Multinational Companies Operating in Sudan
Total SA
ISS Relationship Classification
- Equity
Summary
- Not currently active in Sudan, but has plans to restart operations soon, without regard for human rights situation in Darfur.
Details
- Total SA is a large oil company based in France. In 1980, Total acquired a 32.5% share in the rights to Block 5 in Southern Sudan, one of the largest and richest oil fields in the country, along with partners Marathon Petroleum Sudan Ltd (32.5%), Kufpec Sudan Ltd (25%) and the national company Sudapet (10%)1. Total conducted seismic surveys of the field between 1980 and 1985, but suspended its operations in Sudan in 1985 due to security concerns, before beginning drilling operations in the country2. However, Total maintained ownership of its share of the Block 5 concessions, meeting yearly with representatives of the Sudanese government in Khartoum and paying license fees to ensure their continued commitment to the contract3. With the signing of the comprehensive peace agreement in Sudan’s brutal civil war between the North and South of the country in 2004, Total began making preparations to return to the country. Complications arose, however, when the SPLM (Sudan People’s Liberation Movement) granted the oil company White Nile the rights to a portion of Block 5, and Total contested this move. Despite this ongoing dispute, Total appointed a permanent representative to Sudan in Khartoum on February 1st, 2005, and began work to rehabilitate its Bor base in block B and in the summer of that year4. Total has been somewhat responsive to the concerns of NGOs such as Human Rights Watch and the International Crisis Group concerning the effects of their operations on the human rights situation in Southern Sudan, holding a conference on sustainable development in Southern Sudan in June of 2005, but it has not addressed the Darfur.
1 Total Corporate Website – History of Total’s Prescense in Sudan, accessed 2/28/2006 at
http://www.total.com/en/group/corporate_social_responsibility/ethics_governance/ethics/history_sudan_7581.htm
2 Sudan, Oil, and Human Rights. Human Rights Watch, 2003, accessed at
http://www.hrw.org/reports/2003/sudan1103/27.htm#_ftn1467
3 The Khartoum-SPLM Agreement, Sudan’s Uncertain Peace. International Crisis Group, July 25th, 2005. Accessed at http://www.crisisgroup.org/home/index.cfm?id=3582&l=1 4Total Corporate website – as above. situation at all. Even in Total’s response to our letter of January 19th, 2006, there is not one mention of Darfur. The company is eager to restart its operations in Sudan now that the security situation in Southern Sudan is somewhat stable, and appears to be ignoring the situation in Darfur to this end. The fact that they have been responsive to human rights concerns in the past, however, makes them a good candidate for further shareholder action.
Royal Dutch Shell
ISS Relationship Classification
- Equity
Summary
- Shell is not engaged in the oil and gas exploration business in Sudan, but does operate a network of retail sites selling petroleum products throughout the country. They have ceased selling aviation fuel in Sudan due to human rights concerns, and do not appear to have plans for future expansion in the country.
Details
- Shell has been present in Sudan since 1928, although it is not engaged in oil & gas exploration in the country. It operates a network of about 45 service stations and employs about 130 people in Sudan5. In 2001, Shell faced heavy pressure from European humanitarian groups to stop selling aviation fuel to the Sudanese government, fuel that was used in government attacks on civilians in the Sudanese North-South civil war. Shell promised to stop selling aviation fuel to the Sudanese government in May of 20016, and recently sold their entire aviation fuel business in Sudan to Petronas7. The NGO Christian Aid has raised some concerns about Shell’s ownership of equity in Chinese oil firms that are involved in the oil business in Sudan. According to Christian Aid, Shell invested $430 million in Sinopec, a Chinese oil company active in Sudan in 20008. Several institutions have sold their shares of Sinopec as part of Sudan divestment programs, and a Yale report identifies the company as a ‘Major player’ in the Sudanese
o 5 November 17, 2005 Meeting with Royal Dutch Shell (RD) – Sudan Activities CalPERS Memorandum, November 17th, 2005. Accessed at http://www.calpers.ca.gov/eip-docs/about/board-calagenda/ agendas/invest/200512/item09b-03.pdf
6 List of International Companies Involved in the Sudanese Oil Industry. European Coalition on Oil in Sudan. Accessed at http://www.ecosonline.org/back/companies.html%20on%203/1/2006
7 CalPERS Memorandum, as above.
8 The Regulatory Void: EU Company Involvement in Human Rights Violations in Sudan. Christian Aid, May, 2001. http://www.christianaid.org.uk/indepth/0105suda/sudan.htm oil industry9. The CalPERS Memorandum notes that in November of 2005, Shell “indicated that they do not own equity in Chinese energy companies doing business in Sudan.” Based on this statement, they either have since sold their investment in Sinopec, or (mistakenly) do not consider Sinopec to be an energy company doing business in Sudan. It would be good to ask them about this investment specifically in future correspondence. Shell indicated at the CalPERS meeting that they have not considered selling their remaining assets in Sudan, but also did not appear to view Sudan as an area for much future expansion. From the November 17th memorandum: “Royal Dutch has been selling its assets in Sudan. The refinery business was sold in 1992. The chemicals business was sold shortly thereafter. RD’s Liquefied Natural Gas (LNG) business was sold in 1994. The aviation fuel business was recently sold to Petronas. The question was raised to RD about the prospects of Sudan having the potential to produce oil at levels comparable to Nigeria over the next 5-10 years. RD indicated that their external sources on the subject are not providing information or data that would support that outlook.”
Novartis AG
ISS Relationship Classification
- Equity
Summary
- Novartis is a Swiss healthcare and pharmaceutical company, which according to ISS has an office in Khartoum.
Details
- In September of 2005, NYC Comptroller William Thompson sent a letter to Novartis along with several other companies (the list was based on research from CSAG), urging each to "...review its business ties to Sudan , examine any potential financial and reputational risks, and report its findings to shareholders."10. According to a report by the Novartis Foundation, Novartis helps to supply free medicines to conflict zones
9 An Analysis of Select Companies’ Operations in Sudan: A Resource for Divestment. Yale Advisory Committee on Investor Responsibility, December, 2005. Accessed at http://www.acir.yale.edu/YaleLowensteinSudanReport.pdf
10 Thompson Announces List of Companies Urged to Review Business Ties to Sudan Due to Human Rights and Terrorism Concerns. New York City Comptroller Press Office, September 7th, 2005. Accessed at http://www.comptroller.nyc.gov/press/2005_releases/PR05-09-103.shtm%20on%203/1/2006 world, including Southern Sudan in 200511. Very little other information regarding Novartis’ business in Sudan was publicly available at the time of this writing. Unlike Total and Shell, Novartis does not appear to have been addressed about the human rights implications of its presence in Sudan very often, probably because the fact that it is a healthcare company. Nonetheless, it would be good to get an official response from the company regarding the nature of their business in the country.
SKF AB
ISS Relationship Classification
- Equity
Summary
- SKF is manufactures bearings, seals, and related products, and has an agreement with an independent distributor, Aziz Enterprizes, to market its products in Sudan.
Details
- According to SKF’s distributor list12, they have a distribution agreement with Aziz Enterprises, based in Khartoum. Aziz Enterprises is listed by several business directories as an importer primarily of bolts and nuts. Very little other information is available about the company, or about SKF’s operations in Sudan. A future letter to SKF and/or Aziz Enterprises should inquire about the primary customers of the imported products, and specifically, whether the Sudanese government is a large customer for these parts.
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