Sudan: No signs of slavery: Talisman - Financial Post, Nov.25
- Talisman moves to keep investors onside, pledges support for probe into Sudan
By CLAUDIA CATTANEO
The Financial Post, November 25
CALGARY - Talisman Energy Inc. yesterday downplayed
to shareholders the importance of Sudan to its operations,
while attempting to shore up their confidence by pledging
support for investigations into slavery and human rights abuses
in the war-torn African country.
Sudan will represent less than 10% of expected production
volume next year, the Calgary-based oil and gas company,
Canada's largest, said in a letter mailed to shareholders
yesterday. The company expects to produce nearly 400,000
barrels of oil equivalent daily from Canada, Indonesia, the
North Sea and Sudan.
But Talisman's shares have plunged nearly 20% since Sept.
10 as a high-profile campaign by the U.S. government, the
United Nations and human rights organizations gathers steam.
They allege revenue from the Greater Nile Oil Project, in
which Talisman is a 25% partner, will help Sudan's
government bankroll a civil war against the rebel-held south.
Canada has appointed a special envoy, John Harker, to
investigate allegations that the country condones slavery and
human rights abuses and that oil development is exacerbating
the conflict. His report is expected by yearend.
"I can assure you we have seen no indication of slavery in
our area of operation and all of the people working on our
project are wage earners," Jim Buckee, Talisman's president
and chief executive, wrote. It was the second time in less than
six months Mr. Buckee sent a letter to shareholders to defend
the firm's $800-million investment.
"I would like to make it clear that Talisman is vehemently
opposed to forced relocation for oil development and I
personally believe such practices are abhorrent."
The company says it supports several initiatives to improve
the country's infrastructure and help alleviate poverty in one of
the world's poorest countries.
They include providing jobs to more than 2,000 Sudanese of
all ethnic backgrounds, funding medical treatments, building a
60-bed hospital and a medical dispensary, installing roads and
water wells, and providing funding for an orphanage in
Khartoum, the country's capital.
"Sudan has been in turmoil for many years, however, I
believe that continued investment and international involvement
will provide a catalyst to economic and social development.
This will ultimately improve the standard of living in a country
that has endured more than its share of civil war, famine and
poverty," Mr. Buckee wrote.
Eric Reeves, an American college professor who has been
leading a divestment campaign, discounted the impact of Mr.
Buckee's letter. He said pressure from critics has been
effective.
"Talisman is going to be forced out of Sudan," he said.
"There is no question in my mind that it's just a matter of
weeks. There is no way that Talisman can withstand the
pressure," Mr. Reeves said.
Jesse Sage, associate director of the Boston-based
American Anti-Slavery Group, accused Mr. Buckee of trying
to "whitewash" conditions in Sudan, where the government in
Khartoum has been accused of genocide among southern
rebels.
"He's grasping for straws, for any way that he can present
the situation that somehow Talisman is actually making the
situation better in Sudan when all the evidence suggests that it
is actually making it far worse," he said.
But analysts say the company will back out from the lucrative
investment only if the Canadian government decides to impose
sanctions. Talisman believes sanctions are unlikely.
"In the past, full economic sanctions by Canada have only
occurred with the endorsement of an international organization
to which Canada belongs and not as a unilateral Canadian
action," Mr. Buckee wrote.
Many funds have been unswayed by the divestment
campaign, especially after numerous investment analysts
issued glowing reports following a Talisman-organized tour of
Sudan's oilfields.
Lee Fullerton, spokeswoman for Ontario Teachers' Pension
Plan Board, said the fund intends to keep its 4.5 million shares
of Talisman. She said forcing companies to abandon
investments in Sudan was not the best way of bringing peace
to long-running and brutal civil war.
"Divesting is just not the answer nor an option for us," she
said. "We don't have the legal authority to restrict investments
on ethical or moral grounds."
The company also said yesterday it will not formally
challenge findings of a mid-October United Nations report
alleging many villages on the eastern edge of Heglig, where
one Talisman oilfield is located, were attacked and burned to
the ground by the Sudanese army, causing the displacement of
1,000 to 2,000 civilians.
While Talisman believes the information is inaccurate and
incomplete, "there will not be a formal response ... [because]
it escalates a situation that we frankly would like to see
de-escalated," said Mr. Mann.
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