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June 13, 2000
World Bank Approves Chad-Cameroon Pipeline
Shareholders and activists charge that the controversial ExxonMobil project threatens the
environment and human rights of people in two West African countries.
SocialFunds.com --
The potential negative impacts of oil development on local environments and human rights have been
vividly revealed recently in Nigeria, Sudan, Burma, and Columbia. A new project proposed by
ExxonMobil in the West African nations of Chad and Cameroon stands to demonstrate whether the oil
industry has learned anything from these lessons.
 Last week, the World Bank approved the
construction of the $3.5 billion Chad-Cameroon pipeline project, including its own contribution of
a $90 million loan to cover Chad and Cameroon's obligations for the 650-mile pipeline. The bank's
approval also allows $400 million in loans from other sources, while ExxonMobil, Chevron, and
Petronas, the Malaysian state oil company, will pay for the bulk of the project.
This
announcement comes barely a week after ExxonMobil's annual meeting, where shareholders voted on a
resolution asking the company to review the human rights and environmental implications of the
project. Environmental and human rights activists have asked for a moratorium on the pipeline until
greater assurances could be made that the local environment and human rights would not be violated.
"There are serious environmental concerns that have yet to be properly addressed," said
Alejandro Queral of the Sierra Club's Human Rights and Environment Program. "The political climates
of these countries mean there is a great potential for ecological damage and for violence against
those who would protect their environment."
These concerns are not unwarranted. Cameroon
was rated in 1997 as the most corrupt government in the world by Transparency International, the
international nonprofit devoted to curbing corruption, and has regularly failed to account for
revenues from its massive oil reserves. The U.S. State Department reports that the Cameroon
government has committed numerous and serious human rights abuses.
Meanwhile, civil war
in northern Chad is spilling into the south where the oil project is expected to drilling 300
wells. In 1997, riots in Chad led to the massacre of 80 unarmed civilians by security forces, and
in 1998 another 100 unarmed civilians were killed in a similar incident.
In this volatile
political climate, the security of local people and their environment in the wake of the proposed
pipeline is far from assured. Additionally, both Chad and Cameroon have made the activities of
non-governmental organizations working on social and environmental issues related the project
increasingly difficult and possibly life-threatening.
ExxonMobil asserts that the
pipeline's economic benefits for Cameroon and Chad outweigh potential social and environmental
dangers, and that the World Bank's participation will assure that revenues are shared with
citizens. The project is expected to produce roughly 1 billion barrels of oil over the next 25
years, with an estimated $80 million a year to Chad's economy and $25 million to Cameroon's. For a
point of perspective, the $3.5 billion project is equivalent to 20 times the national budget of
Chad.
"The World Bank's decision to approve their participation is a key milestone for the
Chad Project and for the countries of Chad and Cameroon," according to a statement by ExxonMobil.
"In particular, Chad, the principle site of the development, is among the poorest countries in the
world. The average Chadian lives on fifty cents per day and one in five children die in infancy.
Chad's citizens deserve the right to benefit from the responsible development of their resources."
For ExxonMobil, the World Bank's recent decision is an important validation of the
project's environmental and social impact assessment and mitigation plans. But shareholders,
activists, and the citizens of Chad and Cameroon will need more than assurances from the World Bank
before they believe that the pipeline poses negligible risks to the local environment, society, and
economy.
©
SRI World Group, Inc. All Rights Reserved.
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