Impact of Chad-Cameroon project on local population worse than expected

13 April 2007

The World Bank-backed Chad-Cameroon pipeline is once again in the news - this time following the release of a new report which documents the heavy toll that oil development has taken on the local population in southern Chad.

Over the years, most international attention to the petroleum development project has focused on the management of the country’s newfound oil wealth. Last year, the world watched relations between Chad and the World Bank deteriorate, after the government reneged on its promises to devote a percentage of its oil revenues to social spending and to save resources for future generations.

The spat was short-lived, however; after several months the two parties reached an agreement to resume Bank lending and unfreeze accounts holding the country’s oil revenues – this despite ongoing political instability in Chad and still-questionable government will to prioritize poverty reduction. More recently, the pipeline was in the press following an oil spill off the Cameroonian coast, near Kribi.

In mid-March, the World Bank released a new study which details the impacts of the project on land use and livelihoods in the country’s oil-producing region. The report, commissioned by the World Bank Group, reveals that nearly 1000 households have been seriously affected by loss of land and that the overall magnitude and severity of impacts of local communities have been far greater than envisaged. Meanwhile, in 2006, Exxon-Mobil posted the largest annual profit by a US company in history.

The problems highlighted in the evaluation are not new; civil society groups and the Bank’s own independent monitoring mechanisms have repeatedly raised concerns about the growing footprint of the project in the oil field area. The findings underscore global concerns that the poorest populations, such as the farming and herding communities in Southern Chad, often bear the brunt of the costs for extractive industry projects.

Similar problems with the impacts of land and livelihood loss on local populations have arisen in the context of other large extractive industry projects, such as the IFC-supported Newmont Ahafo Gold Mine in Ghana. Land is arguably the single most important factor for poor farming-dependent communities, and extractive industry projects, such as oil production and gold mining, inevitably entail the seizure and destruction of land. The failure of the WBG and private project sponsors to adequately prevent and mitigate the land use impacts of extractive industry projects casts serious doubt on the purported development benefits of such EI projects.

Resources

• World Bank tells Exxon to fix Chad compensation by Lesley Wroughton, Reuters, March 22, 2007 (Reuters website)
• Chad Resettlement and Compensation Plan Evaluation Study, January 2007 (World Bank website) (Acrobat PDF 4.21 MB)
• Land Use Mitigation Action Plan for Oilfield Development Area, EssoChad, April 6, 2007 (Acrobat PDF 155 KB) 
• Oil leak shows weaknesses in World Bank pipeline, NGOs warn, IRIN, January 25, 2007 (IRIN website)