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Scrutiny of South Sudan's Oil Industry

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Scrutiny of South Sudan's Oil Industry SCRUTINY OF South Sudan’S OIL INDUSTRY Community Relations, Labour Practices and Impact on Land Use Patterns About the European Coalition on Oil in Dr. Mekalilie Benjamin Bol holds a Phd. in Farm Machinery Sudan (ECOS) and Power Engineering from G.B. Pant University of ECOS was established in 2001 by a large group of European Agriculture and Technology (India). In 2010 he was the organizations working for peace and justice in Sudan and Dean of the Faculty of Agriculture at the Dr. John Garang now South Sudan. It is hosted by PAX. ECOS calls upon Memorial University of Science and Technology in Bor, governments and the business sector to ensure that oil wealth South Sudan. For many years he taught Agricultural and contributes to peace and equitable development. Environmental Engineering and held the position of Dean www.ecosonline.org for different colleges at the University of Upper Nile. About PAX (formerly IKV Pax Christi) Acknowledgements PAX means peace. PAX brings together people who have We would like to thank Dr. Simon Simonse who conducted the courage stand for peace. Together with people in conflict a preliminary field study to formulate relevant research areas and concerned citizens worldwide, PAX works to questions on the impact on people, society and the build dignified, democratic, and peaceful societies across environment for the in-depth studies presented in this the globe. PAX operates independently of political interests report. We also thank Mr. Peter H. Justin, then working and is supported by a wide group of involved citizens, social for the (South) Sudan Council of Churches (SCC), for organizations and churches. facilitating the pre-study. Mr. Luk Chol Dau Deng, student, www.paxforpeace.nl and Ms. Akeb Yor Amot, graduate student, are thanked for assisting, respectively, Dr. Akec and Dr. Mekalilie with P.O. Box 19318 their field studies. We are most grateful to all the people 3501 DH Utrecht who dedicated their time to answer our questions: citizens The Netherlands of the oil areas, community leaders, chiefs and omda’s, [email protected] government representatives at national, state and county levels, and company representatives. With regards to the About the authors workshop of November 2012 during which the draft papers Dr. Leben Nelson Moro is Director of the Directorate of were discussed, special thanks goes to Rev. Emmanuel Scientific and Cultural External Relations at the University Natania from the (South) Sudan Council of Churches for of Juba, and teaches graduate courses in the areas of translation, and to Rev. James Ninrew (AMA) for facilitating. development, conflict, forced migration and humanitarian We are grateful for the participation, reflections, comments affairs. For his D.Phil. in Development Studies at the and cooperation of community leaders and chiefs from University of Oxford (UK) he carried out fieldwork in the oil the oil producing areas, civil society organisations, areas of southern Sudan during 2005 and 2006, focussing representatives of the Ministry of Petroleum, Mining and on the connection between oil exploration and conflict. Dr. Industry (MPMI), academics, Members of Parliament, and Moro has been a consultant on diverse social issues for company representatives (CNPC and Total). Finally, our the GoSS, World Bank, UN and NGOs. sincere appreciation goes to Open Society Initiative for Eastern Africa (OSIEA) for their financial support, patience Colophon Dr. John Apruot Akec currently is Vice Chancellor and advice in realising this research program. of the University of Juba, after having served as Vice Authors: Leben N. Moro, John A. Akec and Mekalilie B. Bol Chancellor of the University of Northern Bahr El Ghazal Editors: Egbert G. Ch. Wesselink and Kathelijne A. Schenkel (Aweil) since May 2010. Previously he taught at the College of Engineering and Architecture of the University Cover photograph: Nyiek village, re-established just north of Paloich as the original location was excavated. of Juba. He holds a MSc. in Systems Engineering, a PhD. George Steinmetz | Hollandse Hoogte | 2010 in Manufacturing and Mechanical Engineering and a Postgraduate Certificate in Environmental Innovation. Dr. Graphic design: Het IJzeren Gordijn Akec also chairs the Academics and Researchers Forum for Development (ARFD), an academics-led think-tank. ISBN: 978 907 0443 665 | NUR 972 | PAX2014/001 April 2014 CNPC China National Petroleum Company CPA Comprehensive Peace Agreement List of Acronyms CPFs Central Processing Facilities DPOC Dar Petroleum Operating Company (formerly PDOC/ Petrodar) ECOS European Coalition on Oil in Sudan E&P Exploration and Production company EPSA Exploration and Production Sharing Agreement