Report 3: Part one of the Prosecution’s Opening Presentation
In our previous report, we introduced the positions of the parties on the substantive aspects of the Lundin Oil Trial. This report covers the initial days of the prosecution’s opening presentation. The presentation is scheduled to last until 8th November 2023. This week, we will delve into the prosecution’s description of the Lundin companies’ first two years in Block 5A.
The Lundin Oil Trial is scheduled to last for a minimum of two and a half years. The preliminary investigation encompasses 80,000 pages, which must subsequently be stored in three separate bookcases in the archive of Stockholm District Court. Over the course of approximately two months, the prosecution will have the opportunity to present their case. The upcoming reports will focus on the prosecution’s presentation and, as a result, will exclusively represent the prosecutor’s position on the case.
The prosecution has decided to present their case in chronological order. In this report, we will present a summary of relevant events occurring between 1997 and 1999. For a summary of the indictment, see our first two reports here.
The second civil war in Sudan
The prosecution commenced its presentation by asserting that the Lundin Oil trial encompasses not only the actions of two company executives but also concerns decades of violent conflict. The second civil war in Sudan began in 1983, and per a report cited by the prosecution from Human Rights Watch, it claimed the lives of 2 million people and forced 4 million civilians to flee from their homes. One major catalyst for the armed conflict was the dispute over control of Sudan’s natural resources, particularly the oil reserves discovered in the southern regions of the country.
In 1998, peace negotiations between southern Sudanese rebel groups, notably SPLM/A, and the government were near completion. However, one military general believed that the terms of the peace agreement were too favourable to the South Sudanese and consequently staged a military coup in an attempt to disrupt the negotiations. This general was none other than Omar Al Bashir.
After Al Bashir assumed power in 1998, he decided to continue the war, aiming to defeat the South Sudanese rebel forces through military means. Under his leadership, Sudan rapidly gained notoriety for its methods of warfare. Several UN reports and resolutions expressed deep concern regarding the systematic attacks on civilian targets by the Sudanese military and urged Sudan to immediately cease its military advances against civilian men, women, and children.
One crucial argument presented by the prosecution was that Al Bashir applied a “divide and rule” strategy during the war. Al Bashir utilized the fragmentation among the numerous rebel groups involved in the conflict to advance the position of the Sudanese government. By providing financial and military support to specific rebel groups at strategic times, the Sudanese military could exploit infighting among these groups. The prosecution asserted that this should not be misconstrued as the conflict being mainly composed of “tribal battles”, as the defense and regime had claimed. Instead, it was a deliberate tactic used by the government to further establish their position of power.
Furthermore, the prosecution contended that only the Sudanese military had access to attack helicopters and Antonov airplanes, which were frequently used in the attacks against civilians. Consequently, the prosecution argued, it had been established that the Sudanese government conducted indiscriminate attacks on civilians, in violation of the Geneva Conventions. The prosecution also referenced multiple reports by the United Nations’ special rapporteur, which described the conflict as a non-international armed conflict according to international humanitarian law.
Despite facing international reprimands, the Sudanese army persisted in conducting deliberate attacks on civilians throughout the 1990’s. Moreover, in 1993, the US State Department declared Sudan a suspect of supporting terrorism, and starting in 1997, American companies were prohibited from engaging in business with Sudan. This worsened the country’s economic isolation and Sudan came to be seen as an outcast in the eyes of the international community. The prosecution contended that this was one significant reason driving Al Bashir’s regime to secure control over the oil industry by 1997.
To mitigate the country’s economic crisis and fund the war effort, the Sudanese government had to capitalize on the oil reserves located in the southern parts of the country.
Lundin Oil’s Presence in Sudan
Following the prosecution’s account of the conflict, they transitioned to outlining how the Lundin companies1 established themselves in Sudan. Before commencing activities in Block 5A, the Lundin executives had conducted business in northeastern Sudan as early as 1991. The Lundin companies’ activities in 1991 were not successful, due to a border conflict in the region. However, the Lundin executives recognized the potential for oil exploration in Sudan, and subsequently, they signed the EPSA (Exploration and Production Sharing Agreement) regarding Block 5A in February 1997.
The prosecution presented annual financial reports from Lundin Oil, revealing that from 1997, Ian Lundin held the position of President of the company, and Alexandre Schneiter served as the Vice President of Exploration. The prosecution’s intent was to demonstrate that these roles enabled Ian Lundin and Alexandre Schneiter to have a decisive influence over Lundin Oil and its subsidiary, Sudan Ltd. Furthermore, the annual reports indicated that Lundin Oil early on recognized the potential of Block 5A, with the company’s primary objective being to generate revenue, either through the sale of crude oil or the profitable transfer of concession rights.
