Rome, Wednesday, August 17, 2011
Oil remains the far greatest source of income for both North and South Sudan. The total oil production in both countries, especially in the South, is of 500,000 oil barrels per day (OilPrice.com - 11/07/2011). But, who benefits most from the oil production? Do ordinary people have a share in this natural resource? Do the government and the oil industry investors take into account the real needs of the local communities, or do the interests of some individuals and international corporations put themselves as the main beneficiaries? What about the impact on the environment?
Unity State is South Sudan’s leading state in oil production. Half way between Leer County and Bentiu, Unity State’s capital city, is located Thar Jath, an oil field area of Koch County. Drilling activities and oil production in Thar Jath (Block 5A) started in April 1999 by the International Petroleum Company (IPC), which is owned by Swedish Lundin. Block 5A is now operated by the White Nile Petroleum Operating Company (WNPOC). This joint operation started oil production from Block 5A Thar Jath field in April 2006, according to the company.
Sudan itself started crude oil exportation in August 1999. However, since the signing of the Comprehensive Peace Agreement (CPA) in 2005, the oil revenues had been shared with the then semi-autonomous region of Southern Sudan. It was recently announced that Sudan’s oil revenues only in the months of April and May 2011 exceeded one billion US dollars. “The South Sudan government got a share of 396.03 million US dollars. Unity State, together with Upper Nile and South Kordofan, received a share of 20.04 million US dollars” (Sudan Tribune, 04/07/2011).
Southern Sudan gained independence on 9th July 2011 and continued to share the oil revenues. However, as a new and independent nation it is now doing its own oil business. The Republic of South Sudan has sold its first oil to Chinese buyer Chinaoil just 10 days after become an independent country. According to the government’s figures, this oil shipment amounted to 1 million barrels, “which is worth around 110 million US dollars under current prices” (www.ecosonline.org – 19/07/2011). This means, an amount of about 330 million South Sudanese Pounds. Indeed a good start for the ‘infant nation’.
The irony is that in Unity State people stand on a ground with a lot of oil underneath, and yet they have to pay SSP 6,00 per litre of diesel and SSP 20,00 per litre of petrol, fuels that are both brought from other countries. The reason for this is obvious: South Sudan has no oil industry and still depends on the neighbouring countries for fuel supply. Nevertheless, it produces hundreds of thousands of crude oil daily. Most importantly now is to know how much money of oil revenues each South Sudanese state and county gets and how much of that money is used for the development of the country and the wellbeing of its entire population, services such as education, health care, infrastructure, etc., particularly of those population directly affected by the oil production.
It is worth mentioning that in the beginning of Block 5A Thar Jath oil field operation, “the local communities living in or near it experienced attacks, harassment and displacement from the central government and from breakaway groups of SPLM/A during the war”, says Maren Gunnarson Fallet in her research ‘The impact of the oil industry on local communities in South Sudan’. It is not known, however, whether they got any compensation. Twelve years later the oil companies continue in the area, but the people surrounding them get very little or nothing from the oil production. Very few of them actually know something about oil production, transportation, value, and how much money the government gets from the oil revenues.
There is a clear lack of transparency. One thing, however, that they all seem to know is that the oil companies have brought them some problems, “such as outbreaks of strange diseases, probably caused by leakages of the oil into sources of drinking water” (www.npaid.org 27/04/2010). Indeed, evidence of remarkable pollution by companies drilling for and extracting oil has been seen in Thar Jath oil field. In fact, an international human rights group has confirmed that “environmental hazards due to discharge or leakage of contaminants from oil extraction sites into drinking water” is a reality and poses a threat to people’s lives as well as their livelihood and food security (www.eni.ch – 16/11/2010).
Besides this, environmentalists and human rights activists, after carrying out scientific research, warn that hundreds of thousands of human lives are at risk due to the oil activities in the area and that “the failure of the oil companies to put plastic lining in the swampland's ponds means that oil and poisonous chemicals are seeping into the ground and reaching the area's upper water level, which is an important source of drinking water for local communities” (www.ecosonline.org – 16/11/2010).
Notwithstanding, the government of South Sudan seems to be taking a positive step about oil exploitation. The ‘Transitional Constitution of the Republic of South Sudan’ has set some ‘Guiding Principles for Development and Equitable Sharing of National Wealth’. According to the country’s supreme law, “the sharing and allocation of resources and national wealth shall be based on the premise that all states, localities and communities are entitled to equitable development without discrimination” (68. 5).
Moreover, “accountability for violations of human rights and degradation to the environment caused by petroleum and gas-related operations” is ensured (172. 2) and “at least two percent of net oil and other mineral revenues” go for each producing state (177). In addition, the President of the Republic of South Sudan, Salva Kiir Myardit, said in a recent speech that in this first year of government 5 essential laws will be passed to establish full transparency and accountability in the management of financial resources, natural resources and oil. Amongst these laws there is a ‘Petroleum Act’ for regulating the management of oil resources, and an ‘Oil Revenue Management Law’ for sustainable and transparent management of the oil income (www.goss.org – 08/08/2011).
The birth of South Sudan as a new nation has brought many promises and new hope for all South Sudanese. In ‘peaceful’ time the prospectus to share in the nation’s natural resources changes perspective. The people of South Sudan now can dream of a new nation where its natural resources are to be shared by all. However, a fair share in the oil revenues in such a way that oil is no longer a private property but looked at as a common good, and the environment is fully protected from pollution and degradation, remains jeopardised by mismanagement of resources and by the ongoing greedy and corrupted context. This all poses a challenge to the local churches, organised civil society, and NGOs which, together, could play an important role in the struggle for justice, equity, and a safe environment.
By Raimundo Rocha – MCCJ
Leer, South Sudan.