be political and currently the signs of positive political progress are very limited.
The political competition is indeed heating up as the head of the former General National Congress, Nouri Abu Sahmain, intensified his refusal to recognise the legitimacy of the House of Representatives. In addition, a key member of Prime Minister Abdallah al-Thinni’s cabinet offered his resignation, underscoring the precariousness of the current government. Subsequently on Wednesday the UN Security Council passed resolution 2174 (2014) which aimed to tighten the existing sanctions regime to also include those “individuals and entities…engaging in or providing support for other acts that threaten the peace, stability or security of Libya, or obstruct or undermine the successful completion of its political transition”. The resolution also appeared to give support to the HoR and Constitutional Drafting Assembly by calling on them to “carry out their tasks in a spirit of inclusiveness” and called “on all parties to engage in an inclusive Libyan-led political dialogue in order to help restore stability”. It is unclear if UNSCR 2174 will be applied so broadly by the Sanctions Committee as to cause difficulties for the likes of Abu Shamain who it could be argued is not supportive of the HoR political transition.
Abu Sahmain had already made his opposition to the HoR known when, citing security concerns, it refused to convene in Benghazi as had initially been planned and met for the first time in Tobruk. Abu Sahmain claimed that because no handover ceremony had been held and because the GNC had not authorized the HoR to meet in Tobruk, the HoR was illegitimate. He has now doubled down, allegedly organizing a meeting of former GNC members in Tripoli to possibly “elect” a new prime minister to replace al-Thinni. Al-Thinni and HoR President Aqila Salah dismissed Abu Sahmain’s machinations as irrelevant and without merit. Nonetheless, the point is clear: Abu Sahmain and his Islamist supporters are making a gamble that they can revive the government that they controlled and marginalize the new government under the control of al-Thinni and Salah. The fact that Abu Sahmain is in Libya’s historic capital, Tripoli, and not isolated in the far east of the country like al-Thinni lends credibility to his stratagem. In addition, there are reports that Abu Sahmain’s supporters may be preventing his detractors in the HoR from returning to Tobruk, thereby further handicapping the HoR.
In an additionally worrying sign, Libya’s Minister of Justice has offered his resignation. Salah Bashir al-Marghani said that current conditions prevented him from being able to carry out his duties. Originally from Benghazi, but a long-time Tripoli resident, al-Marghani was a tremendous force for democratization in Libya. He is widely recognized as Libya’s leading human rights advocate in addition to being a successful commercial lawyer. First appointed by ousted Prime Minister Ali Zeidan, al-Marghani was both a technocratic and a revolutionary. Al-Marghani was educated in the UK and worked in both Libya’s private sector, as a founder of the MTL Law Firm in Tripoli, and the public sector, serving as a consultant to the Ministry of Justice during the Qadhafi regime. At the same time, he served as a conduit for NGOs investigating the Qadhafi regime’s human rights record. In August 2012, he was honoured by Human Rights Watch for his contribution to protecting human rights during the final years and months of the Qadhafi regime. In addition, Human Rights Watch recognized him for his role in securing documents that will potentially contribute to investigations into the Qadhafi regime’s crimes against humanity. While his resignation may not be a serious blow to the al-Thinni government (after all, it faces much more serious problems than the resignation of one minister, albeit an important one), that al-Marghani chose to throw in the towel is a very bad sign for the transitional process’s commitment to democratization.
Further to last week’s report there was qualified confirmation from various sources including the US that Egypt was involved in the air strikes that hit Mistratan led alliance (MLA) targets in Tripoli. However much uncertainty remains regarding the source of the attacks, which ultimately appear to have served only to increase the pace of the MLA’s progress in Tripoli and did little to hamper it. It is unclear if other countries, such as the UAE or Saudi Arabia were also involved or if there was additional Western nation backing.
It is surprising that the US, who have substantial assets in the region, and Algeria who it is understood increased its radar coverage post the 2011 revolution to cover far into Libya (including over Tripoli), have not been able, or perhaps more likely, willing to provide unqualified confirmation of the source of the attacks. One potential explanation could be that the US and others were caught off guard and that Egypt (possibly with UAE and Saudi backing) moved more quickly and overtly than had been expected. Given the nations alleged by some to have been involved (Egypt, UAE and Saudi) which all have close ties with the West, others will point to the desire of Western nations to prevent a complete state failure in Libya and question if they were used as proxies.
As Prime Minister al-Thinni highlighted in a recent press conference, oil production and oil exports continue to rise, with El-Feel, Sharara and Waha coming back on line and replenishing storage facilities at export terminals. The NOC reported on Monday that production had increased to 650,000 bpd. Thus, while the political and security situations continue show no sign of progress, with each side refusing to back down and demonstrating a willingness to go the distance both on the battlefield and politically, oil production is creeping back up and a reminder to the warring factions of exactly what is at stake. The UN Security Council resolution passed on Wednesday also specifically stated that sanctions could be applied to individuals or entities “providing support for armed groups or criminal networks through the illicit exploitation of crude oil or any other natural resources in Libya”.
What is remarkable, however, is that production is being brought online almost entirely by Libyan personnel because most foreign IOC staff quit Libya a long time ago. This is a testament to the Libyan staff, a reminder of the surprisingly quick return to production in the aftermath of the 2011 revolution and bodes well for Libya’s economic future if the political and security situations can be resolved. The removal of Omar Shakmak as Acting Oil Minister, to be replaced by Mustafa Sanalla (current Chairman of the NOC who will also retain the Chairman’s role) is an indication of political forces at work to tighten up their grip on the countries’ wealth and potentially also his success in overseeing a slow but steady increase in production through difficult times.
To discuss how Bloxtons can support your work in Libya please contact us by email at email@example.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.
Khalifa Hifter Briefing [Friday 23 May 2014]
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
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
Tel: +44(0)7551 154247
Salamanca Group Libya Office
Tel: +218(0)91 954 2006
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