afrol News, 1 February Protests are emerging as the government of the breakaway republic of Somaliland disclosed a business agreement involving exploration on a territory Somaliland claims is occupied by troops from the autonomous Somali region of Puntland. Puntland authorities last year had sold exclusive mining rights in all its territory, including parts claimed by Somaliland, to an Australian company.

Somaliland has been a self-declared independent state since 1991, and draws its legitimacy and international borders back to the days of British colonialism - as opposed to the Italian colonisation of Somalia. Puntland, on the other hand, is an autonomous region in Somalia, under direct control of Colonel Abdullahi Yusuf Ahmed, who later has become Somalia's transitional President.

Somali clans and transitional governments have never recognised Somaliland's return to independence and claim that the Mogadishu transitional government has jurisdiction over Somaliland. The conflict escalated in 2003, as Puntland forces entered the Sanaag and Sool provinces, which had been a part of British Somaliland but whose population has closer clan ties with Puntland. Sanaag and Sool regions and its capital Las Anod remain occupied by Puntland troops, but are still claimed by Somaliland.

Somalilanders were therefore shocked when finding out that in October last year, the autonomous government of Puntland had entered into a contract with the small Australian company Range Resources Ltd, selling off 50.1 percent of the sole and exclusive rights to all mineral, oil exploration and development in Puntland, including Sanaag and Sool regions.

The business agreement has also caused surprise in Mogadishu and Australia, where media refer to it as a "mysterious deal" between a very small company and territorial authorities that may have no jurisdiction to issue exclusive mining and exploration rights. The Australian government and the national stock exchange have launched an investigation into the deal.

According to the Australian daily 'The Age', Somali Prime Minister Ali Mohamed Gedi had contacted the Australian Stock Exchange (ASX), protesting the business deal. In a letter sent to ASX, Mr Gedi said the deal with Puntland's regional government was invalid because only the country's transitional federal government in Mogadishu had the power to negotiate the sale of mineral and oil rights. Pro-Yusuf members of Somalia's transitional government have however "provided written approval" to the deal, according to Range Resources Ltd.

In Somalia, the mysterious deal has caused public debate since it was known in October. The deal highlights the conflict between the dysfunctional transitional government and the war-raged country's autonomous regions. It also demonstrates the conflict between Colonel Yusuf, who uses his power base in Puntland to stick to his powers as Somalia's transitional President, and those parts of the transitional government based in Mogadishu and opposed to the Colonel.

The implications for Somaliland were only known recently, as it turned out that the dubious contract with Range Resources Ltd also included the Sool and Sanaag provinces. In fact, Range Resources Ltd now indicates that its principal operations "in Puntland" will be focused on these provinces. The Somaliland government immediately protested the deal, saying Puntland authorities did not have the right to sell exploration rights in these occupied Somaliland territories.

In mid-January, the government of Somaliland issued a strongly worded warning to the Australian mining company, warning it against entering on Somaliland territories. The Hargeisa Foreign Ministry in a statement said the Australians had been given "false contracts" and that "they cannot enter Somaliland, nor carry out exploration or mining activities in our country, and if they should do so, will face whatever action that Somaliland deems necessary to protect the integrity of its territory."

The Hargeisa government's protest has inflamed the outrage of Somalilanders all over the world. The Somaliland Forum, which brings together Somalilanders in the Diaspora, this week joined the protests and issued a statement "denouncing the illegitimate and fallacious contract." The Forum called on the Somaliland government to "defend its territory."

Both the Hargeisa government and Somalilanders refer to the borders between Italian Somalia and British Somaliland "that were established during the Colonial Era" as "internationally recognised." According to international law, an occupying state can not sell exploration rights to foreign companies or engage in the exploitation of natural resources on occupied territory.

The issue may however become complicated for the Hargeisa government, which has yet to be internationally recognised. As Somaliland is not a recognised state and thus considered part of Somalia, Somalilanders can not count on international law. Officially, there is no international border between Somaliland and Puntland.