ENVIRONMENTAL DEFENSE FUND
1875 Connecticut Ave., NW, 10th Fl.
Washington, D.C. 20009
Tel: (202) 387-3500; Fax: (202) 234-6049; korinna@edf.org
Korinna Horta, February 1997
Questions Concerning
The World Bank and Chad/Cameroon
Oil and Pipeline Project
Makings of a New Ogoniland?
Corporate Welfare Disguised as Aid to the Poor?
Contents:
- Summary
- The Project and its Context
- The Role of Public International Financial Institutions
- Helping the Poor?
- Process of "Criminalization"
- Reigniting the Civil War in Chad?
- In the Doba Region
- Benefits for Cameroon?
- Social and Ecological Risks
- Loss of Livelihoods and Resettlement
- Loss of Biodiversity
- Leaking Pipelines
- ELF's Special Role in the Routing of the Pipeline
- Political Risk Mitigation Strategy
- Hard Loans from the African Development Bank?
- Financial Edifice
- Cushions for Corporations?
The World Bank and the Chad/ Cameroon
Oil and Pipeline Project
Summary
Should international development assistance for two of the poorest countries
in Africa be used to support big oil companies? An international consortium
consisting of Exxon, Shell and ELF is planning a multi-billion dollar oil
exploitation project with serious environmental and social risks that many
fear may create another Ogoniland, Nigeria's oil- producing region marked by
environmental devastation and brutal human rights violations.
The project consists of the development of the Doba oil-fields in southern
Chad, a landlocked nation, and a 600 mile pipeline through Cameroon to
transport the oil to an Atlantic port from where it is exported. But there
is a hitch. The project won't go forward unless it is supported by public
funding from international development agencies, mainly the World Bank. The
World Bank intends to fund the project both with IDA credits intended to
help the poorest countries and through its arm that supports private sector
companies directly, the International Finance Corporation (IFC). A final
decision by the World Bank's Board of Directors is expected later this year
and the first oil is scheduled to flow in the year 2000.
Exxon, the leader of the consortium, refers in project documents to the
World Bank as the foundation of the financing structure for the entire
project. World Bank officials confirm that the project hinges on the
participation of their institution because the consortium looks to World
Bank participation as the center piece of its risk reduction strategy in a
politically volatile part of Africa and as necessary to attract funding from
export-credit agencies and commercial banks. The international standing of
governments of poor countries depends on their relationship with the World
Bank. When this relationship turns sour, foreign aid and commercial lending
are likely to be cut-off. The resulting political leverage of the World
Bank reduces the risk of other public and private investment with which it
is associated.
The World Bank claims that the project will alleviate poverty because
revenue from the oil for the Government of Chad and royalties for the
Government of Cameroon for the use of the pipeline would be invested in
poverty programs. However, this strategy has little credibility in view of
the demonstrated lack of commitment to poverty alleviation by both
governments.
The Doba region in southern Chad has long been the seat of an ethnic and
regional struggle against Chad's central government which is closely
associated with the government of neighboring Sudan, a country that the
U.S. accuses of supporting terrorism. The promise of oil wealth in the
south risks reigniting the smoldering tensions with fresh demands for a
federalist state and renewed violence. On the financial side of things,
foreign donors have not trusted the President of Chad to handle the
country's finances. At their insistence, the Chad Treasury was under the
control of a Swiss firm for several years.
The Government of Cameroon is also known for the lack of transparency in its
financial transactions, with the whereabouts of the revenues from the
country's own offshore oil production largely unknown. A 1995 World Bank
report found the government's will to address poverty very weak and
complained of financial mismanagement.
The 600-mile underground pipeline through Cameroon will pass through
ecologically fragile rainforest areas, including an area that is the home of
a Pygmy minority of traditional hunters and gatherers. An uncontrollable
influx of people in search of work will gather at the construction sites.
As a result, deforestation, wildlife poaching, and the loss of farm land of
local villages to the construction activities will create a destructive
environmental legacy. The pipeline itself, even with state-of-the art
equipment, poses the danger of groundwater contamination and pollution of
important regional river systems as crude oil containing heavy metals leaks
into the environment.
An environmental impact assessment is being carried out and an Environmental
Panel was put in place to mitigate these problems. But the best
environmental reports are of little help when there is no government
commitment to carry out its recommendations. This lack of commitment is
especially in evidence in Cameroon, a country with one of the highest rates
of deforestation in the world. Once the money is flowing, the unholy
trinity of oil, power and corruption will make corrective action difficult.
