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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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Upon the return of the Harker Canadian human rights team to Canada, and before the report came out, John Harker in January 2000 informed Foreign Minister Axworthy that the Sudanese military was using the GNPOC airstrip to wage war against rebel forces, apparently in violation of Sudan’s pledge to refrain from using oil development as cover for military operations.

Talisman admitted the use and said it had protested strongly to the Khartoum government.1226 The foreign minister of Canada sent a letter of protest in January 2000 to President Bashir, condemning this military use of oil facilities.1227 The Sudanese government denied the team’s finding, contradicting Talisman’s own admissions.1228 1225 The other team members were Georgette Gagnon, Audrey Macklin, Ernie Regehr, Penelope Simons, and Hamouda Soubhi.

1226 Charlie Gillis, “Letter to Envoy Contradicts Firm’s Earlier Denials,” National Post (Toronto), January 14, 2000.

1227 Jeff Sallot, “Axworthy protests Sudan’s tactics in oilfields,” Globe and Mail (Toronto), January 6, 2000.

1228 David Ljunggren, “Sudan denies Canada allegations on military flights,” Reuters, Ottawa, January 13, 2000.

–  –  –

The Harker report was released in February 2000. In a harsh and straightforward manner, it condemned

Talisman and the government of Sudan:

We can only conclude that Sudan is a place of extraordinary suffering and continuing human rights violations, even though some forward progress can be recorded, and the oil operations in which a Canadian company is involved add more suffering.1229

The Harker report made several recommendations, including that:

–  –  –

· Talisman should establish a trust fund acceptable to the southern parties for its revenues, with Canada assisting in forensic accounting and auditing for this trust;

–  –  –

· Canada should seek detailed scheduled reports relating to Talisman’s compliance with international human rights and humanitarian law, and what it knows of the Sudanese government’s compliance;

· Talisman should seek independent help to develop and implement practical means of monitoring and reporting forced removals; and · Talisman should continue discussions with Canadian NGOs regarding setting up a human rights monitoring mechanism.

The report cited two ways of neutralizing the negative impact of oil: either a halt in oil production until peace—which it considered unfeasible—or a set aside for government oil revenues for use when a peace is in place.1230 “It is difficult to imagine a ceasefire while oil extraction continues, and almost impossible to do so if revenues keep flowing to the GNPOC partners and the government as currently arranged,” the report stated.1231 The report urged Talisman to acknowledge the destructive impact of oil extraction, and work toward creating a trust fund. The trust fund idea faded as Sudanese churches in the north and south, which had first endorsed a trust fund, rejected the idea because they concluded that continued oil production would 1230 The Canadian foreign ministry said that as a matter of Canadian privacy law, it had to submit the Harker report to Talisman before its public release, because the Talisman name appeared in the report. As a result, the company was able to conduct a lobbying campaign with several powerful Canadian government ministries to avoid strong government measures. See David Ljunggren, “Canada oil firm said in talks on key Sudan report,” Reuters, Ottawa, February 7, 2000.

1231 Harker report, p. 16. Indeed, fighting continued for almost three more years of oil extraction, until a vigorous international peacemaking effort led by IGAD, the U.S., the U.K., and Norway produced an interim ceasefire agreement in October 2002, which was violated by the government in Western Upper Nile/Unity State on several occasions in 2003. See Herbert J. Lloyd, Civilian Protection Monitoring Team (CPMT), “CPMT Final Report: Military Events in Western Upper Nile 31 December 2002 to 30 January 2003,” February 6, 2003; Charles H. Baumann, CPMT, “Report of Investigation: Violence Against Civilians Along the Bentieu-LeerAdok-Road,” Khartoum, August 19, 2003, http://www.cpmtsudan.org/finalreports/violence.zip (accessed September 24, 2003).

–  –  –

lead to continued abuses. Two months later, the Sudanese churches instead called on the oil companies to withdraw from Sudan.1232 The Canadian government deserves credit for designating a human rights team and commissioning a special report on human rights abuses connected with oil development and Canadian companies. It failed, however, to follow up on the damning findings of its own human rights report.

