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Swedish adventure with an aftertaste

Foreign analysis: the Lundin oil company is accused of crimes against international law in Sudan.

Lundin Petroleum is a Swedish oil company founded by Adolf Lundin almost 40 years ago and is today run by his sons Ian and Lukas Lundin. After huge oil finds in the North Sea the company’s share price has skyrocketed. In the course of just a few hours one morning in September 2011 the price rose by 25%, and the Lundin family became SEK 2.5 billion richer. In March 2012, after new finds, the share price rose again. The Norwegian state pension fund has also discovered Lundin, and last year could enter a profit of NOK 500 millions.

“Buy the shares that are running and running”, it said recently on Stocklink.no. But Lundin has another thing that is running and running, and that is not nearly as pleasant. Lundin is being investigated by the Swedish public prosecutor for possible complicity in war crimes in Sudan.

In 1997, while the civil war was raging in Sudan, Lundin formed a consortium with the Malaysian company Petronas Carigali, OMV from Austria and the state-owned Sudapet. They signed a contract with the government in Khartoum for oil exploitation in an area (Block 5A) over which the government did not have full control. This led to a military campaign whose object was to take control over and secure the oil fields, according to the report Unpaid Debt, published in 2009 by ECOS (The European Coalition on Oil in Sudan), which is a network of more than 50 non-profit organisations.

Thousands of people died, and almost 200,000 had to flee from their homes. The report talks of “random attacks in which civilians were the designated targets, homes and places of refuge burned, plundering, destruction, illegal killings of civilians, the rape of women, the abduction of children, torture and forcible removal of the population”. Satellite images show that agriculture and cattle farming were clearly reduced in the period the Lundin consortium were operating in Sudan. It was soldiers from the Sudanese army and local militia groups supported by Khartoum who carried out these acts.

The report claims that during the war Lundin worked closely with those people behind the criminal acts, and that the infrastructure that was created – amongst other things the “Lundin road” – was utilized in order to carry them out. Lundin should have known all this. They arrived in Sudan in 1991 and knew the country well. When they withdrew in 2003, they had earned almost a billion Swedish kronor, and the company’s market value had risen by 200 million dollars.

ECOS considers that Lundin and its partners may have been complicit in war crimes and crimes against humanity, and suggests that members of the Lundin consortium should pay 300 million dollars in compensation to the victims. The network also claims that the Swedish government is shirking its responsibilities. When the war in the region was at its height, Sweden received information that the decisions made by one of its companies might be contributing to violations of human rights and crimes against international law. This is the background to initiation two years ago by the Swedish public prosecutor of a preliminary investigation into possible crimes against international law. Anyone guilty of such crimes abroad can be tried in Sweden even if the actions are not punishable where they were committed.

The fact that the Swedish Foreign Minister Carl Bildt sat on the Lundin board from 2000 to 2006 with a responsibility for ethical matters has made the case politically sensitive. In addition, the arrest of two Swedish journalists on Ethiopian territory last summer was linked to Lundin’s operations. They were looking for information about the operations of Africa Oil – in which Lundin has considerable interests – in Ogaden province, and they were recently sentenced to eleven years imprisonment in Addis Ababa.

Anyone who has followed Lundin for several years cannot be surprised at what happened in Sudan. According to Aftonbladet (March 3, 2012) Adolf Lundin’s mantra was “no guts no glory”. Trained as a mining engineer, he built up a company that almost specialised in working in conflict zones. He was in South Africa during apartheid, in war-torn Zaire, in Gaddafi’s Libya, and in Syria and Iraq.

In 1996 he said the following: “We work entirely without considering the political risk. It is so difficult to find major oil and mineral deposits that, were one to limit oneself to countries that are politically stable, one would have no chance. It is like setting out on a marathon with a broken leg. The only important thing for us is that what we are looking for can be really big”. (translated from Svenska Dagbladet August 5, 1996).

The Lundin brothers claim in Dagens Nyheter (March 18, 2012) that the accusations of crimes in Sudan are unfounded, unjust and absurd, and that Lundin is a responsible and active investor, helping to make life easier for people in several African countries. They do not respond to the specific charges. Statements by Carl Bildt have not made matters easier.

Over an open microphone he said that there was peace in Sudan when Lundin took over operational responsibility in Block 5A.

While several shareholders, led by Swedish banks and insurance companies, think that Lundin should initiate an independent enquiry into the matter, the board has in writing encouraged owners to vote against this, referring to the fact that an enquiry of this kind is already being conducted by others, and that Lundin is an open, transparent company with nothing to hide.

In the meantime, Lundin Petroleum is having great success in Norway, and they have replaced Carl Bildt with the Zambian economist Dambisa Moyo, who is known for her books critical of overseas aid. In line with these developments, the Lundin brothers have also made room on the board for Asbjørn Larsen and Kristin Færøvik from Norway.

Lundin wishes to establish a close cooperation with Statoil as regards the development and running of the Avaldsnes Field on the so-called Utsira High. Compared with Lundin’s problems in Sudan the controversy about Statoil’s oil sand project in Canada may be considered small beer. The minister responsible, Ola Borten Moe, recently rejected in Dagnsytt 18 the idea that oil sand production implies an ethical dilemma. But just as in Sudan the operation raises problems in Canada around the rights of the indigenous population and local people.

In Canada it is the communities of Canadian indigenous peoples who are hit by production, and it is claimed that polluted water is running for 2,000 km through the vast Mackenzie River system before reaching the Arctic Ocean to the north. If the enormous oil reserves are extracted as planned, researchers report that vast natural areas will be affected, and a number of indigenous communities risk losing the basis of their livelihood. A seminar is being held on this in Tromsø on May 9.

After the major finds in the Avaldsnes field, chair of the board Ian Lundin said to E24 that the field is “beautiful in all its simplicity” and “quite simply an oilman’s dream”. It is easy to understand the first joy and intoxication at what promises to be a Lundin adventure in the North Sea, but it is less easy to understand the management of a Sudan involvement in which serious infringements of the human rights of the local population appear to have been the prerequisite for the profits the company raked in.

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