The discovery of oil in Chad was supposed to allieviate poverty and human suffering, but it's only enriched Western Oil companies and the local dictators.By Brendan Schwartz and Valery Nodem,
Posted December 2, 2009
Courtesy of Alter Net
In 2000 Big Oil, the World Bank, and two corrupt dictators teamed up to launch the Chad-Cameroon Oil Pipeline Project. Years on, the media attention is subsiding while the negative impacts of the pipeline worsen daily. Brendan Schwartz and Valery Nodem reporting from Chad and Cameroon.
Know Chad?
If you’ve heard of Chad -- no, not the Bengals’ Ochocinco -- you probably haven’t heard anything good about it. Almost continuous war since independence and its involvement the Darfur conflict have gotten Chad nothing but bad press. One author called it “a neglected tragedy of a nation.” Chad is in fact a strikingly beautiful country and its people are as vibrant and diverse as any. But without a doubt, there is great human suffering. And as many people have noted, the discovery of black gold isn’t helping.
The Chad-Cameroon Oil Pipeline Project, although relatively little-known to the general public, was for a time the source of fierce debate and high rhetoric in international development circles. The World Bank-financed project in the heart of war-torn Central Africa pumps 170,000 barrels/day of crude from Chad’s Doba basin to Cameroon’s Atlantic port city of Kribi, 1,080 kilometers away. Led by such corporations as Exxon and Chevron, the pipeline received plaudits from the World Bank as “an unprecedented framework to transform oil wealth into direct benefits for the poor, the vulnerable and the environment.” Nine years after the World Bank agreed to finance the pipeline, six years after oil went online, and just one year after the World Bank quit the project, Chad-Cameroon is slowly fading from the development spotlight. The World Bank quietly released their own evaluationof the project last week admitting that the project failed to achieve its two main goals of reducing poverty and improving governance. One hopes this is not the World Bank’s final evaluation of the project since oil is scheduled to flow for another twenty years and the worst of the project’s impacts are just beginning to be felt. This is an update from the field.
National Mourning and Broken Promises
For Chadian President Idriss Deby, oil revenues are a means to prolong abusive and undemocratic rule. He changed the constitution to become president for life, used over 30% of Chad’s oil revenues on war, and used money destined for development in “priority sectors” to grant opaque, no-bid public contracts to god knows whom -- all things he promised not to do. It is little wonder that Chadian civil society declared the pipeline’s inauguration a day of national mourning. The World Bank’s public sector lending arms (the IDA and IBRD) announced their withdrawal from the project in 2008 stating “Chad failed to comply with key requirements” of their participation, though the World Bank’s private sector lending arm (the IFC) had no problem staying on board to reap the benefits of its $200 million commercial loan. Many promises were also made to people living in the oil-producing zone in the southwest of Chad. Villagers were promised fair compensation for the loss of land expropriated by Exxon, employment with the oil companies for the life of the project, and 5% of oil revenues to be invested in their villages. According to local residents, these promises were empty.
The Displaced
A woman in the Bero village of the oil producing zone explained that Exxon had displaced her whole family and promised to build them new houses equipped with furniture and find them new land. Although new houses were built, the construction was so shoddy that Exxon was forced to return just two years later and rebuild them to avoid a major PR embarrassment. There is no furniture to be found. In theory, everyone displaced by the project received some form of compensation, but rarely has it been sufficient to restore their standard of living. This is because Chad’s oil happens to be located a few meters below Chad’s most fertile agricultural land. The farming problem is especially serious since the zone is Chad’s only breadbasket and feeds most of the country. Exxon and the project planners claimed that compensations would be paid to displaced people, but that “self resettlement” would take place naturally whereby villagers would find/purchase new land for farming from a “village land pool.” A recent Chadian report notes that this has not happened; many farmers have not found land or enough land. Agricultural production is continually declining and will ultimately penalize the entire country.
The Local Government of Exxon
Hoping to avoid paying too much compensation, Exxon has allowed many villagers to stay in the oil producing zone. Villagers often live precariously close to oil wells which turn round the clock. Increased banditry in the zone led the former governor of the Logone Oriental Province to instruct local police to “arrest or shoot on sight” anyone circulating through the zone after 6 pm. Now people living in the zone are literally surrounded by oil infrastructure and prisoners in their own homes. Almost every facet of their lives is governed by Exxon, the de facto local government.
Take the case of Namarde Keiro. His family lives within 500 meters of Exxon’s Operations Center and within twenty meters of an active oil well. As high voltage power lines tower over his home, Keiro’s family lives in what the World Bank calls “extreme poverty” with no access to clean water or electricity. On October 11 of this year, Keiro discovered an oil spill while returning home from his farm. He alerted Exxon employees who immediately cordoned off the area and “cleaned” it up before any outside observers could see the damage. The oil spill ruined Keiro’s fallow land, and so they decided to compensate him with a special gift: an empty Esso (Exxon’s operator) backpack.
