ExxonMobil and Chad’s Authoritarian Regime: An ‘Unholy Bargain’

The West African nation of Chad is poor. Really poor. Life expectancy is under 50 years. In fact, Chad residents scrape the bottom of the barrel on most every indicator on the Human Development Index, overall ranking 183rd out of 187 nations. That’s despite vast oil wealth, including about $750 million per year in taxes and royalties from the oil giant ExxonMobil.

How can a country be so oil rich, and dirt poor?

In his new book “Private Empire: ExxonMobil and American Power,” Pulitzer prize-winning author Steve Coll examines ExxonMobil’s “outsized-influence” in impoverished countries.

Coll offers a case study of a “grand experiment” in Chad that started in 2001. The “gamble” was funded by the World Bank, and spear-headed by an Exxon Mobil-led consortium. It bankrolled the develop of oilfields in southern Chad in 2001, but conditioned the financing on agreements from Chad’s government to use the revenues to combat poverty.

Several years into the project, Chad’s leader Idriss Deby backed out and the deal collapsed.

“ExxonMobil’s tax and royalty payments were so gargantuan, he could just afford to buy his way out of the compact,” Coll says.

Coll says if ExxonMobil is going to do business in places where corruption is rampant, it should conditions its participation on transparency.

“This is not Saudi Arabia or Kuwait where per capita income is $20,000 a year. And while the country suffers from all sorts of deficits it is not grinding its people into poverty and exclusion the way Chad’s government is.” Coll says, “There has to be part of the world — and Chad would represent it — where standard operating procedures are just not acceptable.”

Alan Jeffers, Exxon Mobil’s Media Relations Manager, disagrees. He says the firm takes corporate social responsibility seriously, but isn’t going to participate in nation-building.

“If the question is: are we only going to operate in countries that Steve approves of, I think the answer is going to be ‘no,’ “ Jeffers says. “We cannot be expected to be the United Nations. That would not be true to our shareholders. There are non-governmental organizations that we work with all the time who have that as their core function.”

Asked what countries in Africa ExxonMobil has refused to do business in, Jeffers replies, “I don’t have any response to that question Marco. We are in the business of finding and developing energy and there are obviously laws that we have to abide by and we do that, and we do that in the most ethical and most transparent way we can.”