Rapacious Instincts in Sudan
Multinational extraction ventures in Africa are often nothing more than a modern reprise of colonial rapacity. Whether the natural resources are diamonds, titanium, copper or oil, more often than not they have proved to be a source of conflict and human destruction. Nowhere is this more clearly the case than in Sudan, where Western and Asian oil companies have become--quite literally--business partners with one party in Africa's longest and most destructive civil conflict.
Sudan's war, eighteen years old in its most recent phase, has seen more than 2 million people perish, overwhelmingly civilians from the south, where oil resources are located. As many as 4.4 million more have been uprooted, with many at acute risk from war-induced famine. The brutal National Islamic Front regime, which rules from Khartoum in the north, is the exclusive Sudanese partner and beneficiary of this multinational oil venture. It has conducted a savage military campaign to provide "security" for the companies involved in the development project.
In addition to the slow-motion ethnic cleansing that has gradually cleared the oil region of much of its indigenous population, Khartoum has waged a ferocious aerial assault on civilian life throughout the south, going so far as to attack international humanitarian efforts on a repeated and systematic basis. The motive is to destroy all those in the south who might threaten the oil revenues that sustain the regime's grip (it came to power by deposing an elected government and enjoys very little popular support).
In August of 1999, the first crude oil from the Greater Nile Petroleum Operating Company began flowing through a 1,000-mile pipeline that runs from the south to Port Sudan on the Red Sea, in northeastern Sudan. Partners in the Greater Nile project are Talisman Energy of Canada (25 percent), Malaysia's state-owned Petronas (30 percent) and China National Petroleum Corporation (40 percent). Khartoum's state-owned Sudapet has a nominal 5 percent stake but receives upward of 40 percent of revenues, which will eventually rise to 80 percent. These three foreign corporate entities are directly responsible for sending hundreds of millions of dollars annually to the Khartoum regime, which is spending close to $1 million per day on its genocidal war.
Amnesty International issued a devastating indictment of Sudan's oil development last May ("Sudan: The Human Price of Oil"), and its findings will soon be amplified in a report being prepared by Human Rights Watch. Amnesty accurately captured the perverse nature of the "contract" between the oil companies and the Khartoum regime: "By turning a blind eye, in the name of security, to the violations committed by government forces and troops allied to them [the oil companies] indirectly contribute to violations continuing.... Amnesty International believes that companies are responsible for the way the local community is treated as a result of their operations."
As Amnesty and others have pointed out, oil revenues have also given the Khartoum regime the sense that it is economically, and finally diplomatically, insulated. Various pronouncements by the regime have confirmed that Khartoum will use oil revenues to buy more lethal weaponry and intensify the fighting. Indeed, some officials in Khartoum have spoken openly of Sudan's using oil revenues to create self-sufficiency in weapons production. Moreover, in a revealing coincidence, on the very day the first shipment of 600,000 barrels of crude left Port Sudan, twenty Russian-style T-55 tanks, supposedly bound from the Polish Army to Yemen, made their way into Port Sudan, almost certainly purchased with anticipated oil revenues. In the theaters of Sudan's "low-tech" war, these will be military instruments of immense destruction.
Other "in-kind trading," especially between Sudan and China--arms for oil and anticipated oil revenues--has been documented in various reports, including a detailed compendium from Human Rights Watch. Reports from the ground indicate that as much as 75 percent of weaponry captured from Khartoum's forces is of Chinese manufacture. Not coincidentally, China is now a net importer of oil, with consumption growing at about 10 percent a year. And Sudan is China's premiere offshore oil source.
In order to provide security for the Greater Nile partners, the Khartoum regime has orchestrated a campaign of scorched-earth warfare around the vast oil development project, as well as future concession areas, in the south. In western Upper Nile Province and adjacent areas, more than 100,000 people have been killed or cleared from their land and homes. Amnesty's reporting on this devastation has been echoed by the findings of the UN Special Rapporteurs for Sudan, as well as by a report commissioned by the Canadian foreign ministry and by journalists.
To be sure, Sudan's civil war is a nightmare of complexity--a reflection of the country's religious, ethnic and racial diversity. As journalist William Finnegan put it, reflecting on the legacy of British and Egyptian rule, Sudan is a country "whose borders seem to have been perversely drawn, sealing enough ethnic and historical enmity within them to insure a future of civil war."
