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Dangerous Liaison, latest on Talisman Court Case

Like many clandestine attacks, the machine gun assault on Mobile Rig 15 was carried out under cover of darkness.

Near midnight on Oct. 15, 1999, a vehicle carrying more than 20 rebels eased to a stop near the fence surrounding the Talisman Energy Inc. oilrig 120 kilometres south of Heglig, a dusty village in southwest Sudan named for a local species of tree.

According to a report on Sudan's oil industry written by foreign aid organization Human Rights Watch, the rebels were led by a former Sudanese military commander named Peter Gatdet. The attackers opened fire, and during the 20-minute firefight that ensued, two local subcontractors working for Talisman were killed.

It was a worrisome setback for Canada's largest independent oil producer, which faces renewed scrutiny over its business activities in the war-torn East African country. (Talisman was part owner of the Greater Nile Petroleum Operating Co., GNPOC, from 1988 until 2002.)

Recently disclosed memos show that Talisman had a far better understanding than it has ever acknowledged of how its facilities were being used by the Sudan military in its war with the rebels.

Only weeks before the 1999 attack, Talisman investors had been riding high at developments in Sudan.

In August, the Sudanese government had completed a 1,540-kilometre pipeline that, in some patches, snaked a metre below the ground through the country's swampland and parched plains.

The pipeline's promise was enormous. It carried more than 150,000 barrels of oil each day to a terminal on the Red Sea and presented the impoverished country — and foreign investors such as Calgary's Talisman — with the chance to move a portion of Sudan's estimated $5 billion (U.S.) worth of oil reserves to waiting tankers.

Had news of the Friday night attack got out, it could cast doubts on Talisman's investment, prompting some investors to sell their shares. The company made no announcement of the attack, although Human Rights Watch said it acknowledged the assault to several foreign-aid organizations.

The rebel assault on Mobile Rig 15 underscored the challenges of investing in Sudan.

The rebel army in southern Sudan had been attacking oil installations in a bid to disrupt revenues going to the Sudanese government — part of which went to finance attacks on civilians living near potential oil exploration sites in a bid to get them to relocate.

The United States has accused the Sudanese government of genocide in Darfur. Several human rights groups, including Human Rights Watch, allege it has massacred civilians and forced them from their homes to clear oil-producing areas. The government is alleged to have killed more than 2 million people and displaced 4 million others over the past 20 years.

Worried that a renewed wave of assaults might threaten oil production, Sudanese President Abdul Bashir spoke at an Oct. 18, 1999, ceremony and vowed to continue on "the path of jihad and martyrdom," according to the Human Rights Watch report on Sudan.

Bashir's government also created a host of new militia brigades, including the "Protectors of the Oil Brigade," to safeguard the pipeline.

In Canada, Talisman chief executive James Buckee went into damage-control mode, trying to persuade the Canadian government not to impose sanctions on the company. Two years earlier, the U.S. banned American companies from having ties with Sudanese concerns.

On Oct. 26, 1999, then Canadian foreign affairs minister Lloyd Axworthy held a press conference to set forth the country's policy on Sudan.

"Canadians want assurances that the operations of Canadian enterprises are not worsening the conflict or the human rights situation for the Sudanese people," Axworthy said at the time.

On Nov. 3, 1999, Buckee met with Axworthy and pledged Talisman would continue to support Canadian efforts to contribute to the peace process in Sudan.

Three weeks later, shortly before a fact-finding mission commissioned by the Canadian government was due to arrive in Sudan to scrutinize Talisman's activities, Buckee wrote shareholders two letters. The letters, dated Nov. 23 and Nov. 27, both stated the company was doing its best to promote peace in the war-torn nation.

"I would like to make it clear that Talisman is vehemently opposed to forced relocation for oil development and I personally believe such practices are abhorrent," Buckee wrote in the second letter. "Sudan has been in turmoil for many years; however, I believe that continued investment and international involvement will provide a catalyst to economic and social development."

On Dec. 9, Buckee wrote Axworthy to thank him for meeting to discuss his company's efforts.

"In our letter to you of Sept. 8, 1999, we outlined some of our community development projects such as the Heglig hospital, the meningitis vaccination program, the Khartoum orphanage for street children, the Pariang clinic, the roads, the water wells (53 in total so far), and the water dugouts," Buckee wrote. "On my visits and those of other Talisman staff to local villages within the oil concession, we are warmly received and told that the development is enthusiastically welcomed."

