Oil…and Water: Political and Humanitarian Intervention in the Serbian Energy Sector

��Principles of humanitarian aid have been turned on their head. Never before has politics had so much to say about humanitarian affairs’ Interview, diplomat, Belgrade, February 2000

The combined effects of three wars, economic transition and sanctions have caused massive political and economic upheaval in Serbia over the past decade, leaving an estimated two million people below the poverty line. Focussing on the energy sector, this article analyses how humanitarian responses to the country’s multiple crises have been shaped by international politics, and how the boundaries between humanitarian and political action have become increasingly blurred.

Hot and Cold Wars: the problem of energy

Maintaining energy supplies is a necessity in any country, particularly one which is urban and industrialised, and where winters are long and cold. Serbia’s energy needs are complex, as are the constraints to meeting them. The state-owned electricity grid provides the primary source of heat and light. Without electricity, other forms of fuel such as oil and gas, as well as water systems, don’t work. Economic decline has reduced the ability of the state and of households to buy energy. EU and US sanctions have interrupted the flow of petrol and petroleum products into Serbia, while NATO bombing last year severely damaged the electricity infrastructure. The shortage of energy, particularly of oil and oil-related products, has distorted the market. The burgeoning parallel market in fuel and political manipulation of limited supplies mean that available resources are not used efficiently or equitably.

When is a Crisis a Disaster?: defining humanitarian need

Current EU/US sanctions prohibit petrol and related imports, and rehabilitation assistance into Serbia. They allow for humanitarian exemptions, however. The key question therefore becomes: is the energy situation in Serbia sufficiently grave to constitute a humanitarian crisis? If so, deliveries of energy and related goods can be categorised as ‘humanitarian’, therefore qualifying for consideration for EU and US aid funding, and exemption from sanctions. If not, then assistance to the sector would violate the sanctions on two fronts: the provision of non-humanitarian aid, and the provision of energy. Predictably, there has been no simple answer.

In the late summer of 1999 two major studies were carried out on the energy sector, one by a group of governments[1] the other on behalf of the UN.[2] They concluded that a significant, potentially catastrophic, shortage of energy was likely to occur during the winter. These findings were endorsed by EU heads of mission in Belgrade in a report later that year. What followed from this analysis was that repairs to the electricity sector were an essentially humanitarian task, and it was a humanitarian imperative to reach international agreement on oil and gas imports into Serbia. Unsurprisingly, this reading of the situation was controversial. The Dutch, UK and US governments were among those that remained sceptical of the findings, arguing that although there may be energy need in the country it was not so extensive as to warrant easing the sanctions and the provision of large volumes of aid.

In the event outright disaster was averted by a combination of factors, including:

• an unusually mild winter;
• a large grant from the Chinese government enabling the FRY authorities to buy energy;
• sanctions being more ‘leaky’ than predicted;
• the resumption of gas supplies from Russia through Hungary;
• international interventions – which played a small but significant role.

In understanding these latter efforts there are two points worth emphasising. First, at the time of their design consensus existed that a crisis was likely. Any assessment of the effectiveness of these interventions should consider not only whether they succeeded in meeting actual need, but whether they could have mitigated the worst case scenario. Second, international actors pursued a twin-track approach to the energy sector: one political, the other humanitarian.

‘Humanitarian’ Energy: an overview of the response

The scope for humanitarian organisations in the energy sector was narrowed by a number of factors:

• Agencies had to secure funding for their work, which meant convincing donors that what they were doing was indeed ‘humanitarian’.
• No donor government wanted to reinforce the existing regime, and it was not obvious how to input to the energy sector (particularly electricity), without working through national authorities.
• The studies had emphasised that primary responsibility for addressing the energy problem had to rest with the government. No single humanitarian agency could commit to the extensive repairs of a nationwide grid, nor to secure sufficient supplies of fuel to reach all households and social institutions. This meant targeting resources.
• Conventional approaches to targeting are needs oriented. In the case of energy the most important fuel type – electricity – is the most difficult to target, with soldiers and schoolchildren benefiting alike. 

Recognising these complexities OCHA embarked on a wide-ranging advocacy campaign that sought to identify the responsibilities and competency of different national and international actors in preventing disaster.

The political and technical factors outlined above, rather than need per se, shaped the humanitarian response. UNHCR, ECHO and UNICEF all focussed on providing oil and coal which, unlike electricity, could be targeted at particular institutions and could be delivered and monitored by international organisations. On the issue of scale, UNHCR and UNICEF used their mandates to delineate the extent of their programmes and to target their intervention at special groups. ECHO also sought to narrow the scope of its responsibility, targeting orphanages and mental hospitals, for example.

A qualitatively different humanitarian approach was taken by the Swiss government. It accepted the argument put forward by OCHA that the electricity sector was a priority, and its repair a humanitarian task. It circumvented the problem of direct engagement with the FRY authorities by seconding staff and delivering spare parts through the UN.

If predictions regarding the failure of the electricity sector and major shortages of gas and oil had been realised the ability of humanitarian actors to intervene quickly and effectively would have been limited. Political factors, together with the organisation of the humanitarian system itself, limited interventions to small-scale, highly targeted interventions which would have been virtually impossible to scale up. In the absence of any shift in sanctions policy, humanitarian room for manoeuvre would have been very limited.

