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«Human Rights Watch Brussels London New York Washington, D.C. Copyright © 2003 by Human Rights Watch. All rights reserved. Printed in the United ...»

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It is startling that no environmental assessment of Block 5A has been published by Lundin, considering that the White Nile (Bahr El Jebel) flows through Block 5A and that the Ryer/Thar Jath discovery is only a few miles west of the Nile. Indeed, Lundin was even exploring from a platform on the Nile in 1999, before it suspended operations. Eyewitnesses referred to the platform as “on the Nile;” Lundin said that it was actually in the “swamp.” As water floods annually throughout this flat land, the difference between swamp drilling and Nile drilling for environmental protection purposes may not be significant.

The location of Block 5A astraddle the White Nile raises the question: what if there is an accident during the production and oil spills into the Nile, a river on which millions of people depend? The oil spillage would flow downstream, that is, north, to Khartoum and Cairo. An oil spillage not directly into the Nile but into the sudd or toic would also have enormous environmental impact, particularly during the rainy season when the entire area is flooded. As the waters recede, oil slick would remain on the pastures and in the fishing areas far and wide.

Lundin should describe how it plans to handle such a possibility, starting with precautions taken during the exploratory phase of development.

Lundin featured in its annual report for 20001143 a page on Lundin Oil environmental policy, with a case study of Sudan. In that study, it stated that Lundin commissioned two environmental studies for its operations in Sudan, conducted by Metoc PLC of London.

The first study, a risk assessment for IPC [Lundin] Sudan’s operational bases, was done “to formulate a policy and programme on how to deal with safety and environmental issues related to the former 1143 Lundin Oil Annual Report, 2000, page 6, fax from Christine Batrusch, Lundin Oil, to Human Rights Watch, June 5, 2001.

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Chevron bases and any impact from these on Lundin Oil operations.” It reportedly concluded that there were no major issues identified giving rise to serious environmental or safety concern.1144 The second study was called the “Environmental Assessment for Exploratory Drilling and Operations Review – Sudan,” which consisted of an examination of the drilling project from the operational and management perspectives. Potential impacts on the human population, domesticated animals, vegetation, wildlife, surface and subsurface watercourses allegedly were analyzed and the conclusion was that “no significant environmental impacts were identified, either during normal operations or in an emergency situation.”1145 The study is not publicly available, so it is not possible to evaluate its conclusions, in particular that an oil spillage would have “no significant environmental impact.” In its Code of Conduct, Lundin stated that it strives “to limit adverse impacts on the environment.”1146 Lundin claimed that the assessment of human habitation of the area between Rubkona and Ryer/Thar Jath “indicated low density population settlements in the area.”1147 What month and year the study was made are not known.1148 The Jikany, Leek, and Jagei Nuer living in that area were agro-pastoralists and moved seasonally with their herds. Even in normal times, it would be possible for someone studying the area when the agro-pastoralists were in seasonal migration to conclude that the population was very small—but conditions in that part of Block 5A have not been “normal” for years. As a result of the forced displacement of Leek Nuer from their lands north of Bentiu in the 1980s and 1990s, more rather than less Leek Nuer would be living in Block 5A, because the Leek traditionally straddled Blocks 1 and 1144 Ibid.

1145 Ibid.

1146 Lundin Petroleum AB, “Code of Conduct, Attitude Towards the Environment,” http://www.Lundin-petroleum.com (accessed May 28, 2002).

1147 Lundin Oil press release, “Lundin Oil Looks into Allegations on Sudan,” Geneva, March 15, 2001.

1148 Christine Batruch, Lundin Oil, letter to Human Rights Watch, attaching Lundin Oil Annual report, p. 6, faxed March 7, 2001.

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5A and those from Block 1 fled from the army and the Baggara to their kin south of the Bahr El Ghazal (Nam) River in Block 5A in the 1980s and 1990s. Now the Leek have been pushed south and west, into Bahr El Ghazal.

While the environmental program of OMV is extensive, it makes only passing reference to Sudan, and it does not appear that OMV has conducted an environmental impact statement with regard to its investment in Block 5A.1149 Nor, to the knowledge of Human Rights Watch, has there been any environmental study of the effects of the extension of the pipeline from Block 1 to Block 5A—nor to Block 5B.

