Eveline Lubbers on Wed, 4 Nov 1998 13:14:25 +0100

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<nettime> Will Chad become a second Nigeria? Shell's new image under fire

To be spread as wide as possible!

Will Chad become a second Nigeria?
Shell's new image under fire.

by Eveline Lubbers

Shell, acting in partnership with Esso and Elf, is on the verge of opening
new oilfields in Chad. It is also going to build a 600 miles pipeline
through Cameroon's rainforest to reach the Atlantic.  Judging by the
contract that has been made with the government of Cameroon, the
oilcompanies are expecting major trouble with this project.  According to
the agreement, Shell and partners are granted unlimited power to deal with
'cases of emergency' which 'might threaten the project'.  If necesary
their private security outfit can count on the assistance of the local
police or the army.

The World Bank, which will decide in the very near future whether it will
finance grants for the project, harbours concerns. The Environmental Team
of the Bank has already made short shrifts of the oil companies's
'Environmental Assessments' of their plans. The impact and consequences
for the nature, threatened species, and the indigenous people have been
very sketchily chartered, and compensation for the local stakeholders has
yet to be worked out. The Commission for Environmental Impact Assssment
(which brought out a report on request of the Dutch former development aid
minister Jan Pronk) warns of attacks and acts of sabotage against the
project, given the risks of political instability in the countries. =20
When asked in parliament - in April 1998, whether he felt that Chad may
well evolve into a second Nigeria, Dutch finance minister Mr Gerrit Zalm
replied with a curt 'yes'.

It is only two years ago that Shell launched its new business principles
at its AGM, including a code of conduct regarding human rights and
environmental issues. Behind this rather radical shift in policy lies the
Brent Spar affair, and also the flack Shell got because of its collusive
relationship with Nigeria's military dictatorship. Shell's CEO of the
time, Mr Cor Herkstroeter, took the lead in a debate about politically
correct entrepreneurship. Openness and dialogue would be henceforth the
hallmark of the new strategy. These glowing promises were met with some
suspicion by Friends of the Earth' in the Netherlands. For years now,
environmental movements have supported their colleague organisations in
Nigeria in their struggle against Shell. 'The people at Shell have
changed a lot in the way they communicate. They are much more careful
now', says Irene Bloemink of Friends of the Earth. Profits and Principles,
the first entirely reformulated Shell International yearly Report, has
only been published in Dutch and in English. That gives an idea of where
they think are the people they view as a potential threat to them..' May
be that Shell's good intentions were only a clever PR exercise intended to
take the wind out of its criticists' sails.

The question is whether the Oil Major has learned anything from its
mistakes in Nigeria. The new project in Chad and Cameroon, in which Shell
participates for 40% ( together with Esso and Elf, which are good for
respectively 40% and 20% of the remainder), looks like going wrong right
from the start. According to Friends of the Earth, the environmental
assessments came out too late in the day just at the beginning of this
year, where as test drilling has been allready under way, and the
contracts signed two years ago. And in March this year, over a hundred
civilians were killed in massacres perpetrated for the most part by
government troops attempting to regain control over the restive Southern
part of Chad. The separatist movement FARF fears that the oil revenues
will only benefit the presidential clique of Northerners.

Meanwhile, the environmental movement is no longer alone in being critical
of Shell's plans. The Commission for Environmental Impact Assessment
evaluated the plans of the oil companies because the Netherlands are
sitting on the board of the World Bank and wanted its voice heard in the
matter. The team of independent experts was chaired by Professor Dick de
Zeeuw, a catholic political stalward and former president of Wageningen
Agricultural University. Their findings were rather clear. The
commission's final report states, that essential information is lacking.
On the basis of these Environmental Assessments the project nor its
environmental consequences can be fully overseen.' The commission
furthermore noted that Cameroon and Chad are poor countries with weak
government structures which cannot be considered politically and socially
stable. The reports should have addressed all possible environmental risks
resulting from these circumstances. It is also unclear 'how and where
revenues will be used for poverty alleviation and how proper royalty
management is guaranteed'. These factors put together result in a
situation where 'ingredients are present for attacks and acts of sabotage
on the project's infrastructure. Such acts will notably cause considerable
environmental and social damage.' Consultations with local communities,
one of Shell=92s good intentions, do not meet the standards prescribed by
the World Bank - on the contrary: 'the public participation took place
under military escort while military actions against the rebels were
taking place in the region.' The commission voiced doubts whether 'such
circumstances can be qualified as an 'enabling environment' for public
participation. There are even instances where the De Zeeuw commission
qualifies Environment Assessments as 'sweatheart statements' and a
'scoping exercise'. The consortium's claims about the project 's alleged
economic benefit to the local communities are nowhere buffeted by concrete
facts and figures. False hopes have been raised amongst the local
populations, the Commission warns.

