The European Coalition on Oil in Sudan’s Business Principles for Sudan during the Interim Period
I INTRODUCTION
Now that a framework Sudan Peace Agreement is expected to be signed soon, Sudan is likely to see rising revenues and strong economic growth. The six-year Interim Period that will start after the signing of a final Agreement will decide Sudan’s future. It will open up many opportunities for private enterprises to achieve their economic objectives, while contributing to a peaceful development of the country. It is time to consider how to do that.
It has become widely accepted among the international business community that companies are responsible, not just for their actions, but also for their impact and their positive and negative implications for regional and global development. There is a strong business case for social and environmental responsibility. There is even a stronger business case for peace and justice as no investment is safe in an environment that is mired with violence and injustice. It is fully legitimate that companies seek to promote peaceful development and the rule of law. Sudan poses serious challenges and splendid opportunities for businesses to do so.
Civil wars and undemocratic rule have made it highly problematic for companies to be a force for good in Sudan. The upstream oil business in Sudan stands out for having been at the center of warfare and gross human rights violations for many years, and will have to thoroughly rethink the way it operates. A comprehensive Peace Agreement will not immediately solve all of Sudan’s ills and companies will have to do more than respecting national law and regulations. Non-equitable development, myriad internal strife, corruption, a culture of violence, racism, centre-periphery antagonism, and a legacy of oppressive, arbitrary and unaccountable governance will continue to present stiff challenges. The question is which principles and policies to adopt in Sudan’s specific circumstances. This document offers an answer. It proposes a set of principles, complimenting the obvious obligation to respect national law and regulation, that is drawn from three sources, International Law, authoritative voluntary standards for business behaviour, and the provisions and purpose of the Peace Agreement (for details, see below in “Normative Framework”).
The international community invests heavily in Sudan's peace process. Its members cannot accept to let public policy goals be frustrated by private interests. They will have to ensure that their national enterprises which are active in Sudan, have the necessary commitment, understanding and guidance to buttress the public interest. These principles provide this guidance. To assure understanding, home governments will have to inform their enterprises about international standards, the peace process and related dimensions of doing business in Sudan, for instance through concerted action at the embassy-level. To assure commitment, appeals for voluntary action will not always suffice. Not all companies wish to take the public interest into account and unacceptable behaviour need to be effectively thwarted by their home and/or host governments.
These principles and policies are applicable to all companies, Sudanese and international. They expect individual companies to act in accordance with their impact, and to make efforts that fit their size. They are a measure for home governments of transnational companies to assess whether their activities are conductive to achieving peaceful development. They are tailored to serve as a basis for a mutually beneficial relations between companies and their home and host governments. Self assessment of one’s impact is the key to responsibility and good performance and thus to these principles. We wish them to be practical and concise, and therefore concentrate on those issues that we believe are key to the impact that business will have on Sudanese society during the Interim Period.
II PRINCIPLES AND POLICIES
Principles
1. Within the company’s sphere of activity and influence, promote, respect and protect human rights and fundamental freedoms, including social, economic and cultural rights, land rights, and the rights and interests of indigenous peoples, minorities, and other vulnerable groups.
2. All business activities are assured to be conductive to peace and equitable development, and to the realisation of the provisions and purpose of Sudan’s Peace Agreement.
3. No discrimination on the basis of race, colour, sex, language, religion, political or other opinion, national or social origin, property, birth or other status, while actively promoting that the local population sees itself equitably represented, at all levels, in the local work-force.
4. Bribery, extortion and all other forms of corruption are actively combatted..
5. Within the company’s sphere of activity and influence, promotion of transparent and accountable public financial management.
Policies
6. Prior to any investment decision and at regular intervals, the company will assess its impact on and contribution to the communities that surround its operations and the wider society, with regards to development, peace, security, human rights – including social, economic and cultural rights – and the environment, taking into account it’s impact on the physical and economic security of the population, on local and national strife and rivalries, and on the realisation of the provisions and purpose of the Peace Agreement. The assessment will draw upon external experts and local communities, and involve government and civil society organisations. It will contain recommendations for action, consultation, and dispute settlement. The company commits itself to share the assessment with its stakeholders, to implement its recommendations, and to evaluate and update it on a regular basis.
