The Lundin Consortium

The Consortium that signed an agreement with the Government of Sudan in February 1997, consisted of International Petroleum Corporation (IPC, the operator, with a 40,375% stake in the concession), PETRONAS of Malaysia (28,5%), OMV of Austria (26,125%), and the Sudanese state owned oil company Sudapet (5%).

In 1998, IPC merged with Sands Petroleum to form Lundin Oil, which continued to operate the Block 5A consortium. When Lundin Oil was sold to the Canadian oil company Talisman in June 2001, the concession in Sudan was excluded from the sale and transferred to a new legal entity, Lundin Petroleum, that held Block 5A as its only valuable asset. Commercial oil reserves were found in Thar Jath in April 1999. Four years later, in June 2003, the company sold its stake in the Block 5A to PETRONAS, making a net profit of SEK 930 million (U$D 92.6 million). In 2020, Lundin Petroleum changed its name to Lundin Energy. In 2022, Lundin Energy was stripped of 98% of its assets and renamed Orrön Energy.

The legal proceedings against Lundin Energy in Sweden do not directly affect its fellow consortium members PETRONAS and OMV. Evidence presented at the trial, however, may eventually oblige them to face their past and take responsibility for their role in Sudan’s oil war. In May 2024, a criminal investigation was opened in Austria against former senior managers of OMV for alleged complicity in war crimes. The lawyers who brought the case made extensive use of the evidence that was presented in the Lundin trial.

The Lundin Consortium and Human Rights

Lundin Energy, OMV and PETRONAS have endorsed the United Nations Guiding Principles on Business and Human Rights (UNGP), and the first two also the OECD Guidelines for Multinational Enterprises. However, they have disregarded the most essential requirements of these principles as they have

  1. never conducted an appropriate due diligence for their Sudanese operations;
  2. make no effort to know their human rights impacts; and
  3. do not show how they address alleged adverse human rights impacts.

Businesses must avoid causing or contributing to adverse human rights impacts through their own activities, and address such impacts when they occur (UNGP 13), including remedy for victims. The former members of the Lundin Consortium are duty bound to contribute to remedy of victims of abuses in Block 5A if their acts and omissions contributed to abuses, which is plausible because,

  1. The members of the Lundin Consortium accepted the risk of complicity in international crimes by signing a contract with the Government of Sudan without any guarantees that human rights and international law would be respected. At the time the contract was negotiated, the Sudanese Government was in the middle of a civil war and had a record of committing international crimes, and the Government’s access to oil wealth was likely to be challenged with force. Nevertheless, the companies failed to prevent and mitigate the significant existential and human rights risks that their operations presented to the population.
  2. The violent displacement, killings and other crimes that were committed by Government forces and militias to enable the operations of Consortium were predictable, as they had occurred previously in neighbouring oil areas, but the Lundin Consortium did not avoid contributing to these crimes. Instead, throughout the war in Block 5A, it worked alongside the perpetrators of international crimes.
  3. The members of the Consortium should have been aware of the abuses committed by the armed groups that partly provided for their security needs, but they did not prevent their occurrence, mitigate their adverse impact, or address their catastrophic impact on the population.
  4. Furthermore, armed raids against, and the forcible displacement of, significant parts of the population enabled the exploitation of the Consortium’s concession.
  5. The Consortium’s infrastructure enabled the commission of crimes by the Sudanese Armed Forces and allied militia’s.
  6. The members of the Consortium have benefitted immensely from war crimes and other gross and systematic human rights violations.

None of the three companies acknowledges any responsibility for the crimes that have been committed to advance their interests and for the harm that was caused to the population. PETRONSAS and OMV have only issued general denials of wrongdoing. Lundin Energy, on the other hand, has published its own account here, and defends its former executives and itself in court. There are 32 South Sudanese plaintiffs appearing in court as witnesses. The other est. 250.000 victims have nowhere to go to seek their right to remedy and reparation.

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