[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.