What Tunisia’s Phosphate Crisis Says About Its State of Affairs

Author: As-Safir (Lebanon) Posted May 29, 2013

While phosphate is a pillar of the Tunisian economy, it also represents a social time bomb that nearly ousted the regime of former President Zine El Abidine Ben Ali in 2008, when the residents of the mining basin in southwestern Tunisia rose in rebellion, demanding their rights to employment, development and equitable distribution of wealth. Post-2011, protests paralyzing phosphate production became so rampant that the government announced in April the suspension of negotiations with the protesters. It also began a mass media campaign to explain the “phosphate crisis,” stressing these statistics:

SummaryPrint The struggles faced by Tunisia’s economy following its 2011 popular uprising have been exacerbated by a decrease in phosphate production, one of the country’s most lucrative resources.
Author Sofian al-Raqiqi Posted May 29, 2013
Translator(s)Steffi Chakti
  • Production fell from 8 million metric tons a year to 2.7 million metric tons in 2012.
  • Financial losses reached 3 million dinars ($1.82 million) a day, amounting to a loss of nearly 2 billion dinars ($1.22 billion) in 2011 and 2012.
  • The phosphate company’s workforce tripled from 9,000 to 27,000 workers over the course of three years.

The government even went so far as to threaten to shut down the Gafsa Phosphate Co. The threat baffled [Tunisians], as the company serves as the only operator in mining basin cities and because phosphate is considered a significant source of hard currency in the country. Additionally, the government is currently experiencing several crises of its own, so this sort of escalation would not balance in its favor. Is the threat a political maneuver or an official admission of failure? If the latter is true, does the admission pave the way for the state to give up on “reforms” in the phosphate sector?

Even though the official rhetoric considers the Jan. 14, 2011, Revolution, which toppled Ben Ali, a societal revolution whose flame has been sparked inside the mining sector, all of the post-revolution governments have only shallowly looked into the problem, resulting in the adoption of ineffective administrative solutions.

The government regards the “phosphate crisis” as a mere blip in the flow of production caused by protests that are first and foremost demanding employment. Through the lens of the government, the crisis is temporary, isolated, and related to a lax security and social situation. Some officials even believe that the crisis has “separatist” aspects, and is even a political conspiracy fomented by “extremists who aim to sabotage the economy for political purposes.”

Seeing the results on the ground, this view — along with the “administrative adjustments” that were suggested — have not stopped the social situation from worsening. The crisis has persisted for more than two years and the government is yet to propose any plans to solve it. On the contrary, it is seems to be repeating its history of mistakes, notably:

  • Believing that the Ministry of Industry is capable of dealing with the problem and finding solutions, while, in fact, the crisis is national and should have been set as a government’s priority.
  • Focusing on a sole aim, which is “restoring the production to pre-2011 levels”, and assuming the possibility of achieving such a quantitative target without carrying out any fundamental reforms.
  • Blaming the “other” for the crisis and depicting it as a part of the political conflict over power.
  • Turning a deaf ear to demands regarding the transparency and independence of companies and the need to review extraction policy.

In general, the government has opted for the “crisis management” method. It was content with traditional placating measures characterized by clientelism, quotas, politicization and short-sightedness, etc. Moreover, offering concessions outside of a comprehensive, announced plan gives the impression that the government is weak and whets an appetite for new demands, in addition to thwarting the hope of reaching a radical and permanent solution.

Clearly, the longer the crisis holds its ground, the fiercer the protesters become. On the other hand, however, the prolonged crisis is [serving to] further highlight the confusion of the government and its attempt to “get ahead of the game.” It is pushed to dealing with the phosphate problem, the institutions, the concerned parties and civil society groups through its traditional, condescending, slow, non-transparent way, as proved when the government recently removed the general manager of the phosphate company and rejected the plan he proposed to save the company, the sector and the region at a cost that does not exceed 400 million dinars ($2.43 million).

Post-Jan. 14, 2011, and in tandem with the halt of phosphate production, oil production was also stopped in some fields, but has resumed its [normal] activity. Why then did the ministry succeed in putting an end to the oil protests but not the phosphate protests? Is it because the phosphate companies, unlike oil companies, are fully state-owned?

These questions shift the focus from “societal protests” to the availability of the political will [to solve the problem] and to how much the government’s approach correlates with reality. For more than a century, the policy of extraction has been socially unfriendly in general, with the sole aim of “increasing profits through whatever means.” This calls to the minds of the residents of the mining basin the era of colonization that was characterized by plunder, since their region is still mired in poverty, disease and pollution. Furthermore, the policy of extraction was not changed, even though countries that underwent democratic changes reviewed the natural resource management policies, restructured strategically, reviewed the legal framework, and thoroughly looked into the contracts and previous policies, to favor development and promote social justice.

The phosphate sector is in need of a clear vision, an integrated plan, new values that are consensually agreed upon, political boldness and transparency. The latter should be applied to the “societal deals” that were made after the revolution under the pretext of “restoring production” and which seemingly aim to find social and union balances and political alliances.

Regardless of the nature and reasons of the “phosphate crisis,” it is utter insanity for this catastrophe to persist for two years despite its high financial and social cost, political risks and the threats it poses to the future of the sector. In addition, the crisis weakens the sector itself, especially under the pressure of many parties including political powers, residents, syndicates and foreign companies.

These problems will, more than ever, render the sector a victim of the blackmail of some parties that are waiting for favorable conditions to pass dubious projects, adjust illegal statuses or acquire exceptional privileges. Whether the crisis is related to phosphate, energy, the government, the Ministry of Industry, the public institutions or the syndicates, the only constant today is that the strategic sector is struggling with problems that are more essential than the apparent ones, that is to say protests and the production crisis.

The extractive industries sector is undergoing a war of positioning and a struggle to redistribute the roles between “the corrupt networks” that were mentioned by some ministers and highlighted in official reports, including the 2011 report of the fact finding commission on bribery and corruption and the 2012 report of the Cour des Comptes (Court of Audits) on the gas sector. The first report mentioned names of Tunisians and foreigners, in addition to officials in public and private sectors, proving the existence of corruption networks. The report secured financial transaction documents for the members of this network outside Tunisia. The second report, however, affirmed that massive violations were taking place in the energy sector on all levels.

Even though the prime minister promised transparency in this sector and announced his will to join the Extractive Industries Transparency Initiative (EITI), the government is discussing without any plan in hand some of the most important energy and mining projects, including the phosphate mine in Srawartan, an oil refinery in Skhira, the gas pipeline in the south and shale gas extraction permits. Some politicians hold the “phosphate crisis” and protesters accountable for the dependency of Tunisia on the International Monetary Fund, since the large loans Tunisia is asking for equal the losses of this sector. Thus, failure is justified with another failure and the main problems are overlooked.

Reducing the phosphate crisis to a production crisis, as seen by the government, or an employment crisis, as seen by residents, postpones any serious discussion in regard to developing the sector by:Scrutinizing and supporting state control over the concluded contracts and publishing an official report for that purpose.

  • Restructuring the sector and developing its legal framework, especially when it comes to granting and monitoring permits.
  • Issuing periodic reports about the projects, expenses and revenues.
  • Responding to all the violations mentioned in the reports of the Fact Finding Commission and the Cour des Comptes, in addition removing and trying all the accused parties.

The above article was translated from Assafir al-Arabi, a special supplement of As-Safir newspaper whose content is provided through a joint venture of As-Safir and Al-Monitor.

Read More: http://www.al-monitor.com/pulse/business/2013/05/tunisia-phosphate-crisis-politics.html

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