7. The company establishes mechanisms for consultation, dialogue and partnership-building with all its stakeholders – including the authorities, civil society organisations, relevant communities, and its home government if applicable – resulting in a long-term economic, social and peace action programme, that conforms nationally agreed principles and policies.
8. Establishment of procedures to ensure that the own activities – and to the extend possible those of fellow consortia members, subcontractors and other business partners – do not result in, benefit from, or otherwise contribute to human rights abuses.
9. Monitor and document all breaches of the final Peace Agreement and of the ius cogens that occurs within the operational environment and report the findings to the appropriate authorities, or, if this fails to resolve the issue, international governmental and/or non-governmental human rights bodies.
10. When appropriate, considering the company’s sphere of activity and influence, engage high-level Government officials in active dialogue about human rights on a regular and timely basis.
11. Within the company’s sphere of activity and influence, assurance of safety and freedom of movement.
12. For companies that are active in regions with a history of violence, a shaping of the company's security set-up along the lines of the Voluntary Principles on Security and Human Rights
13. Use of all leverage and influence with the Government and at other venues to encourage the adoption of a comprehensive and transparant revenue management regime; and be alert to those circumstances in which revenue allocation is a potential conflict risk, while promoting that agreed rules and transparant procedures for allocation are in place.
14. Full disclosure of all provisions in cash or in kind equipment or services for military, security, or dual use purposes.
15. Not make payments or otherwise support political or religious parties, factions, organisations, their representatives or related interest groups, or take part in any party politics.
16. Openly fight against bribery, extortion and other forms of corruption and not, directly or indirectly, offer, promise, give, accept, condone, knowingly benefit from, or demand a bribe or other undue advantage to obtain or retain business or other advantage and ensure that remuneration of agents is appropriate and for legitimate services only. Where relevant, a list of agents employed in connection with transactions with public bodies and state-owned enterprises should be kept and made available to competent authorities. Management control systems are adopted that discourage bribery and corrupt practices. Financial and tax accounting and auditing practices are adopted that prevent the establishment of “off the books” or secret accounts or the creation of documents which do not properly and fairly record the transactions to which they relate.
17. The company will make the ability to uphold and promote these principles and policies a crucial factor in its decisions to enter into or remain in business relationships.
18. The company will report, on a yearly basis, its own and/or its consortium’s impact on and contribution to development, peace, security, human rights and the environment, covering all the above mentioned principles and policies, an evaluation of the economic, social and peace action programme, and the status of the recommendations of the impact assessment.
III NORMATIVE FRAMEWORK
The three sources for these principles are international law, the agreed provisions of the final Peace Agreement, and authoritative voluntary business principles. In a very poor and war torn country, that struggles with corruption, violence and racism, and has a legacy of oppressive, arbitrary and unaccountable governance, the list of pressing issues is long. We chose to prioritize issues that are directly related to business concerns and where private actors can make a difference: sustainable development, peace and security, dicrimination, accountability and community relations.
A International Legal Principles
An exhaustive list of relevant international legal instruments can be found in the Preamble to the UN Draft Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with Regard to Human Rights (U.N.Doc. E/CN.4/Sub.2/2003/38/Rev.2 (2003)). From these instruments, we distilled four principles that any individual or other organ of society must address with the most urgency:
1. Within their respective spheres of activity and influence, every individual and all organs of society have the obligation to promote, secure the fulfilment of, respect, ensure respect of and protect human rights recognised in international as well as national law, including the rights and interests of indigenous peoples and other vulnerable groups.
2. Nobody shall engage in benefit from war crimes, crimes against humanity, genocide, torture, forced disappearance, forced or compulsory labour, hostage-taking, extra judicial, summary or arbitrary executions, other violations of humanitarian law and other international crimes against the human person as defined by international law, in particular human rights and humanitarian law.
3. Security arrangements shall observe international human rights norms as well as the laws of the country or countries in which they operate.
4. Every individual and all organs of society shall respect the public interest, national development objectives, and the rights of local communities affected by their operations.
