Bank inspectors find fault with Chad Cameroon pipeline project

17 September 2002

The Bank’s own Inspection Panel has backed many of the complaints by non-governmental organizations about a major oil pipeline in West Africa. Disagreements have raged for about 5 years about whether the Bank should support the project and under what conditions.

The Bank’s independent investigation panel received a complaint from local communities in the area where the pipeline is to be built and has now found that the Bank did not undertake proper assessments of the pipeline’s cumulative environmental impact. It also expresses “great concern” that only 5 per cent of the revenues from the project are destined for the region in Chad where the oil will be produced, saying there is no rationale for this decision.

The $4bn project, being built by a consortium of private companies led by Exxon-Mobil, is receiving support from both the public and private sector arms of the World Bank Group. It has been strongly supported by James Wolfensohn, the Bank’s president, in the teeth of concerns raised by human rights groups and environmental campaign groups in Chad and abroad.

The Bank’s Board discussed the Inspection Panel report and Bank management’s aggressive response mid-September, expressing strong support for the project and recommending a few minor improvements. Korinna Horta, senior economist at US NGO Environmental Defense, had warned: “this is a prestige high-stakes project that Bank management has fought very hard for. But it will be extraordinary if they do not learn the right lesson from this experience and suspend participation.”

The Chad-Cameroon pipeline has been portrayed by the bank’s management as a model for public-private co-operation and public consultation, even though democratic rights are curtailed in most other respects.

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