Satellite Evidence of Alteration to the Environment and Drying Out of River/Stream Bed Talisman, as part of its campaign to disprove the existence of human beings in its concession areas, commissioned a special report of satellite images showing the changes in carefully selected parts of the earth’s surface in Western Upper Nile/Unity State from 1965 to 2000.1150 This was presented for the purpose of showing a lack of human habitations, but other interesting material is available in the expert analysis provided by Talisman itself.

Looking at the Bamboo exploration and drilling site, to the southeast of Heglig (far from those alleged to

have been displaced), it is noted that:

1149 OMV, “Environmental Report,” http://OMV.com/mainframe.html (accessed March 18, 2001).

1150 “Kalagate Imagery Report, Sudan Oilfield Exploration Concession,” April 2001, published by Talisman Energy, Calgary. Inside the cover is the report of Geoffrey John Oxlee, Kalagate Imagery Bureau, “Report KIB/035-1/2001, Subject: Sudan Oilfield Exploration Concession,” April 2, 2001.

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[W]here the new road intersected the previous line of water drainage/flow [as evinced from the growth of law scrub and other vegetation] [sic] the natural flow of moisture may have been inhibited and effectively dried out the river/stream bed....

... the imagery indicated changes to the underlying water table of the area with the construction of numerous raised roadbeds and survey excavations.... Although the principal north/south watercourse appears little changed interim, the remainder of the area displays apparent changes to the probable flood plain.1151 In other words, the water table was affected by the construction of the roadbeds and survey excavations.

In other countries, similar effects on drainage caused by roads built for oil companies have caused devastating problems for the local environment.1152 1151 Ibid., pp. 5-6, and Image 2. The “new road” refers to the oilfield road.

1152 See, for example, Human Rights Watch, The Price of Oil: Corporate Responsibility and Human Rights Violations in Nigeria’s Oil Producing Communities (New York: Human Rights Watch, 1999), pp. 68-72.

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Talisman’s Decision to Invest Talisman began seriously to investigate the possibility of investing in Sudan in 1998. At that time, Arakis’ failure to obtain sufficient financing was evident to its partners CNPC, Petronas, and the Sudanese government. A pipeline was under construction and had to be completed in 1999.

A new Sudanese constitution was implemented on July 1, 1998, with an appearance of broader rights.

The war begun in 1983 was still raging in the south, however, and had expanded to the Nuba Mountains and eastern Sudan; just a year before the adoption of the 1998 constitution, the SPLA had retaken many garrison towns from the government, all the way from the Uganda border up to and almost reaching Wau, the second largest town in southern Sudan. In addition, in 1998 there was a major famine in Bahr El Ghazal and relief agencies attracted prime time coverage with their warnings that Western Upper Nile/Unity State was on the edge of famine because of the fighting and government bans on access by humanitarian relief agencies. Human rights reports on Sudan proliferated, by the U.N. special rapporteur on human rights and by nongovernmental groups, denouncing the government as a gross abuser of human rights. The government had its Khartoum Peace Agreement, signed in April 1997 with several small and one respectably-sized southern factions. Riek Machar, head of the largest faction, was assistant to the president of Sudan and head of the SSCC and an army cobbled together of ex-rebel troops, the SSDF. His close political ally was governor of his home area, Western Upper Nile/Unity State, where GNPOC had its concession.

Two government-backed and armed Nuer groups, Riek Machar’s SSDF and the militia of Sudanese army Maj. Gen. Paulino Matiep, were fighting each other in 1998 in Western Upper Nile/Unity State and Human Rights Watch several of the towns in that state had been burned and looted, with thousands of civilians displaced. This was a war that was not limited to fighting between the government and the rebels: even those ostensibly on the same side fought each other.

Then there was the Chevron experience: Chevron had abandoned its potentially lucrative southern project in 1984 because rebels had killed three of its employees in the very concession Talisman was about to buy. And rebels continued to threaten oil operatives in Sudan, in general. Arakis received threats from rebel groups1153 as early as 1995 but played them down.1154 If this project took off as projected, it would attract even more negative rebel attention. So far, it was the only major oil project in Sudan under active development.

