Groupe Castel has started an inquiry into a report that said a unit of the French beverage maker aided militia accused of “mass atrocities” in the Central African Republic in exchange for the security of its sugar assets.
The announcement by Castel came after The Sentry, a Washington-based anti-corruption group co-founded by actor George Clooney, published a 28-page investigation into the sugar-producing unit on Aug. 18.
Once “general management of Castel became aware of the serious allegations made,” it decided to start a probe “in accordance with its internal procedures” and will “communicate on the outcome of this investigation,” the company, which also sells beer in a number of African countries, said in a statement.
The Central African Republic, one of the world’s least-developed countries despite diamond and gold deposits, has been beset by conflict since 2013, when President Francois Bozize was ousted in a coup. Rebels are now pitted against a government backed by Russia, which has provided some military support.
In late 2014, African Sugar Refinery of the Central African Republic, a unit of Paris-based agro-food company Somdiaa, in which Castel is a significant shareholder, allegedly negotiated a security arrangement with an armed group, according to The Sentry. The Sentry said Castel owns 87% of Somdiaa. Castel didn’t respond to a question from Bloomberg about its shareholding.
Through the pact the sugar producer secured its factory and cane fields and ensured free movement on key roads necessary for the provision of supplies, The Sentry said.
The arrangement also reinforced the company’s monopoly on distribution in several regions, including through the seizure of smuggled sugar, The Sentry said.
A “sophisticated, informal system” was established to fund the militia “through direct and indirect cash payments, as well as through in-kind support in the form of vehicle maintenance and fuel provision,” The Sentry said its research showed.
The pact was active through March, “but its future remains uncertain due to the deployment of governmental and Russian forces in territories formerly controlled” by the armed group Union for Peace in the Central African Republic, known as UPC.
UPC, formed in 2014, has been linked to mass killings, abductions, torture, child soldier recruitment, and sexual and gender-based violence, The Sentry said, citing interviews with witnesses. Human Rights Watch has linked the group with civilian displacements and the United Nations issued a report that detailed attacks on villages by UPC and the recruitment of children as soldiers.
Castel, a major bottling partner for Coca-Cola in parts of Africa, declined to comment further to Bloomberg than its statement about its probe. Castel was founded by Pierre Castel in 1949 and, while still controlled by his family, today operates a group of companies.
Alexandre Vilgrain, Somdiaa’s chief executive officer, and Jean Louis Liscio, the company’s operations and risk manager told The Sentry that “to our knowledge, there are no such arrangements made,” with the UPC by its Central African Republic unit’s management and “no support of any kind has been provided.”
Instead, Somdiaa secured its unit’s site in the nation “with the support of foreign military forces under international mandate present in the area,” and this has helped create a “refuge area for the surrounding population,” Vilgrain told The Sentry. Somdiaa didn’t respond to Bloomberg’s request for comment.
