Canadian Energy Firm Criticized for Investment in Sudan - New York Times, Nov.26
By TIMOTHY PRITCHARD
ORONTO -- Jim Buckee would like Talisman Energy Inc. of
Calgary, Alberta, to be known as a true Canadian success story, a
company that has increased oil and gas production by 30 percent a year
since the mid-1990s by reaching beyond its prairie base to develop wells
in the North Sea, Indonesia and Sudan.
But its investment in Sudan has become a huge public relations problem
for Buckee, the president of Talisman, Canada's largest independent oil
and gas producer. Full-scale oil production in Sudan has just begun and
the company is under attack by representatives of church and civil
servant pension funds in the United States and Canada for abetting a
government that, according to a U.N. report, is guilty of genocide and
other abuses of human rights.
Heading the list of critics are Secretary of State Madeleine Albright and
Rep. Donald Payne, D-N.J. The Interfaith Center on Corporate
Responsibility, a church coalition based in New York, and the Task
Force of Churches for Corporate Responsibility in Canada have also
been speaking out against Talisman.
"Why us?" Buckee asks. "We are a business, we are not in politics, and
we can only affect things within our sphere of influence." The holdings in
Sudan amount to only 10 percent of Talisman's total assets.
Some pension funds have been selling their holdings. So despite the
recent rise in oil prices and Talisman's flush earnings this year compared
with losses the year before, the company's stock has been lagging. At
Wednesday's close of $26.9375 on the New York Stock Exchange, it
was 19 percent percent off its 52-week high reached less than three
months ago. About one-quarter of Talisman's shares are owned by
Americans.
But not all investors are expressing their disapproval by selling. Others,
including members of the Canadian Task Force of Churches, continue to
hold their shares in the hope of forcing Talisman to adopt a stricter code
of ethics. The Rev. Tim Ryan, a Catholic priest in Toronto, says this
approach worked with Shell Petroleum NV in Nigeria, where the
company was accused by critics of abetting a repressive government.
The task force wants Talisman to "adopt a corporate code that includes
human rights in it," Ryan says. "If you have that, and you're a force for
improving the situation, what are your objectives and strategies? And can
you produce an audited result of what impact you're having? If you can't
operate without violating human rights, the only option is to leave."
The church group tried to get a human rights motion relating to Sudan on
the agenda at Talisman's annual meeting last spring, but it was rejected.
Another attempt will be made next spring, and management has indicated
it may be more accommodating.
Talisman's Sudan problem came with the purchase just over a year ago
of Arakis Energy Corp., a small Canadian company whose main asset
was an oil property in Sudan. For almost two decades, Sudan has been
devastated by a civil war that has pitted northern Muslims, who control
the government, against Christian rebels in the south.
It is estimated that between 1.5 million and 2 million people have been
killed, and millions more displaced -- some, according to the U.N.
report, to make way for the oil development at two fields and
construction of a 1,000-mile pipeline to a port on the Red Sea. Talisman
has 25 percent of the oil and pipeline development, while the national oil
companies of China and Malaysia have 40 and 30 percent, respectively.
A Sudanese company holds the remainder.
The answer to Buckee's "why us?" question is simple enough, says Stuart
McDowall, a 37-year veteran of Canada's Foreign Service who is now
Talisman's director of public relations for the Sudan operation. China and
Malaysia routinely pay little heed to human rights complaints and "we are
the only recognizable Western face."
While there is no denying the trauma caused by the war, McDowall says
there was no removal of people from the oil field. "There was no need to.
We operate on a vast plain that is flooded with one or two meters of
water for three months during the rainy season," he says.
McDowall also says the oil consortium has helped the local population by
providing 1,000 jobs, paying for a 60-bed hospital, building roads to
move goods to market and drilling more than 50 water wells.
He says Talisman does not have a campaign to counter its critics,
although earlier this month it flew a group of 20 oil analysts and reporters
from Canada and the United States to Sudan for a look at the project.
Some glowing investment reports on Talisman have been written as a
result.
No thought is being given to pulling out of Sudan, McDowall says.
"We're very happy with the country and the project. We're confident that
as people look into the situation and visit Sudan the truth will come out."
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