Africa, Development & Aid, Environment, Headlines, Human Rights

DEVELOPMENT: Chad Inaugurates Giant Pipeline as Activists Mourn

Emad Mekay

WASHINGTON, Oct 10 2003 (IPS) - International and local civil society groups are warning that Friday’s symbolic inauguration of a massive oil pipeline in Chad could lead to a worsening of social and economic conditions in the country while strengthening its corrupt ruling oligarchy.

Oil actually began moving through the pipeline in July, but today’s ceremony – in which Chadian President Idress Deby turned on the spigot for oil to flow at Kome in southern Chad’s Doba Basin – marked the formal opening. Several dignitaries were present, including heads of state.

The new 3.7-billion-dollar oil facilities, which include a 1,000-kilometer pipeline designed to carry oil from Chad to the Atlantic coast of neighbouring Cameroon, are expected to boost the impoverished West African nation’s revenues by at least two billion dollars over the next 25 years, or 80 million dollars per year.

The pipeline, which will transfer 225,000 barrels of oil a day, is a joint venture between U.S. oil giants ExxonMobil (which holds 40 percent of the private equity) and Chevron (25 percent), and Malaysia’s state oil company Petronas (35 percent).

According to World Bank figures, the companies stand to gain some two-thirds of the estimated 13 billion dollars in revenues over 25 years.

Declaring Friday a day of mourning, a coalition of Chadian civil society groups, supported by international human rights, women’s and labour organisations, said that Chadian oil revenues "will only be another weapon in the hands of a plundering oligarchy used to oppress the Chadian people."

In many other oil-rich countries like Nigeria, Angola and Equatorial Guinea in Africa, and Saudi Arabia and Iraq in the Middle East, oil has historically been a catalyst for corruption, war, violence and repression of the local populations.

In a statement, Friends of the Earth International, the Centre for Environment and Development, Environmental Defense and others denounced what they called the insecurity and impunity that prevail in Chad and warned that they "will only increase with the exploitation of oil".

The government has already dealt harshly with critics of the project. On Sep. 12, the government prohibited a peaceful march organised by human rights groups.

Despite protests from local and international groups who decried the social and environmental cost of the project, the World Bank decided to co-finance it with 292.2 million dollars. The European Investment Bank (EIB) provided an additional loan of 144 million euros.

Earlier this month, the bank grandly celebrated the launch of the pipeline with an elaborate press conference at its headquarters in Washington that linked reporters via satellite with experts in London, Paris and Ndjamena, Chad.

Bank officials promised that the project would help fight poverty in the country. The bank says that by 2004, the pipeline will increase government revenues by 45-50 percent per year.

The bank, which is gambling its authority on the controversial pipeline, also promised to help prevent this project from leading to further poverty and corruption – as such projects so often have in other poor nations.

The bank, whose investment in the project is the largest single private investment in sub-Saharan Africa, argues that a tight mechanism has been created to ensure the transparent management of oil revenues.

"We have put into place components to channel earnings from oil to poverty reduction, for health, education, the rural sector and to protect the environment," said Ali Khadar, the director for Central Africa at the World Bank, at a press conference last week.

The bank says Chad has agreed that, after servicing the loans, 10 percent of royalties and dividends will be held in trust for "future generations", five percent will be for regional development in the oil-producing area, and 80 percent will be devoted to education, health and social services, rural development, infrastructure and water management.

Yet critics say the bank’s record in poor nations of favouring major businesses and the private sector at the expense of poor people, along with the continued corruption and lack of capacity in the Chadian government, have both cast doubt on its effectiveness.

Protest groups refer to reports last year that the Chadian government, ranked among the most corrupt and most abusive of human rights, used the first 4.5 million dollars of the signing bonus that it received from the oil companies to buy arms to fight its northern rebels.

The bank later intervened and said it now has guarantees from Chad, which is locked in almost continuous internal conflict, that no more money will be used for military purposes.

But the International Monetary Fund, the bank’s sister institution, earlier this year demanded early repayment of a loan from Chad, saying the government provided bogus data to obtain the funds.

Corruption aside, Chadian groups also fault the project for its negative impact on the environment and local population.

According to the Commission Permanente Pétrole de N’djaména (CPPN), a network of Chadian NGOs active on issues related to the oil sector, the project has polluted water sources, reduced crop production, eliminated forests, violated labour rights and aggravated health problems – particularly the incidence of HIV/AIDS in the area – via the influx of workers and job seekers in the communities.

They say the measures promised by the World Bank to protect the environment and the population have not been implemented to their satisfaction.

CPPN criticised, among other things, the increased food insecurity and social tensions in the oil-producing region due to the massive migration induced by the project.

The network is part of the day of mourning. "The ceremony of Oct. 10 has for us no meaning, it is a non-event," they said in a statement.

Their call was echoed by several other groups, including some in Cameroon, through which the pipeline will cross to the Atlantic Ocean.

"Oct. 10 will be a public celebration of the broken promises of the pipeline construction in Chad and Cameroon, and of human and worker’s rights abuses," said Samuel Nguiffo, director of the Center for Environment and Development in Cameroon, in a statement. "The World Bank should not be proud."

Chad has a population of nearly nine million, with 80 percent living below the poverty line of less than two dollars a day. According to the World Bank, most of the country is desert or semi-arid land, with a harsh physical environment and a very narrow economic base.