Chad-Cameroon Pipeline: Case Study

Case At the turn of the 21st century, Mabolo, a village of 13 mud huts in the central African rain forest, was one of the few places left in the world that could only be reached by foot. To get there, one had to follow a winding footpath that veered off a dirt road and passed through a maze of muddy hills and creeks on the way to the village. Few places remain untouched by the globalization processes that are transforming the world. Even remote Pygmy villages in Cameroon are seeing their way of life change in response to the changing world. For traditional nomadic hunting tribes, even the existence of the villages represents a significant lifestyle change as their attempts to adjust to a globalizing world over the last 50 years have included settling into villages. Here they grow cassava and yams to supplement the porcupines, rabbits, boars, and antelopes that have long been the mainstay of their diets. Living without electricity or running water and most assuredly living on less than the World Bank's US$1.25 a day threshold for extreme poverty, these tribes represent the kind of people whom proponents of development are trying to reach. A recent development project jointly sponsored by the World Bank and several oil companies brought an oil pipeline through the hills nearby. The people who live in Mobolo and the surrounding villages are the Baka and Bakola populations in Cameroon. Some hope to get jobs from the pipeline. Others share 34-year-old Pierre Mbang's concern that “work is good, but the forest is our life. Work is good, but it will end.” Numerous peasants live in villages surrounding the proposed pipeline route, and their voices and concerns regarding the environmental impact of the project, the proposed revenue-sharing development of their region, and the economic compensation for their land have not been adequately considered. Early in the process, local sources reported that military and government officials who visited towns and villages in the region threatened that anyone who opposed the pipeline would be summarily executed (Center for International Environmental Law, 2000). Life for all of the communities in the path of the oilfields or the pipeline itself has been transformed over the last few years as a $3.7 billion oil pipeline built by ExxonMobil, Chevron, and Malaysia's Petronas has snaked its way from oil reserves located in Chad through Cameroon on their way to the coast for export. Chad is a landlocked country in central Africa that is ranked as one of the poorest countries in the world by the United Nations Human Development Report. In fact, in 2006 it was ranked 171 out of 177 countries according to its Human Development Index, or HDI. The HDI ranks countries according to three basic areas of human development—longevity and health of population, knowledge, and standard of living. The current life expectancy in Chad is 43 years, almost half Japan's life expectancy of 82 years (Human Development Report Office, 2006). Only 25% of the adult population is literate, and the average income is roughly $225 a year (Human Development Report Office, 2006; Sengupta, 2004). Oil reserves were discovered in Chad 30 years ago, and discussions have been underway with the World Bank since 1995 regarding the development of an oil pipeline to access those reserves. The pipeline project represents an estimated 900 million barrels of oil, according to ExxonMobil's estimations, which will be extracted over a 25-year period. At current oil prices, ExxonMobil's 40% share of the profit stands to be about $9.8 billion. In their words, the World Bank joined the negotiations to ensure that this will be “a development project rather than just an oil project.” From the perspective of the World Bank, their 15% contribution (approximately $193 million) to the production costs of the pipeline buys them a substantial voice in determining how the oil will reach the market. The World Bank, which views its mission as the elimination of poverty through develop ment, hopes to make a significant impact on the economy and living conditions of Chad. Toward that end the original agreement between the World Bank and the Chadian parliament earmarked 10% of the royalties and revenues for future generations; 80% of the remaining funds for education, health and social services, rural development, infrastructure, and environmental and water resource management; 5% for regional development in the oil-producing area; and 5% as discretionary funds (World Bank, 2000). Total revenue for Chad is anticipated to be about $2 billion and the expectation on the part of the World Bank was that this money would significantly improve the standard of living in this desperately poor country. Although this is an admirable goal, a variety of objections and concerns about the project have been raised over the years by nongovernmental organizations (NGOs) that are concerned about the viability and potential success of the project. One of the most significant objections to the project has to do with the political instability in the region. Chad's involvement in a civil war for the first 30 years of its independence, from 1960–1990, is the primary reason this oil has not been exported already. The nonprofit Bank Information Center (BIC; 2000) that monitors the work of the World Bank and other International Financial Institutions reported that the pipeline has exacerbated conflicts between the largely Muslim government in the north and the Christian/Animist rebels in the south. Amnesty International and BIC reported two unexplained massacres of civilians in the oil-producing region, one in 1996 and the other in 1997, that killed 180 people combined. Additional concerns that oil revenues would be used to arm and fund the military proved prescient when the president used $4.5 million from an initial $25 million signing bonus to secretly purchase weapons for the military in 2001 in direct violation of standing agreements with the World Bank and the International Monetary Fund. In August of 2006, President Idriss Deby ordered pipeline partners Chevron and Petronas to leave the country for tax nonpayment, a charge disputed by both companies. Some observers saw this move as part of Deby's attempts to renegotiate the pipeline contract with the World Bank to free up a larger percentage of the oil revenues to spend on beefing up the military and his security forces. Deby argued that he needs this freedom to adequately address the renewed civil unrest he faces in the east, which has been described as a second civil war. The porous borders between Chad and Sudan have meant that much of the conflict in Darfur has spilled over into neighboring Chad, and the Janjaweed forces reportedly have been attacking villages and eastern Chad since 2004. This kind of political instability makes it difficult to maintain the security of something as large as the oil fields and pipeline in the southern region. Transparency International has rat ed Chad as the most corrupt nation in the world, and Deby recently arranged to have the constitutional term limits for the office of the president removed as he faced the end of what should have been his second and final term of office. Given that Chad and Cameroon are two of the poorest countries in the world, it is not surprising that social concerns are also a dominant factor in the debate over the pipeline. Questions and concerns about how the pipeline will affect the ability of local inhabitants to survive have been central to public debates. We have already discussed the threat to the remote Pygmy villages in