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Pipeline's Profits May Bypass Africans
Published on Tuesday, June 17, 2003 by the Los Angeles Times
Pipeline's Profits May Bypass Africans
Chad and Cameroon stand to reap billions from a consortium's oil project, but those living in poverty have seen few promised benefits
by Ken Silverstein

NANGA EBOKO, Cameroon — Skinny children play in front of mud huts, cars kick up clouds of dust on dirt roads and open pits serve as the sewage system in this isolated tropical town. In the jungle nearby, construction crews work in the burning sun, laying 5,000-pound links of pipeline.

By year's end, hundreds of thousands of barrels of crude will be coursing from oil fields in neighboring Chad, through rain forests in Cameroon and into tankers docked off the Atlantic coast.

The consortium made all sorts of claims about this being a 'development project,' and how it would reduce poverty," he said. "In the end, this is just an oil project.

Oliver Mokum, of the Cameroonian offices of Catholic Relief Services
The government of Cameroon will collect about $500 million over three decades for allowing the pipeline to cross its territory. Chad, which owns the oil, will receive at least $2.5 billion.

But with construction nearly finished, promises made about the pipeline's economic and social benefits appear overblown. Doubts are growing that needy places such as Nanga Eboko will see any lasting gain.

When construction began three years ago, the participating oil companies, the World Bank and the U.S. government all said the project would set a new standard for Third World energy projects, which historically have enriched corrupt rulers and multinational companies while often deepening poverty.

The oil consortium, led by ExxonMobil Corp., and its backers said the $3.7-billion, 670-mile pipeline would provide jobs, improve health care and raise living standards in the impoverished countries. If successful, the project would also smooth the way for increased oil exports from Africa, key to the Bush administration's strategy for reducing U.S. energy dependence on the Middle East.

As promised, the pipeline created thousands of jobs — but the vast majority turned out to be temporary. The World Bank says about 400 Chadians will have full-time jobs with the consortium, most in low-paying positions such as drivers and security guards. In Cameroon, the bank says, the number of permanent jobs will be "negligible," probably about 100.

Chad agreed to a World Bank plan to devote nearly all its pipeline revenue to education, health care and poverty reduction. Then, this year, President Idriss Deby dismissed the head of a committee charged with monitoring the regime's use of the oil money.

The dismissed official had opposed Deby's plans to spend it on such things as a prison and cars. The government claimed that the cars were needed to distribute food, but the oversight committee suspected that they would be given to regime insiders.

The Deby government has also failed to produce a promised economic development plan for the country's neglected southern oil region.

In Cameroon, plans to assist Pygmy villagers and establish forest reserves have barely got off the ground. The board of a foundation overseeing those efforts says the World Bank and the consortium haven't provided the money needed to carry out its mission. Foundation staffers say they can't afford to buy a car for field work, much less hire biologists and build guard posts.

"Social projects that were supposed to accompany the pipeline are far behind schedule," said Korinna Horta, who has monitored the project for Environmental Defense, a Washington nonprofit. The sponsors "were more worried about building the pipeline than putting these programs in place."

The consortium sought World Bank involvement in the pipeline to counter criticism that the oil companies were interested only in enriching themselves and corrupt African regimes. The request led to a lengthy and sometimes angry debate within the bank.

Some World Bank staffers, as well as human rights and environmental groups, warned that the oil revenue would be pocketed by officials in Chad and Cameroon. (The two countries have consistently been ranked among Africa's most corrupt states in surveys by international organizations.) Skeptics also feared disastrous ecological consequences, especially in Cameroon, where the pipeline crosses lush tropical terrain.

ExxonMobil and its partners, ChevronTexaco Corp. and Petronas of Malaysia, said the project would generate jobs, business activity and government revenue for social investment. The consortium said the pipeline was not just an energy project, but a "development project" as well. Chad and Cameroon made commitments of their own, promising social and political reforms.

