Force Majeure Declared as Violence Disrupts South African Ports
The South African logistics company Transnet that oversees the operations of the country’s ports and terminals declared force majeure on July 12 announcing that it is suspending terminal operations in both the ports of Durban and Richards Bay. The company cited concerns for the safety of their employees and the inability to travel safely in the cities, but the company denied a report of looting at the ports.
The closures followed days of violence that is now spreading across South Africa after the country’s former president was jailed on contempt of court charges for not appearing at a corruption inquiry. After former president Jacob Zuma handed himself in to police to begin serving a 15-month sentence, there were initially demonstrations in his home province in eastern South Africa, where the ports are also located.
After days of scattered efforts to block roads in the local area, the protests escalated and spread to other major areas including Johannesburg. On Monday, July 12, there were reports of a shopping mall being looted and set on fire, warehouses looted, and major roads being blocked. The Wall Street Journal is reporting that at least 72 people have been killed while the Associated Press reports that more than 400 people were arrested as the South African security forces attempted to stop the violence.
South African President Cyril Ramaphosa addressed the nation and in a series of Tweets has appealed for calm and a return to order. He is vowing that they will not hesitate to arrest and prosecute the perpetrators. He has said they will do everything to guard against the threat of violence, intimidation, theft, and looting.
Transnet in its statement however said that “the violence has now reached proportions beyond the control of the local law enforcement and security services.” Unfortunately, due to the civil unrest the company said it had to suspend work at the general terminals in both ports, although S&P Platts is quoting sources saying that coal operations appeared to be continuing, but that additional disruptions were expected at the ports.
After a video began circulating online showing a container being vandalized, Transnet issued a further statement denying reports of looting at its facilities. They reiterated, “We can confirm that the container is not at any of our ports, or at any of Transnet's facilities.”
Late today, South African media is also reported that Shell and BP South African Petroleum Refineries have also declared a force majeure. The operations reportedly are responsible for 35 percent of South Africa's refinery capacity.
Two weeks ago, before the latest rounds of violence, mining giant Rio Tinto also declared a force majeure on customer contracts at its Richards Bay Minerals project. At the time, they cited "an escalation in the security situation at the operations."