The Lundin Consortium

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The Consortium that signed an agreement with the Government of Sudan in February, 1997 consisted of International Petroleum Corporation (IPC, the operator, having a 40,375% stake in the concession), Petronas of Malaysia (www.petronas.com.my, with 28,5%), OMV of Austria (www.omv.com, 16,125%), and the Sudanese state owned oil company Sudapet (www.sudapet.sd, 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 transfered to a newly founded company called Lundin Petroleum (www.lundin-petroleum.com). When Lundin Petroleum entered Stockholm´s stock exchange in 2001, Block 5A in Sudan was its only asset of value. Commercial oil reserves were found in Thar Jath in April 1999. Four years later, in April 2003, the company sold its stake in the Block 5A to Petronas with a profit of SEK 930 million.

Sweden’s Public Prosecutor Magnus Elving suspects that Lundin Petroleum officials Lundin Petroleum’s Chairman Ian H Lundin and CEO Alexandre Schneiter have been complicit in war crimes.

 

The Lundin Consortium and Human Rights

Lundin Petroleum, Petronas and OMV seem to be systematically disregarding basic requirements of the international standards for business and human rights that they claim to adhere to, OECD Guidelines and UN Guiding Principles, as they

  1. have never conducted an appropriate due diligence;
  2. made no effort to know its human rights impact; and
  3. do not show how they address alleged adverse human rights impacts.

According to these standards, 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 believed to be duty bound to contribute to remedy of victims of abuses in Block 5A as their acts and omissions contributed to abuses, 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 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.
  2. The violent displacement, killings and other crimes that were committed by Government forces and militias were predictable, as they had occurred previously in neighboring 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 the 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 others.
  6. The members of the Consortium have benefitted immensely from war crimes and other gross and systematic human rights violations.

Unfortunately, none of the companies acknowlegde any responsibility, issuing general denials of wrongdoing instead.

The majority of the victims will not be able to claim remedy and reparation before a Swedish court. In cooperation with the victims, PAX and other NGOs are seeking other avenues to realise their right. Unfortunately, a proposal to Lundin Petroleum’s 2017 AGM asking the company to set aside SEK 5 billion and request the Swedish Government to design mechanisms to compensate the victims, was voted down by a whopping 99,84% majority. This confirms the conclusion of a recent study by Swedwatch and the Fair Finance Guide that the human rights policies of major investors in the company are flawed.


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