Those in the countries that dare complain will do so at their own risk.
According to the U.S. State Department's Report on Human Rights both the
Governments of Cameroon and Chad are responsible for severe violations of
human rights, the lack of freedom of expression, and their citizens' very
storage stations, about 500 km of road upgrades, and the building of a
floating storage and off-loading facility on Cameroon's Atlantic coast at
Kribi.
Total project costs are estimated at about U.S. $ 3.5 billion. The project
will not go forward without significant backing by the World Bank (please
see below) and a decision by the World Bank's Board of Directors may be
scheduled for as early as the summer of 1997.
Given the scale of investments and the nature of risks, the project raises
serious questions. Furthermore, it appears that alternative investment
programs and a more balanced pattern of development which are more
appropriate to alleviating poverty and promoting sustainable development
must receive more attention.
The Role of Public Financial Institutions
A brief project report by Exxon, the lead operator of the project, states
that the World Bank and the International Finance Corporation (IFC), the
World Bank's arm which directly supports the private sector, will represent
the foundation of the project financing structure. 1/ The reasons for this
prerequisite are that World Bank involvement provides political risk
insurance and serves to attract funding from other sources, especially
export- credit-agencies.
World Bank Group direct participation involves IDA support of about U.S. $
120 million and IFC investments of an estimated U.S. $ 250 million directly
for the private sector companies to be established by the consortium, which
is made up of Exxon (40%), Shell (40%) and Elf (20%). 2/
But more importantly, building on IDA's commitment to the project and its
relationship with the governments, the IFC will play a key role in raising
project funds on international capital markets. The IFC plans to mobilize
at least an additional $ U.S. 1 billion in limited recourse debt. Limited
resource debit is debt for which the responsibility of the parent oil
companies is limited.
The Project Information Document (PID) of April 4, 1995, 3/ the only
publicly available World Bank document on the project, does not specify if
there will be separate credits to Cameroon and Chad. It does, however,
state that World Bank Group financing will be only for downstream
facilities, e.g. the pipeline and marine facilities, whose total cost is
estimated to be U.S. $ 1.8 billion.
Helping the Poor?
According to the PID, the project will reduce poverty by promoting the
economic growth of Chad and Cameroon through the private sector-led
development of Chad's petroleum reserves and the royalties Cameroon will
receive for allowing Chad's oil to pass through for export.
World Bank investments in large-scale infra-structure are a "blunt
instrument" for intervening directly on behalf of the poor as stated in the
Bank's 1994 Development Report on Infrastructure. 4/ But worse, this type
of investment crowds out programs that would directly benefit the social
sectors, health, education, and environmental protection. The argument has
been made eloquently by a former World Bank official, Martin Karcher, who
decided to leave the World Bank when the Bank's planned involvement in the
Arun dam in Nepal threatened to wipe out long-standing efforts to improve
basic health care and education in the country.
According to interviews with World Bank staff, the poverty impacts of the
Chad/Cameroon oil and pipeline project will be different for Chad and
Cameroon. In the case of Cameroon, the royalties, which may amount to as
much as U.S. $ 60 million per year, will provide general budgetary support
to the government and be used to meet the country's external debt burden.
In the case of Chad, on the other hand, there will be a technical assistance
project to strengthen the country's management of oil revenues, which are to
be paid into a special Development Fund. The Development Fund is to be used
by the government for poverty alleviation programs, but for sovereignty
reasons the Government of Chad alone decides how to use the funds.
In principle, a development fund can be a critical resource for social
development programs in a poor country that has limited access to outside
assistance. In practice, however, the situation is complicated by the
entire political and socio-economic situation of a country. In a case far
simpler than Chad, the Development Fund established under the Lesotho
Highlands Water Project, which receives royalties from the export of water
from the Highlands of Lesotho to South Africa, has so far failed to benefit
the people directly affected by the project and has become an instrument of
the politically powerful.
Process of "Criminalization"?
In both Chad and Cameroon, civil society organizations struggling for
greater democratization and defending human rights and the environment are
taking root. These organizations whose presence and growth is a source of
hope for more equitable and environmentally sound development, face
difficulties and threats from the existing power structures. They are in
need of strengthening and support, but the oil project may undermine hopes
for a greater democratic opening.