In the end, the World Bank voted to support the project, asserting in one planning document that it provided "a unique opportunity to play a significant role in reducing poverty in one of Africa's poorest regions."

Instead, disappointment has followed the pipeline from village to village along its route.

In Mpango, a village of about 600 people a few miles from the pipeline's end on the Atlantic coast of Cameroon, a bulletin board nailed to the wall of Chief Savah's mud-and-wattle hut offers jobs on the pipeline. But the chief, wearing the matching shorts and jersey of England's national soccer team, said only 10 residents were able to land jobs, all short-term.

The consortium has promised to replace Mpango's one-room schoolhouse, a termite-damaged, tin-roofed building, to compensate the village for the loss of land to the pipeline and disruptions caused by construction, including pollution of a stream used for drinking water.

"The new school is badly needed, and that's what we'll remember most from the pipeline," said Savah, who uses a single name. "There have been some positives and some negatives, but the changes have not been great. We thought this was going to be a development project, and that is not what has happened."

Community Initiatives

Sponsoring animal sacrifices was one of the more unorthodox initiatives that the consortium undertook as part of its agreement with the World Bank and Chad.

Such sacrifices are common in Chad. They are believed to alleviate illness or dispel bad luck. The animal — usually a chicken but sometimes a goat or cow for a particularly urgent request — has its throat cut while a spirit is invoked and asked for protection. Afterward, the animal is cooked in a sauce for a communal meal.

"Like the squirrel gravy of Appalachian fame, a little goes a long way," said Ellen Brown, an ExxonMobil anthropologist, referring to a Depression-era meal of protein-laced sauce atop a plate of biscuits.

Other consortium-sponsored programs ranged from the compensation plan for villagers to distribution of mosquito nets to combat malaria.

Dressed in a long gown, in accordance with Muslim tradition, and work boots, Brown conducted a bus tour of the project area in southern Chad to show the consortium's good works.

Among the stops was the village of Madjo, near Kome Base, the headquarters from which the consortium supervises the project.

Madjo sits by a muddy river where people bathe, wash clothes and dishes, fetch drinking water, water scrawny cattle and fish for carp and Nile perch. Residents survive on a diet of grains and an occasional fish. Some women have thick, swollen necks from goiter, which is common in the area because of a lack of iodine.

Most locals employed on the pipeline take home about $225 a month, a fraction of what foreign workers are paid but three times Chad's minimum wage. One villager who has a maintenance job at Kome Base used his salary to build a house with a tin roof, buy two cows for breeding and pay a dowry owed his wife's family.

"Before the project, I was just getting along. But now I have a much better situation," said the man, who asked not to be named.

The pipeline has helped spur economic growth of about 10% in Chad during each of the last two years, but the project's overall impact has been shallow and fleeting. The vast majority of jobs lasted a few weeks or months. Now that construction is almost complete, pipeline employment in the two nations is in a steep decline from a peak of about 13,000.

That's been an especially bitter blow in Cameroon, because its share of pipeline revenue — about $16 million a year — is too small to have much effect on the population's living conditions.

ExxonMobil says that locals hold four out of five pipeline jobs in Cameroon, but few are of the highly skilled, highly paid variety.

At a work site near Nanga Eboko, almost all the welders laying one of the last stretches of pipeline were from the Middle East or South America. The consortium has a financial incentive to hire Cameroonians because they are paid one-fourth or less what foreign pipeline workers earn. ExxonMobil says it simply can't find enough skilled workers in the country.

Ekani Lebogo, a union representative for pipeline construction workers, said this explanation is unconvincing.

"We have had welders on jobs in Angola, Equatorial Guinea and other parts of Africa, but here most of the welders are foreigners," he said. "Tell me how you should feel if you are Cameroonian and see this?"

The paucity of Cameroonians in skilled jobs has resulted in strikes and protests. Bruce Hayes, an ExxonMobil employee who implements labor agreements in Cameroon, attributes the frustration to unrealistic expectations.

