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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.

June 17, 2003|Ken Silverstein | Times Staff Writer

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 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.

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