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· Acknowledged that the Sudanese government rejected a draft security agreement between it and GNPOC on the grounds that security was the prime responsibility and prerogative of governments;
· Acknowledged continued reports of oil-related displacement, stated that it dedicated “a significant amount of financial and human resources” to investigate these claims, but failed to disclose the results of any investigation apart from the satellite photo study (above);
· Noted that the Heglig and Unity airstrips were increasingly used by the Sudanese military, but failed to disclose (as was done in CSRR 2000) the number of times it used these airstrips for “offensive” purposes;
· Acknowledged that the Sudanese government had rejected Talisman’s request that the government allow unrestricted and unfettered access to humanitarian organizations and human rights investigators within the GNPOC concession;
· Noted that the Talisman Internal Human Rights Monitoring and Incident Investigation Program had opened twenty-nine case files as of December 31, 2001, and closed fifteen of the cases as of January 2002. Ten cases involving people who returned to Pariang (implicitly from SPLA-held areas) reported on in 2001 had made little progress; and Acknowledged eight separate “security incidents on oil infrastructure or personnel” in 2001, presumably rebel attacks. In one incident, six civilian members of a subcontractor’s road construction crew were killed during an attack for which the SPLA claimed responsibility.
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Talisman Pulls Out, October 2002 On October 30, 2002, Talisman announced that it had agreed to sell its Sudan assets to ONGC Videsh Limited, a subsidiary of Oil and Natural Gas Corporation Limited, India’s national oil company.1319 Talisman estimated that the aggregate amount it would realize from the transaction would be approximately U.S. $ 758 million (Canadian $ 1.2 billion), an after-tax return of approximately 30 percent. It expected the sale to be completed by December 31, 2002, subject to conditions, relating to obtaining consents from the government of Sudan and the other consortium members and to the waiver or expiry of rights of first refusal.
Commenting on the sale, and effectively confirming that the decision was made as a result of pressure
from the human rights community, CEO Jim Buckee said:
Talisman's shares have continued to be discounted based on perceived political risk incountry and in North America to a degree that was unacceptable for 12% of our production. Shareholders have told me they were tired of continually having to monitor and analyze events relating to Sudan. We are encouraged by recent developments in Sudan, but had to weigh all possible outcomes against having a firm and fair offer, in hand, right now. Selling our interest in the project resolves uncertainty about the future of his asset.1320
Talisman stated that its development projects there would continue in the short term:
We have long argued that Talisman's presence in Sudan has been a force for good and we have taken steps to ensure that the benefits created through our involvement will continue to improve the lives of the people of Sudan both now and in the future. Talisman and its employees have made significant 1319 Talisman press release, “Talisman to Sell Sudan Assets For C1.2 billion," Calgary, October 30, 2002, http://micro.newswire.ca/releases/October2002/30/c6739.htm (accessed October 30, 2002).
contributions to this end over these past four years, providing medical assistance, shelter, clean water, vocational training and initiating capacity-building programs. A program will be established to ensure continuity in funding of such Talisman development projects for the remainder of this year and through 2005.1321 The corporate responsibility policies and procedures implemented within the Greater Nile Petroleum Operating Company, the operator of the project, as a result of our advocacy efforts, such as the GNPOC Code of Ethics and human rights training, have influenced and, we hope, will continue to influence the operations of the consortium in the years to come. We also hope that the economic benefits of oil field development will play a constructive role in the Sudan peace process.1322 While Human Rights Watch welcomes this decision, we believe that Talisman still shares in the complicity of the oil companies operating in Sudan for the human rights abuses documented in this report during the period of its operations in Sudan.
Lundin’s Concession Lundin Sudan Limited is the Swedish company which was the operator of the consortium granted the rights to develop Block 5A, largely located south of Bentiu in the swampy, marshy, and meandering flat landscape on the West Bank of the White Nile in Western Upper Nile/Unity State. Most of the inhabitants of Block 5A are Nuer, except for some Dinka in the northern and southwestern corners that are not presently the targets of oil development.
