July 9, 2003
Though most commentary on oil development in southern Sudan has focused on the concessions of Western Upper Nile, this emphasis is ultimately skewed, as a number of recent developments make clear. For while there is a greater humanitarian presence in Western Upper Nile (and thus a greater source of intelligence from the region), and though most human rights reports on the consequences of oil development have derived from research conducted on the ground in Western Upper Nile, there are a steadily increasing number of accounts and bodies of evidence suggesting that what is occurring in Eastern Upper Nile is rapidly becoming a ghastly reprise of what we have already seen to the west.
When speaking of oil development in Eastern Upper Nile, we are speaking of two concession blocks, Block 3 and Block 7 (the two consortia operating in Western Upper Nile are working in Blocks 1, 2, 4 and 5a). Block 7 is also known as the Melut concession, and Block 3 as the Adar Yel concession. The present analysis will offer an account of the recent history of the consortium operating in both the Melut and Adar Yel concessions—the “Petrodar Oil Company”—and the evidence suggesting how and why the Petrodar Oil Company may be considered responsible in very direct ways for the human destruction consistently reported in Eastern Upper Nile, including in the Liang area near Mabaan and in the Longochok area further south.
Here it is important to remember that the US-led Civilian Protection Monitoring Team has recently issued reports on atrocities reported in these two areas. Strikingly, there is no mention at all of Petrodar in the earlier (May 27, 2003) Liang area report. And in the July 1, 2003 report on civilian atrocities reported around Longochok, Petrodar Oil Company is referred to only in ways that would suggest it is a self-effacing, but deeply humanitarian hydrocarbon corporate presence. The Civilian Protection Monitoring Team (CPMT) refers to “the clinic that Petrodar had built for the people of Longochok,” and “medical and humanitarian aid that [Petrodar] was providing the local citizens,” and “the water tanks for livestock” provided by Petrodar.
What the CPMT nowhere notes or indicates by way of context, in either its “Introduction” or “Background” paragraphs, are the most relevant features of the Petrodar Oil Company. The most essential of these is that operational control of Petrodar is entirely Chinese—entirely governed by the business ethics and level of concern for human rights that define China’s business presence world-wide, including in Western Upper Nile. Here it is worthwhile to rehearse some of the salient features of Chinese presence in Western Upper Nile, in the form of China National Petroleum Corp. (CNPC is also the corporate/operational presence in Petrodar in Eastern Upper Nile).
In the Amnesty International report of May 3, 2000 (“Sudan: The Human Price of Oil”), the organization notes:
“Chinese workers were apparently involved in the displacement of civilians during the construction of the [oil] pipeline. Sudanese civilians who escaped attacks reported that the Chinese workers were armed and appeared willing to use their guns.”
The Amnesty International account squares with the numerous reports from the ground of Chinese workers ferrying Khartoum’s troops along oil construction and development roads.
Medecins Sans Frontieres (MSF) has reported in “Violence, Health, and Access to Aid in Unity State/Western Upper Nile” (April 2002) on the notorious oil road south of Bentiu, where an earlier incarnation of the CPMT has chronicled in great detail massive civilian destruction and displacement:
“According to [civilians from the road area], whose accounts were consistent, road clearing first began in 2000, often preceded by Antonov bombings and helicopter gunship activity. Then the government of Sudan and Nuer troops, along with Chinese laborers, brought bulldozers to clear the site of the road and the surrounding area. After the bulldozers cleared a track, troops arrived in vehicles and burned all the tukuls in the path of an alongside the goad. Government garrisons were then established at 30-minute intervals along the road.”
Here Chinese workers for China National Petroleum Corp. are authoritatively identified as working hand-in-glove with the armed forces of Khartoum in a process of civilian destruction and displacement in Western Upper Nile that has been chronicled by MSF as well as in numerous other human rights reports. None of this seems to be known by the Civilian Protection Monitoring Team now conducting investigations in Eastern Upper Nile. (Notably, Khartoum has not withdrawn any of these garrisons along the oil road south of Bentiu, despite its obligation to do so under the February 4, 2003 “Addendum” to the October 15, 2002 cessation of hostilities agreement.)
Indeed, given China’s strategic interest in Sudan, its premier source of offshore oil, it is all too predictable that China and Chinese workers would be implicated in the worst of the human rights abuses committed in the oil regions. China brings to Africa an appalling sense of business ethics. As a major publication from the distinguished International Crisis Group (“God, Oil, and Country”) reported last year, “‘[The Chinese] have a vested interest in the continuation of a low level of insecurity. It keeps the other major investors out.'” In other words, China welcomes the absence of real peace in Sudan as enhancing its business opportunities, whatever the cost to southern Sudanese civilians. As the International Crisis Group study concludes: “There is [on the part of the Chinese] an almost total disregard for the human rights implications of their investments.”
