Economy Background 
The Chad-Cameroon Petroleum Development and Pipeline Project

afrol.com - The Chad-Cameroon Petroleum Development and Pipeline Project constitutes one of the greatest development projects started on African soil. It could enable the poverty-ridden, landlocked Chadian nation to embark on deep ploughing social development and poverty reduction. Critics are however loud and widespread. Will the grand project instead destroy the environment, fuell the civil war, enhance human rights violations and strengthen General Idriss Deby's undemocratic hold on power? 

Chad is one of the poorest countries in the world. About 80 percent of its 7 million people - or 5.6 million people - live on less than $1 a day. Chad also has very high infant mortality rates, limited access to basic social services, and extremely poor nutrition levels. Without oil, and despite recent growth of 5 percent a year, it could well take 35 years to double Chad's per capita income, according to World Bank estimates.

Ninety percent of the country is desert or semi-arid. Its very narrow economic base and lack of skilled people limit the opportunities for growth in most sectors. This project provides Chad with a unique opportunity to lift itself out of its extreme poverty. The additional revenues could remove the bottlenecks that constrain growth and create opportunity for the next generation of Chadians.

However, natural resource "booms" are difficult to manage. "Drawing on its global knowledge, the Bank Group is seeking to ensure that the country's new wealth will be invested responsibly, for the well-being of all Chadians," the World Bank claims. "The project would increase Government spending on key economic and social services. Rather than displace social sector projects, the pipeline would support implementation of World Bank and other donor projects in these sectors by generating additional revenues to finance critical Government expenditures, such as teachers' salaries." 

Why now? 

Petroleum was discovered in southern Chad 30 years ago, and the country has been waiting anxiously ever since for the right combination of international prices and private interest to develop the resource. Chad is not the only country with untapped petroleum reserves. Exploration is underway throughout the continent to find new oil sources - which could prove cheaper and more accessible. "If Chad does not seize this opportunity, it may well pass the country by," according to an year 2000 World Bank assessment.

- More needs to be done to build capacity within Government and society to participate fully in project implementation, the Word Bank states. "This will start immediately and continue for at least the four years before oil revenues start to flow. Until the oil is developed, poverty will remain deep and widespread. For example, each year 1 in 5 children die before the age of five. Although the project by itself will not eliminate early childhood deaths, it is certain that revenues from the pipeline - linked to improved basic health and education programs - will save a large number of these young lives in the future."

Difficult start

In many ways, the Chad-Cameroon pipeline project went wrong from the start. It became known that the pipeline would cut through one of the world's last primary rainforests in East Cameroon and that the sloppy environmental impact assessment had been carried out by the Exxon and Esso oil companies in 1997-98. Human rights groups further pointed to very poor human rights standards in Chad and the fact that there is a civil war going on, which only could be fuelled by the access to "fresh" money.

The critics were actually met, both by the World Bank, who's financing was absolutely necessary to exploit the oil fields found 30 years earlier, and by the Chadian government. New environmental impact assessments were carried out, leading to several significant changes in the pipeline's alignment route. Further, the Chadian president guaranteed improvements in the human rights situation, transparency in oil revenues and deep ploughing social development. The oil revenues are expected to double Chad's, one of the world's poorest countries, GDP. 

President Deby in June 2000 promised to manage oil proceeds transparently, build schools, hospitals and modernise agriculture and animal husbandry. "We need to create higher institutions of learning so that our children and our brothers can stay home to learn what is needed instead of going to the four corners of the world to look for knowledge," the President said.

The government even made serious attempts to end the civil war by offering rebel groups a participation in government. Given all these promises and conditions, the World Bank finally granted its aid to the pipeline project. New scandals were, however, soon to come. 