The National Islamic Front looks to the Islamic and Arabic world for cultural and racial identity. Moreover, its view of the Nilotic and Equatorian peoples of the south is animated by a vicious racism: The most common term of designation in Arabic is abid, which translates almost exactly as "nigger." Such attitudes do much to explain why Khartoum has actively abetted a modern slave trade, directed against the racially "African" people of the south. Tens of thousands of Sudanese live the lives of chattel slaves.
These Nilotic and Equatorian peoples are often at odds with one another in the difficult environment of the south, and Khartoum has proved masterful in exploiting tribal animosities. Even so, the opposition groups are formidable military adversaries, and the conflict in much of the south continues to be intense. What becomes ever clearer is the central role of oil development, both in generating further conflict and in providing the revenues that prevent good-faith negotiations by Khartoum.
Culpable as the Greater Nile partners are in this regard, there is a good deal more corporate responsibility for the ongoing destruction of Sudan. For example, when China National Petroleum Corporation sought an initial public offering on the New York Stock Exchange, the investment bank Goldman Sachs willingly offered its services. And when the Sudan controversy began to stalk the deal, Goldman expediently restructured it, creating a factitious "domestic" unit of China National called "PetroChina." No matter that the IPO still sent almost $300 million directly to China National, and no matter that governance of "PetroChina" is entirely by China National (which also receives 90 percent of all "PetroChina" profits). But as the issue moved forward, the market became queasy. A broad, well-organized coalition opposed the deal; it included not only Sudan activists but also Tibet activists and organized labor in the form of the AFL-CIO. The last took an unprecedented stand in opposing the IPO, an action that will continue to define the terms of foreign entrance, especially on matters of labor rights and fairness, into US capital markets.
Though massively reduced from its original target of $10 billion, the "PetroChina" IPO was still set to fail in realizing even $3 billion in proceeds when British oil giant BP Amoco entered the scene. Enticed by lucrative natural gas concessions and retailing possibilities in China, BP Amoco agreed to commit up to $1 billion. BP Amoco management disingenuously continues to deny that it has helped to capitalize oil development in Sudan, but the financial realities of its investment clearly prove otherwise.
Nor does corporate complicity end there. Other European oil companies not part of the Greater Nile project have invested vast amounts of money in various of the other concession areas in southern Sudan; some have begun exploration work. Seismic information is not yet definitive, but the potential of the Muglad basin, which stretches across the entire southern girth of Sudan from eastern Chad to the Red Sea, may reach to billions of barrels of reserves. This has proved more than temptation enough for the likes of Lundin Oil of Sweden and OMV of Austria. But the concession areas that appear so enticing will become viable only if security is established by Khartoum's forces. The Europeans have in effect invested in the military success of the regime in expanding its cordon sanitaire, which will entail destroying the lives and livelihood of additional tens of thousands of southern Sudanese.
As a consequence, many people feel there can be no neutral shareholding in these companies. American economic sanctions against Sudan (imposed by the Clinton Administration mainly in response to Sudan's support for world terrorism) should be construed to include capital market sanctions. Talisman Energy, which trades on the New York Stock Exchange, should be delisted, as should China National Petroleum Corporation's contrived "PetroChina" and Lundin Oil, which trades on the Nasdaq. But despairing of useful action, a grassroots coalition of Sudan advocates has taken matters into its own hands with a divestment campaign modeled on the efforts undertaken during apartheid-era South Africa.
The campaign has successfully targeted the largest and most influential pension plans and public holdings of Talisman Energy, including TIAA-CREF and all major US public institutional shareholders, among them the states of New Jersey, Wisconsin, New York and California, and the City of New York.
Divestment efforts have now turned to high-profile mutual funds that own Talisman Energy. The campaign has singled out Fidelity Investments (which manages the Fidelity mutual funds, holders of 3.2 million shares of Talisman Energy, one of the largest US institutional shareholders) and mutual funds of Royal Bank in Canada. Still-emerging divestment efforts in Canada are also focusing on prominent public pension plans, including those for Ontario municipal employees. The Ontario Teachers Federation has actively called on its pension board to divest.
Sudan marks a defining moment for human rights organizations and advocacy efforts. If such a brutally destructive venture cannot be stopped, if a "line in the sand" cannot be drawn for Sudan, other efforts at rapacious exploitation in Africa will be encouraged, and the consequences will often be heightened conflict. But a successful divestment campaign against the participants, direct and indirect, in Sudan's oil project will go a great distance toward discouraging corporate indifference to human suffering and destruction. A decade ago South Africa demonstrated the power of divestment. Sudan's agony gives to divestment the force of another unambiguous moral imperative.