Big Oil On Trial: The Story Nobody’s Telling

A Calgary energy company is being sued in a New York court for complicity in genocide. Back home in Alberta, news organizations are happy to look the other way.

By Jeremy Klaszus

When Ottawa Citizen reporter Kelly Patterson heard about new evidence being presented in the lawsuit against Talisman Energy in the US District Court of New York, she set to work. She got on the phone. She researched. For several days, she investigated the latest chapter in a long story about Talisman’s controversial involvement in Sudan.

The Citizen published her story on October 22, 2005, almost three years to the day after Talisman CEO Jim Buckee announced his company would be ending its stay in the war-torn country, having been attacked from all sides for its presence there. From 1998 to 2003, the company was a 25 per cent stakeholder in the Greater Nile Petroleum Operating Company (GNPOC), a consortium that included China’s and Malaysia’s national oil companies. Talisman sold its holdings to a subsidiary of India’s national oil company in 2003.

Patterson’s story focused on a slew of previously confidential documents that had recently been made public. The lawsuit had been filed in the New York court on November 8, 2001, by the Presbyterian Church of Sudan and a group of Sudanese citizens and refugees. The suit names Talisman and the Sudanese government as co-defendants, alleging they collaborated “in a brutal ethnic cleansing campaign against a civilian population” to enhance their “ability to explore and extract oil from areas of southern Sudan.”

It continues: “The armed campaign, which… has resulted in massive civilian displacement, the burning of villages, churches and crops, and the extrajudicial killing and enslavement of innocent civilians, is possible only through Defendants’ collaboration and the Government’s use of equipment and infrastructure, such as vehicles, helicopters, aircraft, roads and airfields, owned, chartered, constructed and/or maintained by Talisman.”

Talisman denies the allegations, calling them “baseless” and “demonstrably false.” In court papers, Talisman has argued: “It is not sufficient to show that Talisman Energy sometimes provided services to the Government of Sudan, and that it knew or should have known in some general way that the Government of Sudan was abusive of human rights…. As a matter of fact, Talisman Energy never rendered any assistance to the Government of Sudan. GNPOC, not Talisman Energy, had facilities in Sudan.”

The Sudanese civil war—fought between the Arab Muslim north and the mostly Christian and animist south— has raged on and off since the mid-1950s. There was a hiatus in the war from 1972 until 1983, but peace agreements collapsed and fighting broke out again and continued until another peace agreement was signed in 2005. Between 1983 and 2005, an estimated two million people were killed and over four million displaced.

The war was often portrayed as nothing more than a religious and cultural conflict between Muslims and Christians, but human rights groups say it was more about resources than religion. Southern Sudan is “one of the most underdeveloped regions in the entire world,” according to a 2003 human Rights Watch report, even though it sits on vast amounts of oil.

It was into this mess that Talisman walked. Groups such as Amnesty International and Human Rights Watch found that oil revenues—including those that came from Talisman—directly fuelled the war. When the GNPOC pipeline started operating in 1999, oil money poured into Sudanese government coffers. Oil accounted for just over 7 per cent of total government revenue in 1999. In 2000, the first full year of production for GNPOC, that number was up to 43 per cent. And as the revenues increased, so did military spending.

Human rights groups also found that civilians were being killed and driven from their homes near oil concessions. Canada’s own 1999 fact-finding mission to Sudan found the same things. “…[T]wo things are certain,” says the government-commissioned Harker Report, released in 2000 by a delegation led by special envoy John Harker. “First, the gunships and Antonovs [Russian cargo planes used as bombers by the military] which have attacked villages south of the rivers flew to their targets from the Heglig airstrip in the Talisman concession. Second, it is a prominent perception of southern Sudanese that Talisman, ‘the Canadian oil firm,’ is in active collaboration with the GOS [Government of Sudan], economically, politically and militarily.”

“I have watched soldiers going to the battle be transported in our company trucks,” reads one e-mail from an employee in Sudan.

The 300-plus pages Patterson obtained for the Ottawa Citizen had been submitted by the plaintiffs as part of a failed motion to elevate their suit to a class action. The documents include internal company memos and e-mails. Among them is a response to the Harker Report written in 2000 by Mark Reading, Talisman’s security adviser at the time, who described the Sudanese military’s use of the Heglig airfield, which GNPOC had paid to improve. “This bombing most certainly happened… the airstrip was definitely used during this period to conduct war against the South, of that there can be no doubt,” he wrote.