As far as donor governments are concerned it was by luck, rather than judgement, that humanitarian assistance could be portrayed as a palliative to the effects of the bombing and sanctions. If the weather had been different, and the FRY government had not made new and wealthy friends and invested these gains in the energy sector, then the scenario would have been very different. The limitations of humanitarian aid interventions, anticipated by OCHA, would have been revealed.

‘Political’ Energy

‘Energy for Democracy’ (EfD) was a project run by the EU. It funded deliveries of heating oil, targeting municipalities run by opposition parties. The rationale was that, by providing oil, the political standing of opposition parties would be enhanced and the benefits of alliances with western Europe demonstrated to the population.

Initially ECHO was approached to fund and implement the project. However, ECHO advocated successfully against use of its funds arguing that it ran counter to the regulation governing the use of ECHO funds since it violated principles of impartiality and neutrality. It further argued that participating in EfD might threaten the rest of its programme in Serbia, which would be politically counterproductive for the EU as well as unfortunate for existing beneficiaries. In the end an alternative source of funds was found from within the Commission.

European civil servants sought to maintain a distinction between the political and humanitarian tracks. For example, rather than relying on the existing humanitarian exemption from the sanctions regime a new amendment was drafted exempting EfD oil.[3] Unlike humanitarian aid, EfD oil inputs were to be treated as commercial transactions, with tax payable on the shipments.

In practice, the distinction between the EfD as a political project as opposed to a politically conditional humanitarian project was not sustained. The FRY authorities held up the first deliveries at the border with Macedonia for three weeks in November 1999. The EU reacted to these hold-ups by emphasising the humanitarian cost of these delays. An EC press release stated that ‘The fuel is desperately needed in Nis and Pirot…around a third of the city, including schools, kindergartens and hospitals [are] without heating.’[4] The impression that EfD was primarily a humanitarian project was reinforced by key European and American politicians. For example, in the UK a Foreign Office minister stated that EfD ‘…is a humanitarian effort, but we are able to deliver it because of the added opportunity of a political bonus’.[5]

Problematic about such statements is that the technical distinction between political and humanitarian action is quickly lost. The political character of EfD is downplayed as its objective of influencing public opinion (domestically and in Serbia), and so supporting the democratic overthrow of the Milosevic regime, becomes hidden behind the humanitarian card. In so doing the value of humanitarian currency is diminished. The impression is given that it is legitimate for the West to selectively provide assistance to those in need on political grounds, although it is not legitimate for the Serb authorities to do so. Arguably, deploying such tactics diminishes the legitimacy not only of international humanitarian action but also that of EfD’s supporters. In undermining the spirit of humanitarianism, with its emphasis on impartiality and neutrality, the distinction between those upholding human rights and those abusing them becomes more difficult to maintain.

In their search for tools to promote political change diplomats have repackaged humanitarian assistance. While the costs to the values of humanitarianism are clear, the political benefits of such tactics are not. The opposition groups that EfD was designed to support have been disappointed by its implementation. EfD has not served to legitimise and empower them, since it was implemented by international firms and not through local political institutions. Its limited coverage has meant that its impact has been marginal. Its selectivity is seen by some to have compromised its legitimacy and to have been politically counterproductive. 

Finally, EfD avoids the big political question surrounding the energy sector. Designed to compensate for the effects of the bombing and sanctions, its tiny scale has meant that it has made a limited impact on the energy market. The parallel economy that has grown up around fuel (and other goods) in Serbia is sustaining a complex set of alliances between the state, criminal groups and paramilitaries; these networks intermittently expand to include parts of the opposition. The criminalisation of key aspects of political life in Serbia, and the violence which invariably attends it, represent a significant threat to the emergence of liberal democracy in that country. It is a threat that remains unacknowledged, and certainly unaddressed by the relatively simple tactics of EfD.

The story of EfD suggests that humanitarian-type instruments have proven ineffective in securing significant political change. Like oil and water, humanitarian and political action are equally essential to life.They are equally difficult to mix, however. In blurring the boundaries, the values and effectiveness of both are diminished.

Notes

1. Called FOCUS, this group included Switzerland, Greece, Russia and Austria. ‘FOCUS Assessment Mission 2 to the Federal Republic of Yugoslavia. Heating, 6–15 August: Executive Summary and Final Report’ Swiss Agency for Development and Cooperation, Berne

2. OCHA (1999) Electricity and Heating in the Federal Republic of Yugoslavia: Winter 1999–2000, September 20, OCHA, Belgrade

3 Commission of the European Communities (1999) ‘Proposal for a Council Regulation amending Regulation (EC) NO 2111/1999 prohibiting the sale and supply of petroleum and certain petroleum products to certain parts of the Federal Republic of Yugoslavia’, 3 November 1999, Brussels.

4 Commmision of the European Community (1999) ‘External Relations Commissioner Chris Patten regrets further delays to delivery of ‘‘Energy for Democracy’ heating oil’, 29 November 1999, Brussels, <www.europa.eu.int/rapid/sta>

5 Cited in: International Development Committee (1999) ‘Minutes of Evidence taken before International Development Committee, 25 November 1999, Mr P Hain, Ms R Marsden and Mr T Faint’, House of Commons, London.