“Rapacious Instincts in Sudan,” The Nation, June 4, 2001

[from The Nation, June 4, 2001] “Rapacious Instincts in Sudan” Eric Reeves 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 [...]

[from The Nation, June 4, 2001]

“Rapacious Instincts in Sudan”

Eric Reeves

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.

**************

Eric Reeves is a literary academic by training, but has taken

extended leave without pay from Smith College to research and write

on Sudan. His publications on the role of oil development in Sudan’s

civil war have appeared in many newspapers and journals.