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Chad-Cameroon Questions remain concerning the pipeline construction |
ECONOMY
Chad and Cameroon have given the go-ahead to an oil pipeline project.
The
World Bank has added its blessing. But questions remain
In its Washington meeting held on 6 June 2000, after 18 months of pussyfooting hesitation, the World Bank’s Administrative Council approved Chad’s oil exploitation project and the accompanying two environmental back-up projects needed. In so doing, the World Bank added its moral and financial guarantee to this mega-project. It will even provide the financial backing for Cameroon’s and Chad’s participation in the project, through a US $92.9 million loan (i.e. 3% of the global cost of investment in the project); US $53.4 million goes to Cameroon and US $39.5 million to Chad.
This might seem to be peanuts when considering the total cost but it is in fact of paramount importance. In reality, it provides the project with a triple guarantee: A political one for Chad and Cameroon; a financial one for other banks (wishing to participate in the project); an environmental one for the ecologists (who acknowledge the World Bank’s seriousness in this matter).
The branch of the World Bank specialising in helping the private sector, will grant a US $100 million loan for the construction. There are also loans taken out with private banks, so the total loan available towards the construction will amount to an estimated US $300 million. The overall cost of the oil pipeline construction is estimated at US $3.7 billion, of which US $1.5 billion will be for the 300 oil wells of Doba (south Chad), and US $2.2 billion for the actual pipeline construction.
Documents revised and amended
The World Bank has said it’s satisfied with the content of documents presented by the oil consortium (the American companies Exxon and Chevron, and Malaysia’s Petronas) and by Chad and Cameroon.
According to ecologists, Cameroon’s Mbere Valley in the north is known to be the sanctuary of the last black rhinoceros in the world. The stretch of pipeline originally scheduled to pass through this area has been now re-routed. The same goes for the forest areas of Deng Deng in the east. Moreover, the oil consortium has promised to provide the necessary finance towards conserving two forest reserve areas (Mbam and Djerem in the east, and Campo on the south coast). A foundation will also be provided for developing socio-economic activities connected with the pygmies’ way of life. The pygmies are a marginal community in danger of extinction. Finally, compensation for those peasants who will find their way of life disturbed by the pipeline construction, will be improved. The consortium, together with Cameroon’s government, has readjusted its indemnity rate which, overall, has now been doubled.
The World Bank’s decision has been favourably welcomed by the population both in Yaounde (Cameroon) and in N’Djamena (Chad). Chad’s President, Idriss Déby, described the 6 June as «an historic date, to be written in letters of gold in Chad’s history». The people’s reaction can be well-understood considering the possible revenue from the oil pipeline project. During the entire period of the Doba pipeline construction, Chad will benefit from a substantial income: 2 billion US dollars during the whole period of exploitation, i.e. 30 years. This will allow Chad, ranked as the 5th least developed country in the world, to break out of its vicious circle of poverty and misery. As for Cameroon, it could receive 500 million US dollars during a thirty-year period. Moreover, during the actual oil pipeline construction period, the project will provide 1,000 jobs, and 250 jobs will be available during the exploitation phase.
But questions remain
Will this «oil manna» effectively benefit the poor? In Cameroon, the management of the oil revenue, described by the World Bank as «impenetrable» (1), is bound to puzzle people. Contrary to Chad, there exists no management law regarding the «black» gold.
In Chad, in spite of appropriate legislation concerning the fair distribution of oil revenue, the NGOs directly concerned with ecology, are somewhat pessimistic about ecology and human rights. Following the example of Bruno Rebelle, president of Greenpeace-France, Marie Hélène Aubert, a Member of Parliament for France’s Green Party (2), says: «Oil exploitation has never favoured development in Africa». The German environmental NGO, Urgewald, is somewhat sceptical about N’Djamena’s goodwill to distribute the oil income fairly, in spite of all its declarations and commitments to do so. (A law passed by Chad’s parliament in 1998 stipulated that 80% of oil revenue must be allocated to health and education; 10% will be set aside in a special fund for «future generations»).
If the commitments are not adhered to, there is danger of destabilising the countries’ involved in the project. Politicians could take advantage of the people’s frustrations for their own ends. In Cameroon, Kribi was chosen to be the pipeline terminal instead of Limbe (in Anglophone Cameroon). According to certain political analysts, this is all to do with politics, especially between the French-speaking and English-speaking segments of the population. Be that as it may, there are very real technical reasons for disqualifying Limbe, mainly on account of the volcanoes surrounding the area. Referring to the political issue, Le Floch-Prigent who supported Elf’s interests in the project, puts it this way: «My role was to take a practical interest in France’s presence in Cameroon and Chad. That’s the reason why Elf came into the consortium. My role was to persuade the American contributors to pass through Cameroon’s French-speaking area.»
On the other hand, according to local press reports, the Cameroonian rebel, Guerandi, who had taken refuge in Burkina Faso, would have made contact with the armed rebel groups in the south of Chad so as to sabotage the oil pipeline.
There are still questions concerning the conditions of the agreement between Cameroon and the oil consortium. This agreement was given the force of law in the 97/17 law of 7 August 1997. However this particular law contains ambiguous clauses, for instance, article 97/12 has important implications concerning Cameroon’s sovereignty. The article states: «In urgent cases, and especially when there is immediate danger for the population or for the environment, the Cameroon Oil Transportation Company (COTCO) (3) has the right, under its own responsibility, to have access to any public or private area, whatever its status or location, in view of carrying out an enquiry on the causes of the danger or the urgency of the situation, and this without any authorization and with the possibility of obtaining help from a public or private security organisation».
Evidently, the consortium could legally invite a group of mercenaries «in case of immediate danger».
(1) At the behest of the IMF, Cameroon’s National Hydrocarbon Company agreed to adjust its accountancy system in line with international norms and to pay its revenue into the State’s budget. (2) Author of the October 1999 report on petroleum companies’ activities, after a fact-finding tour of Chad and Cameroon in March 1998. (3) COTCO (Exxon, Petronas, Chevron) is the oil consortium in charge of the building and management of the pipeline in the Cameroon section of the project.
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