By Eugen Iladi
Ask two people standing apart what they saw at an event and, chances are, they will tell you different versions of the same story. That’s the case with an on-going controversy in the east African nation of Mozambique.
The so-called tuna-boat scandal involves Mozambique’s default on $2 billion in loans that it used to pay for an ambitious set of maritime projects. A criminal indictment filed in U.S. federal court in Brooklyn, New York, tells a story that is remarkably disconnected from an indictment filed by Mozambique authorities about the same case.
While the Brooklyn filing has fueled most of the media’s commentary, the Mozambique filing raises questions about what the true story is.
The now-infamous “tuna scandal” began in 2010 when the Mozambique government decided, based on its intelligence service findings and endorsed by the World Bank, that the East African nation needed to build a modern fishing fleet and coastal monitoring and surveillance security system to control and benefit from its offshore Exclusive Economic Zone.
The impoverished nation had good reason to take advantage of its valuable fisheries and newly discovered offshore oil and gas reserves. Mozambique also wanted to protect its waters from piracy, terrorists, poaching and illegal drug and arms traffickers.
To advance these goals, the Mozambique government set up three state-owned enterprises to purchase vessels and equipment. After receiving offers from various companies, the Mozambicans selected Privinvest, a leading international shipbuilder that has delivered vessels to 40 navies around the world, including NATO member countries such as France. After visiting Privinvest shipbuilding facilities, Mozambique officials contracted with the company to design, build and deliver an integrated maritime system. Deliverables included naval patrol and tuna fishing vessels, patrol aircraft, satellite coverage and related equipment and maintenance, training along with the transfer of technology and intellectual property rights. Mozambique at the time was thought to be on track to start its own shipbuilding industry.
Instead, it abandoned the projects, failing to follow through on training. It also defaulted on $2 billion in loans it used to pay for the projects and has been accused of hiding most of the debt from the International Monetary Fund, which subsequently suspended its assistance program.
These events, plus the change in Mozambique’s government in 2014, sparked finger-pointing, investigations and arrests of some involved in the projects. Different sets of allegations are made in Brooklyn and in Mozambique about the same projects and each document tells a different story.
Neither the Brooklyn nor the Mozambique indictments charge Privinvest with wrongdoing. In New York, though, two Privinvest employees are charged; the Mozambique filing indicts no Privinvest employees. The Brooklyn document accuses Credit Suisse employees with creating fraudulent financing for the projects. The Mozambique indictment doesn’t.
In addition, the Brooklyn filing calls the projects a cover for enriching certain parties rather than delivering vessels and other equipment and systems. The Mozambique filing undercuts that assertion by saying that Privinvest delivered the contracted ships and other equipment. Indeed, the ships and equipment are sitting unused in Mozambican ports.
The Brooklyn filing declares the loans for the Mozambique projects were secret or hidden. But the Mozambique filing says that government officials at high levels, including the head of state and finance minister, were informed of and were involved in the transactions. The contracts also were arranged after a series of publicly disclosed actions, according to the Mozambique filing. For example, for each of the loans, the government names the senior finance officials who signed the contracts.
Also, the Mozambique filing says the projects began after the government conducted extensive studies. The government then called for proposals, visited shipyards to ascertain their capabilities, chose Privinvest to scope out and fulfill the projects and monitored their progress. Documentation, which the Brooklyn indictment implies was often missing, is laid out in some detail in the Mozambican retelling.
So, who to believe? Generally, the person standing closest to the event is the most reliable. In the tuna boat case, judges in Brooklyn and Maputo will have to decide and assess the different versions of the same important tale.
Eugen Iladi is a freelance reporter based in Virginia who covers politics, conflict, business and development in emerging markets.