The company’s response points out that the Sudanese government, not Talisman, owned the Heglig airfield. Further- more, it asserts, “there is no indication in any of the documents or testimony that during the brief period that Antonov bombers used the government airstrip at Heglig, the Antonovs were being deployed against civilian populations.” Talisman argues that the planes were used against rebel groups, which is “conduct not violative of international law.”

In some of the e-mails made public, company employees vividly describe what was happening on the ground in Sudan. “I watched one of their [military] gunships refuel at our company fuel tanks today,” says an e-mail dated November 2, 1999, from Talisman employee Larry O’Sullivan. “I have watch [sic] soldiers going to the battle be transported in our company trucks… Nobody can tell me that this oil is not buying more military power.”

To any reporter worth the notebook they write in, these documents had news value. The Alberta press, however, ignored them completely, even though Patterson’s story was readily available to the Edmonton Journal and Calgary Herald for republication, since the Citizen, the Herald and the Journal are all part of the CanWest Global chain.

“I think there were some problems with [the story],” says Charles Frank, the Herald’s business editor. “There were some legal issues with it. I think the decision here was that we weren’t totally comfortable with that story, so we didn’t run it.”

The Citizen, however, was comfortable enough to publish it, even after Talisman pressured them to fill the space with something else. “Talisman has a lobbyist who repeatedly phoned the Citizen,” says Patterson. “He phoned both the business editor and the editor-in-chief, trying to convince them that we shouldn’t run the story.”

As for legal issues, Patterson and the Citizen had their lawyer examine the piece before it hit newsstands and the CanWest wire. “We went above and beyond to ensure the company’s point of view was well represented,” she says. “Our lawyers combed over the copy very carefully.”

Talisman responded swiftly. David Mann, the company’s senior manager of corporate and investor communications, wrote a rebuttal, which the Citizen published. Mann chastised the newspaper for printing “a very select number of excerpts without proper context.” he denounced the allegations as “outrageous and implausible” and explained that Talisman was being sued under an arcane law put to “imaginative” use.

The suit is being heard under the US Alien Tort Claims Act (ATCA), a once-obscure law created in 1789 as part of the Judiciary Act to extend court jurisdiction to non- US citizens who violated international law. It’s not clear why exactly the law was written, but legal scholars suspect the ATCA applied mostly to pirates in the late 18th century. In 1980, an American judge blew a couple centuries worth of dust off the law when the relatives of a Paraguay man who was kidnapped and tortured by a police officer successfully sued the offender. Since the late 1990s, the law has been used against US and non-US companies.

The plaintiffs’ lawyers in the Talisman case have already negotiated settlements in prominent cases under the ATCA. Both Stephen Whinston and Carey D’Avino were counsel in suits filed by holocaust victims against Swiss and German banks and other companies for laundering money on behalf of the Nazis and for supporting Nazi slave labour. Settlements were reached and the victims were compensated.

“Fortunately for us, human rights law has progressed to a point… where even governments aren’t allowed to do anything they want to their own civilians,” says D’Avino. “And since a sovereign is not allowed to commit certain crimes like genocide, war crimes and crimes against humanity, certainly no private entity is entitled to be absolved from participation or aiding and abetting in those crimes.”

D’Avino says that if the Talisman suit goes to trial, “this case will set landmark precedents with respect to corporate responsibility for genocide, war crimes and crimes against humanity.”

Talisman has tried several ways to get the suit thrown out. The company has twice argued in court that corporations, unlike states, are incapable of violating international law. District Judge Allen Schwartz dismissed that argument as illogical and “anachronistic” in March of 2003.

Another argument the company has repeatedly put forward is that it shouldn’t be tried in US courts, but in Sudan or Canada. “We are a Canadian company, we were operating in Sudan, and the plaintiffs have decided to pursue this in a US court,” says Mann. “But it’s a big, complicated world that we live in. Our view is that courts in Canada are competent to address or hear any similar claims.”

When Talisman argued this in New York, Schwartz noted that an Alberta court would most likely apply “the law of the place where the activity occurred”—in this case, Sudanese sharia law. “Under Sudanese law, plaintiffs as non-Muslims would enjoy greatly reduced rights,” Schwartz wrote in his landmark opinion dated March 19, 2003, three days before he died of a heart attack. he concluded that New York was the most appropriate forum for the suit.

