Afghanistan Analysts Network – English

Economy, Development, Environment

The Great Hindukush Gold Rush (2): Afghanistan is not Chad (yet?)

Thomas Ruttig 5 min

There is plenty of evidence from all over the world that indicates that mineral wealth can easily turn into a curse – environmentally, socially, politically and even economically. It also can exacerbate conflict, instead of alleviating it. A particular example is the Central African country of Chad*, and it should warn both the Afghan government and broader society against too hastily and optimistically throwing their mineral assets on the ever-hungry world market if they want to use them responsibly, argues Thomas Ruttig, Senior Analyst at AAN, in part 2 of a mini-series (part 1 here).

Surkhrod reservoir in Afghanistan's Logar province, not far from Ainak. Photo: Thomas Ruttig

Chad – although on another continent – shares a lot of features with Afghanistan. It is land-locked, arid, with a few fertile agricultural areas, ethnically diverse, with a disputed border (in the north, with Libya) and troubling and troubled neighbours (besides Libya, Sudan, the Central African Republic, Mali and Nigeria), plagued by an even longer although lower-profile civil war (since 1965) and therefore situated amongst the bottom ten of both the UNDP’s Human Development Index and Transparency International’s corruption index.

Then, in the mid-1990s, oilfields were discovered in Southern Chad’s green agricultural belt, in the Doba basin. A consortium of some of the biggest oil companies in the world (Exxon aka Esso, Shell and Elf Aquitaine/Total, later replaced by Malaysian Petronas) got the contract, based on an US$ 3.7 billion investment, and an exemption from tax. The Chadian Parliament approved it but the MPs were given the details, as the only opposition MP disclosed. The pro-government majority did not bother because the oil would pay for two thirds of the country’s expenditures.

The investment included a pipeline over more than a thousand kilometres to a port in neighbouring Cameroon, through untouched jungles and areas where marginalised ethnic groups live. (Cameroon’s president made sure that the offshore oil terminal was not build in his constituency.)

In 2000, the first oil was to flow. The pipeline consortium tried to persuade the World Bank to co-finance the project; before EITI (see part 1 of the blog here), marginal participation of the agency was seen as an environmental quality seal.

But soon resistance grew amongst civil society groups and the opposition, with their only parliamentarian as its mouthpiece: the project might jeopardize the livelihoods of the local farmers, the pipeline might be attacked by rebels or bad maintenance might lead to environmental damage; the Niger delta, in neighbouring Nigeria, with its polluted land and rivers was not far away where particularly Shell had been active for 40 years. (Only a few weeks ago, Shell for the first time has accepted to pay compensation for two oil leaks in the Niger delta, see Guardian Weekly, 12-18 August 2011.) Apart from damage to nature, there was enormous social and political fallout: agriculture stagnated and the local population became dependent on food imports, corruption grew and, last but not least, the oil money turned into the materiel basis for a predatory military dictatorship. (A new elected government took years to get back the money transferred out of the country by General Abacha.) Chad was already ruled by a dictator who had taken over in a coup d’état.

Indeed, people in the Doba basin were resettled and lost their livelihoods. For each mango tree they were ‘compensated’ with the equivalent €5 (after protests increased by the factor 100). The oil wells were fenced and protected by private security companies. A German NGO said that ‘the oil companies were awarded with paramilitary authority and can enter private properties of the local population without authorisation’**.

French troops and Chadian Special Forces were deployed in the area, officially to combat local armed resistance movements – a number of them had resumed fighting, before the oil find, after the government broke its promises for reintegration after an earlier round of civil war. Protesters were criminalised as their allies, real and perceived rebels rounded up, jailed and tortured. Amongst them was the only opposition MP who was jailed for three years under false accusations (when he was about to testify during a G7 meeting), then released, re-arrested and exiled. In 1997, amnesty international reported a case where guards shot dead a man who was just curiously watching an oil company airplane landing – and later declared a ‘rebel’.

Finally, a worldwide unprecedented deal was struck in 1999 that was turned into law in Chad, the so-called Law No. 001. The Chadian government committed to investing a large part of the oil income into poverty reduction measures, health, education, rural development, infrastructure and the protection of the environment and particularly water resources. A percentage was dedicated to the Doba region, another one invested in a ‘fund for future generations’. The President promised transparency about the use of the oil income; a joint government/civil society body was established for this aim – with limited authority, though. And, first of all, no weapons purchases were allowed.

This deal held for six years. Under pressure from increasing rebel activity, President Idriss Déby pushed Law No. 002 through parliament. After the chance, he was allowed to define the use of the oil money himself, including for ‘security’ purposes now. That led to conflict with the World Bank that finally withdrew from the project in 2008.

This April, a Swiss weekly reported from Doba:

‘We have submitted an advance notification [for the visit], otherwise we would have been immediately stopped by one of the security patrols. The guards look like men from Mars with their modern helmets, facemasks and shades. The whole exploration area is strictly controlled. As we are to find out, the planned visit at the regional Esso headquarters in Moundou [town] for which we had been pre-announced is impossible.

Meanwhile, there are hundreds of oil wells and they have cut off many local villages from their environment. They are called ‘villages enclavés’. The farmers often have to take detours to get to their fields. They report about random arrests by private security men and from torture-like mistreatments. […] It is as if an alien power had occupied their country, a young man says. […] As we pass the villa of an [government] official, a fellow-journalist remarks: “Look, this fellow has overcome his poverty”.

[…] The district chief we visit bitterly reports that the local people do not produce sufficient crops anymore to feed themselves because of the oil extraction. And due to the stress resulting from this, tensions in the local communities have grown.

Bishop Michel Russo in Doba draws a sobering balance. With the money allocated for Doba, useless things have been done: A football stadium built while there is no football team, a middle school for which there are no teachers, a hospital that is empty because there is no staff. But Esso Chad does not respond to the complaints of Doba’s population, arguing that these problems are linked to the government. […]

President Déby will be able to determine the use of the oil money also in his [then still forthcoming***] fourth term in office.’

(translated from wochenzeitung, Zurich, 21 April 2011, not online)

There are also oil fields (in Sarepul) amongst the first Afghan deposits that are offered to investors (see part 1 of the blog). But not only oil exploration can have such devastating results, the same goes for gold, as in Baghlan, Takhar and Ghazni, and copper, as in Ainak. The former is often washed out with mercury; in Turkey, anti-mining activists called a gold mine ‘the equivalent of a chemical plant in open air’. Already extracting the Ainak copper needs an enormous amount of water, and Logar province, where Ainak is situated, is irrigated by the tiny Logar River. According to inhabitants of the area, it has already fallen dry in mid-summer this year, after the insufficient snowfall last winter, and people do not have surface water to irrigate their fields (the wells for drinking water are still filled). With Ainak potentially draining away much of the Logar river water, the situation might become even more dramatic.

Conclusion: Resources extraction under conditions of weak and predatory states (or both) rarely benefits the population. Consequently, it might be better to keep the wealth unused until there is a responsible and representative government that acts in the interests of the whole nation, and not of an oligarchic elite, and that is able to implement its laws – because copper and iron do not grow on trees that give fruit every year. When the minerals are gone, they are gone forever.

(*) This author has closely followed the case over some years when working as a journalist on development issues.

(**) Author’s interview with Susanne Breitkopf from German NGO urgewald, 26 May 1999.

(***) The election took place on 25 April this year, with Déby winning 88,7 per cent of the vote. In 2005, before his third term, constitutional term limits were removed.


Commerce Economy Minerals