"Everyone wants a job, and those that don't get one are upset," said Hayes, whose tan work shirt bore an embossed patch with a tiger giving the thumbs-up sign. "There's nothing we can honestly do to resolve that."

Compensating Villagers

The centerpiece of the consortium's social efforts is its compensation plan, which has paid $10 million to thousands of people in Chad and Cameroon.

Anyone displaced by the pipeline, or whose farming is temporarily disrupted, is eligible. Recipients can take cash or select goods from a glossy catalog of items that includes plows, carts, sewing machines, bicycles, water pumps, peanut de-hullers, mattresses, cooking pots and construction material.

The oil consortium has also compensated villages that suffered a communal loss, such as the destruction of mango trees.

Several villagers in Madjo received brick-making equipment. They now make and sell baked bricks for homes that can last 25 years, about three times longer than the traditional mud huts. So far, about 20 Madjo residents have replaced their old dwellings.

In other villages near Kome Base, residents have started community gardens or bought sewing machines to make and sell clothes.

The project's impact dwindles the farther south one travels from Kome Base. Some Chadians deride the consortium's social efforts as mere public relations.

Helen Doumro, who works for a French company that sells supplies to the consortium, called places such as Madjo "show villages." In most places on the project route, she said, "you won't see any impact from the pipeline other than a few new houses."

Georgius Koppert, a Dutch anthropologist who works for ExxonMobil in Cameroon, acknowledged that no more than one-third of the consortium's compensation payments in that country will go for long-term investments.

"The rest may pay for immediate needs, such as food or alcohol, to pay for an extra bride or to help a sick relative," he said.

ExxonMobil officials say that the oil company is not a social service provider, and that the two African governments have promised to use their oil revenue to fight poverty.

"There's a need to distinguish between the company's role and the governments' role, especially as the government presence has been largely absent," Exxon-Mobil anthropologist Brown said.

Delicate Environment

The pipeline's southernmost section in Cameroon is its most environmentally sensitive stretch, running near Pygmy villages, through thick forests filled with soaring palms, and ending at the Atlantic Ocean in the town of Kribi.

The consortium provided $3.5 million to the Foundation for Environment and Development in Cameroon, which is charged with establishing two new national reserves and an Indigenous People's Program to improve health, education and agriculture in Pygmy villages.

The foundation is intended to operate for 28 years. In June 2001, its five-member board, which included an ExxonMobil representative, sent an urgent request to the World Bank and the oil consortium, saying that the $3.5 million was about a quarter of what it needed to fulfill its mission. Without more money, the board wrote, there would be a "risk of failure."

The consortium did not provide additional funding.

Two years later, the consequences are apparent. The Mbam-Djerem and Campo-Ma'an forest reserves exist only on paper. In the meantime, a French timber company has constructed an access road through Campo-Ma'an to serve its logging operations outside the reserve.

The road encourages trespassing and poaching in Campo-Ma'an, which is rich in plant life and home to forest elephants and buffaloes as well as endangered species such as the mandrill, a type of baboon.

"We are not able to function," said Paulette Bisseck, the foundation president and a senior lecturer in organic chemistry at the University of Yaounde in Cameroon's capital. "The money is insufficient, and no one wants to talk about it."

Tom Smith, a board member and director of UCLA's Center for Tropical Research, said that establishing reserves involves building field stations and guard bases, hiring teams of biologists to conduct surveys, and buying vehicles to police the grounds.

In dozens of Pygmy villages, the foundation is charged with improving agricultural output and health care — by building storage sheds for medical supplies and training locals in first aid, for example.

"I'm concerned about being able to keep the project going if we don't get more money," Smith said.

Stephen Cobb, a British environmental consultant who advised ExxonMobil on establishing the foundation, also is worried.

"Projects of this type that have succeeded have had substantially larger budgets," said Cobb, who has 30 years of experience in African conservation projects. "It suited ExxonMobil not to make a more flamboyant gesture, and the World Bank accepted it."