“The case is particularly significant because there’s no equivalent to the ATCA in Canada,” says Craig Forcese, a law professor at the University of Ottawa. “The prospect of ever actually litigating a Talisman-like case in Canada is theoretically possible, but there isn’t an easy way of doing it. It would be tough and expensive and would require all sorts of new precedent.”

Furthermore, the plaintiffs have pointed out—and the judges have backed them up—that Talisman is jurisdictionally present in the US. Talisman owns Fortuna Inc. and Rigel Petroleum Inc., two American subsidiary companies. Fortuna is one of New York State’s largest gas producers. In an August 27, 2004, opinion, District Judge Denise Cote, who took over the case after Schwartz died, noted that Fortuna is a “mere department” of Talisman, with the same board of directors and no employees of its own. Talisman itself also trades on the New York Stock Exchange and has a sizable amount of American investment.

“If you’re accessing capital in a US market, then I don’t see why it’s not fair that you should be subject to the jurisdiction of courts within New York,” says Forcese.

A trial in the Talisman case is tentatively set for January 2007. Until then, Judge Cote has ordered both parties not to try the case in the media—an order that Mann says frustrates the company. “This is the conundrum we face,” he explains. “Some media outlets feel inclined to report on the story even though it’s before the courts and the judge has said really, she’d like to have a chance to review the information before the media assess the merits of the case.”

But Talisman has nothing to worry about in Alberta, where the story simply doesn’t get covered in the mainstream press, even though the media are as free to report on this as they are on any other lawsuit. Investigative reporters at the Citizen and Toronto Star have written several stories on the case over the last year, but the last time a Calgary Herald journalist reported on it was in 2003—unless you include a 145-word business brief published in the Herald’s “Drill Bits” section in August 2004. Since then, there has been only a sprinkling of wire stories buried inside the paper’s business section—and even wire copy is treated as suspect at the Herald.

“Obviously we have to rely on news services for the coverage, and they may or may not be interested and they may have specific agendas in the coverage,” says Frank. “I think that in certain places, there are organizations and individuals who are

“I interviewed one little 8-year- old girl, and a 12-year-old boy. each of them had had an arm blown off,” says Slobodian.

interested in making big oil companies look bad. So that can colour how you report things.” Frank describes the plaintiffs— the Presbyterian Church of Sudan and a group of Sudanese citizens and refugees—as a “small special interest group.”

In a 2002 column, Frank complained about the “gaggle of international do-gooders” opposing Talisman. He condemned their “tired, inflammatory rhetoric which, unfortunately, has a way of garnering the attention of some of the less discerning members of the local and national media.”

Later that year, when Talisman announced it was selling its Sudan holdings, Frank lamented the company’s departure in the Herald, praising the corporation as “one of the world’s most socially responsible oil companies.”

Frank says it’s difficult to cover the case fairly. “Talisman, because they’re involved in a court case, can’t really comment on it. So I don’t feel that they’ve had a chance to rebut the [allegations].”

Mann says it’s his job to ensure balance in coverage of the case. “Our fundamental responsibility to shareholders, Talisman employees and the public at large is to make sure that it’s clearly stated in any coverage of the lawsuit that first of all, we haven’t been tried and convicted, and that we have consistently and will continue to consistently deny these allegations.”

In March 2002, Edmonton 630 CHED reporter Byron Christopher got his hands on a copy of the plaintiffs’ amended complaint. Despite the fact that no one else in Edmonton was reporting on it, Christopher knew it was big.

“How can this not be news?” asks Christopher, a veteran reporter who covered the Nicaraguan civil war in the early 1980s. “I was shocked when I read the court documents, the allegations, and the fact that it had not been covered here. What a big story.”

Christopher discovered first-hand one reason why the case may have been kept out of headlines and off airwaves. He learned that the plaintiffs’ lawyers claimed to have a May 7, 1999, memo from the Sudanese petroleum security office that said military forces would conduct “cleaning-up operations” in villages near the Talisman concessions at the request of “the Canadian company.” Government forces attacked the area two days later, wiping out villages and killing civilians. The Harker delegation found that “roads built by the oil companies enabled [military vehicles] to reach their destinations more easily than before.”