At present, the situation in both Chad and Cameroon does not augur well for
wide-spread benefits from the proposed project for its struggling
populations. The lack of respect for human rights, as documented by Amnesty
International, is pervasive in both countries. According to the U.S. State
Department's Annual Report on Human Rights, both the Governments of Chad and
Cameroon are responsible for severe violations of human rights, the lack of
freedom of expression and association, and their citizens' very limited
(Cameroon) or non-existent (Chad) capacity to change their government. 5/
The World Bank's claims of development benefits for both countries cannot be
evaluated without considering the political economy of each country.
Both governments have been successful at obliterating the distinction
between public and private assets. In Chad, the national treasury has been
controlled by the Swiss company COTECNA for several years on the advice of
donors who wanted to prevent the President of Chad from having direct access
to cash in the Treasury. 6/ Cameroon's oil revenues are largely unaccounted
for, a situation which a respected British publication describes as one of a
"historic lack of transparency in its recording of trade figures, especially
for crude oil exports."7/ Foreign donors, especially France, and the
multilateral development banks have abetted-if not promoted-the wide-spread
corruption in Cameroon by continuing to make loans turning it into a
severely indebted country, while its natural resources are disappearing
without benefiting the country's citizens.
A confidential report of June 1995 to the French Ministry of Foreign Affairs
warns of a "the process of Criminalization" in the way many economies in
Sub-Saharan Africa are being run. 8/ According to the report as quoted in
the magazine Novel Observateur, this "criminalization" is the result of the
combined effect of economic crisis, neo-liberal structural adjustment
programs and the lack of legitimacy of political institutions. The report
makes explicit mention of the role played by French oil companies (i.e.,
Elf, a partner in the Consortium) in the lack of accountability and
transparency (i.e., corruption) in the oil business on the continent.
Reigniting the Civil War in Chad?
For more than thirty years Chad, a vast country two-and-a half times the
size of France in the center of Africa, has suffered an intense civil war.
The reasons are complex, but put simply, the war pits the largely Muslim
North of the country against the South, the country's main agricultural
region which is home to mainly Christians and Animists.
There are several politico-military groups around the country, but Doba is
the main center of the southern rebellion against President Idriss Dby who
rules from the capital of N'Djamena which lies 350 miles to the north. Much
of the army is recruited from the President's ethnic group and is regarded
by Chadians as the principal source of insecurity. 9/ The oil wealth in the
south is likely to increase southern demands for greater autonomy. During
Chad's 1996 Presidential elections, which were staged with the help of
France and which are reported to have been largely fraudulent, the candidate
who campaigned on a federalist platform was put in jail. 10/
The fragile truce at present is at great risk as acts of sabotage and the
secessionist movement are fueled by resentment of northern control over the
oil income. Ironically, the main ally of the Chadian Government is the
fundamentalist Islamic Government of Sudan, which the U.S. accuses of
sponsoring terrorism. It is also the widening civil war in Sudan itself,
which has much to do with control over oil resources, that worries many
well- informed Chadians as a harbinger of things to come.
With a per capita income of U.S. $ 210 in 1993, most Chadians are very
poor. Low health indicators due to malnutrition, lack of clean water, and
sanitation are the central problems. Will the oil change that? According to
recent reports, the feeling by many in the capital that the country will
soon enter a golden age of oil wealth is tempered by the views of local
human rights workers, journalists and others who fear becoming the next
Ogonis. 11/
In the Doba Region
Two worlds are clashing in the oil region, traditional peasant culture and
the expatriate oil business way of life with its sophisticated technologies
and base camp offering all of western amenities. Tragedy already has been
visited on local people. One case is that of the peasant who took his two
children to see the landing of an airplane, something that had not been seen
in his area for a long time, and was killed by Exxon security guards.
Notwithstanding the fact that the villagers testified that the peasant was
one of them, had never left the village, and had just wanted to see the
plane, the military chief prepared a report stating that the man was a
rebel, thereby officially justifying the killing, and closed the case.