The consortium consisted of Lundin Petroleum AB (Sweden), OMV (Sudan)Exploration gmbH (Austria), Petronas Carigali SDN BHD (Malaysia), and Sudapet (Sudan): Lundin had 40.375 percent, OMV 26.125 percent, and Petronas 28.5 percent. Sudapet owns 5 percent.1323 The concession was granted in 1996, operations on the ground started in late 1997, and within months fighting broke out in the key Nuer towns of the block, culminating in a May 1999 attack on the first well Lundin drilled. The attack was carried out by Riek Machar’s SSDF forces, who executed three government employees there.
Lundin evacuated the one hundred workers at the site the same day and did not recommence oil operations for eighteen months, until late 2000, after the government and its militia had attacked, burned out, and displaced many thousands of Nuer living there.
In March 2001, Lundin announced a “significant find” at the Ryer/Thar Jath location. In the same month, the NGO Christian Aid issued a report critical of Lundin for its role in Sudan. In January 2002, after one of its helicopters was shot down, Lundin again suspended operations on Block 5A. A major government operation, primarily against civilians along the oil road, began in early 2002, resulting in more massive displacement and civilian casualties. Operations on Block 5A were suspended for fourteen months, until April 2003, while the government pursued an offensive in Block 5A, in violation 1323 The consortium is described in Lundin Petroleum AB, Community Development and Humanitarian Assistance Program (CDHAP), Sudan, 2001-2004 (October 2001).
Foreign Corporate Complicity, Foreign Government Support of the ceasefire agreement. Only a few months after the resumption of oil exploration activity, Lundin agreed to sell out its interest in Block 5A to its partner, Petronas.
Lundin Hides the Situation of Armed Conflict in Block 5A Waves of massive displacement have been destroying life for the residents of Lundin’s Block 5A concession since it started operations in late 1997—though developments in peace negotiations in late 2002 did provide some hope that the pattern might cease.1324 The forcible displacement of Nuer agropastoralists from their homes, and from the Jagei area they believe is the place of origin of all Nuer,1325 began once Block 5A’s economic feasibility was created by the construction of the GNPOC pipeline to the Red Sea. As described above, the pipeline was designed with excess capacity so that it could carry the GNPOC oil as well as several hundred thousand more barrels of oil daily from Block 5A and other nearby blocks to the marine terminal.
The oil companies, led by Lundin, made no public statement condemning this destruction and displacement in Block 5A, despite the press attention it garnered and the regular alarms from U.N.
agencies about the dire state of the needy in this very area.
Nor did the oil companies disclose that rebel attacks had closed down their activities in May 1999. As set forth above, Lundin’s only exploratory well was attacked by rebel forces and the work force of approximately one hundred was evacuated the same day, by air, on May 2, 1999. The same day, as part of that attack, three government employees at the rig were shot point-blank by rebels; two died immediately and a third died of his wounds hours later; these killings were summary executions.1326 Lundin’s 1324 See above, “Numbers of Nuer and Dinka Desplaced from Oil Blocks in Western Upper Nile/Unity State.” On October 15, 2002, the parties to the IGAD peace talks at Machakos, Kenya, agreed to a ceasefire. “Memorandum of Understanding between the Government of Sudan and the Sudan People’s Liberation Movement/Army on Resumption of negotiations on Peace in Sudan,” Nairobi, October 15, 2002.
1325 Governing the Nuer, pp. 162-3 (“Nuer mythology traces a common ancestry for the sub-tribes the origin of which was a miraculous descent from Heaven at Kot (a Tamarind... tree) in the Jagey country of Western Nuer, some 300 to 350 years ago.”).
1326 See above, “Battle for Control over Block 5A, April-June 1999.”
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operations were suspended in May 1999 until late 2000 because of this attack on its operations and continued fighting, burning, and looting—with civilian casualties—between Nuer forces backed by the government, and later between Nuer forces backed by the government and by the SPLA.