Troubled Human Rights Legacy
Chad has had a troubled history. However, "the country has made progress since the early 1990s towards a more inclusive and stable political environment," the World Bank assessed the situation on granting its credits. "A democratic process and a program of national reconciliation have been launched. Opinions differ on how significant this progress has been. Military incidents in southern Chad two years ago and the temporary imprisonment of a parliamentarian from the project area created obvious concern. But everyone agrees - inside and outside Chad - that the success of the project will be enhanced by the free expression of community views," the year 2000 assesment of the Bank went on.

In itself, the preparation of the pipeline project has been a training ground for public debate. "More information has been made available about this project than any other activity in the country," the World Bank maintains. "In addition, seminars organized by non-government organizations (NGOs) over the last three years have allowed local NGOs, traditional village authorities and farmer organizations to speak out about the project. These exchanges have improved the project - and also contributed to strengthening the voices of civil society." 

Improvements in the human rights situation however proved temporal. Media harassment quickly reappeared and in November 2000, a former senior public servant, Garonde Djarama, was imprisoned for an article he had published in a Chadian weekly newspaper. He had criticized the government for not reacting strongly enough against the racist killings of sub-Saharan Africans in Libya. 

The same month, the renown World Organisation Against Torture (OMCT), accused the Chadian government forces of putting children "on the front line in order to detect mines and if reluctant they are reportedly killed." The government allegedly makes use of forced recruitment of child soldiers from Southern Chad to the armed forces in the north of the country.

In January 2001, the MDJT claimed that government troops had executed prisoners of war, including one of the movement's leaders, Yaya Labadri. Executions of prisoners of war are seen as a serious war crime and the Chadian government quickly denied the charges. The case has still not been investigated by an international body. 

Protecting the Environment?
Any large project of this nature entails risks for the natural environment. "From the start, the environmental risks of this project were seen to be significant but manageable," according to the World Bank. "Numerous issues were identified, but in all cases adequate measures have been designed to deal with them. There was considerable work in studying alternative routings and induced - not just direct - impacts. National experts, Bank Group specialists, and consortium personnel walked the entire pipeline route to double-check data from aerial surveys." 

These analyses were summarized in a 19-volume Environmental Impact Assessment and Management Plan, the first draft of which became available in June 1998. The final version was made public in June 1999 and additional information regarding the oil spill response plan was made available in October 1999. "These documents were the subject of regular exchanges of views with local and international NGOs. Those discussions were aimed at ensuring that the project planners were studying the full range of potential risks and applying the appropriate standards of environmental protection," the bank maintains.

Following 18 months of analysis, significant changes were made to the proposed right-of-way. "As a result, the project will have only a minor net effect on the natural and human environments," the World Bank claims. "The pipeline will be buried, rather than above-ground. For most of the route, it follows existing infrastructure. No one will need to be resettled along the 1,070 km route - although a maximum of 150 families (probably many fewer) may be displaced where the oil itself will be produced. Construction may interrupt farmers' access to their land, but during a brief period. They will be compensated fully for lost income and lost fruit trees."

The final route complies with World Bank safeguard policies, including those on Environmental Assessments, Natural Habitats, Indigenous Peoples, Cultural Property, Resettlement, and Forests. "Only a small amount of tropical forest (10-15 sq. km.) will be lost as a result of the construction. To compensate for this, two large new national parks (approximately 5,000 sq. km.) have been created in Cameroon, and will be managed for better biodiversity conservation in those areas," the bank asesses.

Environmentalists however keep complaining about the poor environmental security in the pipeline project. Korinna Horta, a senior economist at the Environmental Defence involved in the pipeline project, says she is "not confident at all" in how the environmental concerns of the project are addressed. 

While the project initially had promised a local participation of all the peoples affected, it later turned out that the consultations had been more or less fictive. "In Chad local people were visited in their villages by some Exxon or other company, accompanied by military gendarmes. The bank has admitted that, so there cannot be any kind of participation, people are intimidated and afraid and they have not got any real information about the project. They were only told about the benefits," Horta told Edie News. 

