The Chad Oil and Pipeline Project is a $3.7 billion development
project comprising some 300 oil wells, which are expected to extract
approximately one billion barrels of oil over twenty-five years.
Located in Chad's southwestern region, it is one of Africa's largest
public/private development projects. Once extracted, the oil will
be transported by a 640 mile underground pipeline, through neighboring
Cameroon, to an offshore export loading facility. Construction began
in October 2000 and the oil is expected to flow in 2004. Project
ownership is comprised of a three-company oil consortium (Exxon/Mobil
40%, Petronas Malaysia 35% and Chevron 25%) and the governments
of Chad and Cameroon, which hold a combined 3% stake in the pipeline
portion of the project. The funds used to secure the investment
share of the two countries were provided in the form of a loan by
the World Bank. Exxon/Mobil, operating under the name EssoChad,
is the project's construction and operations manager.
is a landlocked country in north-central Africa.
It is among the world's poorest countries, a condition aggravated
by various civil wars during thirty of its forty years of independence
from France. Political stability has been hindered by tensions between
the Muslim populations in the north and non-Muslim populations in
the south, as well as by conflicts within each population. The political
conflicts, coupled with its limited natural resources, have resulted
in minimal private investment. The country is governed by an elected
Deby, a Muslim from the north who seized power in 1990 and was
elected for a five-year term in June 2001. The current Constitution
was passed by referendum in 1995 and a constitutional court began
to hear cases in 2000. Chad's legal system is based on customary
law, French civil law and now the provisions of the new Constitution.
It has not accept compulsory International Court of Justice (ICJ)
jurisdiction. 125 four year seats are available in the country's
single-house legislature, which will held elections in late 2001.
As one of the ten poorest countries in the world, Chad's economic
development is challenged by its landlocked geography and the desert
climate in the northern half of the state. In 2000, GDP was estimated
at $8.1 billion with an expected real growth rate of 4% and an inflation
rate of 3%. Per capita GDP was $1000. Most of the population (85%)
worked in agriculture, often on the subsistence level. According
to a 1995 estimate 64% of the population lives below the poverty
line, receiving inadequate health care and educational opportunities.
Economic factors undoubtedly contribute to the fact that Chad has
1:30,000 doctor to patient ratio and an adult illiteracy
rate of 80% (people over the age of fifteen illiterate in French
or Arabic). Life expectancy is approximately 50 years (48.86 years
for males and 52.98 years for females) and the infant mortality
rate is 95.06 deaths/1,000 live births (2001 est.).
Chad is said to be one of the few countries in the world never
to have a railroad, and with less than 200 miles of paved roads
in one of Africa's largest countries, its road
infrastructure is poor. The communications system is also underdeveloped.
A 1997 estimate by the CIA claims Chad has only 7000 main phone
lines in use. Internet access is even worse: 1 server used by an
estimated 1000 people out of a population of 8,707,078 (2000 estimate).
Human Development Report for 2000, ranks Chad eighth from the
bottom of the 174 countries surveyed.
SOCIAL CONDITIONS IN CHAD PRIOR
TO THE OIL PROJECT
Since receiving independence from France in 1960, nation-building
in Chad has been hindered by civil wars largely stemming from
competition among ethnically-defined groups seeking overall
political power. There has also been external interference
from Libya in the north. Traditionally in Chad political power
holders governed local resources such as grazing rights, water,
and land for agricultural cultivation.
Today the group in control of the country administers all the nation's
natural resources and designs and implements all social, economic
and political policies, including the use of external aid. Competition
for this power has undermined other efforts to unite disparate tribal
cultures under a single state authority based on pluralism, rule
of law, and a just distribution of resources, power and authority
based on constitutional democracy. These political ideals have remained
on the horizon as each successive president sought to centralize
power in his office. Recent changes in communications and growth
in the numbers of local NGOs have brought world attention to the
country and to the oil project in particular.
In June 2000, the World Bank's Board of Directors gave the final
approval for its loan to the Chadian and Cameroonian governments.
This was the final component necessary to move the project forward.
Many environmental and human rights international NGOs and activists
opposed the Bank's approval. Their reasons included Chad's poor
human rights record and environmentalists' concerns that proper
legal and technical environmental safeguards did not exist in Chad,
thus exonerating the oil consortium from any future liability or
accountability with respect to its operations. Several international
NGOs requested the World Bank to grant a two-year moratorium to
its approval of the project. The Bank declined, http://www.globalpolicy.org/ngos/wbank/chad.htm
As a precondition to the two governments' loan request, the World
Bank required the oil consortium to prepare a comprehensive environmental
assessment (EA) and risk management plans. This resulted in a 13-volume
package, six volumes of which were dedicated to issues in Chad.
(While the primary focus of this assessment is an examination of
environmental issues, the environmental issues are clearly related
to the rights to physical well-being and survival of people in such
marginal societies) [One section of the project's EA addresses issues
related to human rights at, http://www.essochad.com/eaff/essochad/
documentation/english/summary/index.html (From the link,
go to Chapter Nine, Section 9-41 (the last page of the Chapter)).]
The development of Chad's oil reserves is predicated on the goal
that the revenues will be used to reduce poverty in Chad by investing
in education, health and other basic infrastructure projects. Critics
fear that little of the income will reach the poorest populations,
much will be lost through incompetence and corruption and that a
large part will finance military and political interests under the
guise of national interest. Persistent civil unrest in Chad has
left the government fighting a perpetual civil war in the north
and occasional ones in the south. The concern that oil money will
be used to purchase weapons to strengthen the government's force
against rebel opposition movements proved valid in November 2000,
when the government used $4.5 million of a $25 million oil contract
bonus to purchase weapons. The President justified this action by
stating that "development must be protected."