US embassy cable - 05MAPUTO25

UNCLAS SECTION 01 OF 02 MAPUTO 000025 
 
SIPDIS 
STATE FOR AF/S, AF/EPS, EB/IFD/OIA 
MCC FOR BRIGGS AND GAULL 
STATE PASS OPIC FOR WATSON AND SHORE 
SENSITIVE 
E.O. 12958: N/A 
TAGS: EINV, MZ, Nyati, OPIC, Tourism 
SUBJECT: MEETING WITH PRESIDENT-ELECT GUEBUZA ON OPIC- 
SUPPORTED NYATI BEACH LODGE INVESTMENT 
 
Refs: A) 2004 Maputo 1446; B) 2004 Maputo 1539 
 
Sensitive but Unclassified - Business Confidential 
Information. Not for Internet Distribution 
 
1. (SBU) Summary: OPIC-supported investor Dave Herbert 
continues to be under threat from a claimant to the land on 
which his Nyati Beach Lode is located. It appears that 
plans by the claimant to take possession of the lodge and 
evict guests on December 31 were frustrated when the 
Minister of Interior told the provincial police not to 
enforce a recent court order. On January 4, Charge, OPIC 
Senior Advisor to the President and Director of African 
Affairs Marysue Shore, and Herbert informed President-elect 
Armando Guebuza of developments. Guebuza was sympathetic 
but noncommittal. Herbert expects that until the High Court 
(currently on vacation until March) rules, the plaintiffs 
would continue to attempt to take possession of the lodge. 
End Summary. 
 
2. (SBU) Reftels describe background of the case involving 
OPIC-supported investor Dave Herbert. On December 30, 
Herbert learned that the plaintiff who is seeking to obtain 
control of his Nyati Beach Lodge had received an order from 
an Inhambane judge allowing him to use the provincial police 
to enforce an earlier judgment that gave the plaintiff 
rights to the land on which the lodge stands. This order 
was issued even though in late November the Attorney General 
made a formal recommendation to the High Court that the 
judge's earlier ruling be overturned. Herbert understood 
that the plaintiff planned to use the police to evict guests 
from the lodge and take possession on December 31. Herbert 
alerted OPIC, which alerted post. Charge informed Foreign 
Minister Leonardo Simao, who expressed concern and promised 
to call the Attorney General and the provincial governor. 
The following day, Herbert told post that as a result of his 
own team's efforts, the Minister of Interior had told the 
Inhambane police chief not to enforce the judgment. Herbert 
expected the situation to remain calm for a few days but 
that, until the High Court ruled, the plaintiffs would 
continue to attempt to evict him. 
 
3. (SBU) On January 4, Charge, Shore, and Herbert met with 
President-elect Guebuza to bring him up to date on Herbert's 
difficulties and OPIC's concern. Shore opened the meeting 
by saying that in his meetings in Washington last summer, 
Guebuza had asked to be kept informed about the progress of 
OPIC-supported investments. Guebuza appeared to be familiar 
with some of the issues involved. Herbert explained the 
situation and emphasized his interest in following the law. 
He stated that the law had not been followed in the process 
to date, but that the Attorney General recognized the 
problems and supported his side in the case. He 
particularly cited the Attorney General's recommendation to 
the president of the High Court that the Inhambane court 
judgment be overturned (ref b). Herbert also noted the 
damage an eviction would do to tourism in Mozambique, 
emphasizing that he employs 70 Mozambicans at Nyati Beach 
Lodge and a total of 300 at his properties in Mozambique. 
Shore highlighted the importance of a quick High Court 
decision and expressed concern that the president of the 
High Court had apparently not seen the Attorney General's 
recommendation over a month after it had been sent to the 
court. She also explained that OPIC had suspended new 
lending projects in Mozambique. 
 
4. (SBU) Guebuza was sympathetic but noncommittal, saying 
that he was sorry to hear about the situation but that he 
was not sure what he could say. He said he had some 
information but did not think he had it all, especially the 
details of the various court documents. He advised Herbert 
to be patient, and he noted that there were different 
interpretations of the law, which was why courts existed. 
He cited his limitations as not yet being in office but said 
he would "go through" the matter. He also told Shore that 
he was very interested in having OPIC investment, which he 
said sent a good signal to other investors. 
 
5. (SBU) Herbert and Shore met on January 4 with lawyers 
representing Nyati Lodge, the Vilanculos Coastal Wildlife 
Sanctuary, OPIC, and Minister of Environment John Kachamila, 
who is on the Sanctuary's board. Herbert told post on 
January 5 that his legal team planned to file additional 
appeals to increase the pressure on the Attorney General, 
but he acknowledged that it would not be appropriate to 
pressure the High Court directly. 
DUDLEY