Robert Goodland, a former head of the World Bank's Environmental Department who helped set up the foundation, said the $3.5 million was envisaged as "start-up" money that would be augmented by the oil consortium and the World Bank.

"I did a back-of-envelope estimate that it would scarcely last a couple of years if trained staff did their poaching prevention and patrolling adequately," he said.

Marcia Zelinsky, a spokeswoman for ExxonMobil, said the World Wide Fund for Nature and the Wildlife Conservation Society have agreed to work with the foundation. "We believe this indicates it is functioning as intended and is adequately funded," she said.

Michel Pommier, who oversees the pipeline project for the World Bank, said: "I understand [the foundation's] interest in having more funds, but at this time our view is that it is progressing reasonably well."

Goodland said the road through Campo-Ma'an indicates otherwise. Conservation of the two parks was a "firm legal condition" for World Bank backing of the project, he said. He added that the bank should threaten to suspend its support unless Cameroon prevents loggers from using the road.

"If that is not stopped," he said, "it's an end to all Campo-Ma'an biodiversity as soon as World Bank attention wanes, as it always has soon after construction."

Pygmy Way of Life

About 1,000 Pygmies live in 60-odd villages scattered on and around the pipeline route. Environmentalists demanded that the project not disturb their forest life, so the consortium made 20 changes to the route to bypass their villages.

ExxonMobil says that angered some Pygmies because they wanted to benefit from road construction and other pipeline-related improvements.

"Keeping Pygmies in their current pristine state means they will keep dying of tuberculosis at the age of 30," said Andre Madec, ExxonMobil's development executive on the pipeline.

Yet for some Pygmy villagers, the project has been a double disappointment: It has disrupted their communities while bringing few economic benefits.

Jeanne Nouah, a Pygmy leader, met a journalist at a roadside village in Cameroon, about 25 miles from the pipeline's end. She then led the way to her home village of Maboulo — an hour's walk through thick forest. Though the heat was brutal, Nouah, wearing a headscarf, a flowery short-sleeved shirt, pants and flip-flops, never seemed to break a sweat.

In Maboulo, about 50 thatched-roof mud huts were scattered about in a clearing. There are no wells — villagers get water from a nearby stream — and the closest school is an hour's walk.

Soon after Nouah's arrival, the village chief returned from the bush, machete in hand. His wife was by his side, carrying firewood on her back in a basket woven of palm leaves.

The chief joined a group of about 20 villagers sitting in the shade. One boy chewed on the local version of a toothbrush, a stalk containing a resin that protects the teeth. Another boy sharpened a spear.

During construction of the pipeline, the chief said, small game fled deeper into the bush, communal fruit trees were cut down, and medicinal plants were lost. Only three men out of about 20 in the village got temporary work.

The chief said the oil consortium sent representatives to Maboulo several times and has promised to build new housing as compensation.

"They have been making promises for two years, but we are still waiting," he said. "It's like a tree that dies and falls in the forest. You can wait and wait, but it will never rise again."

Miles Shaw, an ExxonMobil official in Chad, said the compensation program would meet all its commitments to villagers. He said that offering short-term jobs allowed the consortium to maximize the number of people who would benefit.

Oliver Mokum, of the Cameroonian offices of Catholic Relief Services, a U.S.-based organization that is monitoring the pipeline, said the Pygmies and other locals might have had unrealistic expectations.

"When the villagers heard that a big American company would pay them for their losses, they thought Father Christmas had arrived," he said. "They thought they'd get everything they wanted and were disappointed when they only got part."

But Mokum said the oil companies are partly to blame. "The consortium made all sorts of claims about this being a 'development project,' and how it would reduce poverty," he said. "In the end, this is just an oil project."

This article was reported with assistance from the Center for Investigative Reporting and its Fund for Investigative Reporting on the Environment.

Copyright 2003 Los Angeles Times


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