(Pictured above: Esso backpack and remnants of the oil spill)
This was allegedly the fifth oil spill related to the project, yet was not reported by a single media outlet in or outside of Chad. If a journalist from the Associated Press made just one phone call to Exxon in Houston, Keiro likely would receive thousands of dollars of compensation within a week.
Employees of the oil consortium returned to Keiro’s home on November 6th with surveying equipment. Apparently they want to build a road which will pass two meters from the family’s mud hut. According to local NGOs, Exxon’s strategy is to make life so unbearable for local residents that they leave on their own accord with no compensation. It’s working.
Invisible 5%
As for the 5% of oil revenues promised to residents of the oil-producing zone -- it’s all being spent on so-called “Presidential Projects.” These are high-profile large infrastructure projects that Deby has gifted to the regional capital of Doba, more than a thirty-minute drive from the villages hit hardest by oil production. These projects, which include an already crumbling football stadium, are intended to win support for Deby’s party in the 2010 local elections and 2011 presidential election. When asked if any of the 5% funds had been spent in his village, the Chief of Meikiri choked up with laughter before finally catching his breath to say “no.” That was Sunday. On Monday, Exxon began drilling an oil well just feet from the soccer field of his village’s elementary school. $74 million dollars have been spent in the oil producing zone on development projects according to the Vice-President of the committee managing the “5% fund.” Yet nothing is visible in the villages playing host to the project.
Weapons, Weapons, Weapons
The greatest impact of oil in Chad has been felt not by the caged-in villages of the Doba Basin, but rather in the North and East of country where hundreds of millions of dollars of oil money has been used to purchase weapons for a war that has killed thousands and displaced hundreds of thousands. In 2007, Chad spent 4.5 times more money on the military than it did on health, education, and other social spending combined. Despite the World Bank’s guarantee of a model framework for oil-led development, oil has continued to fuel war where civilians are the primary victims. Chad even used oil money to purchase weapons which were later confiscated from JEM, the Darfurian rebel group Deby hired to protect his capitol from Chad’s own rebels. The oil for war and war for oil reality is deeply ingrained in Chad’s popular political consciousness. Nadji Nelambaye, the coordinator of a Chadian NGO, snapped “are you trying to provoke me?” when asked if he thought there was a link between oil and war in the country. He then launched into a passionate hour-long speech which 99% of Chadians would agree with. According to a recent International Crisis Group report, two of Chad’s high ranking ministers -- who happen to be President Idriss Deby’s twin nephews -- defected to the armed rebellion explicitly because of perceived misuse of oil revenues.
Cameroon, the Other One
Chad has received a lot of attention and criticism related to its oil adventures. However, almost 900 kilometers of the Chad-Cameroon Pipeline pass through that other country: Cameroon.
Despite receiving minimal “transit revenues” from Chad’s oil, the pipeline’s social and environmental impacts are just a harsh for Cameroonians living along the pipeline route. 248 villages are directly impacted by the pipe and dozens more by roads, operations centers, and employee living bases all built expressly for the project. Unlike in neighboring Chad, no oil revenues have been set aside for development spending in the affected villages. The Cameroonian government claims it only receives $25 million per year and some of that money returns to impacted villages via increased social spending in the national budget. But the truth is no one knows where the $25 million is spent (or if that’s the true amount) and there is no accountability for the use of the revenues. Thus the accent of the debate in Cameroon centers on the (non)payment of compensation. The Environmental Management Plan (EMP), hundreds of pages of World Bank crafted policy jargon, required the oil consortium and Cameroonian government to pay all compensation before construction of the pipeline began in 2001. Today, Cameroonian NGOs have documented hundreds of cases in which compensation was never paid, partially paid, or paid in kind with shoddy materials. Try this Pu-pu platter of compensation disasters:
The Village Grandfather
Mongotsoe Akam is a quiet and awkward grandfather living in the small village of Ebaka in Cameroon’s East Province. He has been a farmer his whole life and seems content to continue living the traditional village life. During the pipeline’s construction, multiple subcontractors of the oil consortium were constantly buzzing around his home and farm. They were looking for laterite, a type of rock used to surface the unpaved roads the consortium built to transport materials and heavy machinery. Mr. Mongotsoe showed them the exact location of his laterite and negotiated a price for its extraction. Not only was he never paid for the use of his laterite, but he also was never compensated for the $50,000 worth of crops that were bulldozed to access the quarry. Mr. Mongotsoe politely waited until the pipeline construction was completed in 2003 to complain of his plight. When Exxon refused to pay, he asked an agricultural engineer from the Cameroonian Ministry of Agriculture to evaluate the damage to his land. Using EMP principles, the engineer’s report concluded Mongotsoe was owed a little over $50,000 and was sent to the director of Exxon’s environmental unit. Exxon later replied in a written notice that Mongotsoe’s claims documented by the Ministry of Agriculture are “not convincing” and “lack coherence.” In September, 2009 the oil consortium finally offered to settle with Mongotsoe for a mere $600. When the old man refused, an Exxon employee told two Cameroonian NGOs that Mongotsoe was trying to swindle the company since he knows they have tons of money. Can you imagine the headline in The Onion? “Cameroonian Grandfather Bankrupts Supermajor.”
