World Bank's "model" project in Chad beset by persistent problems
13 February 2007
The controversial Chad-Cameroon pipeline is again in the news after an off-shore oil spill occurred near the town of Kribi in coastal Cameroon. Meanwhile in southern Chad, where ExxonMobil and its consortium partners extract nearly 200,000 barrels of “black gold” per day, the security situation and living conditions are deteriorating.
Despite mounting political instability in Chad and little tangible evidence of poverty reduction nearly four years after the start of oil production, the World Bank maintains that it is still “premature” to draw any final conclusions regarding the success of the petroleum development project.
The Chad-Cameroon oil pipeline, the World Bank's highest profile project in Africa, has again made headlines following an oil spill off the coast of Cameroon in January. The slow response time and allegations that the public was not duly informed of the spill raise critical questions about the safeguards that exist to cope with a larger accident.
Samuel Nguiffo, the director of the Centre for the Environment and Development, a Cameroonian NGO, said that if there had been an incident affecting the coastline, “the impact would have been catastrophic because of confusion among authorities and communities who do not seem to know which avenue to pursue in case of a petroleum accident.”
Meanwhile in southern Chad, where ExxonMobil and its consortium partners extract nearly 200,000 barrels of “black gold” per day, the security situation and living conditions are deteriorating. The oil operations have taken over more of the region’s arable land than expected, threatening to exacerbate conflicts between farmers and herders over land-use and leaving some of the country’s poorest residents even more vulnerable than they were before the World Bank-backed project. In 2006, ExxonMobil recorded record-breaking profits for the second year in a row, but the company continues to lag on addressing concerns about its operations in Chad that have been documented repeatedly by international monitoring groups.
Despite mounting political instability in Chad and little tangible evidence of poverty reduction nearly four years after the start of oil production, the World Bank maintains that it is still “premature” to draw any final conclusions regarding the success of the petroleum development project. At the same time, the Bank’s “Implementation Completion Report,” issued in December 2006, rates performance on achievement of project objectives as “satisfactory.”
In contrast, the latest report of the International Advisory Group (IAG), an external body tasked with monitoring the project’s implementation, paints a more sobering picture of the situation on the ground. The report from the IAG’s 11th mission to Chad cites numerous outstanding social, environmental and security problems in the oil zone, and describes persistent weaknesses in the country’s public expenditure system that make it nearly impossible to ensure accountability for how resources are used. According to the IAG, “alarming delays” persist in the implementation of a regional development plan in the oil zone and capacity building measures; the government’s ability to monitor the oil sector - “already severely crippled a year ago – has further eroded”; and there is “urgent need to clarify and clean up the whole system of government revenues and expenditures.”
The government of Chad is expected to receive nearly $1 billion in March, when Exxon and the other Consortium members deliver their annual corporate tax payments. Local residents and international observers are concerned that there are no measures in place to ensure that this money is not used to fuel growing conflict on the border with Sudan and internecine strife, or to intensify repressive measures reportedly being taken against Chadian citizens and the press. The only assurance that the World Bank and other international donors can point to is President Deby’s promise to direct the majority of government resources to "priority sectors" for poverty reduction, laid out in a Memorandum of Understanding signed with the Bank in July 2006. The President has broken his word in the past, with serious consequences for the people of Chad and neighboring Sudan. Will things be different this time?
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