Yet what went unsaid in Buckee's letters, and what the company still has not publicly acknowledged, was that Talisman officials knew the company's facilities at Heglig were being used by the Sudanese to refuel planes and helicopters and load them with 500-pound bombs and other armament.

In an internal report prepared for Talisman, Mark Reading, the company's security adviser and former British special forces member, wrote that during the week of Nov. 15-22, 1999, there were, "increased sorties by helicopters (one gunship and one transporter) and the involvement of an unmarked Antonov [bomber aircraft] for bombing purposes, in fact the baggage trolleys were being used to move bombs on the field!

"All the [Talisman employees] see the level of activity concerning the airfield and are genuinely concerned that it makes them a legitimate target," Reading wrote. "The real issue isn't that, but one of how the news would be received if it got out.

"It would be absolutely disastrous and would undo all the good work that we have done up to now," wrote Reading. "We are on solid ground on most issues. I feel, however, with this issue concerning the air facilities at Heglig that it could be a real powder keg and that we are storing up problems for the future ... I think that all possible pressure should be brought to bear to get the military gunships and the airlift away from Heglig. The damage that could be done to Talisman might be immeasurable.

"The bottom line," Reading wrote, "is that [Sudan government forces] are using the runway, the GNPOC fuel and the GNPOC air traffic control to wage war in the south. That is how it would be perceived and it would be difficult to defend.

"In my opinion the best way to handle this situation is for it to remain in country. We can bring pressure to bear on the GNPOC hierarchy to move the situation away from our facilities. We can state all the good work done on the video team visit, the analyst visit, the good press that is starting to filter through and how all this is being put in jeopardy by these activities at Heglig."

It's unclear when the memo was received at Talisman's headquarters in Calgary. Talisman, which has never disclosed Reading's revelations, wouldn't elaborate.

Reading's memos are among the myriad documents that recently have been released in U.S. federal court as part of a personal injuries lawsuit filed against the company by the Presbyterian Church of Sudan, along with a group of displaced Sudanese. They have alleged Talisman was complicit in genocide in Sudan.

The Canadian government has also stoked controversy with its efforts to have the lawsuit against Talisman tossed out of court. In a diplomatic note sent by the Canadian embassy in Washington to the U.S. State Department on Jan. 14, 2005, Ottawa asked that U.S. officials intervene in the lawsuit. The plaintiffs have failed in two attempts to have their case certified as a class-action lawsuit, while Talisman has failed to have the case dismissed.

In August, a U.S. judge rejected Canada's claim that the case might hurt Canada's relationship with Sudan and added that the Canadian letter regarding the Talisman lawsuit suggested "a lack of understanding" about the litigation.

Seven months after his situation report on Heglig, Reading wrote another memo for Talisman officials, this time in response to a report prepared for the Canadian government by diplomat John Harker.

In his June 2000 report, Reading wrote that in October 1999, "there were up to three bombers using the airstrip at any one time. In October, at the peak of the bombing, they were flying around the clock.

"The reason they used Heglig makes perfect sense," Reading continued. "They would be much closer to the area that they were bombing, so enabling them to carry out more sorties.

"Given the amount of bombing runs they were doing and with the frequency they were doing them meant that in all probability they would have been bombing in the area immediately south of the oilfields."

Reading wrote that villagers called the bombing runs "whispering death" because they could hear the propeller-powered planes but couldn't see them.

And in the same 14-page report, the Talisman security adviser wrote that "when Calgary was notified in mid-to-late November, it took three weeks for the planes and bombers to be removed completely.

"By December 1999 everything was removed and the airstrip resembled a company facility. The airstrip has been clean from that time until present."

At the same time as Reading was appraising the situation in Heglig, some Talisman employees seemed to be having second thoughts about the company being there.

Talisman employee Larry O'Sullivan, a maintenance operator at the company's Unity Field oil facility, wrote in a Nov. 16, 1999, email to several colleagues that while the quality of food had improved at its Sudan facilities and the Calgary company had given him a 10-per-cent pay hike, he wasn't "too keen on going back (to Sudan).

"I totally disagree with GNPOC and Talisman taking any part in this conflict between the rebels and the government and I have seen on more than two occasions where Talisman does take part in it," O'Sullivan wrote in his email, which has been filed as evidence with a U.S. court.

"I have watched the government attack-helicopters refuel at GNPOC fuel tanks and, as far as I can figure, Talisman owns 25 per cent of that fuel."

With Talisman's facilities on yellow alert, O'Sullivan and other Talisman employees were required to travel with at least four soldiers in each company truck. But even that carried its risks, O'Sullivan wrote, because it made the employees targets for rebels.

