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 (16,125%), and the Sudanese state owned oil company Sudapet (5%).
In 1998 IPC merged with Sands Petroleum to form Lundin Oil, who continued to operate the Block 5A consortium. When Lundin Oil was sold in June 2001 to the Canadian oil company Talisman, the concession in Sudan was excluded from the sale and transferred to a new company, Lundin Petroleum. When it entered the Stockholm stock exchange in 2001, Block 5A was 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.
The legal case against Lundin Energy in Sweden does not directly affect its fellow consortium members Petronas and OMV. Even though they share the same responsibility, they will escape legal accountability unless criminal investigations will also be opened in Austria and Malaysia. Evidence presented at the Lundin trial, however, may eventually oblige them to face their past and take responsibility for their role in Sudan’s oil war.
The Lundin Consortium and Human Rights
Lundin Energy, Petronas and OMV are disregarding the OECD Guidelines for Multinational Enterprises and the United Nations Guiding Principles on Business and Human Rights (UNGP), as they
- never conducted an appropriate due diligence for their Sudanese operations;
- make no effort to know their human rights impacts; and
- 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 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,
- 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 signed, 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 risk that their operations presented to human rights.
- The violent displacement, killings and other crimes that were committed by Government forces and militias 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.
- 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 the catastrophic impact on the population.
- Furthermore, armed raids against, and the forcible displacement of, significant parts of the population enabled the exploitation of the Consortium’s concession.
- The Consortium’s infrastructure enabled the commission of crimes by others.
- The members of the Consortium have benefitted immensely from war crimes and other gross and systematic human rights violations.
Unfortunately, none of the companies acknowledges having any responsibility, whether for yesterday’s abuses or their consequences today. They issue general denials of wrongdoing instead.
With few exceptions, the people who have been harmed during the oil war in Block 5A will not be represented in the Swedish court and have nowhere to go to claim their right to remedy and reparation. PAX and Global Idé are supporting their efforts to realise their rights by other means, including the provision of reliable information, publicity, and engagement with investors.