Veolia Seeks Gabon Arbitration as Russia, China Close In

(Bloomberg) -- Veolia Environnement SA’s Gabonese unit is seeking arbitration after the government seized its assets in the central African nation, moving away from decades-old ties with former colonial ruler France.

The dispute about Veolia’s water and electricity utility in Gabon comes as the cash-strapped government of President Ali Bongo is looking east to woo investors from China to Russia, while several French companies are on the way out.

Veolia’s unit, known as SEEG, filed a request for conciliation at the International Centre for the Settlement of Investment Disputes in Washington, the company said in a statement Friday. “As a victim of a unilateral and illegal breach of contract by the Gabonese state, and faced with a brutal requisition, SEEG expects Gabon to comply wth the rules of law and its commitments,” it said.

Members of the armed forces seized the utility on Feb. 16, before the government announced on state television that the expropriation was necessary because of the company’s allegedly poor services. Ten days later, government spokesman Alain-Claude Bilie By Nze said that almost all SEEG sites were contaminated by petroleum waste.

Veolia, which has operated in Gabon since 1997 and renewed its concession agreement for SEEG for a further five years in July, has rejected the allegations.

“No government inspection agencies reported any alleged environmental damage until after the government’s illegal seizure of Veolia’s assets in Gabon,” Veolia General Counsel Helman le Pas de Secheval said in emailed comments.

Russian Interest

Russia’s ambassador to Gabon told reporters last week that there’s growing interest from Russian companies in Gabon’s oil, mining and forestry sectors, including from state-owned power producer RusHydro PJSC. Gabon is in talks with Russia but the conversation isn’t about SEEG, Energy Minister Patrick Eyogo Edzang told Jeune Afrique on Wednesday.

The oil-producing nation has been governed by Bongo since he won a 2009 vote, succeeding his father, Omar Bongo, who cultivated close ties with France during his 42-year rule.

But relations between Gabon and France have cooled since Bongo narrowly won the closest election in the nation’s history in 2016 amid allegations of vote-rigging from the opposition. Scores of protesters were killed in violence in the aftermath of the election, which European Union observers said was marred by “anomalies.’’ Calls for a recount by France’s then-Prime Minister Manuel Valls were ignored.

China was Gabon’s biggest trading partner last year, importing oil, manganese and timber from the nation of less than 2 million people. Singapore-based commodity trader Olam International Ltd. has expanded operations in recent years by building a port and a special economic zone.

At the same time, Bouygues SA abruptly left Gabon in October and the government said in January it won’t renew a contract for the airport in the capital, Libreville, that Paris-based Egis Group and Aeroport Marseille Provence SAS have held since 1988.

To contact the reporter on this story: Pauline Bax in Johannesburg at pbax@bloomberg.net.

To contact the editors responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net, Michael Gunn

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