Canadian Government Announces Toothless Sudan Program, February 2000 Foreign Minister Lloyd Axworthy on February 14, 2000 announced that Canada would not impose sanctions on Talisman—at that time.1233 Talisman’s stock briefly rose.1234 Axworthy listed new measures that Canada would undertake, along with others already underway. But the Canadian government overlooked almost all the Harker report recommendations and was ready to

take only conventional small steps:

–  –  –

1232 “Statement of the Sudanese Churches on the oil factor in the conflict in the Sudan,” signed by representatives of the Sudan Council of Churches, based in Khartoum, and the New Sudan Council of Churches, based in Nairobi, dated April 14, 2000, http://SudanInfonet.tripod.com/NSI (accessed June 7, 2001).

1233 Lloyd Axworthy, minister of foreign affairs, press conference on Sudan, Ottawa, February 14, 2000 (the minister said that sanctions were not off the table and the issue would be revisited).

1234 “Talisman shares jump in wake of Sudan report,” Financial Post (Toronto), Ottawa, February 16, 2000.

–  –  –

· Opening of a Canadian consular office (but not an embassy) in Khartoum for three purposes: to make a more effective contribution to the peace process, to promote respect for human rights, and to offer consular services to Canadians.1237

This list of Canadian initiatives overlooked several Harker report recommendations:

1235 The Canadian government had supported the establishment and operation of a Sudan Peace Talks Secretariat in Nairobi, under IGAD, to carry out continuous and sustained mediation efforts for peace in Sudan. “Canada Supports Sudan Peace Talks Secretariat,” Canada News Wires, Ottawa, July 26, 1999.

1236 The Canadian government was aware that four Canadian NGOs were having quiet discussions with Talisman to, among other things, establish an independent human rights monitoring office with funding from Talisman, the Canadian government, and other sources. The four groups were Steelworkers Humanity Fund, United Church of Canada, Project Ploughshares, and World Vision Canada. Many Canadian NGOs declined to participate in these talks because they felt Talisman would not negotiate in good faith.

Ernie Regehr, “Drilling for a Corporate Conscience,” Globe and Mail (Toronto), March 20, 2000. (Regher was a participant in the negotiations.) 1237 Department of Foreign Affairs and International Trade Press release no. 26, “Axworthy Outlines New Initiatives to Further Peace in Sudan,” Ottawa, February 14, 2000.

–  –  –

· It did not attempt a step-by-step approach—whereby the foreign minister could publicly express grave concern about Sudan and receive the mounting evidence that Canadian oil extraction activity was exacerbating the crisis, to be followed by stiffer measures.

–  –  –

As soon as the Canadian government announced it was not imposing sanctions, Talisman negotiations with Canadian NGOs ended. These were negotiations to develop monitoring mechanisms to assure Talisman operations did not lead to an increase in abuses, or otherwise contribute to the ongoing conflict. Talisman insisted that the NGOs had proposed unworkable mechanisms, such as having an NGO representative attend Talisman human rights discussions with the government. It said the NGOs were to blame for ending the negotiations. The NGOs said the negotiations ended because Talisman was not serious and “had refused to recognize evidence that Talisman’s operations in Sudan were linked to human rights abuses.”1238 1238 Randall Palmer, “Focus: Rights groups deal blow to Canada Sudan policy,” Reuters, Ottawa, February 24, 2000. Less than one month after Canada’s failure to enact sanctions against Talisman, another Canadian oil company announced it would invest in Sudan’s oilfields. In March 2000, Fosters Explorations Ltd., described in the press as “a fledgling Canadian junior oil company,” said it was investing in Blocks 3 and 7, in the Adar Yale oilfield in the Melut Basin in Eastern Upper Nile. Minister Axworthy recommended that Fosters think twice about operating in Sudan. Oil company operations “have a serious impact on the political

413Human Rights Watch

U.S. Criticizes Canada In February 2000, almost immediately after Canada’s no-sanctions announcement, the U.S. Treasury announced that it was imposing sanctions on GNPOC and Sudapet, adding them to the list of entities owned or controlled by the government of Sudan with which U.S. persons were forbidden to do business.1239 The U.S. State Department said, “We certainly have concerns about the way in which this Canadian and other companies have essentially provided a new source of hard currency to a regime that has been responsible for massive human rights abuses in Sudan.”1240 It had earlier criticized the Canadian government for not imposing sanctions on Talisman. The Canadian government responded that it made its own policy “in Canada based on Canadian values and Canadian judgment as to the most effective way to support the peace process in Sudan.”1241 Foreign Minister Axworthy alluded to Canadian opposition, in principle, to unilateral sanctions such as the U.S. imposed on Cuba, which affected Canadian businesses.1242