Nor did the oil companies, led by Lundin, disclose the fighting that occurred up and down their block, Block 5A, during the months of June, July, and August 1999. Although their operations were suspended, they could not have failed to monitor the situation through the project security staff, because this was a valuable property where they expected to produce substantial quantities of quality oil.
The World Food Program noticed, however. It put out an alarmed press release on July 10, 1999, stating it feared “a worsening humanitarian crisis as it is unable to deliver urgent relief assistance to tens of thousands of people trapped by the fighting.”1327 It estimated that war between two rebel factions was blocking food delivery to 150,000 in rebel-held areas of Western Upper Nile/Unity State.1328 None of this fighting nor mass displacement caused the oil consortium, led by Lundin, to express concern about the well-being of the people living in its concession area.
Lundin never mentioned the armed conflict in its public releases.1329 Instead, it announced in January 2000 that:
1327 WFP press release, “150,000 Trapped by Renewed Fighting...,”July 10, 1999.
1329 After estimating that its oil find might be up to 300 million barrels, Lundin stated, “The rain [sic] period is just starting so Lundin Oil cannot investigate the current finding in detail until the autumn of 1999.” “Jackpot for Lundin Oil in Sudan,” Finanstidningen (Stockholm), May 21, 1999, abstracted from Finanstidningen in Swedish, BBC World Reporter.
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Only a month later, however, Lundin Oil announced that it had “temporarily suspended testing operations on the Thar Jath #1 well on Block 5A... due to logistical considerations.”1331 According to the press release issued on February 20, 2000, “The access road running from the company’s supply base at Rubkona to the rig site with an approximate length of 100 kilometres, is still under construction.”1332 Still no word about the fighting and displacement. The press release added that Lundin expected to resume testing operations in approximately one month, “once all the necessary equipment has reached the well location.”1333 In its report for the year ended December 31, 1999 (issued on February 28, 2000),
Lundin began to edge away from that estimate for early resumption of operations:
In Sudan the amount of work that can be carried out will very much depend upon the length of the dry season and our ability to overcome the logistical challenges. Sudan remains a tremendous opportunity for the Company and the Thar Jath discovery alone, which was drilled last year, could materially affect the Company’s reserves profile.1334 In March 2000, Lundin announced that its activity on Block 5A remained suspended because of “logistical difficulties and safety considerations,”1335 for the first time hinting at but not admitting the armed conflict in which Block 5A had been enmeshed since 1999 at least. In its report for the third 1330 Lundin Oil (SE) press release, “Stable Production and Good Oilprices. Lundin Oil about to embark on heavy work programme for year 2000,” published January 10, 2000.
1331 Lundin press release, “Lundin Oil AB – Lundin subsidiary suspends Thar Jath testing,” Canada Stockwatch (Vancouver), Geneva, February 22, 2000.
1334 Lundin Oil (SE), “Report for the Financial Year ended 31 December 1999,” Geneva, February 28, 2000.
1335 Lundin Oil AB press release, “Further delay in Sudan. January Production Update,” Geneva, March 21, 2000.
quarter of 2000, issued on November 14, 2000, Lundin noted, “In Sudan the construction of the allweather road on Block 5A is progressing well....”1336 Lundin did not disclose that there were ambushes on convoys traveling on the road to its drilling site, nor ambushes on its road construction/improvement activities in 2000, and that there was extensive fighting again in Block 5A during the months of June, July, and August 2000, up to September 2000.
There was a large swathe of burned territory stretching all the way from Nimne to Nhialdiu, south and east-west of Bentiu, by late July 2000. The vast area of burn and destruction was visible from any small plane—a relief plane flew over the area and commented on the destruction in late July 2000, which cut through the area of the oil road.1337 Thousands of displaced persons from this area of Block 5A fled into Bentiu for relief in the month of August 2000, generating relief agency alarms and press and coverage.1338 Thousands more headed from Nhialdiu through Bul Nuer territory and into Bahr El Ghazal for relief. Still there was no oil company comment on this large-scale tragedy unfolding in its concession.