Confusion in the Domps
A few hundred kilometers away in the village of Dompta, unemployed youth watch as small airplanes land and take off where they used to farm—now Exxon’s private landing strip. Their individual compensation payments were spent years ago and now they have no livelihood. The Chief of Dompta signed a contract with Exxon for the construction of a health clinic as “community compensation.” When the health clinic wasn’t built, he wrote to the oil consortium demanding they follow through on their written agreement. One of Exxon’s directors cordially replied that the health center would be built and the village could use health clinics in neighboring villages until then. Dompta’s chief died in 2007 and was replaced by his son as tradition requires. The new Dompta chief claims Exxon built a health center in Dompla (notice the difference in spelling), a village about 30 kilometers away and even proudly posted a sign that read “Dompta Health Clinic.” We will never know if this is a cruel joke or corporate idiocy because no one from the oil consortium has yet to comment on the issue. For the people of Dompta, it doesn’t really matter.
Fishing for Oil
No place in Cameroon has been overrun by the pipeline as much as the coastal city of Kribi. Traditional Kribians wake up around 5 am and ready their wooden canoes for the day’s fishing expedition. As each day passes, they paddle farther and farther to catch fewer and fewer fish. That’s because one of the principal fishing reefs was dynamited to make way for the Chad-Cameroon pipeline, which is buried under 11 kilometers of seabed. Supertankers from around to world come to dock at the Offshore Loading Facility just off Kribi’s coast, fill up on Chadian crude, and then head off to Europe and the US. The Cameroonian coast guard and Exxon private security won’t let fisherman drop their nets near the Offshore Facility and routinely harass artisanal fisherman as commercial Chinese trawlers illegally overfish the outer waters with impunity.
In January of 2007, an oil spill occurred in Kribi. As fisherman reeled in their day’s catch, they couldn’t help but notice the distinctly black color of all their fish. Exxon claims the damage was minimal. No independent analysis has been conducted to measure the impact of the spill in Kribi, which is also Cameroon’s premier tourist destination. The damage done to Kribi’s artisanal fishers is incalculable because the oil consortium’s environmental baseline studies don’t include sufficient data on fishing. Beach-front villages have been given $4,000 each in additional compensation, which Exxon calls “bon voisinage”—being good neighbors—but takes no responsibility for the collapse of Kribi’s fishing industry.
The World Bank asked the government of Cameroon and Exxon to jointly publish an official “Oil Spill Response Plan” before the project became operational in 2003. The plan was “inaugurated” at Yaounde’s ritzy Hilton Hotel on November 3rd, 2009. A member of a prominent Cameroonian NGO which has been monitoring the project was barred from the event because “he didn’t have accreditation.”
America’s Responsibility and What You Can Do
As America’s search for oil and gas intensifies on the African continent (soon to comprise 25% of all US oil imports), Americans should be aware of the human/environmental costs of their continuing lust for black gold and the actions of their corporations. Bluntly put, oil in Nigeria, Equatorial Guinea, Gabon, Congo-Brazzaville, Cameroon, Chad, Angola, and Sudan has further impoverished people at best and caused inestimable human suffering in many cases. Ghana, Mauritania, Uganda, Sao Tome and others have nascent industries which could become strategic in the search for the world’s least renewable resource.
The ultimate goal of international campaigning is to “leave African oil in the soil” and build stronger governance beforehand since the extractive industries almost never contribute to development. However, powerful interests are making that objective difficult. Thus the fight will for now be concentrated on policy improvements. Here are a couple easy things you can do to influence policy and help prevent a repeat of the Chad-Cameroon debacle:
Contact your elected representatives to support Senator Richard Lugar's Energy Security through Transparency (ESTT) Act, S.1700. The bill would require energy and mining companies to reveal how much they pay to foreign countries and the U.S. government for oil, gas, and other minerals. The information would be included in financial statements that are already required by the Securities and Exchange Commission (SEC). This would apply to both American and international companies listed with the SEC, covering a majority of the largest oil, gas and mining companies in the world. This bill is part of a large international campaign called the Extractive Industries Transparency Initiative (EITI).
Alert your elected representatives to the Human Rights Watch campaign to mandate that the US Export-Import Bank (ExIm) and Overseas Private Investment Corporation (OPIC) require extractive industries companies who receive funding or political risk insurance from them to show that they have effective policies and procedures to address security and human rights, and give those companies the capacity to monitor compliance with those standards. Both ExIm and OPIC financed the Chad-Cameroon Pipeline.
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