On the 6th of February 1997, Lundin Oil entered into the EPSA Agreement with the Sudanese government. The agreement granted Lundin Oil rights to extract oil in Block 5A in exchange for certain fees and future revenues to be paid to the Sudanese government. According to the prosecution, during this period there was widespread information available to Ian Lundin and Alexandre Schneiter concerning the Sudanese government’s violations of human rights and international humanitarian law during the ongoing civil war.
At the time of the agreement, publicly available UN resolutions and reports from NGOs all indicated that the protection of human rights and civilians in the country would continue to be reduced. Additionally, the prosecution noted that during the preliminary investigation, news articles detailing the conflict were found in the Lundin offices in Geneva.
By 1997, foreign oil companies operating in southern Sudan had become recognized as legitimate military targets by rebel groups who opposed their presence in the region. To demonstrate that the Lundin companies had prior knowledge of this situation, the prosecution quoted Ian Lundin’s statement to a Canadian newspaper on 20 April 1997: “We take the military threat seriously, but it is a risk worth taking because of the potential of the oil basin.”
In conclusion, the prosecution argued that this indicated that the Lundin companies, at the time of the signing the EPSA regarding Block 5A, were aware of the illicit methods of warfare being used by the Sudanese military, as well as the role that the desire for control over oil revenues played in the conflict.
Security Concerns and Power Struggles in Block 5A
Drawing upon various reports from the UN and NGOs, as well as internal security reports commissioned by Lundin Oil AB, the prosecution proceeded to describe the security situation in Block 5A during the first year of the concession. One significant event, which played a major role in the events occurring in the region, was the signing of the Khartoum Peace agreement on 21 April 1997.
The prosecution contended that the Khartoum Peace Agreement was not to be perceived as a legitimate peace agreement, given that the primary rebel group, SPLM/A, was not a signatory party to it. Instead, they argued the agreement had been reached between the government and rebel groups already allied with the regime. According to the terms of the agreement, oil revenues were to be distributed among three entities: the government of Sudan, the Coordinating Council of Southern Sudan, and the state in which the oil had been found. It also stated that rebel alliance SSDF, under the leadership of Riek Machar, would assume responsibility for security in Block 5A, along with other areas in the south. Notably, the SSDF would not be integrated in the Sudanese military, and the military’s presence in the area would be limited to peace-time troops.
Nonetheless, the prosecution asserted that the Sudanese government had no intention of relinquishing their stake in the southern oil exploration. To preserve their control of the area, the Sudanese regime ensured that their representatives continued to operate in Block 5A. By assigning representatives from the state security force Petroleum Security and OEPA (Oil Exploration Production Authority) to supervise the security in Block 5A, the government maintained their presence in the area.
It became evident that the SSDF did not endorse these actions taken by the government. The prosecution cited multiple security reports from Sudan Ltd.’s own security personnel, H&SE, which described the agitated security situation in the area during 1997-1998. H&SE personnel expressed concerns regarding the government’s presence in the area and stated that it was apparent that OEPA representatives had a political motive for deploying northern state security personnel to Block 5A. In one report from 14 February 1998, it was stated that “I believe that [the state security forces] will return to enforce their belief that they should be in control of the security of this location.”
However, in 1988, the Lundin companies underwent a shift in their approach to security provisions. The prosecution presented evidence that in September 1998, representatives from the Lundin companies, at the instigation of Ian Lundin, initiated contact with the Sudanese government and suggested they cooperate in providing security for the business activities in Block 5A. By December 1998, the Lundin Oil consortium and the Sudanese government were in full agreement, stipulating that the regular army would provide security for future operations. Following this agreement, H&SE personnel who had previously voiced concerns regarding the government’s actions were deported from the country.
The agreement between the Lundin Oil consortium and the government faced resistance from the SSDF, resulting in military intervention by the group which halted the Lundin companies’ activities in the area. In an effort to address the situation, Ian Lundin, acting on behalf of Sudan Ltd., suggested the establishment of a hybrid security force responsible for maintaining security and order in Block 5A. This security force would be comprised of representatives from both SSDF and the state security force. According to the prosecution, this solution helped alleviate the situation for a short period.
However, when Sudan Ltd. struck oil in Thar Jath in April 1999, regular military forces entered Block 5A in direct violation of the Khartoum Peace Agreement. According to the prosecution, this led to multiple rebel groups breaking their allegiance to the government, worsening the situation in Block 5A. Most notably, in retaliation, SSDF troops attacked the Thar Jath drilling site. From that point on, the prosecution alleged, the Lundin Oil consortium decided they would endorse the Sudanese government in providing security for their business and initiated their close cooperation with the regime, which would last until the Lundin companies left Sudan in 2003.
Subsequent to the attack on the Thar Jath drilling site, the government and regime-allied militia groups carried out the offensive military operations as outlined in paragraph 6a of the indictment. These operations resulted in the loss of civilian lives and the displacement of civilians in Block 5A. The prosecution noted that the military operation violated international humanitarian law because of the systematic attacks on civilians. This included, but was not limited to, the use of barrel bombs in civilian settlements, burning of villages and looting.
