A settlement to the 19-year-old war between the predominantly Arab and Islamist government in Khartoum and the mostly African, non-Islamist rebels of the Sudan People’s Liberation Army (SPLA) is unlikely to be achieved any time soon unless the United States and Europe exert much stronger pressure urgently, according to a new report by an international think tank that specializes in conflict resolution.

In particular, the Brussels-based International Crisis Group (ICG) is calling on the U.S. Congress to enact the long-pending Sudan Peace Act (SPA) that includes penalties against foreign oil companies–currently from Canada, western Europe, China, and Malaysia–that invest in Sudan’s booming but increasingly bloody oil sector.

Although both houses of Congress passed the SPA by large margins last year, a conference committee to reconcile the two versions has been held up for months by Sen. Phil Gramm at the behest of the Bush administration, which argues that the bill’s sanctions would set a precedent for political intervention in U.S. capital markets. The House version would ban the target companies from being listed on U.S. stock exchanges.

“It sends all the wrong signals to the bourses all around the world and those who control (them),” said Assistant Secretary of State for African Affairs Walter Kansteiner during a rancorous hearing before the House International Relations Committee in early June.

The ICG report, “Dialogue or Destruction? Organizing for Peace as the War in Sudan Escalates,” also recommends that Washington continue to veto loans or debt forgiveness for Sudan from international financial institutions like the World Bank and that the European Union (EU), whose members have engaged in a “critical dialogue” for several years with the National Islamic Front (NIF) regime, make aid and full normalization of relations conditional on its striking a comprehensive agreement with the SPLA.

“The positions of the government and the rebels are too entrenched to reconcile through conventional facilitation alone,” says John Prendergast, codirector of the ICG’s Africa program. “A more assertive diplomatic effort is needed, backed by much greater leverage than currently exists.”

The ICG report is the latest in a series of blasts directed against both the EU’s ongoing flirtation with Khartoum and the Bush administration’s failure to back up its tough rhetoric against the regime with stronger measures.

The war, which is believed to have taken more than two million lives and displaced at least four million people, has intensified in recent months despite some progress achieved by Bush’s Special Envoy, former Sen. John Danforth, on several “confidence-building measures,” including a ceasefire in the Nuba Mountains, to which both parties agreed earlier this year.

The Nuba ceasefire, which has held now for several months, has permitted both sides to divert forces to the main battlegrounds in the war, especially the Western Upper Nile region, which lies at the heart of the oil fields that are earning the government some $500 million a year–most of which is being used to buy weapons, such as helicopter gunships and warplanes, to prosecute the war.

In early June, the United Nations warned that virtually the entire population in the war-affected part of the region–about 1.7 million people–were at risk of famine as a result of both increased fighting and what many critics call Khartoum’s “scorched-earth” strategy in areas around the oil fields. So far this year, as many as 300,000 people have been uprooted from their homes in the region, according to the U.S. Agency for International Development (USAID).

Making matters worse, the NIF effectively cut off relief supply lines into the region in April and subsequently banned all relief flights into the area from outside government-controlled territory. The move was a clear violation of a 1989 accord between Khartoum, the SPLA, and the UN, which operates Operation Lifeline Sudan (OLS). Nevertheless, both the UN representative on the ground and the first U.S. chargé d’affaires to be posted to Khartoum since Washington all but closed its embassy there in 1996, Jeff Millington, went along with the ban.

USAID chief Andrew Natsios denounced Khartoum’s move as “not acceptable,” stressing that tens of thousands of lives were at stake. The issue has fueled ongoing tensions between Kansteiner who, while denouncing Khartoum’s conduct of the war, has praised its cooperation in Washington’s antiterrorist campaign, and USAID, which appears far more focused on the desperate humanitarian situation in the south.

On the diplomatic front, despite the resumption two weeks ago of direct talks in Nairobi under the auspices of the Intergovernmental Authority on Development (IGAD)–a grouping of regional states under the chairmanship of Kenyan President Daniel arap Moi–the two sides have reported no progress on issues that divide them.

