Income from Chad's oil resources will figure in the country's 2004 budget, indicating that from now on, Chad is an oil producing country with 225,000 barrels per day. Its annual budget will increase from 45% to 50%. But there are any number of social issues to be considered.
The Chad-Cameroon oil pipeline project will have cost 3.7 billion dollars and hopefully the oil resources from the Doba Basin can be exploited for the next 25 years. Chad could make a profit of some $2 billion and Cameroon, $500 million.
The World Bank is financing the project. Shortly before the World Bank gave its go-ahead, the former French Prime Minister, Michel Rocard (he's now an EU Member of Parliament), wrote: “The Chad-Cameroon pipeline project is a striking example of the way in which governments and the international private sector can work together with multilateral institutions, to completely transform a poor country's expectations”.
Chad is overseeing the project and is receiving the necessary financing from the World Bank. It is accountable to the World Bank for the way in which the money is used, and stands guarantor that the Bank's conditions for completing the project are met. Financial backers have invested some 3.72 billion dollars in the whole project; i.e. 2.2 billion for the 1,070 km-long pipeline (890 km are in Cameroon), which will link Doba to Kribi, south-west Cameroon and onwards to the off-shore terminal. A maximum of 250,000 barrels of oil can flow through the pipeline each day.
The first barrel pumped through Chad's oil is now a reality, because the first barrel of crude oil was symbolically pumped through the pipeline on 15 July. Recently, production started in the Miandoum oil fields (southern Chad). Construction work is still underway in Chad's central oil refinery and normal production levels will be reached by the end of this year. Drilling operations are continuing in two other fields - Kome and Bolobo - both in the Doba area. Once the preliminary drilling has been completed, 225,000 barrels each day will flow from these oil fields. The project's official inauguration will take place at the end of September in Komé, in the centre of the Doba oilfields. Chad's Prime Minister, Foamed Faki, says: “Construction work is continuing on shore installations and all should be finished by April 2004”. Wishful thinking, perhaps, because not all the installations in the oil fields have been completed. Mr Tom Erdimi who is Chad's coordinator for the project says: “The government decided to go ahead using whatever was presently available. All the 301 wells will only be operational at the end of the year 2006”.
During the next 25 years when the nation's oil resources should be raising vast amounts of wealth, Chad could earn a total of 2 billion dollars (1,200 billion CFA francs) and income available to the government in its annual budget will be increased from 45% to 50%. The government has taken appropriate measures to ensure oil revenue is better managed. It plans to earmark 10% for future needs; 5% for developing oil-producing regions; 80% for priority sectors: i.e. education, health, social services, rural development, infrastructures.
Benefits from oil
But who will really profit from Doba's oil? There are various reactions from Chad's population on this subject! Everyone's hoping their daily lives will be changed for the better. Aliouda Limane is the “Mission Fellowship Aviation” flight planner. He explains that “Chad's oil will probably effect my work, because the number of flights may possibly increase. NGO's with which we work, will be wanting to travel more than before, which means we'll have higher salaries”. Bérénice Rimbarné sells textiles in N'Djamena (Chad's capital)'s main market. She's hopeful that: “Thanks to the money which oil will bring, there'll be no more buying "on tick". People will have enough money to pay cash for my goods. Because the way things are at the moment, people are buying on credit and in order to get your money, you've really got to go after defaulters. So, I hope oil will help us. Oil will make it possible for some people to increase their sales' turnover; others are rather concerned”. Dobia Assingar is president of the Chadian Human Rights League . He says: “Income from oil must be well managed. Thanks to pressure from civil society and the World Bank, we've been able to ensure that a Control Commission has been set up to monitor how income from oil is used”.
Chad is one of the world's poorest countries: 80% of the population live on less than one dollar per day. The newly-discovered oil resources are thus “manna from heaven” and will foster development. However, care must be taken to use the income wisely. Laltchad's editor puts it this way: “Some people are over the moon that Chad will produce 225,000 barrels per day of oil.” But we say: "Let's be on our guard". Indeed, the plans for the distribution of revenue were drawn up under pressure from the World Bank and only include 55% of oil revenue. (The plans only pertain to the Doba-Komé-Miandoum oil fields).
Waste matter upsets people
An investigation has revealed that many diseases caused by badly-stored waste matter, leading to fatalities among humans and livestock, have taken place in four villages in the Mayo-Rey Region, approximately 750 kms north-east of Yaounde, Cameroon's capital. An NGO, the Ecumenical Service for Peace, says this waste is produced by one of the companies, sub-contracted by the Cameroon Oil Transportation Company (COTCO) to build the pipeline.
Their report, published in June in Yaounde, states that the Willbros Company , hired by COTCO for construction work in the northern section of the pipeline, «is guilty of not taking sufficient care over waste matter discharged during the course of construction work. This has caused considerable loss among livestock, especially pigs. Humans have not been spared, either, and a number have died from toxic poisoning. Also, the ecological balance of the area has been disturbed». Samuel Nguiffo, who is Coordinator for the Centre for the Environment and Development (CED), states: “We are doing our best to get immediate compensation for those who've suffered, and we want to make COTCO and the government aware of the dangers which this haphazard discharge of waste matter causes the people of Mayo-Rey ”.