None of this appears in the accounts we currently have from the CPMT. None of it. Petrodar—which is to say its operator, China National Petroleum Corp.–is simply the supplier of humanitarian aid and water tanks for livestock. No mention is made by the CPMT of the all-weather oil road that now leads from the headquarters of Petrodar in Adar Yel to Longochok, where reports from the ground indicate that Petrodar has drilled several successful oil wells, one ready for production. No mention is made of reports of drilling efforts in the Liang area, cite of what have been reported as massive civilian atrocities (though receiving no confirmation from CPMT).
General confirmation of these oil-drilling efforts comes from the authoritative Energy Intelligence, which reported on March 7, 2003 that “over in the east [Eastern Upper Nile], the Chinese-operated Petrodar consortium has quietly been drilling away on blocks 3 and 7, making at least two discoveries in Block 7 [the Adar Yel concession block].” This would seem of immense significance in understanding the fighting in Eastern Upper Nile as well as what lies behind attacks on civilians, given the Chinese record in Western Upper Nile. Again, this appears nowhere in the “Background” or “Introduction” to the CPMT report on Longochok—and oil development is not mentioned once in the Liang report.
The Energy Intelligence report continues: “Details are patchy, but initial estimates put recoverable reserves at around 700 million bbl, industry sources say. Petrodar has capitalized on the fact that both blocks have been in government hands since 2001. The northern National Islamist Front (NIF) government has invested significant military capital in holding Mabaan, the gateway to Block 3’s Adar Yel field, against rebel forces who control the area bordering Ethiopia further east. That has discouraged scrutiny by non-governmental organizations.”
Energy Intelligence has put its finger on a key feature of the situation in apparently oil-rich Eastern Upper Nile: the lack of a reporting presence by humanitarian organizations operating on the ground. Even so, it is not as if we are without earlier reports on the consequences of oil development in Eastern Upper Nile. The important Christian Aid report of March 20, 2001 (“The Scorched Earth: Oil and War in Sudan”) notes what certainly should have registered somewhere in the CPMT reports on the region:
“The devastation in Block 5a [Western Upper Nile] [is] being repeated in a wide swathe in Eastern Upper Nile, from the Adar oilfield east to the Ethiopian border. Local chiefs and opposition commanders say that here too the government [the Khartoum regime] is attempting to drive civilians from the area in order to allow oil exploration to proceed unimpeded. They say the attackers—primarily government militias, some of them newly organised and armed—are avoiding military targets and attacking only civilians.”
Oil exploration means the activities of China National Petroleum Corp., again the operating partner in the Petrodar consortium. China has managed to export to Sudan its worst domestic product, a supreme indifference to human rights, and this has become the defining feature of the operating procedures of China National Petroleum Corp/Petrodar.
The implications of these operating procedures for civilians are further chronicled in the Christian Aid report:
“In recent months, attacks on relief agencies have spread from Western to Eastern Upper Nile, where Chinese and Arab oil firms have formed a joint consortium to develop existing oil fields in Adar Yel and explore other fields in a [seventy-five thousand] square-kilometer area east of the White Nile.
“In an attack last May  on Mading forces placed anti-personnel mines inside the compound of one nongovernmental organization, outside the primary health center and at a water point. Syringes and needles in the health center were piled up and doused with fuel. All nongovernmental organization compounds were looted. Seeds delivered by CARE the day before the attack were stolen.”
“Five months later, in October  a government militia moving south form the Adar area attacked two villages with a nongovernmental organization presence. In one village, Uleng, they sprayed the compound of the [organization]—the International Rescue Committee—with machine gun and rocket fire.”
None of this recent history—none of it—figures in the reports on Eastern Upper Nile by the US-led Civilian Protection Monitoring Team, even though the Team is reporting on precisely the same areas. There is no mention of the all-weather oil road from Adar to Longochok. There is no mention of another oil road built in 2001 from Adar to the Mabaan area (the area in the which the Liang atrocities were reported). There is no mention of reported Petrodar drilling activities in the Liang area. There is no mention of the credible reports from the ground that Petrodar workers, in Chinese trucks, are moving Khartoum’s military forces in the oil concession area. There is no mention of the highly authoritative reports that Khartoum has very recently redeployed helicopter gunships—truly fearsome weapons of civilian destruction in the oil regions of Western Upper Nile—to Eastern Upper Nile. And again, there is not a single noting of the fact that the often-cited Petrodar is entirely Chinese in operational makeup. These omissions are hopelessly compromising of CPMT, indeed are a scandal of incompetence or disingenuousness.