FDI Foreign Direct Investment FPF Field Processing Facility GoRSS Government of the Republic of South Sudan (since July 2011) GoS Government of Sudan GoSS Government of Southern Sudan (pre-Independence) GNPOC Greater Nile Petroleum Operating Company (now GPOC) GPOC Greater Pioneer Operating Company (formerly GNPOC) ICESCR International Covenant for Economic, Social and Cultural Rights IFC International Finance Cooperation ILO International Labour Organisation JOCs Joint Operating Companies OBC Oil Base Camp ONGC Oil and Natural Gas Corporation Videsh PDOC Petrodar Operating Company (now DPOC) R&M Refining and Marketing company SAF Sudan Armed Forces SEIA Social and Environmental Impact Assessment SPLM/A Sudan People’s Liberation Movement/Army SPOC Sudd Petroleum Operating Company (formerly WNPOC-1) UNGP UN Guiding Principles on Business and Human Rights WNPOC White Nile Petroleum Operating Company (now SPOC) Introduction to the report 8 Contents Key Recommendations 10 1. Oil Company-Community Relations: 12 Pariang County Key Research Findings 12 Introduction and Research Objectives 13 Wartime Oil Activities 16 Peacetime Oil Activities 18 National and International Standards for Community Engagement 28 Oil companies’ Practices in Pariang compared to National and 31 International Standards Conclusion 33 Recommendations 34 2. Oil Industry Labour Practices in South Sudan 36 Introduction and Research Objectives 36 Applicable National Laws 40 Regulatory context 44 Structure of the Oil Industry’s Labour Market 50 Composition of the Oil Industry’s Workforce 52 Work Environment and Conditions 58 Workers Unions and Bargaining Power 66 Complaints and Grievance Mechanisms 69 Discussion of Research Findings 70 Recommendations 73 3. Oil Industry’s Impact on Land Use Patterns 76 in Upper Nile State Introduction and Research Objectives 76 Land use and impacts of oil exploitation 80 Effects of oil industry on land use in Melut County 82 Discussion of Findings 102 South Sudan legislation and international standards 109 Conclusions and Recommendations 114 Annex: Chiefs of Melut County 116 Bibliography 117 Introduction “It is time for us to stop blaming the North and be prisoners of the past. We to the report should be moving forward and do better for ourselves.” Workshop participant, Juba, November 2012 With South Sudan’s independence, in July 2011, came the responsibility to manage its multi- During the course of the research project, a petroleum policy was developed by the Government billion petroleum industry, constituting the backbone to the country’s economy as it accounts with the purpose to optimize the value of South Sudan’s petroleum resources and to convert for over 95% of the Government’s revenue. The studies in this report are the result of a them into benefits for current and future generations, indicating a long-term perspective of the research project designed to inform Government measures to improve petroleum sector Government. In July 2012, the Petroleum Act was passed, including very strong sections on practice, and with that, reduce tension between the oil companies and the local communities. social and environmental management. The findings of the three studies presented here, point It started in 2010 with a preliminary field visit to the oil areas of Unity State and Upper Nile out the importance of effective and immediate implementation of these clauses and suggests State to identify the most pressing issues as voiced by the communities. They included: topics to be regulated further. community-company relations, with special a special concern about compensation practices; questions about labour practices, especially on the rights of South Sudanese workers; and the impact on local land use patterns and environmental concerns. On these issues, separate in-depth researches were designed. The study on a fourth issue, concerning the security arrangements for the petroleum industry, could not be finalised due to the changing situation on the ground at the time. The fieldwork for the three studies was conducted between end-2010 and 2012. In November 2012 a workshop on ‘Social Dimensions of the Petroleum Industry’ was organised jointly by ECOS, the (South) Sudan Council of Churches (SCC) and the Bonn International Centre for Conversion (BICC). Here, the research findings were presented and validated among a diverse group of people, including Chiefs, other community leaders, government representatives and members of parliament from state and national level, academics, company representatives from the Chinese National Petroleum Company (CNPC) and Total, and civil society organisations. 8 Scrutiny of South Sudan’s Oil Industry Scrutiny of South Sudan’s Oil Industry 9 ! Develop regulations on remedy and compensation mechanisms for adversely affected people and communities, complying
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