The Boston Globe: Canadian Oil Company's African Pipeline Provokes Human Rights Activists
The Boston Globe - Massachusetts
November 21
MONTREAL--Oil companies routinely work in dodgy places. So when Talisman
Energy Inc., Canada's largest independent oil company, first considered joining a
mammoth oil field and pipeline project in the African nation of Sudan, executives
routinely weighed the risks of operating in a realm of brutal heat, malarial swamps,
and civil war.
In the swaggering tradition of the oil business, Talisman was undaunted by the
dangers -- at least when stacked against potential profits. And so last year the
company charged into a chaotic country where most Western companies have
long feared to tread.
But what no one at headquarters in Calgary, Alberta, reckoned on was that
Talisman would soon be taking the worst heat not from the African sun but from
outraged human rights activists, church organizations, and government critics in
Canada and the United States. Talisman, which prizes its record as a good
corporate citizen, is these days accused of subsidizing a brutal religious conflict in
one of the world's most wretchedly impoverished nations.
And just as the 1,000-mile pipeline comes on line, and the profits start to flow, the
company has become the target of one of the most aggressive international
divestment campaigns since the days of South African apartheid.
"Investors (in Talisman) should be aware that they have been made inadvertent
partners to slavery and slaughter in Sudan," said Charles Jacobs, president of the
Boston-based American Anti-Slavery Group, one of the most visible crusaders
against the slave traffic revived during the country's long civil war.
Even Madeleine K. Albright has taken a swipe. During a diplomatic tour of Africa
last month, the US secretary of state accused the company of putting profits into
the pockets of a regime that has given sanctuary to international terrorists and has
used human slavery as a tactic of war.
But the worst shot against the company may have come last week with a quietly
released report by the United Nations Commission on Human Rights, which
accuses Sudan of using "bombers, helicopter gunships, and artillery" against
unarmed civilians in scorched-earth attacks around the oil fields near the town of
Heglig. Khartoum apparently fears the black Christians and followers of traditional
African animist faiths might be sympathetic to rebels attacking oil facilities.
Meanwhile, Canada's foreign minister, Lloyd Axworthy, weighed in with his own
blasts against an oil company often hailed as one of Canada's most
entrepreneurial and successful. He pledged Ottawa will take stern measures,
including imposition of economic sanctions against Talisman, "if it becomes
evident that oil extraction is exacerbating the conflict in Sudan or resulting in
violations of human rights."
Whether Canada can make good on the threat is an open question. But oil industry
analysts have been stunned by the ferocity and suddenness of the campaign
against the company, which has driven down the stock price 17 percent in two
months, to $27.90 a share, and wiped out $538 million of the company's market
value.
"They've been knee-capped," said Ian Doig, publisher of a newsletter covering the
Canadian oil industry. "Talisman never made a secret of what they were doing, or
where. But now the Canadian government is acting all shocked and surprised just
to ward off criticisms from the US."
Indeed, far from secretly investing in Sudan, the company was boastful of its
participation in the ambitious crash project to get the immense underground
pipeline up and running across some of the most inhospitable terrain on earth,
from the fever-ridden swamps of south-central Sudan across blistering deserts to
Port Sudan, on the Red Sea.
In just a year, in an extraordinary $1.2 billion engineering feat, Talisman, together
with the state-run oil companies of China and Malaysia, completed a project
dismissed as a pipe dream for decades.
The crude oil today is flowing north at a rate of 155,000 barrels a day, and millions
in profits are suddenly pouring into the coffers of the Islamic military junta that
grabbed power in a 1989 coup. This marks Sudan's entry into the circle of
oil-producing states; at the same time, Western relief agencies are spending $250
million a year to feed and provide medical care for victims of its interminable war.
Sudan claims the money will be used to build irrigation systems, roads, hospitals,
and schools.
But many observers are convinced the money will just go to buy more battle tanks,
rocket launchers, and other military gear for the longest-running and bloodiest civil
war in modern African history.
"The oil pumping from our land might as well be blood," said Bona Malwal, an
exiled southern Sudanese politician now teaching international relations at Oxford
University. "The Muslim regime in Khartoum is absolutely dedicated to wiping out
our African culture in the south."
The war pitting the Islamic north against the Christian and animist tribes of Africa's
largest country has sputtered on and off since Sudan achieved independence from
Britain in 1956. But the most recent 16 years of fighting and famine have been
spectacularly horrific -- with 2 million dead and more than 5 million people
displaced from their homes.
Most ghastly of all, the conflict has resurrected the ancient south-to-north slave
trade, with thousands of southern tribespeople, mostly women and children,
abducted by Muslim militias to serve as house servants, manual laborers, and
concubines in the north. The slavery has been documented by relief agencies, the
United Nations, human rights researchers, and journalists.
Against that backdrop, critics argue, Talisman's investment in Sudan is
unconscionable. The American Anti-Slavery Group is at the front of the human
rights watchdogs urging mutual fund companies, civil service pension plans, and
other investors to divest Talisman stock on moral grounds.
The Texas Teachers Retirement Fund on Nov. 1 became the first major entity to cut
its investment in Talisman Energy on moral grounds, selling 100,000 shares.
Meanwhile, New York City's comptroller, Alan Hevesi, has said that city may shed
its $4 million stake, accusing the company of being "cavalier about its moral and
social responsibilities," according to published reports.
The company has been stunned by the groundswell of indignation, but so far is
staunchly defending its operations in Sudan.
"We're going to stay there. We do not see our involvement in Sudan as a bad
thing," said David Mann, manager of investor relations for Talisman, noting that the
company subsidizes a 60-bed hospital for Sudanese civilians living in the vicinity of
the oil fields, an orphanage in Khartoum, and vaccination projects. "There's lot of
misinformation out there on Sudan."
Talisman owns a 25 percent share in the project, with the remaining stakes in the
oil fields near Heglig and Bentiu in south-central Sudan held by Malaysia, China,
and Sudan's own government oil company.
"Our presence there ensures a Western eye, and brings the West's attention to the
issue," said Talisman chief executive James Buckee, who has dismissed as
overblown charges that the regime in Khartoum encourages slavery. "There is a
long-standing practice of hostage-taking which we wouldn't characterize as
slavery."
That is the argument long made by Sudan's government -- that southern blacks
taken by Muslim raiders are simply victims of tribal feuds.
But antislave activists, human rights groups, aid agencies and journalistic
accounts indicate that a genuine slave trade has been revived in Sudan, for
centuries a major African center for the dread commerce until the British stamped
it out in the 1920s.
Meanwhile, Sudan last week accused the Canadian government of caving into
pressure from the United States in its recent criticisms of Talisman. The United
States lists Sudan as a nation sponsoring terrorism and imposed an economic
embargo in 1997, a year before American cruise missiles hit suspected terrorist
targets in Khartoum.
"I'm not saying that Sudan is the model for human rights," said Sudan's foreign
minister, Mustafa Osman Ismail, in an interview from Khartoum. "(But) if Talisman
withdraws ... there is more than one company ready to replace it." |