The consequences of this failure bear further analysis. For example, at one point in the conclusion to the Longochok report, CPMT speaks of evidence consisting of “confirmed testimony from Petrodar and Senior Military Intelligence Government of Sudan officials.” In other words, the testimony of cut-throat Chinese oil operatives, obviously working in close conjunction with Khartoum’s notoriously brutal security officials, is supposed to amount to contributing evidence for what the CPMT has concluded in its report on attacks on civilians. This is nonsense of an unfathomable sort. How can the testimony of such Chinese officials, corporately deeply complicit in massive civilian destruction, in both Eastern and Western Upper Nile, be of any use? How is the putative authority of such testimony enhanced because it is mimed (or orchestrated) by Khartoum’s vicious security personnel?
If the absurdity of the CPMT analysis anywhere greater, it is only in the extraordinarily fatuous final bit of “evidence” offered in one of the last sentences in the conclusion. The military forces of Khartoum are judged unlikely to have engaged in an attack on a particular village near Longochok (Wan Tau) because “Petrodar had done [sic] a series of capital investment project [sic] in conjunction with the [Khartoum-allied] Southern Sudan Defense Forces and the Government of Sudan.” This monstrously ignorant conclusion simply ignores the vast body of reporting on how oil development, sometimes with a small side-bar of humanitarian gestures, has relentlessly destroyed villages throughout both Western and Eastern Upper Nile by way of creating a cordon sanitaire for oil development. The forces of the Southern Sudan Defense Forces, along with Khartoum’s regular forces, are precisely the instruments of this civilian destruction. Such ignorance and its various reporting consequences are simply unconscionable and demand that there be an immediate change in the present leadership of CPMT. It will have no credibility without such change.
But the indictment of the Chinese presence in Sudan is longer still. The bulk of the weaponry that is now used by Khartoum’s military forces (regular and militia) is of Chinese manufacture—or is manufactured domestically in the huge GIAD and Military Manufacturing Complex (MMC) facilities outside of Khartoum, both funded with anticipated oil revenues from China and its consortium partners (see Christian Aid report, Chapter 3, for details on the construction, financing, and manufacturing capacity of these two vast facilities: http://www.christian-aid.org.uk/indepth/0103suda/jourbrief.htm). Human Rights Watch has also published a telling account of Chinese weapons transfers to Sudan (see http://www.hrw.org/reports98/sudan/Sudarm988-05.htm). And the International Crisis Group reports in “God, Oil, and Country” (2002) (available in PDF format at www.crisisweb.org) that:
“Sudan is a growing market for Chinese arms and other industrial goods as well. China produces lower end military products that Africa consumes readily and Sudan is no exception. It sells affordable AK-47s, ammunition, mortars, and rocket-propelled grenades. It has also sold Sudan fighter aircraft, attack helicopters and anti-tank weaponry.”
All this comes, as ICG notes, with no human rights lectures or strings attached.
It is important to note that Petrodar, though Chinese-operated, is not entirely Chinese in composition. Indeed, Malaysia’s Petronas very recently acquired the 46% of Petrodar that had been owned by the Qatari Gulf Petroleum Company. Petronas itself has abundant Sudanese blood on its hands by way of participation in both the Greater Nile Petroleum Operating Company (Blocks 1, 2, 4) and the Block 5a consortium (both dependent on oil roads in Western Upper Nile). The other ownership stake (roughly 10% at this point) is controlled by the northern Sudanese state entity Sudapet and another Sudanese oil company, al-Thani (further information on the make-up of Petrodar is offered by: Report from the Energy Information Administration of the US Department of Energy, December 2001; Energy Intelligence, March 7, 2003; and “Sudan: A future divided by oil,” Alexander’s Oil and Gas Connections, June 3, 2003).
Notably, both China National Petroleum Corp. and Malaysia’s Petronas have recently been able to access the US capital markets in very substantial fashion, in amounts running to many hundreds of millions of dollars: CNPC through its New York Stock Exchange listing in 2000 of a factitious surrogate (“PetroChina”), and the stated-owned Petronas through a Morgan Stanley-led bond offering in 2002 that raised over $1 billion in the US alone. The Bush administration has steadfastly resisted imposing capital market sanctions on oil companies operating in Sudan, and these ventures into US capital markets can be expected to continue. What this means, of course, is that US capital—ultimately from typically unwitting American investors—is flowing to Asian oil companies complicit in the massive oil-driven destruction of southern Sudanese civilians.