Christopher says that when he contacted Talisman for comment on the government memo, company spokesperson and former Calgary Herald reporter Barry Nelson asked for the spelling of his name and CHED’s address. A letter from Nelson arrived at the station a few days later stating “the allegation that Talisman ‘ordered ethnic cleansing in Sudan’ is entirely false and defamatory and Talisman will vigorously defend itself from this malicious attack.”

The letter had the desired effect—sort of. The station initially balked at running the story. (CHED would later broadcast several reports on the case.) Christopher, however, was not so easily dissuaded. When CHED hesitated, he sent the story to the online alternative newsmagazine, which published it on March 19, 2002. It would be four more days before the news appeared in the Calgary Herald in the form of an Associated Press wire story. The Edmonton Journal didn’t touch it at all.

“The end result is that it’s a lawsuit few people know about,” says Christopher. “They know more about a lawsuit involving two movie actors or some damn thing than they do this.”

Christopher was nervous about taking the story to another news source, but decided it was more important than his or his employer’s interests. “You’re always afraid,” he says. “But you have to be honest with readers. They have to know what happened there…

“I’ve been asked before why I went over the station’s head on this story, and the answer I always give people is that a reporter’s first loyalty is to the audience or the readership. I’ve been questioned about that at staff meetings. They ask, ‘What’s your loyalty to the company?’ And I say, ‘What do you mean? I have none. I’m a reporter. My loyalty is to the audience.’ ”

While silence now surrounds the Talisman suit, Alberta’s media haven’t always been this quiet about the company’s Sudan venture. Like the Herald, the Calgary Sun has run only a handful of stories on the New York lawsuit, but the paper did send a columnist to Sudan three times from 1997 to 1999. Linda Slobodian initially went to report on slavery, but when Talisman moved into the country in 1998, she followed that story. She came back from her 1999 trip with a damning account of the company’s presence. In 2000, Slobodian wrote in the Sun that because of Talisman, “our glorious maple leaf, which stands for freedom, compassion and justice, is stained.”

Her sharply written, vivid reports of the carnage wreaked by military bombing in the south seem uncharacteristic of a publication known more for its scantily clad Sunshine Girls than its investigative reporting. Slobodian had gone where journalists weren’t supposed to go—into a no-fly zone in the Nuba Mountains in the south. The government had blocked any kind of relief to the region, and Slobodian wanted to get the real story of how the Nuba people were being affected.

Slobodian found that the Antonov bombings had caused immense suffering. “In this one case, we had just got there and [the military] had just thrown a bomb onto kids who go to school outside under trees,” says Slobodian, who is now a senior reporter at the Herald. “There were a bunch of kids killed. I interviewed two little ones—one little 8-year-old girl, and a 12-year-old boy. Each of them had had an arm blown off. This is what people in Sudan were living with every day.”

In a 2000 internal Talisman report made public in the New York court last year, former company security adviser Mark Reading described what an Antonov attack is like. “These bombing runs are extremely terrifying to the people on the ground because they can hear what is trying to kill them but cannot see it,” Reading wrote.

“A lot of locals refer to this as ‘whispering death.’ This certainly is not precision bombing, and as we know, it leads to many accidents. Schools, hospitals and a whole manner of targets have been frequently hit.”

Describing the situation in Sudan was no small challenge for reporters and human rights observers. The Canadian Harker delegation heard credible reports that when Talisman brought a group of financial analysts and journalists to the Heglig airfield in November of 1999, military use of the airstrip was temporarily stopped. The Harker delegation itself received the same special treatment when it visited a month later.

“We learned that, I think it was just the day before, they had moved the Antonovs and the gunships off that airstrip,” says Georgette Gagnon, a member of the Harker delegation and the deputy director for human Rights Watch’s Africa division. “They moved them somewhere else so that when we got there, you didn’t see anything.”

Documents made public in the New York court show Talisman even considered building a separate airfield for the Sudanese military, as company employees and management were clearly uncomfortable with what they saw at Heglig.

A statement by Ian Taylor, Talisman’s former head of community relations in Sudan, says the new airfield was to be “out of the sight of journalists and other unsympathetic visitors to the oil concession area, thus allowing the Sudan military to continue to expand aerial attacks against civilians without the knowledge of the general public or international media.” Before he died of a heart attack in 2004, Taylor wrote to his brother: “I am haunted by nightmares of what I have witnessed in Sudan…. I fear constantly both for the Sudanese people I’ve lived and worked with as well as for my own soul.” In the end, the company decided not to build the new airfield.