Other environmental groups maintain that the impact assessments and security precautions are insufficient. "The 660 mile long pipeline poses risks of soil and water pollution from oil spills, and threatens pristine rainforest habitats in Cameroon, the Sierra Club maintains. "According to studies and comments made by foreign and US government agencies, the oil spill response plan is too general and it is severely underfunded to properly respond to an oil spill," the group said. 

Management of the Oil Revenues
Chad and the Bank Group have applied the lessons of international experience to the proposed management of the oil resources. "In fact, the Government has already taken unusual steps to target most of the oil revenues to poverty reduction and to ensure public oversight of the use of these resources," the World Bank claimed on granting its credit.

On December 30, 1998, Chad's Parliament approved a law that sets out the Government's poverty reduction objectives and details arrangements for the use of the revenues. Under the law, 10 percent of the royalties and revenues will be held in trust for future generations, 80 percent of the remaining funds will be devoted to education, health and social services, rural development, infrastructure, and environmental and water resource management, and 5 percent will be earmarked for regional development in the oil-producing area (over and above its share of national spending). There will be annual published audits of the petroleum accounts, regular public expenditure reviews by the Government and the Bank, and special arrangements for channeling and accounting for the funds.

In addition, the law created an oversight committee to monitor the use of the oil revenues. This committee will include representatives of the Government, Parliament, the judiciary and civil society. A related IDA capacity-building credit will support the work of the oversight committee, as well as strengthen Chad's general accounting office and the dissemination of information about government expenditures.

Shortly after the credit was granted, it was however known that the Chadian government had been spending some of the money on arms and did not consult the parliament on how the money was spent. President Deby had earlier guaranteed the transparent spending and consultations with the parliament. 

World Bank Country Director Robert Calderisi in an interview with Edie News downplayed this incident, saying "about 18% of the petroleum bonus that the government received from the companies in May has gone to military expenditure. The rest of the 60% already committed has gone to a variety of things, including road maintenance and flood relief."

In December 2000, even the Washington Post, initially very positive to the project, ran an editorial saying Deby's government should get any more funding if it was not managing the revenues in a transparent fashion. The US newspaper was outraged about how Deby had used the initial money he got for the project and the bonus he got from the oil companies to buy weapons.

Calderisi however admitted that he was uncomfortable with the lack of transparency, remembering that the president had promised to consult Parliament and an oversight committee representing civil society about the use of these funds. "In fact, the Government committed 60% of the funds without doing what the President had promised, so that's led to concern here and there that the President's and the Government's commitments were not being respected. So we've taken a very strong position on this, which is that the commitment to the Chadian public was at least as important as any agreement with the World Bank," Calderisi said. 

- This money is not covered by agreements with the World Bank, but we agreed with the President that was a good way of demonstrating the Government's intention to use such resources responsibly and openly, the regional World Bank leader continued.

Although the World Bank plays down the significance of the money spent on arms, fact is that the civil war has been fuelled the last months. Especially in the Tibesti mountain desert region bordering Libya and Niger, fights between the government and the Mouvement pour la democratie et la justice au Tchad (MDJT) have escalated since October 2000. The MDJT, which demands the resignation of Deby, claims to have killed 413 government soldiers in December 2000, while government troops claim to have killed 120 enemy fighters. 

"A brighter Future for Chad"
All involved groups, including the MDJT rebels, environmentalists and human rights activists, however agree to the World Bank's main argument for supporting the project, that "the Chad-Cameroon project represents an unparalleled opportunity for creating a much brighter future for Chad." 

The World Bank's argument goes on: "At present, the country cannot afford to provide the minimum public services necessary for ensuring a decent life for its people. In four years' time, the pipeline would increase annual Government revenues by 45 to 50 percent per year over current levels and allow it to use those resources for poverty-reducing investments in health, education, environment, infrastructure and rural development." 

Very few, however, believe this latter part of the argument will be fulfilled under Deby's leadership in N'djamena, although the work of International Advisory Group might improve the situation somewhat. 

Sources: World Bank, Edie News, Corporate Watch, etc

 

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