Cameroon and their inhabitants who now number about 100,000 out of Cameroon's population of 14 million. But the livelihoods and well-being of many other communities in the pipeline's path are also threatened. Fertile land in the region was scarce even before the pipeline arrived, and many subsistence farmers and their families are finding their possibility for survival increasingly threatened by the expanding oil field development. The project is expanding because after the crews got into the fields they realized they were not going to be able to meet the original production goals. So they began expanding their drilling, and the original land-use estimates have expanded by 65%. The participation of the World Bank was intended to make sure that local residents would be compensated by the ExxonMobil consortium for any loss of land as a result of the pipeline project. Though efforts have been made to offer compensation, disputes over the valuation of the land, survey results, and land ownership have result ed in reports that the living conditions of many of the inhabitants of the region have been further immiserated since the pipeline came through. Furthermore, one-time cash compensation for the loss of farmland and fruit trees that provide food for local farmers and villagers is hardly an adequate solution to addressing the poverty of these two countries. Obviously, any oil development project will also have its share of environmental concerns. In the case of this particular project, opponents have cited the threat to the wildlife, the threat of oil spills to drinking water and arable land, increased risk of drought, increased deforestation and loss of biodiversity, and concern for marine pollution along the Cameroonian coast as some of their primary concerns. Since completion of the project and the pumping of oil in 2003, one of the problems cited by local residents is the contamination of drinking water in the village wells. Madame M, a woman who lives in a village just north of Cameroon's capital, Yaounde, explained, “We used to have clean water, but since the oil pipeline was built all we have is pollution” (Horta & Djiriabe, 2007). The only source of water in her village is a small well located near the pipeline. The surface of the water is covered by a film of what appears to be grease. Other villagers agree that water contamination is a serious problem, and they complain of “skin rashes, stomach pains, and unknown ailments.” A significant lack of dust control has also led to a decrease in the overall air quality as well as damage to crops. The dust causes visibility problems, eye infections, and respiratory problems. The lack of an adequate health care infrastructure in the region means that many of these conditions are left untreated, further compromising the health of an already fragile people. In December 2006, the World Bank completed a Project Implementation Completion Report, or ICR, which usually indicates the completion of World Bank involvement with a development project. The ICR assesses the actions of the borrowing government and whether or not a project achieved its stated development goals. The Environmental Defense Fund has produced its own report that characterizes the ICR as an incomprehensible and misleading report. In documenting both the current situation and the serious concerns about corruption, graft, and civil unrest in Chad, the EDF calls on the World Bank to remain actively engaged in working on the Chad-Cameroon pipeline project until the social, political, and environmental problems have been adequately addressed. Globalization is often approached as a monolithic phenomenon that is shaping our world. However, globalization is not a singular, universal theory but rather a concept that can express many ways that people understand, interpret, and respond to the global changes that are occurring in our world. While participants in the pipeline debate are not engaged firsthand in a debate over globalization per se, the debate offers a glimpse of competing perspectives and approaches to how we will continue to globalize as a human community. There are at least four major interests in the debates over the pipeline – the oil companies, the development community, non-governmental organizations, and local communities affected by the pipeline. These four groups have very different perspectives, experiences, and values as well as significantly different levels of power and influence with regard to decision-making about the pipeline project. These distinct voices correspond and help to illustrate four different theoretical positions regarding globalization – neoliberal, development, earthist, and postcolonial (Peters, 2004). While the outcome of the Chad-Cameroon Petroleum Development and Pipeline Project will not determine the future role of globalization in our society, the pipeline project is emblematic of how globalization is being articulated, enacted, and experienced all over the world. Globalization is a historic phenomenon that incorporates economic, cultural, material, philosophical, and social aspects. Often globalization is reduced to an economic paradigm characterized by increased trade among nations and the creation of a single global economy. This approach to globalization is a neoliberal approach and it represents the most dominant version of globalization. However, in the pipeline story, we can also see that globalization extends far more broadly than just economics, touching on issues of culture, tradition, politics, work, values, the environment, human rights, consumerism, power, and a host of others. Leadership in the context of global change requires a deep understanding of the variety of ideologies, concerns, and experiences of all of the stakeholders involved and an awareness of the different expressions of human values embodied by each approach.

1. How did this crisis incident become a project and describe the elements that make it a project
2. Identify and describe the roles of the project owner, the project leader, the project committee, execution agency, and other key stakeholders and what stake each one has on the project
3. Discuss the power dynamics between the various key stakeholders
4. How was this crisis handles, and what could have been done differently?
5. How should stakeholder relations management and communication have been planned and executed for this crisis project? What could have been done differently to shorten the time?
6. What are the sources of project stakeholder conflict in this case study and explain how the communication approach with project stakeholders is influencing the conflict, pros and cons, in the execution of the project?
7. How should the project manager, handle the communication crisis? Identify options focusing on the potential impact on project execution and completion of the objectives
8. What action should be taken to avoid negative impact on project execution and delivery?
9. How can you obtain project stakeholder buy-in, negotiate trade-offs, and sustain relationships with the multiple project stakeholders to diffuse the conflicts?
10. Is this an appropriate method to recruit project team members? Justify your response i.e. if your answer is NO explain why. If your answer is YES, explain why.
11. What approach would you use to assess each team member's capability and suitability to work in a project team?
12. Describe the different stages of how the project team would develop, transitioning from a group of individuals to a performing team
13. Develop a project communication plan, providing a narrative explaining the content of the plan.