Communiqué: World Bank suspension of loans to Chad: What comes next?
Date: 9 Jan 2006
The Chadian Association for the Promotion and Defense of Human Rights (N’Djamena, Chad) and Environmental Defense (Washington, D.C.) welcomed the World Bank’s decision last Friday to suspend funding for Chad, but called attention to the urgent need to address problems of social disruption, public health and environmental damage resulting from the controversial Chad-Cameroon oil & pipeline project.
“We agree with the World Bank’s decision to suspend funding for Chad because new money would mainly be used for military purposes and increasing repression of the Chadian people,” said Delphine Djiraibe, a lawyer at the Chadian Association, which together with Environmental Defense has been closely involved with the Chad-Cameroon pipeline project since 1997. “But we regret that the Bank did not listen to the warnings of civil society organizations earlier because now we face greater poverty and severe environmental problems as a result of this mega-project.”
“Poverty, public health and environmental problems continue to increase as the Exxon-Mobil led consortium running the project expands drilling activities in both existing and new oilfields,” said Korinna Horta, a senior economist with Environmental Defense. According to the International Advisory Group, which was established by the World Bank to monitor project implementation, the oil consortium is taking land from poor subsistence farmers without ensuring that compensation payments will make up for lost livelihoods. Local authorities and the military are known to extort money from villagers when they receive cash compensation from the oil companies. Chadian human rights organizations report that human rights activists trying to defend local people’s rights often receive death threats and have to flee the region. Pollution is taking a toll on the health and crops of some of the poorest people on earth, but none of the project sponsors are even studying it, let alone resolving the problems.
“The World Bank bears responsibility for the project and must press Exxon-Mobil to vigorously address these problems,” Horta said.
“We hope that the World Bank Group will work with other donors and the private sector to tighten sanctions until the Chadian government agrees to implement the revenue management law and show greater respect for human rights and the environment,” said Delphine Djiraibe.
“On a broader level, the World Bank and other donors will hopefully learn from this experience and limit future support for extractive industry and other high risk projects to countries where basic good governance conditions are in place and where affected people have a voice in decisions affecting their lives,” added Korinna Horta.Oil development in Africa has generated ruinous corruption, armed conflict, human rights violations and poisoned landscapes. When the World Bank approved financing for the Chad-Cameroon Oil & Pipeline project in 2000, it promised that this would be a different kind of project: Oil wealth would be transformed into benefits for the poor and environmental and social impacts would be adequately addressed.
The Bank tried to do this by requiring Chad to adopt an oil revenue management law and by financing capacity-building projects meant to ensure that the government could handle the environmental and social consequences of the project. The capacity-building projects have largely failed and now with the government’s decision to modify the revenue management law to divert money to military expenditures, the project increasingly resembles the disastrous oil development in neighboring countries such as Nigeria. The difference is that this project, supported by the World Bank and run by an Exxon-Mobil led,, is the single largest investment in Africa today.
Djiriabe and Horta have published articles on the project in the Boston Globe, the Los Angeles Times and the Washington Post, amongst others.
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For further information:
Delphine Djiraibe; 001 235- 29 95 09
Korinna Horta 202-572 3325 or 202- 431 9406 (cell)
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