There was also the domestic challenge to Talisman’s involvement in Sudan: the Canadian nongovernmental Inter-Church Coalition on Africa (ICCAF)1155 was actively opposing Canadian oil

company investment in Sudan. Referring to Arakis, an ICCAF press release dated July 20, 1995 accused:

“Canadian oil firm does business with one of the world’s worst human rights abusers.”1156 The industry press carried news of these human rights criticisms of Arakis, including the Petroleum Intelligence Weekly.1157 This criticism did not let up.

1153 Riek Mansour Khalid, Deputy Secretary General, Foreign Relations, NDA press release, London, August 10, 1995 (“the NDA wishes to serve notice... that any agreements concluded with the NIF illegitimate regime... shall be considered... a contribution to that regime’s war effort....”); Deng Alor Kuol, “SPLM/SPLA Press Release” (“all Arakis Energy Corporation oil production installations, pipeline and port facilities will be legitimate SPLA military targets”), Chukudum, New Sudan, July 11, 1995. Threats by the NDA and SPLM/A to Arakis were mentioned in Cheryl Strauss Einhorn, “Arakis Energy Corp.: Pipe Dream?” Barron’s (New York), August 28, 1995.

1154 “Arakis Energy Belittles Threat From Sudanese Rebel Group,” Bloomberg (New York), August 14, 1995.

1155 As of July 1, 2001, the Inter-Church Coalition on Africa (ICCAF) became part of KAIROS: Canadian Ecumenical Justice Initiatives/Initiatives canadiennes oecumeniques pour la justice.

1156 Inter-Church Coalition on Africa press release, Toronto, July 20, 1995.

1157 “Arakis to Awaken Slumbering Sudan with Saudi Cash,” Petroleum Intelligence Weekly (New York), July 17, 1995.

386Foreign Corporate Complicity, Foreign Government Support

On August 17, 1998, Talisman announced that it would acquire Arakis and Arakis’ main asset, the Sudan project.1158 Before Talisman closed the Arakis deal, the Taskforce on the Churches and Corporate Responsibility (TCCR, another Canadian nongovernmental group) protested by letter of August 28, 1998 Talisman’s announced intention to invest in Sudan, citing human rights abuses.1159 Talisman proceeded with the acquisition of all outstanding shares of Arakis, which was completed on October 8, 1998.1160 Talisman acquired a 25 percent interest in GNPOC’s Blocks 1, 2, and 4 and the incomplete pipeline and port, on which construction had started in May 1998.1161 On November 18, 1998, Canadian NGOs that had been protesting Arakis’ presence in Sudan issued a press release denouncing Talisman’s participation in Sudanese oil development, with allegations about

forced displacement from the Talisman concession:

According to these reports, Sudanese government forces and the militias armed and directed by the government have cleared the area of local people (whom the Sudanese government believes could be sources of support for the rebel Sudan People's Liberation 1158 Jim Buckee, Talisman Energy press release, “Talisman Agrees to Acquire Arakis,”Canada Stockwatch (Vancouver), Calgary, August 17, 1998. Shortly thereafter, the U.S. bombed a pharmaceutical plant in Khartoum. See Human Rights Watch letter to U.S.

President Bill Clinton, September 15, 1998, http://www.hrw.org/press98/sept/sudan915.htm. Talisman decided to proceed with its investment.

1159 TCCR letter to Talisman dated August 28, 1998, available at http://www.web.net/~tccr/CorpResp/TalismanPhaseOneRep(Jn99).html (accessed March 18, 2001).

1160 Talisman purchased all the outstanding stock of Arakis. Jim Buckee, Talisman Energy press release, “Talisman Advances Funds to Arakis,” Canada Stockwatch (Vancouver), Calgary, August 31, 1998; David Mann, Talisman Energy press release, “Talisman Advances Additional Funds to Arakis,” Canada Stockwatch (Vancouver), Calgary, September 18, 1998. David Mann, Talisman Energy press release, “Talisman Acquires Arakis Energy,” Canadian Corporate News, Calgary, October 8, 1998.

1161 Talisman Energy, “Background Paper,” pp. 2-3; Talisman Energy, “Company Highlights,” http://www.Talismanenergy.com/high.html (accessed July 17, 1999).

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