B The Peace Agreement
By the time of the writing of this document, a comprehensive Sudan Peace Agreement was not yet reached. Still, the already agreed documents – the Machakos Protocol, the 25 September 2003 Framework Agreement on Security Arrangements during the Interim Period, the 7 January 2004 Agreement on Wealth Sharing during the Pre-Interim and Interim Period, complemented by June 2003 Nakuru Draft Framework Agreement on Power Sharing of which a number of practical details are still under negotiation – contain a important set of values and norms for the pre-Interim and Interim periods. They include principles that are relevant to the private sector and that would translate into the following general business principles:
1. To promote quality of life, dignity and living conditions of all the citizens without discrimination on grounds of gender, race, religion, political affiliation, ethnicity, language, or region.
2. To contribute to the rehabilitation and reconstruction/construction of the social and physical infrastructure in a post-conflict Sudan.
3. To be sensitive to historical injustices and inequalities in development between the different regions of the Sudan that need to be redressed.
4. To take into account the religious and cultural diversity of the Sudanese people.
5. To ensure representation of all the people of the Sudan in the work force, utilising affirmative action and on the job training to achieve equitable targets for representation within an agreed time frame and the provision of educational opportunities for war-affected people.
6. To provide, as appropriate, compensation/reparations for those who have suffered loss as a result of conflict.
7. To recognise customary land rights and/or law
In addition, the Wealth Sharing Agreement gives specific guiding principles for the oil industry:
“Sustainable utilisation of oil as a non-renewable natural resource consistent with:
a) the national interest and the public good;
b) the interest of the affected states/regions;
c) the interests of the local population in affected areas;
d) national environmental policies, bio diversity conservation guidelines, and cultural heritage protection principles.”
These are partially specified for primary resource extraction as follows.
a) To study and record land use practices in areas where natural resource exploitation occurs.
b) To consult with persons enjoying rights in land and to seek their consent in respect of decisions to develop subterranean natural resources from the area in which they have rights, and to share with them in the benefits of that development.
c) To provide compensation to persons enjoying rights in land on just terms arising from acquisition or development of land for the extraction of subterranean resources from the area in respect of which they have rights.
e) To assess appropriate land compensation, which need not be limited to monetary compensation, for applicants in the course of arbitration or in the course of a reference from a court.
f) To respect the right of the communities in whose areas development of subterranean natural resources occurs to participate, through their respective states/regions, in the negotiation of contracts for the development of those resources.
g) To include the state in which development of subterranean natural resources occurs in the negotiation of contracts for the development of those resources.
h) Persons whose rights have been violated by oil contracts are entitled to a just compensation. On the establishment of these violations through due legal process the Parties to the oil contracts shall be liable to compensate the affected persons to the extent of the damage caused.
C Voluntary Business Principles
Companies are obliged to promote respect for the principles underlying international human rights law. Over the past years, government and business organisations have launched several voluntary processes to promote desirable behaviour. The following ones have gained considerable authority:
- The Guidelines for Multinational Enterprises of the Organisation for Economic Cooperation and Development. Another very relevant OECD document, which is not voluntary, is the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.
- The United Nations Global Compact initiative which challenges business leaders to embrace and enact nine basic principles with respect to human rights.
- The Voluntary Principles on Security and Human Rights for the Extractive Industries. These principles are supported by the United States, United Kingdom, the Netherlands and Norway, all of them deeply committed to the Sudan peace process, while France, the home of Total which hold the largest oil concession in Sudan, has expressed its interest. Security arrangements being crucial to the peace process and a major challenge for any business activity in Sudan, the Voluntary Principles offer a proven standard for the extractive industries, in which other companies may also find useful guidance. The US and EU efforts to bring peace could benefit from a combined initiative to promote respect for these principles in Sudan.
ECOS P.O.Box 19318 3501DH Utrecht The Netherlands Tel: +31 30 24 28 485 wesselink@paxchristi.nl
- Database Search
- Unpaid Debt A comprehensive overview of the role of the Lundin Consortium in the oil war. ECOS calls upon the Swedish, Austrian and Malaysian governments to investigate whether, as a matter of international law, Lundin, OMV and Petronas 'were complicit in the commission of war crimes and crimes against humanity by others during the period 1997-2003.’ In response, the Swedish Public Prosecutor for International crimes opened a criminal investigation into ‘links between Sweden and the reported crimes’.
- In Depth For more specific information about the Lundin court case please visit the Unpaid Debt dossier.