Moreover, "these soldiers have no idea of gun safety," he wrote. "I find myself ducking my head or pushing the gun barrel away from my body anytime I am around these kids because they just don't seem to have a problem about letting the gun be pointed at someone."

O'Sullivan, now a maintenance co-ordinator with Talisman's Port Colborne office, didn't return calls seeking comment.

In January 2000, just days after Canada's Sudan delegation returned to Ottawa, Axworthy challenged Sudan's charge d'affaires to reconcile claims made by delegation leader Harker. Harker had briefed Axworthy that the Sudanese military was using the Heglig airstrip to "wage war against the rebel forces, apparently in violation of Sudan's pledge to refrain from using oil development as a cover for military operations," Human Rights Watch wrote.

With allegations swirling about how Sudan's military was using the oil company's facilities, a Talisman spokesperson was quoted Jan. 6, 2000, in The Globe and Mail, saying that while the company was aware military aircraft were using the Heglig airfield, employees couldn't see whether aircraft were unloading military supplies or simply refuelling.

"We really don't know what they were doing," Jackie Sheppard was quoted as saying.

Six years on, Reading's memos are raising new questions about the company's former ties to the Sudanese government, said Human Rights Watch official Georgette Gagnon, a member of Canada's fact-finding mission to Sudan.

"Talisman obviously kept relevant information from us and did not fully provide accurate answers to questions about military use of the airstrip, (and) company knowledge about attacks on civilians," Gagnon said.

A month after the Sudanese government denied claims that the airstrip was being used as a base to launch attacks on civilians, Harker issued his report.

"We can only conclude that Sudan is a place of extraordinary suffering and continuing human rights violations, even though some forward progress can be recorded, and the oil operations in which a Canadian company is involved add more suffering," the report said.

The report urged Canada and Talisman to fight Sudan's ban on relief operations, and said the company ought to provide detailed reports about its compliance with international human rights and humanitarian law.

Axworthy, however, declined to impose any sanctions against Talisman.

In a recent interview, after he reviewed Reading's memos and other internal Talisman documents, Axworthy said he was powerless to impose sanctions against Sudan or Talisman since the United Nations hadn't first made any claims of wrongdoing. Canada's Special Economic Measures Act demands that the country follow the U.N.'s lead in imposing financial penalties. "The U.N. hadn't acted, so we couldn't do anything," Axworthy said.

University of Ottawa law professor Craig Forcese, who is familiar with Talisman's Sudanese investment, calls the company's operations there and Canada's so-called non-response "the single greatest failure of Canadian foreign policy in the last decade.

"The Talisman story makes Canada out to be a hypocrite on the world stage," Forcese said. "And nothing has changed in government policy or practice since Talisman. Another Talisman-like controversy involving Canadian resource companies is only a matter of time."

In a statement on the newly released documents, a company spokesperson told the Star: "Talisman has provided the court with more than 800,000 pages of documents in support of our position in this dispute. It does not help your readers to understand this complex case to publish excerpts from a few, highly selected documents without context or a chance for rebuttal.

"This is particularly true when Talisman is unable to comment because U.S. Judge (Denise) Cote has told both parties not to argue this case in the media. Talisman is respecting Judge Cote's direction."

In a court document filed July 29, Talisman wrote, "there was no indication in any of the documents or testimony that during the brief period that Antonov bombers used the Government airstrip at Heglig, the Antonovs were being deployed against civilian populations."

Rather, Talisman said in the court filing, the company believed the Sudanese military was deploying the armament against rebel forces in the south.

Even so, Axworthy, Harker, and Gagnon are among those who now contend Reading's memos should prompt the Canadian government to re-open its investigation into Talisman's activities in Africa.

Harker, now president of Cape Breton University, said, "obviously there were (company) reports that weren't shared with us. Canada has a moral and a legal onus to take this on."

Axworthy also said he was "saddened" at what the memos suggest.

"I've always felt there was a lot of information indicating Talisman was more involved than it had let on," Axworthy said. "This simply provided a very strong case that the Canadian government is going to have to look at its legislative tool kit.

"I'm not saying the government should run around with a microscope on every company, but we need to make sure that we hold companies to a standard. Companies shouldn't be allowed to hide behind their borders."

In October 2002, Talisman sold its interest in GNPOC to an Indian company for $1.2 billion.

In the company's own 2002 corporate responsibility report, Buckee wrote, "It was time to turn the page on this controversial asset for a number of reasons ... our shares had been discounted based on perceived political risk ... to a degree that was unacceptable for only 12 per cent of our production."

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