Tunisia ends decadeslong agreement with France

Tunisian Prime Minister Youssef Chahed decided to terminate an agreement with a French company exploiting sea salt, ending France’s monopoly over Tunisia’s salt market, which has been ongoing since the colonial era — but is this move part of an early electoral campaign?

al-monitor Salt pans are seen in Tunisia, in an image uploaded Dec. 18, 2015.  Photo by Facebook/Cotusal Tunisia.

Topics covered

youssef chahed, agreement, natural resources, salt, france

Mar 15, 2019

TUNIS, Tunisia — Tunisian government spokesman Iyad Dahmani told the state-owned Tunis Afrique Presse Feb. 27 that Tunisian Prime Minister Youssef Chahed decided not to extend the agreement on sea salt exploitation with France’s Compagnie Generale des Salines de Tunisie (COTUSAL), which dates back to 1949.

The agreement has been subject to much controversy, as it is said to favor the French company that held a monopoly over Tunisia’s salt market and benefited from very low operating rates.

Dahmani said that COTUSAL’s legal representative was notified of the government decision to end the agreement, which was supposed to expire in 2029 as per the convention signed between Tunisia and the French company. The convention stipulated that France would exploit sea salt in Tunisia for 50 years. It was automatically renewed twice for a period of 15 years, in 1999 and 2014.

The termination of the agreement has long been a demand of several Tunisian parties and parliamentarians, most prominently Ameur Larayedh, chairman of the parliamentary Committee on Industry, Energy, Natural Resources, Infrastructure and Environment.

In a Feb. 27 statement to the privately owned Al-Fajr newspaper, Larayedh said that the committee has been pressuring the government to terminate the salt agreement since October 2018. He stressed that the committee’s efforts have finally paid off.

In a Facebook post Feb. 28, Larayedh said the 2004 government bears responsibility for the automatic renewal of the agreement with COTUSAL. He stressed that a new agreement for exploiting salt will be put out to tender with new terms in favor of Tunisia, in terms of financial and fiscal returns and environmental impact.

The opposition Progressive Democratic Party (PDP) wrote on its official Facebook page Feb. 27 that Chahed’s decision to terminate the contract came in response to the party’s statement March 7, 2018, on the need to end the agreement with COTUSAL.

The 2018 statement stressed that the French company has been exploiting Tunisia’s salt at a rate of one French franc per hectare per year. The PDP blamed Chahed and warned that they would take him to court if he did not take immediate action to terminate the agreement on charges of squandering the country’s resources.

Member of parliament for the opposition People's Movement Zuhair al-Maghazawi told Al-Monitor that the decision to stop the agreement with the French company is of great significance but not enough as long as other contracts relating to the exploitation of other natural resources, such as oil and phosphate, have not been reviewed yet. He stressed that this is an old demand, and that Chahed has finally yielded to the popular and political pressure, after mounting calls for scrutiny into the dossier of Tunisia’s natural resources.

On Oct. 2, 2018, 39 parliamentarians from various blocs signed a petition calling on the government to terminate the salt exploitation agreement.

During a press conference Oct. 3, 2018, the opposition party Democratic Forum for Labor and Liberties (FDTL) considered the agreement to be unfair to the Tunisian state, prolonging the colonial policy of the French protectorate of Tunisia, which extended from May 1881 through March 20, 1956.

During the conference, an FDTL spokeswoman said that her party filed a case against COTUSAL in 2014 in a bid to terminate the contract.

The decision was also praised by Tunisian General Labor Union spokesman Sami al-Tahiri, who spoke to Al-Monitor. Tahiri said that the government’s decision reflects the strong will of the people who have always called for the end of the agreement. He considered the move to be a necessary step in the right direction, albeit late, stressing the need to begin the nationalization of the rest of Tunisia’s natural resources, including oil and phosphate, to compensate for what the country has lost for decades since the French colonial era.

In a statement at the opening of the “Made in Tunisia” symposium Feb. 28, Chahed stressed that the government was not pressured by any party into taking the decision to end the agreement with the French company, which was based on Tunisia’s best interest only.

Hassouna Nasfi, member of parliament for the Free Bloc, told Al-Monitor that the prime minister exercised his role as the head of the Tunisian government and he took the right decision to protect the country’s natural wealth. She added that the most important thing currently is to determine how the country can exploit its own salt, now that the COTUSAL agreement has come to a halt.

Mohamed Ghazi Ben Jemia, the national coordinator of the Tunisian Coalition for Transparency in Energy and Mines, told Al-Monitor that although the government’s move is important, he believes it is not enough. He calls for the need to review all contracts with regard to the exploitation of the country’s natural resources that are included in the Tunisian Mining Code, noting that most of these contracts provide for unfair conditions for Tunisia.

According to official data, COTUSAL produces between 900,000 and 1 million tons of salt per year, with a turnover of 35 million dinars ($11.5 million) out of the total 51 million dinars ($16.8 million) achieved by Tunisia’s salt extraction sector.

Meanwhile, the Tunisian state has been losing 900,000 Tunisian dinars ($297,000) annually, as the French company has not been abiding by the mining code that regulates the exploitation of natural resources and pertinent agreements. COTUSAL has failed to pay any tax to the governmental Coastal Protection and Planning Agency.

Sadiq Jabnoun, an expert in investment strategies, told Al-Monitor that he does not believe that the termination of the agreement would have a big impact on Tunisia, since salt is not of great value on international markets and is not in high demand, with the exception of some derivatives such as psyllium.

Psyllium production requires a large electric power, which Tunisia cannot afford, he said.

“To me, the only good outcome of the agreement termination is that Tunisia took back its legal sovereignty over a part of its natural wealth,” Jabnoun concluded.

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