The report goes on to emphasise that “the way in which waste matter has been discharged by the Willbros company, has changed villages in the north into "village rubbish dumps" where you can see what can only be described as a "cocktail of decomposing refuse", dumped near houses. This means people are forced to inhale the odours released into the atmosphere.” In flagrant violation of the Environmental Law which clearly states that waste and refuse must be deposited at a reasonable distance from dwellings. Josiane Ngante is an engineer working with the Ministry for the Environment and Forests, and says: “What's happening is a clear violation of Cameroon's present environmental regulations, which envisage a plan for compensating environmentally for any environmental loss along the pipeline. We have taken this company to task so that it follows the contractual obligations contained in the specifications.”
So far, no compensation has been considered by COTCO or the World Bank. This attitude is annoying those NGOs concerned with protecting the environment, in particular the CED which asked the Mbaïmboum Zoological and Veterinary Centre to prepare an official report, confirming the fact that many animals have died from eating contaminated food they found when roaming among the rubbish.
Procedure for compensation is less advanced in Cameroon than in Chad, but the principle remains the same. Mr. Michel Gallet is COTCO's general manager and he explains: «Discussions on the route the pipeline would take lasted some time and so we weren't able to make a final decision immediately. But we did consult the local population and worked out how much compensation would be given. There were innumerable lawsuits during which the people could say what they wanted».
Villages on the Lolodorf to Kribi section are feeling the consequences of building the pipeline. Felix Dévalois Ndi Ombgwa is a farmer and he says: “There were obvious attempts to dissimulate when it came to counting the number of trees destroyed. You could see ten palm trees on the ground; in fact, only five got listed. 17 people who were compensated, all disputed the number of trees, but to no avail. Consequently, they didn't receive much money in compensation.” Another farmer, Joseph Nzie, denounces COTCO's scale of compensation for destroyed trees: “One kilo of cocoa is sold for 600 CFA francs. A cocoa tree brings in three kilos of cocoa each year and lives for more than 50 years. But only 2,000 CFA francs are given. It's daylight robbery! And the same goes for oil palms.”
It's clear that the Chad-Cameroon pipeline project is giving rise to a great deal of controversy regarding its environmental and social impact. Many ecologists in Cameroon, Chad and other countries questioned the project's environmental impact, and this delayed the project for several months. The breathing space allowed time for research into its environmental impact on local populations living alongside the pipeline. However, at the time when the first consignment of oil was due to be discharged into the pipeline, Cameroon's civil society were of the opinion that not enough time had been given to weigh up the consequences for the local population.
Most Chadians are delighted that oil has been discovered in their country but worry about the way in which revenue generated by the oil will be used. Gilbert Maoundonodji is spokesperson for the civil society association. He worries: “The oil sector will generate an increase in Chad's income. But we are concerned to note that Chad (according to a World Economic Forum study) is the most corrupt country in Africa. So, will this income be used in the priority sectors for development purposes?” He also regrets that the environmental aspect of the project was not sufficiently taken into account. “Unfortunately, the World Bank has ignored this concern. Today, oil is a reality and you can't ignore it.”
Chad has brought in a law according to which, 80% of income from the oil must go towards financing priority sectors, i.e. education, health, the environment, water and rural development. Readers should remember that Chad's GDP per capita is 250 dollars per annum. But, according to an American NGO specialist in development aid: “The practical application of this law reveals significant gaps”, giving rise to a possible disappearance in other directions of a substantial part of these resources.
Opposition leader Kassiré Coumakoye who is chairman of the National Rally for Development and Progress (RNDP) puts it this way: “I'm happy that the oil is now flowing, but more importantly, I'm wondering how revenue accruing from the oil is going to be managed”.
Ngarlejy Yorongar is a Member of Parliament in Federation Action for the Republic (FAR), the main opposition party. He says: “Good management is good governance. If oil revenue was to be well-managed, then the Chadian people's sufferings would be relieved. But let's face it - income from oil will not benefit our people. It's high time they face facts.”
NGO's have taken a practical interest in the Chad-Cameroon pipeline project , and they've contributed many helpful ideas dealing with the exploitation and export of Chad's oil. The World Bank guarantees that in both Chad and Cameroon, the population's interests will be defended and the environment protected. True, there have been some criticisms about limitations to these guarantees; nevertheless, they are there. So, it's hard to understand why some northern hemisphere NGOs have taken it upon themselves to attack the pipeline project, especially when one sees what's happening in other countries. It's all-important to reaffirm the absolute primacy of international law and human rights over any other international treaty, especially those dealing with commerce. Human rights remain paramount and are absolute obligations.
Antoine Lawson, Gabon, September 2003 - © Reproduction authorized, with usual acknowledgment.
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