But this unflattering review is mild stuff compared to what the World Bank
itself wrote about the consortium plans. In 65 points, the Bank's
environmental experts demolished the environmental reports on the
Chad-Cameroon project. A selection from the report which the Bank
intentionaly leaked out this summer: The Environtal Assessments 'do not
provide an adequate basis for Bank project appraisal.' It remains unclear
how the choice was made for the pipeline's corridor. The Bank demands a
detailled account of the criteria taken into consideration, and wishes
also to know whether a 'no-project alternative' has ever been seriously
looked into. The Bank also wonders whether the consequences of building a
pipeline in a direct line towards the Atlantic Ocean have ever been
properly considered, this with regard to the indigenous Pygmee population,
the archeological heritage, and the bio-diversity of the rain-forest. The
oil project will cause a 'pull' on job-seekers from outside in a region
where even a limited influx could have a significant impact on the
lifestyles of indigenous and local people. And: The report does not spell
out the critical treshholds for eligibility for involuntary resettlement
assistance. says the World Bank. Resettlement entitlements for affected
people in case they choose the alternatives to resettlement need to be
specifically defined. The plan needs to be much more specific, to prevent
major problems. Will the people be given sufficient time to arrive at a
decision? Where the monies for compensation will come from and what the
exact nature is of the promised 'assistance' will be remains obscure. =20
Furthermore, the oil consortium has convened a panel of independant
observers who will 'advise' the Chad government in the event of problems
arising from the resettlement scheme. 'This seems to imply the absense of
any accountability on the part of the consortium for solving problems in
project implementation' notes the Bank dryly, and goes on to demand that
'the respective responsabilities of the Government of Chad and the
consortium be clearly agreed and detailled in the plan.'

For the oil companies, the importance of a loan by the World Bank is
mostly political. It represents only a fraction of the funds that need to
be mobilised to finance such a project. But with the World Bank's fiat it
becomes far easier to interest other investors. The World Bank's decision
has already been postponed a number of times. And at the last Bank's
meeting, in September in Washington, environmental groups were staging
protests outside, while the oil companies had marshalled a team of no less
than hundred lobbyists to convince the Bank of their good intentions. The
oil consortium does not really care about the environmentalists' concerns.
Friends of the Earth Irene Bloemink: 'Elf keeps totally mum. Esso says it
will only react when the definitive Environmental Assessments are out. But
in the meanwhile, all other players are being bombarded with preliminary
versions of key documents.' Shell is an even more special case.  The open
dialogue between the company and Friends of the Earth in the Netherlands
has gone on the backburner since this summer. Whereas in April, Shell's
CEO for Chad had told Friends of the Earth that 'the project is Chad is in
accordance with the World Bank's conditions.', adding: 'but if you find
things you're not happy with, come and tell us', now that the environment
movement is getting support from independant quarters, the dialogue has
trickled down to polite letters of aknowledgements for forwarded material.
In Chad, a member of parliament opposed to the oil project was arrested
early June. Ngarledgy Yorongar lost his parliamentary imunity and has in
the meantime been condemned to three years in prison for 'defamation of
the state'. Since they were denied access to the relevant documents his
lawyers refused in protest to conduct his defense. In Cameroon also, notes
the Commission De Zeeuw, opposition against the oil project was silenced
as it would have been explained as opposition against the national

Untill recently, few details were known about the contract between the oil
companies and the government of both countries. Through allied NGO=92s
however Friends of the Earth discovered recently that the official
agreement has reached the status of law in both Chad and Cameroon (it has
been published as such in the Statue Book, the Official Gazette - Cameroon
Law no. 97-16). The consortium has, for all practical purposes, obtained
carte blanche. The section in the agreement in which Shell and partners
are granted permission to operate as a para-military outfit is convoluted
in formulation but explicit in its purpose. The consortium is granted full
authority to investigate any situation that might cause immediate danger
to the project. The oil-police is allowed 'under its sole responsibilty
and without previous authorisation, to have access to any private or
public land' in order to put an end to the threat. If necessary, it can
count on the assistance of the local police, the army or other security
services.  Further definitions of the terms like 'investigate' and
'immediate danger' are not provided.

In the very next future World Bank's president, Mr Wolfensohn must decide
what the Bank's standpoint will be with regard to the pipeline project.
The overall decision about the whole project is expected early next year. =
Realistically it would take at least two years to sort out and answer the
questions put forward by the Bank own environmental assessment team. Irene
Bloemink explains why the clout of the World Bank would have major
consequences. Even though a World Bank's loan has only been applied for
the pipeline and the exploitation of a single oil field in Southern Chad,
it would appear from both the proposed duration of the contract and the
estimates about the amounts of oil to be drilled, that more oil fields
will be opened in the region. This was also one of the findings of the
CEIA. Irene Bloemink: 'The cumulative consequences of the potential
pollution in a much larger area have not yet been researched at all.'

Going by its new business principles Shell nowadays expects a degree of
responsability towards society at large from its employees. Beside
endorsing basic human rights and values, this also includes: 'taking
account of the standards for public health, safety procedures, and
security measures which are in accordance with the intent to contribute to
sustainable development.' Whether this is just public relations or not
will show quite soon. Friends of the Earth has started an international
campaign with the motto 'Don't let Chad become a second Nigeria.' The
Progressive Green Party in the Netherlands has already tabled questions in
parliament about the rather extensive powers enjoyed by the consortium on
foreign soil. But for the time being Shell deflects all awkward questions
towards its partner Esso. Esso's issue manager has no formal position on
the wide critisisms. The consortium is trying to answer the World Bank's
questions by providing new information, this is an ongoing process.

__________________________ Translated by Patrice Riemens

Will be published on Telepolis shortly:

More on Shell's counterstrategies: http://www.xs4all.nl/~evel

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