Why is this being allowed to happen? Why is the vicious reality of a Chinese-operated Petrodar in Eastern Upper Nile being effaced in reports by the US-led Civilian Protection Monitoring Team? Why is CPMT allowed to continue operating and reporting under the woefully inadequate leadership of General Charles Baumann? Why are the state oil companies of China and Malaysia being funded by US capital markets in their ongoing, brutally destructive oil development activities in southern Sudan? Why are various highly credibly reported violations of agreements by Khartoum not being investigated by what was supposed to have been a Verification and Monitoring Team (per the terms of the February 4, 2003 “Addendum” to the October 15, 2002 cease-fire agreement)?
Ultimately the answers all lie with the Sudan policy of the US State Department, and in particular the policies of Assistant Secretary of State for African Affairs Walter Kansteiner. It was Kansteiner who vociferously opposed imposing capital market sanctions on oil companies like China National Petroleum Corp. and Petronas in his June 2002 testimony before the International Relations Committee of the US House of Representatives. It is Kansteiner and the Africa Bureau that have accepted the woefully inadequate performance of the Civilian Protection Monitoring Team under the leadership of General Baumann. It is Kansteiner and the Africa Bureau that have failed to push effectively for the deployment of a robust Verification and Monitoring Team (VMT), despite being party to the negotiations that created the mandate for the VMT on February 4, 2003. It is Kansteiner and the Africa Bureau that refuse to accept or respond to reports of major ongoing violations of the October 15, 2002 cessation of hostilities agreement, which explicitly prohibits redeployment of military assets. (Eight barges loaded with military equipment are presently making their way southward on the Nile toward Juba, even as construction on the oil road south of Bentiu continues and Khartoum refuses to dismantle its garrisons on the road, despite explicitly committing to such in the February agreement.)
Perhaps Kansteiner and the Africa Bureau are convinced that the interests of a peace agreement are best served by refusing to “roil the waters” at this critical moment. What this view fails to take into account is that the chances of the Machakos peace process succeeding have already been slowly attenuated by precisely this US unwillingness to confront Khartoum over its serial violations of previously signed agreements. The same can be said of the State Department’s refusal to deal honestly with the realities of oil development in Sudan—both its consequences for southern civilians and its generation of the oil revenues that convince Khartoum it can acquire the weaponry that will allow the regime to prevail militarily. State Department myopia and fecklessness have left us precious little chance for a truly just, and thus sustainable, peace.
Only the most immediate and concerted of diplomatic efforts by the US can avoid the negotiation of what will be an expedient peace deal within the mid-August framework established by chief Machakos mediator, General Lazaro Sumbeiywo. The final round of talks has now convened in Nakuru, Kenya and most of the key issues remain outstanding; but General Sumbeiywo and his fellow mediators are without sufficient power to convince Khartoum to make a just peace. It is thus incumbent upon the US vigorously to support Sumbeiywo in insuring that the final agreement is not the codification of injustice—one that would consign Southern Blue Nile, the Nuba Mountains, and Abyei to the National Islamic Front’s continuing tyranny (tyranny powerfully on display with the brutally repressive crackdown now underway in Khartoum). The final security arrangements negotiated must not abandon the people of the south to merely the “good faith” promises of Khartoum. And there must be reasonable compromises by Khartoum on wealth- and power-sharing, as well as the status of the national capital.
The sheer length of this list of issues insures that the Khartoum regime has any number of ways to forestall reaching a just peace, one secured with adequate international guarantees or guarantors. The time is short and the diplomatic needs are many if Machakos is to avert collapsing in failure during the end-game.
And even with renewed and more skilful US efforts Khartoum may simply run out the string on the Machakos process and then shop around for another diplomatic “peace forum.” This possibility was raised in an Agence France-Presse report of today, which cites SPLM/A spokesman Samson Kwaje as declaring that “the SPLM/A had learned that the Sudanese foreign minister was circulating a proposal at the African Union summit, calling on the pan-African grouping to take over the Sudan peace process from IGAD” (AFP, July 9, 2003). Such “forum shopping” has been a staple of National Islamic Front diplomacy in the past, and rather than make any concessions under the auspices of Machakos (which is an extension of IGAD), the NIF may simply choose to abandon the process and continue the status quo, with its enormous and asymmetrical military advantages for the regime.
If this happens, both the Machakos mediators and the State Department must be prepared to give a fully honest account of why the Machakos process collapsed and where responsibility lies. If Khartoum is responsible for the collapse, if the regime fails to accept the terms of a just peace, then the consequences must be appropriately severe.
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