Exxon hid behind the military chief and no compensation was paid to the
family of the victim. 12/
Recent visitors to the area found that local people who have already lost
houses and fields to the prospecting work, construction of the base camp and
other project-related activities are angry about the compensation they are
receiving. Even a small patch of land can be a question of family survival
in poor rural areas. Interestingly, the question of compensation seems not
to have received much attention from the Chadian Government. At a press
conference following the signing of the pipeline agreement between the Oil
Consortium and the Governments of Chad and Cameroon in February 1995, the
General Secretary of Chad's Presidency responded to a question on
compensation by saying "we have not thought about it yet." 13/
There are myriad examples of how poor rural people's livelihoods suffer when
infrastructure and other projects intrude on their survival economy and the
levels of repression and violence increase. This situation can easily be
repeated in southern Chad.
Benefits for Cameroon?
Cameroon, an oil-exporting country, used to be classified as one of Africa's
middle-income countries. This status was changed to "low-income country" by
the World Bank following the devaluation of the FCFA in January 1994. The
devaluation led to a 25 to 30% decline in purchasing power in the capital
city of Yaound alone. 14/ This came following a decade of severe economic
crisis and growing pervasive poverty in both rural and urban areas. The
revenues from the country's oil exports (please see below) have never been
accounted for and the country's rich tropical rainforest is being raided by
timber companies and their friends in government without consideration of
the ecological and social consequences. The country's natural resources are
being used for private benefit with little accountability in the system.
Not surprisingly, a 1995 World Bank report concluded that Cameroon
government commitment to poverty alleviation is weak. 15/
Today, Cameroon is a severely indebted country, which according to World
Bank figures has only paid about 30% of its debt service due since 1991.
The pipeline project, according to the already mentioned World Bank
officials, will bring in hard currency royalty payments to help service the
foreign debt. The project plans to create about 600 jobs in Cameroon for
the duration of the pipeline construction. This is not much for a large
investment, including several hundred million dollars from the World Bank
Group, and hardly a contribution to sustainable development given the
considerable social and ecological risks of the project.
Social and Ecological Risk
Information on the project has been very tightly managed and the out-dated
World Bank Project Information Document has been the only publicly available
document. Foreign journalists, including a German TV team, have not been
allowed to film or photograph the Exxon base camp in southern Chad. Martin
Zint, one of the journalists who recently visited the project area, thinks
that Exxon seems to count on the "No Picture, No Story" strategy.
An Environmental Impact Assessment (EIA) and an Environmental Panel are
intended to mitigate the social and ecological risks of the project. A
summary of the EIA, which is being prepared by the U.S. consulting firm
Dames and Moore, will be made available to the executive directors of the
World Bank 120 days in advance of the Board vote on the project (a
requirement spurred by U.S. Law 17/). The three member Environmental Panel
is sworn to confidentiality and has not released a report.
It is striking that throughout the EIA process, there seems to have been no
involvement of affected people contrary to the Bank's instructions in its
October 1991 Operational Directive 4.01 on Environmental Assessment. It is
worth quoting the relevant paragraph since a conversation with members of
the Environmental Panel indicated that they were not aware of it:
"Involvement of Affected Groups and Non-Governmental Organizations
19. The Bank expects the borrower to take the views of affected groups and
local NGOs fully into account in project design and implementation, and in
particular in the preparation of EAs. This process is important in order to
understand both the nature and extent of any social or environmental impact
and the acceptability of proposed mitigatory measures, particularly to
affected groups." 18/
Instead, Exxon seems to plan to hold public meetings in Cameroon in each
locality through which the pipeline will pass with lectures and videos to
explain the pipeline and its impact to lay people. 19/ This hardly seems to
be the consultative process called for in OD 4.01.
Even if we assume that the environmental impact assessment is very good and
that the Environmental Panel has the resources and influence it needs, the
socio-economic and political context will make effective environmental
mitigation and compensation for affected people extremely difficult. Other
World Bank-funded mega projects, for example, the Lesotho Highlands Water
Development Project in Southern Africa which is also being monitored by an
Environmental Panel, show how limited institutional capacity and political
will on the part of governments prevent the implementation of mitigation
plans.
Despite the fundamental lack of detailed information, an outline of the
over- all ecological and social risks of the project can be drawn.