Canadian Initiative at U.N. Security Council Blocked, April 2000

situation and the human rights situation,” said Minister Axworthy. “It puts a much stronger onus on companies.” Fosters backed out as quickly as it jumped in, saying it was unable to raise the money. In the meantime, human rights critics, both Canadian and American, had besieged it. Sudan had been inviting bids for exploration on these blocks since 1998. Claudia Cattaneo, “Fosters unit wins Sudan concession: Junior’s site double the size of nearby Talisman field,” Financial Post (Toronto), Calgary, Canada, March 13, 2000; “Slavneft Seeks Oil Riches in Sudan,” Africa Analysis, May 3, 2001.

1239 U.S. Treasury Department news release, No. 320, “Treasury Announces Sanctions Against Sudan’s Sudapet Oil,” Washington, D.C., February 24, 2000.

1240 Peter Morton and Claudia Cattaneo, “U.S. imposes sanctions on Talisman Sudan project, Contrast with Canada,” National Post (Toronto), Washington, D.C., and Calgary, February 17, 2000; Karen DeYoung, “Over U.S. Protests, Canada to Reopen Sudan Ties,” Washington Post, February 15, 2000.

1241 Ibid.

1242 “U.S. imposes sanctions... Contrast with Canada,” February 17, 2000.

414Foreign Corporate Complicity, Foreign Government Support

The Canadian government, as president of the U.N. Security Council for the month of April 2000, sought to put the Sudanese war on the Security Council agenda, and garner the “highest level multilateral support for the ongoing efforts” of IGAD, as Axworthy had announced in February 2000. Canada sought an informal consultation of the Security Council on the Sudan peace process, followed by a press statement expressing the Council’s backing for regional mediation efforts.1243 Canada dropped its plans, however, after closed-door consultations with the Arab League and the Organization for African Unity (OAU), which in the language of diplomacy suggested that Security Council engagement on this issue “at this time” would not be “productive.”1244 China’s ability, as a permanent Security Council member, to shame the U.S. into blocking any Security Council consideration of Sudan posed one of the real impediments to action. The Chinese did this by threatening to put the issue of the August 1998 U.S. bombing of the Al Shifa pharmaceutical plant in Khartoum on the agenda whenever Sudan came up. The U.S. government, intent on avoiding this potentially embarrassing sideshow, had little stomach for a Security Council investigation of that missile strike, and urged its ally, Canada, to refrain from putting Sudan on the Security Council agenda.1245 1243 David Melvill, desk officer, Canadian Department of Foreign Affairs and International Trade, email to Human Rights Watch, Ottawa, April 3, 2000.

1244 Anthony Goodman, “Canada drops bid to discuss Sudan in U.N. council,” Reuters, United Nations, April 4, 2000.

1245 Human Rights Watch interview with diplomat, May 2000.

415Human Rights Watch

TALISMAN “HUMAN RIGHTS” AND DEVELOPMENT EFFORTS, 2000-2002 Although the Canadian government had not imposed sanctions on it, Talisman responded to the pressure it was facing by appearing to change course. Instead of continuing an exchange of sound bites with activists, Talisman created an internal corporate responsibility department and took CEO Buckee off the front line. It made efforts to look as if it was taking its duties seriously and endorsing human rights language if not actions. Nevertheless, it repeatedly denied that there were abuses and, initially at least, denied that it had any responsibility in the human rights area at all.

Even though only 10 to 15 percent of Talisman’s overall operations were in Sudan,1246 Talisman’s stock was discounted because of the controversy surrounding the Sudan operations. The Globe and Mail reported from Toronto on June 26, 2000, that oil analysts as a group felt that the Sudan discount in Talisman’s share price was in the range of Canadian $15 to $ 25, an effect serious enough to make the company a candidate for a hostile takeover.1247 Talisman had a real financial motivation to make the image of its Sudan project acceptable to the market and to public opinion.

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