The SPLA continues to insist on self-determination, including a referendum that offers the people of the south the option of secession from Sudan, a point guaranteed them in IGAD’s Declaration of Principles (DoP) that was signed by both parties in 1997 and supported by Washington.

While many other issues divide the two parties, including the DoP’s guarantee of religious freedom and the equitable allocation of oil revenues, the most difficult issue to be resolved in the peace process, according to the ICG, is self-determination.

“Self-determination for the South stands above the others for its potential to be the ultimate spoiler of the peace process,” according to the report. “The commitment of those in the South–the core of the national insurgency–to achieving a referendum that offers them a choice of independence continues to grow. It is matched only by the government’s opposition to any referendum that would include an option for the breakup of the country.”

In a report submitted to Bush in mid-May, Danforth explicitly recommended against secession as an option, arguing that autonomy for the South within a unified Sudan was both preferable and more feasible. He also called for a formula for sharing the proceeds from oil sales as an incentive for persuading both sides to agree to extending the Nuba ceasefire to the oil fields.

The two recommendations–reportedly made largely at the behest of Danforth’s chief aide, retired Ambassador Robert Oakley–were rejected outright by the SPLA, which argued that a ceasefire covering the oil fields would deprive it of the one weapon–attacks on Sudan’s oil infrastructure–that was most likely to force Khartoum to seriously address its demands for self-determination as reflected in the DoP.

As a result, the State Department has had to spend considerable diplomatic energy explaining to the SPLA, as well as the coalition of Christian Right, human rights, and black U.S. lawmakers who support its cause, that Danforth’s recommendations represented only his personal opinions and did not reflect official U.S. policy. While Danforth remains Special Envoy, Oakley has been let go, and Kansteiner and his deputy, Charles Snyder, appear to be firmly in charge of the policy.

The problem, however, is that no one is very clear at the moment on what the policy is; specifically how hard and how urgently the administration is willing to push its EU allies and the parties to an agreement that is consistent with the DoP. Its opposition to capital market sanctions–and its ability to veto them–take away what most observers believe is the strongest available source of leverage.

“(Khartoum) currently has no incentive to end the fighting, and neither Sen. Danforth nor the Bush administration has provided one,” according to Michael Young, chairman of the quasi-governmental U.S. Commission on International Religious Freedom. “The only way to get Khartoum’s attention is to curtail its oil revenues (through enactment of the SPA).”

A similar position is taken by the Congressional Black Caucus, which recently sent an unusually strong letter to Sen. Majority Leader Tom Daschle demanding that he use his influence to expedite the selection of Senate conferees. But neither the administration, nor Gramm on its behalf, is inclined to budge on the issue, preventing any breakthrough.

Oil Revenues to Buy Jets

Like a number of other Sudan specialists, Prendergast argues that time to bring the parties to a final settlement may be fast running out.

“Nine months have been spent primarily haggling over humanitarian agreements rather than focusing on the war’s root causes,” according to the report. “Khartoum is using oil revenues to buy increasingly lethal weapons, including MiG fighters from Russia. The SPLA is boosting its manpower and has also acquired more lethal arms. January to June 2002 saw the bloodiest battles yet in the 19-year war.”

Unless the SPLA can mount an effective counter-offensive to the government’s recently concluded dry-season campaign, the military situation will be effectively stalemated, at least until the next dry season when Khartoum’s forces, backed by more and better weapons, will try once again to extend its control southwards to open new oil fields for production.

That is why, according to the ICG, maximum pressure to achieve success in Nairobi, where the United States, Britain, and Norway all have official observer status, is required.

“The window of opportunity for peace in Sudan is beginning to close,” according to the report. “A much more robust effort must be undertaken both by the IGAD states and, in their support, the international community if peace is to be made.” That means “the deployment of serious leverage,” according to Prendergast.

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