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CAMEROON: Activists accuse World Bank of double standards over pipeline project

by Michael PeelFinancial Times
November 6th, 2004

Amid the forest greenery and yellow and purple flowers near Nkol-Ntara, central Cameroon, the scene is disturbed by a sign a few feet high showing an oil derrick and petrol pump . It reads: "Caution: oil pipeline."

The notice gives instructions to call a number in case of emergency or before starting to dig. This in a country where the World Bank estimates 30 per cent of adults are illiterate and there is less than one telephone for every 20 people.

The pipeline, which links Cameroon and Chad, has been in operation since July 2003. Supporters hail the World Bank-backed project as socially responsible and transparent.

As attention focuses on the fate of Chad's oil money, however, Cameroonian activists are critical of what they say are double standards in the World Bank - allowing the government to remain opaque and unaccountable despite Cameroon's reputation for corruption.

"Transparency means you can see if you made a good decision," says Samuel Nguiffo of the Centre for the Environment and Development, a non-governmental organisation that works with Catholic Relief Services of the US. "Here, we don't have the transparency."

The 1,070km-long pipeline, which takes oil from landlocked Chad's southern oil fields to the Cameroonian Atlantic port of Kribi, is part of a Dollars 3.5bn (Pounds 1.9bn) construction project funded by the World Bank and oil companies ExxonMobil, ChevronTexaco and Petronas.

At Dollars 140m, the bank's financial contribution is small, but it says its involvement has helped ensure the project includes innovative environmental, social and anti-corruption safeguards.

A committee has been set up to oversee how Chad spends an estimated Dollars 2bn in revenues over a 25-year production period. Cameroon is expected to earn a quarter of that amount over the same period.

But whereas Chad is obliged to put 72 per cent of the money into health, education, agriculture and infrastructure projects, the bank did not impose similar checks on Cameroon.

Cameroon's record on spending under the 22-year presidency of Paul Biya is poor: its debts are equivalent to almost half of its gross domestic product.

A report published last December by the International Monetary Fund praised some aspects of the country's economic performance. It raised concerns about lapses in financial supervision, however, such as the piling up of taxpayers' cheques in the Treasury that were booked as revenue even though they had not been cashed.

The report said the government had begun "corrective measures" but raised further concerns about the possible impact on spending of a plan to buy a presidential aircraft. The IMF said the authorities needed to prioritise efforts to combat corruption and improve governance in areas such as public procurement.

Twice in the last seven years, Cameroon has been ranked worst in the annual survey of perceptions of corruption compiled by Transparency International, the campaigning group. In the latest report, released last month, it was rated 129th out of 146 countries, tied with Iraq, Kenya and Pakistan.

The World Bank says it did not impose conditions on Cameroon because the oil is from Chad and Cameroon's income from the project is a transit fee that accounts for only a tiny percentage of the country's CFA Fr1,497bn (Dollars 2.9bn) budget revenues.

Emmanuel Noubissie Ngankam, operations officer in Cameroon, says the bank is "neither happy nor unhappy" with the way the country is managing its pipeline income, because that was not the subject of an agreement. "It's a Chad project," he says. "They are Chad oil revenues."

The bank's involvement helped reassure oil companies that were nervous about doing business in Chad, where the government had been involved in intermittent conflict with rebels since it took power in 1990.

In Cameroon, they were less concerned about the repressive but US-friendly and apparently stable hegemony of Mr Biya, who was officially re-elected with more than 70 per cent of the vote in October amid opposition claims of widespread ballot fraud.

"Chad needed the World Bank . . . to give credibility to the project," the diplomat says. "Cameroon wasn't in that position."

Cameroon's actual revenues from the pipeline are likely to rise in step with the growing global significance of the oil-producing western and central African region, which already accounts for about 15 per cent of US crude imports.

The bank's Mr Noubissie admits actual oil reserves in Chad are likely to be at least double the official forecasts of 1bn barrels, while analysts say the pipeline has the potential to act as a conduit for future crude production in surrounding countries such as Niger, Central African Republic and Cameroon itself.

Activists say the international community should be taking account of this and pressing Cameroon for greater transparency ahead of the December deadline for the country to secure an agreement with the IMF that could lead to substantial debt relief.

SNH, Cameroon's state oil company, declined to be interviewed about pipeline revenues. A senior government official invited the Financial Times to "come back in six months" to see what the authorities were doing about corruption.



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