Loss of Livelihoods and Resettlement
Rural people will be affected as their land is being occupied by oil wells
and other infrastructure. Southern Chad is the most fertile part of Chad,
producing most of the country's food and cotton for export. How will the
project affect food production? Even if the number of people to be resettled
is not high, lack of institutional capacity by government-as demonstrated by
the Lesotho project-is a formidable obstacle to adequate resettlement. But
in addition to physical resettlement, there is the more prevalent problem of
loss of livelihoods when productive assets, land, trees, access to water are
taken away from rural people and compensation is inadequate. The basic
requirement of the World Bank's policy on Involuntary Resettlement is to
ensure that affected people are at least able to maintain the standard of
living they had before resettlement. But there are numerous examples in
Africa and throughout the world, where the Bank has not been able to
implement this provision and where poor and vulnerable groups, which are the
ones who usually have to be forcibly resettled, suffer greatly as a result
of resettlement and are unable to re-establish their livelihoods.
In Cameroon, the problem is not limited to the clearing of land for project
infra-structure during pipeline construction. In addition, there will be an
uncontrolled influx of people seeking construction jobs or searching to
provide services to the migrant work force along the pipeline route and
around the port of Kribi. In addition, public health problems, especially
in the form of AIDS, are likely to spread rapidly along the pipeline route
as the work force and its entertainment industry of bars and prostitution
moves through the rural areas.
Loss of Biodiversity
World Bank officials claim that the pipeline will only move alongside
existing road and railway lines and therefore only pass through already
degraded areas. This, however, may not be the whole picture. Stretches of
the proposed pipeline route will pass through or close to still largely
undisturbed rainforest areas, including areas inhabited by indigenous
people. The large influx of people will lead to the clearing of forest and
poaching near the construction sites as people try to grow food and hunt.
In addition, project- related infrastructure such as roads, construction
camps, housing for workers, pump stations, etc. represent a serious threat
to the survival of these forest areas and their unique wealth in plant and
animal species.
Kribi, the Atlantic port from which the oil is to be exported, lies
sandwiched between two national reserves, Campo and Douala Edea, which are
known for the threatened fauna that they shelter. Protection of the Campo
reserve is part of the Cameroon Biodiversity Conservation and Management
Project funded by the Global Environment Facility (GEF) and implemented by
the World Bank. Poaching of large mammals already is a problem and is
likely to increase manifold with the expected arrival of new migrants to the
area.
The off-shore oil facility itself will be located outside of Kribi in front
of the Lob waterfalls, which are one of the rare cases in the world where
waterfalls flow directly into the ocean. It is a unique area with potential
for revenue generation such as eco-tourism, that will be undermined by
project infrastructure and the constant threat of oil spills.
Leaking Pipelines
Oil pipelines are an environmental hazard anywhere in the world. Even with
the latest state of the art technology, oil leaks in pipelines can go
undetected until a huge amount of damage has been done. The most
sophisticated technology has a detection capacity of a leakage of 0.002% of
the oil passing through. With an estimated daily volume of 9,450,000
gallons of crude oil a day (i.e., the equivalent of 225,000 barrels/ day) ,
this means that under the best of circumstances 2,000 gallons could leak a
day without being detected. Crude oil contains many heavy metals and the
dangers for groundwater contamination and stream pollution, especially given
the several river crossings of the pipeline and its proximity to the Sanaga,
one of West Africa's most important river systems, should not be
underestimated.
The fact that the ca. 80 centimeter (30 inch) wide pipeline is underground
will make repairs more difficult. The oil from Chad's Doba fields is low
quality, high sulfur and very thick. In addition to pumps, this will
require heating of the pipeline to move the oil. Both the heating and high
sulfur content increase the risk of pipe corrosion.
ELF's Special Role in the Routing of the Pipeline
ELF has long been a major French foreign policy instrument in Francophone
Africa. The former head of ELF, Mr. Le Floch-Prigent, who now stands
accused of corruption in France, recently confirmed what many outside
observers have long suspected: Elf put in place the Government of President
Bongo in Gabon, ELF maintained control over the Government of Congo, even
when it was Marxist, and the Government of President Biya in Cameroon has
only survived with ELF support. 21/
According to Mr. Le Floch-Prigent, his role in preparation for the Chad/
Cameroon oil pipeline was to "convince the Americans discreetly that the
pipeline had to traverse the Francophone part of Cameroon." 22/ The
Francophone part of Cameroon is where the country's President and his allies
are in control, while the Anglophone part of Cameroon is an opposition
stronghold. Incidentally, Cameroon's own oil is exported from the
Anglophone area and it would appear to have been ecologically preferable to
make use of the same area instead of exposing a new-and as of now- pristine
Atlantic coast area to oil pollution.