Lundin Oil’s Cooperation with the Government of Sudan
The prosecution proceeded by outlining how the cooperation between the Lundin Oil companies’ and government of Sudan was carried out. According to the prosecution, following the military intervention in Block 5A, the collaboration with the Sudanese government deepened. The Lundin oil companies provided logistical support to the military, opting to construct roads commissioned by the government and seconding state security force Petroleum Security personnel within Sudan Ltd. These actions, the prosecution argued, demonstrated the companies’ support for and the deepening of their relationship with the government, which continued up until their withdrawal from the country.
The prosecution argued that the main connection between Ian Lundin and Alexandre Schneiter and the Sudanese regime was the Sudanese Minister of Energy and Mining, Awad Ahmed El-Jazz. El-Jazz had a close relationship to President Omar Al Bashir that predated the military coup that brought Omar Al Bashir to power. Following the coup, El-Jazz was appointed as the Minister of Energy and Mining, a position that gave him overarching responsibility for safeguarding the regime’s interests in the oil sector. According to the prosecution, this also meant that El-Jazz was given power over the military and state security forces in order to fulfil his obligations. The relevant government bodies through which action was taken were primarily OEPA and the aforementioned Petroleum Security. Allegedly, both of these entities were under the minister’s control.
OEPA had the responsibility of supervising the Lundin consortium’s compliance with EPSA and facilitating cooperation between the government and the consortium in all matters related to the concession in Block 5A. Consequently, representatives from OEPA were present at all meetings with the consortium. Petroleum Security, on the other hand, was a state security force, which eventually assumed the role of providing security in Block 5A.
To demonstrate El-Jazz’ pivotal role in the collaboration between the Lundin oil consortium and the government, the prosecution highlighted that he had personally signed the EPSA on behalf of the Sudanese government. They also mentioned that in 1999, following the military intervention in Block 5A, El-Jazz was appointed as the head of a newly established National Security Council. This council had a specific mandate to safeguard the government’s interest in the Sudanese oil industry. The prosecution also stated that they possessed evidence showing that Ian Lundin and Alexandre Schneiter had repeatedly made demands either directly to El-Jazz, or his subordinates.
The revelation of El-Jazz stirred some excitement among journalist’s listening to the proceedings. During the preparatory hearings leading up to the trial, the defence had asked for clarification regarding the alleged connection between Ian Lundin, Alexandre Schneiter and the Sudanese regime. By naming El-Jazz, one such link became clearer to many observers. The prosecution reiterated that they would present both written evidence and oral testimony in support of their claims.
Ian Lundin and Alexandre Schneiter’s Significant Influence over the Lundin Companies
Throughout the week, the prosecution made sure to highlight parts of the written evidence that underscored Ian Lundin and Alexandre Schneiter’s decisive influence over the operations of the Lundin companies.
The prosecution began by reiterating that when Sudan Ltd. entered into EPSA, Ian Lundin held the position of president of Sudan Ltd. In 1998, he was also appointed CEO of Lundin Oil AB. During 1998, Ian Lundin on multiple occasions directed subordinates within the company to take all necessary measures to ensure the safety of their operations. Furthermore, the prosecution presented written documents seemingly showing that in 1999, Ian Lundin issued warnings to Minister El-Jazz indicating that Lundin Oil AB would consider invoking force majeure if the security situation in the area was not resolved. In the message presented by the prosecution, Ian Lundin explicitly demanded that the Sudanese government uphold their previous agreement to deploy regular army troops in the area. He added: “We would like to reiterate our strong interest in the area, and we still consider Sudan to be one of the top projects in our portfolio. We desire to accelerate our projects accordingly.”
In accordance with the indictment, as detailed in the previous report (read more here) the prosecution also restated that Ian Lundin’s decisive influence over the Lundin companies can be shown by him entering into multiple agreements with the Sudanese government on behalf of Sudan Ltd.
Regarding Alexandre Schneiter, the prosecution argued that in his capacity as Vice President of Exploration, he also had a decisive influence over the Lundin companies. Moreover, he served as the highest-ranking representative of the Lundin companies at multiple meetings between the oil consortium and the Sudanese government. The prosecution further referenced the annual financial reports of Lundin Oil AB, in which Alexandre Schneiter was mentioned as a decisive influence within the company. Notably, he was also the recipient of substantial stock options, signaling that he held a significant role within Lundin Oil AB. The prosecutor indicated that they would provide more detailed insights into the actions of both Ian Lundin and Alexandre Schneiter in the upcoming weeks.
The week concluded rather unexpectedly with representatives from the prosecution, court and defence teams sharing in a redemptive laugh in response to a slight miscommunication between Judge Tomas Zander and a defence counsel. Whether this will lighten tensions between the prosecution and defence during the coming weeks is still to be seen.
In the next report, we will continue to provide coverage of the prosecution’s presentation during the upcoming week.