When journalists finally got access beyond the company- guided tour, Talisman’s version of events on the ground was found severely wanting. In December of 1999, Buckee was quoted in the Herald as saying that the company hadn’t seen any evidence of forced displacement: “We have diligently investigated these allegations and found them to have no basis in fact.” But in a story published in the The Globe and Mail later that month, reporter Stephanie Nolen described child slavery where Talisman said there was none, displaced people where Talisman said no one had been displaced, and an absence of schools or wells where Talisman claimed to have sponsored community development.

Ottawa has sent two diplomatic notes to Washington asking for the Talisman case to be thrown out of the New York court.

The Harker delegation would later discover that the investigation cited by Buckee had produced no formal report. Furthermore, the person Talisman assigned to investigate the displacement had never even been to Pariang, a region where much of it had occurred. “I interviewed that investigator,” says Gagnon. “He never went there, he never talked to victims or witnesses or anything. So you can imagine what the investigation was like.”

While journalists were blinkered in Sudan, the Canadian government’s role in the Talisman story went largely untold in Alberta. It remains untold. Lloyd Axworthy, then the minister of foreign affairs, sent the Harker delegation to Sudan in 1999 to discover what was actually happening on the ground. But as Human Rights Watch has pointed out, by allowing Talisman to stay in Sudan, Canada failed to follow up on the damning findings of its own report.

More recently, the Canadian government has tried to get the Talisman suit thrown out of the New York court. Talisman’s 2005 Corporate Responsibility Report says the US Department of Justice filed a statement of interest in the New York court “expressing the US government’s view that the lawsuit interferes with US/Canada relations.”

What the report doesn’t say is that Washington filed the statement at Ottawa’s—and ultimately Talisman’s—request. In July of 2005, Toronto Star scribe Rick Westhead reported that Talisman sent a letter to then prime minister Paul Martin’s senior foreign policy adviser asking the government to intervene on the company’s behalf. Westhead obtained the letter through Access to Information.

The Canadian embassy dutifully complied with Talisman’s request by sending two diplomatic notes to the US Department of State in 2004 and 2005. The second note, dated January 14, 2005, protested the policy ramifications of US courts exercising jurisdiction over a Canadian company. The note says the Talisman suit “creates a ‘chilling effect’ on Canadian firms engaging in Sudan.”

Upon receiving the second note, Washington filed its statement of interest informing the court that the case frustrates Canadian foreign policy. “Canada’s judiciary is equipped to consider claims such as those raised here,” it read. But the plaintiffs pointed out that Canada’s legal system isn’t at all sufficiently equipped, and that the Canadian government had consistently “stood mute” on Talisman’s involvement in Sudan. District Judge Cote emphatically rejected Talisman’s, Ottawa’s and Washington’s arguments, pointing out that the court had already decided “Canadian courts are not able to entertain civil suits for violations” of international law.

Professor Forcese calls the Canadian government’s position “utterly unpersuasive.”

“The Canadian government is deeply hypocritical on several levels,” he says. “They’re hypocritical on the specifics of the Talisman case where, by its own admission in terms of the Harker report from 2000, the Canadian government said this was a bad thing that was going on, did nothing, and now there’s some effort to hold Talisman to account and they’re actively resisting it. It’s quite disturbing.”

Like most elements of this story, the diplomatic notes were mentioned only in passing in the Alberta press. The newspapers ran wire stories that cited the work of a reporter in Toronto.

As the Talisman case draws closer to its tentative trial date of January 2007, it remains to be seen whether the Alberta media’s silence will be broken. At the Herald, Frank says sending a reporter to New York to cover the trial wouldn’t be out of the question. “We like to view ourselves as reporting on the industry in its entirety, so certainly it would be on the table,” he says. “I think it’s an interesting story, and I think people are always looking for the story behind the story.”

But if the story behind the story is going to be told in Alberta, news organizations will have to stop sweeping it under the rug and start actually reporting on it. “It’s a matter of public interest,” says Forcese. “And as a matter of public interest, it deserves comment in the media. It’s exactly the sort of issue that needs to be discussed.”

Jeremy Klaszus is the contributing editor at Alberta Views.


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