But there may be more than the political considerations of the Biya
Government at stake. According to the French publication "La Lettre du
Continent" the French military see this pipeline route and the road that
goes along it as providing easy access to southern Chad in case of crisis.
Had the route gone through the Anglophone area to the port of Limbe, along
the Nigerian border, French military movements would be more difficult. 23/
Political Risk Mitigation Strategy
Interviews conducted with officials at both the International Development
Association (IDA), the World Bank's concessional lending window for the
poorest countries, and at the International Financial Corporation (IFC), the
World Bank's arm for the private sector, reveal the following:
The oil companies have stated clearly that the project will not proceed
unless there is substantial World Bank Group involvement in the project.
There are two primary reasons for this prerequisite:
-- It provides political risk insurance -- It serves as a catalyst for
export-credit agency funding
Political risk insurance in this case will not be provided through the
Bank's regular branches providing this type of service, e.g. IBRD guarantees
or MIGA (Multilateral Investment Guarantee Agency). These institutional
mechanisms cannot be used because both Chad and Cameroon are qualified as
too poor for regular World Bank IBRD loans and Chad is not a member of
MIGA. Instead the political risk insurance will be provided through the
relationship (and leverage, one should say) of IDA with both the Chadian and
Cameroonian governments. For most African countries, access to foreign aid
and finance depends on their relationship with the World Bank. When this
relationship deteriorates, countries face the risk that all foreign aid from
multilateral as well as bilateral aid programs might be cut-off. Under such
circumstances private foreign investment would also stay away. The
resulting political leverage of the World Bank reduces the risk of other
public and private investments with which it is associated.
Hard Loans from the African Development Bank?
Exxon representatives representing the consortium have paid regular visits
to World Bank headquarters to promote the project. There have been special
briefings to World Bank Executive Directors' offices and the U.S. Treasury
Department and possibly the Finance Ministries of other countries. More
recently, Exxon representatives have also visited the African Development
Bank in Abidjan, Cte d'Ivoire, which is still in the process of overcoming
years of deep-seated mismanagement. As a result of this visit the AfDB may
now consider a special "enclave" loan to support the Oil Consortium
project. An "enclave" loan at the AfDB means that poor countries that
usually only qualify for concessional loans from the AfDB's soft loan
window, will receive high-interest loans from the Bank's regular lending
window. As a result of this special "enclave" provision, Chad and Cameroon
are likely to further add to their already high foreign debt burden, by
contracting high interest loans to pay for their participation in the
project-such as state participation in the pipeline.
Financial Edifice
On the basis of the World Bank's involvement, the oil consortium is able to
spread the remaining risk more widely. World Bank presence provides the
"level of comfort" necessary to attract additional funding from a whole host
of other sources, such as the African Development Bank, but most
importantly, the export-credit agencies of the major industrial countries.
Once the export-credit agencies support the project, then the commercial
banks feel safe enough to provide loans. What we have is a financial
structure where private sector risk is comfortably cushioned by public funds
intended to help the poor in a politically unstable area of Sub-Saharan
Africa.
Cushions for Corporations?
What emerges is a case of corporate welfare: The private sector-the oil
companies and the commercial banks-are taking cover behind publicly funded
or guaranteed institutions, be they the World Bank group or the
export-credit agencies of individual countries. The mixing of public costs
and private benefits does not match with the private sector's image as one
of self-reliant, risk-taking initiative and enterprise in an unfettered free
market system. The financial risks in this particular case are shared
with-if not shouldered by- public funds and guarantees from both
multilateral and bilateral sources. To whose benefit?
There are clear trade-offs, funding from the World Bank (and the African
Development Bank) for each country is limited, what ever is allocated to the
Exxon/Shell/Elf project will not be available for investments in other
sectors with direct positive impacts on people's lives.
Even those convinced that governmental reform in Chad and Cameroon will wipe
away long-standing problems overnight and make a trickle-down effect from
the oil and pipeline investments possible cannot claim that this project
provides the best alternative for poverty alleviation. The World Bank
itself recognizes-at least rhetorically-that it is investments in the social
and environmental sectors, health, education, and in infrastructure that
provides clean water and sanitation, that bring about the best result in
helping people out of poverty. 24/
Oil projects, especially in countries with politically repressive regimes,
hardly point the way to sustainable development. Nor does it in the
oil-importing countries, where the continued availability of cheap oil (e.g.
at a price that manages to externalize the environmental costs of its
extraction, production and transport) crushes incentives to provide energy
from alternative and sustainable sources and threatens the Earth's
atmosphere.
