The end of the affair: Talisman wins Sudan human rights ruling

Talisman's adventure in Sudan reveals the ethical dilemmas companies face in conflict zones.

Talisman Energy Inc. closed the final chapter on its adventure in war-torn Sudan this month, when an American judge dismissed a human-rights lawsuit against it.

The Calgary-based oil company entered Sudan in 1998, when it bought Arakis Energy Corp., whose sole asset was 25% ownership in a consortium, the Greater Nile Petroleum Operating Company Ltd. (GNOPC), pumping oil and building a pipeline across the country. It was a time of hope: the government in Khartoum had signed a peace agreement with rebel groups the previous year. Hostilities subsequently resumed, however, and rebel groups attacked GNPOC's property. Critics alleged oil revenues to the government helped fuel this conflict, so Talisman's involvement came under fire.

Talisman sold its stake to an Indian company in 2003–but not before being accused of some of the gravest of crimes. In 2001, a group of non-Muslim Africans and several Christian groups filed suit against Talisman and the Sudanese government in the United States District Court for the Southern District of New York. The plaintiffs accused Talisman of conspiring or aiding the government in genocide, war crimes and crimes against humanity. A trial was scheduled for January, but earlier this year, Talisman moved for summary judgment. On Sept. 12, Judge Denise Cote spiked the case.

The Calgary-based oil company hailed the decision as a “complete victory.” It could be appealed, but Cote's written opinion and order meted a stinging rebuke of the plaintiffs. While acknowledging the difficulties of gathering evidence from strife-torn areas, she wrote: “The issue is whether the plaintiffs have supplied sufficient admissible evidence to proceed to trial on their claims. They have not.” In her view, the plaintiffs came up short in proving key assertions, such as the claim that Talisman actively assisted government attacks on civilians. When the plaintiffs backed away from certain allegations and attempted to amend their written complaint at the last minute, the judge wondered if they had acted in good faith.

Cote noted her decision did not “pass on the wisdom or propriety of Talisman's conduct.” That conduct remains controversial. Sudanese military personnel, police and intelligence officers provided security for GNPOC's facilities. Sudanese forces reportedly cleared areas around the oilfields of villagers in order to create a “buffer zone.” Helicopters and bombers allegedly executed sorties from airstrips located on the consortium's concessions. A UN report, published in October 1999, took a dim view of Sudan's oil industry, arguing that the “oil issue” exacerbated the conflict and worsened the human-rights situation.

Cote's decision revealed some of the ethical dilemmas in which companies find themselves when they operate in conflict zones. She cited evidence Talisman president and CEO Jim Buckee urged Sudanese officials to avoid bombing civilians and advocated that the government's oil royalties be spent on development rather than war. Still, Cote observed, while Talisman came to learn a great deal about Sudan's civil war even prior to acquiring Arakis, it denied knowing about alleged human-rights abuses near its concessions. Some didn't buy it. As a UN special rapporteur once said: “If the oil companies don't know what's going on, they're not looking over the fences of their compounds.” Talisman quit Sudan completely with the 2003 divestiture.