Chad-CameroonPetroleumDevProject

a senior member said neither Exxon Mobil - which has built a pipeline to export the crude - nor the government were providing sufficient information. A rather staid anti-corruption conference in London came alive when Therese Mekombe, vice-president of the Chadian oversight committee, got up to speak.

He said the Chadian economy was set to grow by more than 20% a year as a result of oil revenues. But Mrs Mekombe continued to paint a negative picture of both the oil company and the Chadian government.

A $4.2 billion oil pipeline has generated $399 million for Chad since mid-2004, but the spending of the money has been seriously marred by mismanagement, graft and, most recently, the government's decision that a hefty share can be used to fight a rebellion.

In recent weeks, Chad seriously weakened a law that dedicated most of its oil revenue to reducing poverty and reneged on its deal with the World Bank. In response, the bank suspended all its loans to the country.

I think to stand back and say the whole thing is a dirty business and we in the World Bank don't want to have anything to do with it is very shortsighted."

Oil can fuel the engine of the economy, with other industries creating jobs. But over the years, easy money from oil has distorted investment decisions, allowing Nigeria to neglect other industries. Some 95 percent or more of its foreign-exchange earnings come from oil, and with the current stratospheric prices, Nigeria might think it has no reason to look beyond oil. Its reserves are about 36 billion barrels, and at the current rate of production, it has enough oil to last another 40 years.After that, what? Better management of oil revenues is one solution. Reflecting on the destructive role sudden wealth can play, policymakers have tried monitoring oil revenues. But the effort hasn’t borne any fruit. Take for instance Chad. When oil was discovered in the Chad basin and the Chad-Cameroon pipeline was built, the World Bank insisted on conditions to ensure that revenues would be deposited in an escrow account, with funds only used for approved development expenditures. However, with conflict in Darfur and the presence of hundreds of thousands of refugees on the border, Chad now ignores those commitments some of the time, and spends more on defense. Rising oil revenues, thanks to rising prices, means there are limits to the absorptive capacity in Chad for more development expenditure. A waste of those resources is, then, inevitable.

The World Bank claims that the project will alleviate poverty because revenue from the oil for the Government of Chad and royalties for the Government of Cameroon for the use of the pipeline would be invested in poverty programs. This argument has little credibility, however, in view of the demonstrated lack of commitment by either government to alleviate poverty.

An environmental impact assessment is being carried out and an Environmental Panel was put in place to mitigate these problems. But the best environmental reports are of little help when there is no government commitment to carry out its recommendations. This lack of commitment is especially evident in Cameroon, a country with one of the highest rates of deforestation in the world. Once the money is flowing, the unholy trinity of oil, power, and corruption will make corrective action difficult.

In both Chad and Cameroon, civil society organizations struggling to increase democracy and defend human rights and the environment are taking root. The presence and growth of these organizations is a source of hope for more equitable and environmentally sound development, yet they face difficulties and threats from the existing power structures. They need strengthening and support, but the oil project may undermine hopes for a greater democratic opening.

www.eireview.org.

During the EIR review process, the World Bank was unable to provide a clear example where poverty was alleviated as a direct result of one of its investments in the extractive industries.

It is true that investment in the extractive industries has been on a general decline over the last few years, but the share of support for investing in the private sector through IFC and MIGA has increased. In some regions, like Africa, investments in extractive industries representative the vast majority of that continents development support. Regardless, the World Bank Group sets the standards and best practice for the extractive industries globally. Even if the direct investments are a small percentage of the World Bank's overall investments, the approach the World Bank adopts will have a ripple effect beyond its own direct investments.

Indeed, by supporting Chad - whose main oil project is the Chad-Cameroon pipeline operated by Exxon Mobil Corp (XOM) - the movement has "definitely" helped U.S. oil interests in the region, he added. Though mostly Muslims, Darfur rebels have also sought support from Israel.

I’m not the only one to have been thrown out of the College.  The president of the Chadian human rights’ league (LTDH) and the representative of development organisations were too.  I’m very sad it happened, but it was a great experience and I learnt a lot about my country.  I was the rapporteur general,  which was a great honour.  Today, I doubt this institution can still play the role it used to.