1. Paper: Exxon's Chad Doba Project, August 15, 1996.
2. Ibid, the Exxon Paper states that World Bank funds for the Governments
of Chad and Cameroon should be used to meet their obligations as
shareholders of in the oil transportation companies to be established. The
Chad Oil Transportation Company (TOTCO) would be 15% owned by the Government
of Chad, 34% Exxon, 34% Shell and 17% ELF. The Cameroon Oil Transportation
Company (COTCO) would be 15% owned by the Government of Cameroon, 5% by the
Government of Chad, 32% by Exxon, 32% by Shell and 16% by Elf.
3. The World Bank Project Information Document (PID). Chad-Petroleum
Development and Pipeline. Region: Africa; Sector: Energy. April 4, 1995.
4. The World Bank, World Development Report, Infrastructure for Development,
1994.
5. Department of State. Country Reports on Human Rights Practices for
1995. April 1996.
6. The Economist Intelligence Report, Chad, 3rd Quarter 1996.
7. The Economist Intelligence Unit, Cameroon, 3rd Quarter 1996.
8. Jean- Franois Bayart, La Criminalisation en Afrique Subsaharienne, Report
to the Center for Analysis and Forecasts of the French Foreign Ministry,
June 1995, as quoted by Daniel Carton. "Ce Rapport, Enfermez-le dans Votre
Tiroir" in Le Nouvel Observateur of May 10, 1996.
9. New York Times, "Chad: Every Silver Lining Has a Cloud", June 12, 1996.
10. Economist Intelligence Unit, Country Report Chad, Third Quarter Report,
1996.
11. Martin Zint, Hessen Public Radio, Germany, February 11, 1997.
12. This case, known as Dingamtolem Ajikolmian, was described by German aid
workers in the region, Claudia Duppel and Martin Petry-Duppel, in a letter
of November 1994.
13. Bttoudji Alain "Ptrole Tchadien Enthousiasme et Inquitudes" Tchad et
Culture No. 140, April 1995.
14. The Economist Intelligence Unit, Cameroon County Report, 2nd Quarter
1996, quoting World Bank commissioned report by consultant Louis Goreux.
15. The World Bank, Implementation Completion Report, Republic of Cameroon,
Social Dimensions of Adjustment Project, June 16, 1995.
16. The World Bank "Trends in Developing Economies", Extracts, Vol. 3 Sub-
Saharan Africa, 1995.
17. The law, known as the Pelosi Amendment, establishes that the U.S.
Executive Director to the World Bank can only vote on a project with
significant environmental impacts if the EIA is made available 120 days
before the Board vote.
18. World Bank, OD 4.01, Para. 19, October 1991.
19. Declassified State Department Memorandum (no date).
20. Calculation provided by Lois Epstein, EDF engineer and pipeline expert.
21. "La Confession de Le Floch-Prigent" in L'Express of 12.12.1996.
22. Idem.
23. "Cameroun - Un Pipeline Petrolo-Militaire", La Lettre du Continent, No.
228, 9.2.1995.
24. See, for example, The World Bank, A Continent in Transition- Sub-Saharan
Africa in the Mid-1990s, November 1995.
_____________________________________________________
Copyright: 1997 The Environmental Defense Fund
The Environmental Defense Fund is a leading national, New York- based,
non-profit, research and advocacy organization with over 250,000 members
nationwide. EDF's staff includes scientists, attorneys, economists, and
engineers who seek practical solutions to a broad range of environmental and
human health problems.
Contact Korinna Horta, Environmental Defense Fund, 1875 Connecticut Avenue,
N.W., Suite 1016, Washington, D.C. 20009; Tel.: 202 387 3500; Fax: 202
234 6049; Email: korinna@edf.org
Special thanks for input and encouragement to Hlne Ballande (Les Amis de la
Terre), Lois Epstein (EDF), Irne Mandeau (Amnesty International), Bruce
Rich, Ken Walsh (both EDF), Martin Zint and several other knowledgeable
persons who wish to remain unnamed. KH.