SEEN's Bulletin on Fossil Fuel Projects and Development Aid

Business as Usual at the World Bank 

[This Carbon Watch also appeared as an OP-ED in US local newspapers]

June 28, 2000

The nation’s capital was shut down last April when 15,000 protesters engaged in marches, teach-ins and civil disobedience called attention to the destructive policies of the International Monetary Fund (IMF) and the World Bank--the two most powerful economic institutions in the world. The diverse crowd of students, religious groups, labor, environmental and human rights activists, challenged the elitism and unaccountability of these publicly funded institutions. The World Bank’s public relations office responded by claiming the protesters were misinformed, that Bank employees were doing “God’s work” every day by helping finance health care and education programs for those most in need in developing countries. 

But once the teargas had cleared, it was back to business as usual: on June 6, that same World Bank PR office was generating lengthy press releases defending its $365 million loan in support of the Chad-Cameroon pipeline, one of the more controversial projects the World Bank has ever supported. This loan gives oil companies ExxonMobil, Chevron, and the Malaysia’s Petronas the green light to go ahead with the $3.7 billion construction of a 650-mile pipeline through southern Chad into the ecologically sensitive rainforests of Cameroon. The pipeline will cross numerous rivers, risking the possibility of countless spills. As Nobel Prize-winning Archbishop Desmund Tutu said of the pipeline, "Africa cannot afford the environmental devastation of such a project.”

Human rights concerns also loom large in this project: thousands of indigenous peoples will be forced to resettle to make way for the project, their intact cultures disrupted, their futures uncertain. Those who might be inclined to speak out in opposition to the pipeline were warned in mid-May by Chad’s military henchmen that they risked execution if they did so.

Why are the African governments and World Bank officials so eager to support a project that would create social and environmental destruction? One word: money. The pipeline is projected to bring over $9 billion—and possibly as much as $50 billion-- in revenues over the next 28 years to the oil companies, at least $1.7 billion to Chad, and $500 million to Cameroon. The World Bank argues that this money will go to much-needed poverty alleviation programs in Chad and Cameroon, which rank among the poorest countries in the world. Indeed, for Chad, whose GNP was $1 billion and Cameroon, whose GNP was $9 billion in 1999, these moneys are significant. 

But will they “trickle down” to the poorest? Unlikely. The government of Cameroon has been rated the most corrupt nation on earth for two years in a row by Transparency International. The government of Chad has been in a state of financial disarray resulting in donor countries demanding that its Treasury be under the authority of a Swiss firm. Chad is also in the midst of a civil war. 

The World Bank insists that it has a plan to address these sticky problems, and has created a revenue management plan. However, a Harvard Law School study calls the plan “vague” and “clearly insufficient.” 

The lion’s share of these “poverty alleviation” moneys—at least $9 billion-- goes to the oil companies. ExxonMobil, the largest multinational oil company in the world, had revenues in 1999 that were 164 times greater than Chad’s GDP and 18 times greater than Cameroon’s. ExxonMobil is also considered one of the worst corporate environmental actors in the world. 

Chevron’s record in neighboring Nigeria also gives reason to pause: the company is currently being sued in US federal court for its complicity in human rights abuses in two separate incidents in 1998 and 1999. In 1998, unarmed civilians protesting environmental devastation in the Niger Delta were shot and tortured. In 1999, a village was razed, and villagers killed--including a seven-year-old girl and an elderly man. 

Although US taxpayers pay the largest share of the bill for the World Bank, most Americans are unaware of the policies we are indirectly supporting. To avoid more business as usual hiding behind glossy PR at the World Bank and IMF, we need greater accountability from above, at the level of the United Nations (to which the World Bank and IMF are unaccountable) and greater accountability from below, at the level of taxpayers. Tell your member of Congress that you don’t want the World Bank to invest in oil, gas and mining projects that benefit large corporations, and that only environmentally and socially sustainable projects that truly benefit the poorest have your support.

By Christine Bustany and Daphne Wysham, Institute for Policy Studies

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