The World Bank Involved in a Dirty Quarrel in Chad

Since the very beginning of the project, around the middle of the 1990’s, various environmentalist, human rights defence and international solidarity organizations (CADTM among them) expressed their concern over the World Bank’s support for building the 1070-km pipeline that would connect Doba’s oil region (in Chad) to Kribi’s maritime terminal (in Cameroon). Environmental, human and financial risks were always so huge that Shell and Elf preferred to withdraw. But the last joint venture involving Exxon-Mobil, Chevron-Texaco (from the US) and Petronas (from Malaysia), finally managed to fulfil this $ 3,700 m dollar project, thanks to the powerful strategic support from the World Bank.

The oil pipeline, finished in 2004, was built without taking into account the interests of the people living in the region. For instance, the initial compensation offered them was 25 CFA francs (3.8 cents of Euro) for each square meter of peanut plantations destroyed, 5 CFA francs (0.8 cents of Euro) per square meter of lost millet, and 3,000 CFA francs (4.6 Euros) for every mango tree cut down when, according to Chadian representative Ngarlejy Yorongar, the first yield of one of these trees may produce 1,000 mangoes, which can be sold each at 100 CFA francs (15 cents of Euro)… Only at the end of a strong protest, an increase in such compensation was achieved.

Reality is sometimes cruel. Chadian dictator Idris Deby was the military adviser to Hissene Habré – former dictator arrested in Senegal just a few days ago. A soldier trained in France who came to power in December 1990 as a result of a coup, Deby has long enjoyed the support from the French President and the French-African networks. The program? Fraudulent elections with illegal balloting or reversal of the results, repression against any form of democratic opposition or freedom of the press, revision of the Constitution to enable unlimited re-election of the president… A much-talked-about news story was the failure of the trial Deby tried to orchestrate against François-Xavier Verschave, author of the book Noir silence, which detailed all of the above.

The World Bank could not openly support a regime of this nature. By making Chad its first investment in black Africa, the World Bank forced Deby to use 90% of oil sale funds on social projects chosen with his approval and in investments throughout the region of Doba. The remaining 10% should be reserved for the next generations – this reserve would be deposited in an account blocked in London’s City Bank, under the World Bank’s control. In order to run that account, the World Bank proposed the creation of a Board for the Control and Supervision of Oil Profits (CCSRP in French), made up of 9 members. But 5 of these members were appointed by Deby himself…
Many said then that the World Bank profits would not stop Deby from seizing the loot produced by oil. The World Bank insisted, however, on what has been confirmed today as a big mistake.

The joint venture has benefited the most from the Chadian oil exploitation, but the regime has nothing to object to. Profit sharing between the Chadian state and the oil venture seems to be quite unfavourable for the state, which should earn only 12.5% of the direct sale duties from that oil. In addition to this are the different taxes and royalties, which go straight to the Chad Public Treasury. The first royalty, handed over in advance, wasn’t really an exemplary operation: $ 7.4 m dollars were apparently embezzled. Furthermore, another misappropriation of $ 4.5 m dollars seems to have been earmarked for the President’s son to buy helicopters. The World Bank, deeply involved in the project, majestically decided to turn a blind eye so as not to blemish its own reputation.

That was not enough for Deby. The figures allowing us to make an estimate of his share – well… his country’s share – come from Exxon-Mobil and the joint venture itself. As a country, Chad lacks the expert knowledge and the technical means that would have it stay abreast of the prices and use such data to obtain an estimate of the profits by comparing them with the amounts of oil extracted. That is why on October 7, 2004, the Chadian presidency issued an extremely bizarre release entitled “Arnaque, opacité et fraude du consortium” [Cheating, lack of transparency and fraud by the Joint Venture.] alleging that the multinationals were hoarding the oil rent and that Chad had no way to accurately control the joint venture’s statements, which the release was exposing in strong terms.

At the most recent stage of the scandal, and in an utterly foreseeable manner, the mechanism established by the World Bank got completely stuck. Idriss Deby is about to dip into the till kept for future generations, at least $ 27 million dollars. Destabilized by the strong social tensions, several overthrow attempts and army desertions; Deby surely has no intention at all to use that money to strengthen the paltry social budgets. That money would most probably go to strengthen the repressive and military presence, as the whole international community assumes.

Lesson: The World Bank was the determining factor in a project that is getting the Chadian nation terribly into debt, at the same time that corruption and poverty worsens, the environment deteriorates and extracts a natural resource without processing it in its country of origin; all of this in the interests of some transnational companies which share out a crumb with the local magnates on condition that the latter ensure the privilege of the formers’ ownership right over natural resources that should instead be considered the common wealth of the local population. In other words, here we find the main ingredients of a beverage, consciously prepared and served by the World Bank – a bitter-tasting beverage that could be explosive.