ICC’s Kenya Trials May Raise Ethnic Stress, Slows Oil Law

Sept. 10 (Bloomberg) -- The start of International Criminal Court trials against Kenya’s president and his deputy threaten to delay revisions to oil and mining laws and rekindle ethnic tensions, according to Eurasia Group.

Deputy President William Ruto and co-defendant Joshua Arap Sang, a radio presenter, pleaded not guilty as the crimes against humanity case opened at The Hague-based court today. President Uhuru Kenyatta’s trial begins Nov. 12 on similar charges. Proceedings are expected to last “several months,” according to the ICC.

The leaders, former political foes who ran on a joint ticket to win March elections, say they can manage East Africa’s largest economy while fighting the indictments. Kenya is on the cusp of becoming an oil producer as early as next year and is preparing to sell a debut sovereign bond to raise as much as $2 billion by December to fund infrastructure.

“The start of President Kenyatta’s and Deputy President Ruto’s trials could slow the legislative agenda, potentially pushing petroleum and mining code revisions into the first half of next year,” Clare Allenson, an Africa associate with Eurasia Group, said in an e-mailed note on Sept. 5. Delays to policy making may be caused by “weeks long” absences by the accused and while lawmakers who support the pair travel to the court to show their political loyalty, Allenson said.

Post-Poll Violence

Allegations of ballot fixing after national elections in December 2007 sparked two months of clashes between mobs armed with machetes, spears, and bows and arrows that left about 1,100 people dead and more than 350,000 homeless. Economic growth slowed to 1.5 percent in 2008 from 7 percent a year earlier, after farmers abandoned their fields and tourists fled.

“This trial is about obtaining justice for the many thousands of victims of the post-election violence and ensuring that there is no impunity for those responsible, regardless of power or position,” ICC Chief Prosecutor Fatou Bensouda told the court today.

Kenyatta’s ICC trial will be the first against a sitting president. Sudanese President Umar al-Bashir has been targeted by the ICC with an arrest warrant over charges of genocide and crimes against humanity related to the conflict in the western region of Darfur.

Kenyan lawmakers on Sept. 5 voted in favor of a motion to leave the ICC after members of the opposition walked out of the debate. House Majority Speaker Aden Duale is expected to present a bill to that effect within 30 days. Even if that’s passed, an official withdrawal requires written notification by the government to the United Nations, Barclays Capital said in an e-mailed note on Sept. 6.

Arrest Warrants

Kenya’s pullout from the ICC would have no bearing on the Kenyan cases and arrest warrants can be issued if Kenyatta or Ruto fail to cooperate, the British Broadcasting Corp. reported Sept. 5, citing ICC spokesman Fadi El Abdallah.

Kenyatta, 51, and Ruto, 46, fought on opposite sides of the ethnic and political divide in the 2007-08 clashes.

ICC prosecutors accuse Ruto of mobilizing his Kalenjin and allied kinsmen to carry out pre-planned attacks on Kikuyus, Kisii and Kamba in Eldoret, 265 kilometers (165 miles) from Nairobi, and the surrounding area. He “directly” supervised weapons purchases and gave cash rewards to perpetrators on the ground who looted and killed, according to a case information sheet on the ICC’s website. Sang allegedly incited the attacks through radio messages.

Kenyatta is accused of ordering the outlawed Mungiki gang to respond with reprisal attacks, which included rape, on the Luo, Luhya and Kalenjin communities in Nakuru and Naivasha towns, about 87 miles northwest of Nairobi.

Tensions Rising

“Members of parliament risk raising local tensions over the allegations as the witness testimony on human rights violations comes to light,” Allenson said. “Further politicization of the cases could cause low level unrest in areas most impacted by the violence, particularly the southern Rift Valley and the outskirts of Nairobi.”

The passage in March of largely peaceful elections deemed credible by observer missions lifted business confidence in the economy, which the government forecasts will expand at the fastest rate in six years in 2013 at 5.8 percent. The Nairobi Securities Exchange’s All-Share index is up 29 percent so far this year, the best performer in sub-Saharan Africa after Ghana.

“Foreign investors will be keen to see how these events affect the country’s macroeconomic performance,” StratLink Africa, a financial advisory, said in an e-mailed note Sept. 5.

“As such. we are likely to see a slowdown in foreign activity momentum as foreign participants evaluate their exposure to the NSE.”

Foreign Investment

Non-Kenyan investors represented 52 percent of all trading on the Kenyan bourse in August, when it posted record turnover, according to the Nairobi Securities Exchange’s website.

The shilling declined for a second consecutive day, falling 0.1 percent to 87.55 per dollar by 4:06 p.m. in Nairobi.

Kenyatta’s administration is making changes to oil and mining rules to derive more economic benefits from Kenya’s natural resources, with the start of crude output expected in 2014. The country has deposits of niobium, gold, soda ash, fluorspar, titanium, iron ore, coal and gemstones, according to the government.

The ICC trials against Kenya’s top two leaders will interfere with the government’s ability to enact policies and make decisions, Njonjo Mue, head of the International Center for Transitional Justice-Kenya, said by phone yesterday.

Full-Time Job

“It is clearly going to have an impact on the running of the government,” Mue said. “The presidency is a full-time job, the president convenes cabinet every week, signs bills into law, chairs the national security committee, which is very busy now because Somalia is still an issue.” Kenya has troops in the Horn of African nation fighting al-Qaeda-linked rebels.

Ruto has already faced defeat on some procedural decisions by the court. Judges rejected his request for the trial to be held in East Africa and ruled against his wish to hold proceedings in two-week intervals instead of daily. The court has authorized Ruto’s absence from parts of the trial and it will hear his case and Kenyatta’s on alternating dates.

“There will be no vacuum in governing the country,” Duale said in an interview on Sept. 3. “The speaker of the parliament and myself will be working with the president and when the president is away we will be working with the deputy president.”

About 39 percent of Kenyans want the ICC trials to go ahead, while 32 percent prefer the cases be referred to a local tribunal, according to Ipsos-Synovate, a Nairobi-based polling company. The survey of 2,000 Kenyans held between June 23 and June 30 has a margin of error of 2.2 percentage points.

To contact the reporter on this story: David Malingha Doya in Nairobi at dmalingha@bloomberg.net

To contact the editor responsible for this story: Nasreen Seria at nseria@bloomberg.net

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