Report 5: Part Three of the Prosecution’s Opening Presentation

Gavel on a dark background

In the previous report, we detailed the third week of the prosecution’s opening presentation. It centered around the events of 1999, in particular the Government of Sudan’s alleged breach of the Khartoum Peace Agreement and subsequent events. The prosecution described how the Sudanese regular army entered Block 5A, following the finding of oil at the Lundin companies’ rig site Thar Jath, in order to take control of the oil exploration and expected revenues. After the military’s entry into the block, groups such as the SSDF that had previously been allied with the regime, attacked the rig site and the Lundin companies decided to turn exclusively to the Sudanese government for security for all future operations. To read a more extensive summary, see our previous report here 

The fourth week of proceedings began promptly on Tuesday morning. After ten days in the courtroom, it seemed that all parties had become comfortable with the routine of the prosecution’s opening presentation. Apart from a comment from Ian Lundin’s defense attorney revealing the defense’s eagerness to present their case, the week progressed without any major complaints or disturbances. This week’s report will delve into the events of the first half of the year 2000, detailing the continued cooperation between the Lundin companies and the Sudanese government as well as Lundin Oil AB’s response to increasing international critique. 

Continued Cooperation Between Lundin Oil AB and the Government of Sudan

The prosecution began their presentation by detailing point 9b of the indictment. Point 9b asserts that sometime around the 8th of November 1999, Ian Lundin, on behalf of Sudan Ltd., entered into a “Security and Road Agreement” with the Sudanese government. Under the agreement, Sudan Ltd. was to pay for and construct an all-weather road between Rubkona and Thar Jath. The road would partially pass through Jikany – an area the prosecution alleged was not controlled by the Sudanese military or regulated militia. The agreement also contained a security amendment, which stipulated that the Sudanese regular army would be Sudan Ltd.’s exclusive security force for the upcoming season, whose duties included, but were not limited to, enabling the construction of the all-weather road.   

In accordance with the terms of the agreement, it was apparent that both the government and Sudan Ltd. expressed the intention to undertake the construction of an all-weather road in Block 5A, and they agreed that the construction would benefit both parties. Ian Lundin signed the agreement on behalf of Sudan Ltd. and the Sudanese Minister of Energy and Mining, Awad El Jazz, signed the agreement on behalf of the Sudanese government.  

According to the security amendment to the agreement, the Government and Sudan Ltd. agreed that a force of between 500-1000 troops would be required to guarantee the security of the companies’ operations. The prosecution also highlighted wording indicating that the terms and conditions of the agreement had been drafted by Sudan Ltd.  

As noted, the all-weather road agreed upon would have to pass through the Jikany area. The prosecution held that this posed certain security risks as admitted to in the agreement, which stated: “[road construction] is the most vulnerable area from a security standpoint, particularly as it passes directly through the Jikany area which is not under military control.”  

Following the presentation of the agreement, the prosecution spent a considerable amount of time detailing evidence which they claimed showed that the Lundin companies had planned for further operations in the Jikany area, despite the security risks. According to multiple protocols from meetings within the Lundin companies, as well as meetings between the consortium and representatives from the Sudanese Government, the companies intended to conduct 250 km seismic operations in and around the Jikany area. On the 25th of November 1999 it was agreed with the Sudanese government that this would be done during the year 2000. However, on the 4th of October 2000, Alexandre Schneiter announced to representatives of the Sudanese government that Sudan Ltd. had not been able to carry out any seismic operations due to multiple security incidents. 

The prosecution alleged that entering into the “Road and security agreement”, as well as the agreement with the Sudanese government to conduct these seismic operations in uncontrolled areas of Block 5A, amounted to Ian Lundin aiding and abetting the subsequent military offensives by the government, which according to the prosecution were carried out to secure these areas in order to create conditions favorable to the Lundin companies’ operations. The specific military offensives attributable to this time period will be described in further detail in upcoming reports.  

Business As Usual in Block 5A

Despite the multiple security incidents that had taken place during the year 1999, the Lundin companies decided to continue their operations in Block 5A. On the 1st of December 1999, the Lundin companies and the Sudanese government agreed to a modification of the Exploration and Production Sharing Agreement (EPSA). The modification entailed an extension of the time frames set out in the original agreement, permitting an additional 12 months to perform the scheduled exploratory operations. The prosecution alleged that through this addendum to the EPSA, the Lundin companies showed that they sought to continue their operations in the area, regardless of the conflict.  

On the 28th of February 2000, former Swedish Prime Minister Carl Bildt joined the board of directors of Lundin Oil AB to consult on geopolitical events.  Mr. Bildt has been called as a witness by the prosecution and the significance of his presence on the board and any involvement in the company’s operations will presumably be detailed at a later date. On the 7th of April 2000, Lundin Oil AB reiterated to their shareholders that their operations in Block 5A were one of the company’s most important business ventures. Block 5A was also the largest concession owned by the company at that time. According to the prosecution, these events further indicated that the senior executives of Lundin Oil AB were evidently not discouraged by the unstable security situation in the Block. To reinforce this notion, the prosecution showed a letter from Lundin Oil AB to their shareholders, in which representatives of Lundin Oil AB wrote “[I]n conclusion, we are expecting 2000 to be a very exciting year.”  

Renewed Offensive Military Operations

Despite the optimism expressed by representatives from Lundin Oil AB, the prosecution maintained that 2000 would turn out to be one of the most violent years in Block 5A to date.  

The prosecution described the security situation in Block 5A in January 2000 as being relatively calm. The Block was at that time largely controlled by rebel groups not aligned with the Sudanese government. This, the prosecution alleged, was due to many previously regime-allied officers, such as Peter Gatdet, abandoning the government’s forces following the breach of the Khartoum Peace Agreement. However, because the Block was largely out of military control, the Sudanese government had to plan for further military offensives in order to guarantee security for Lundin Oil AB in accordance with their agreements.  

Therefore, on the 7th of February 2000, the military entered into rebel-controlled areas and initiated the offensive military operations which are detailed in point 6b of the indictment. To move their troops over a river crossing, the military used a barge provided by Sudan Ltd. The prosecution cited reports from international aid organisation World Food Programme (WFP), which voiced concerns that WFP’s ability to distribute emergency food supplies had decreased since the military’s advance, as well as noting that 2000 internally displaced people – mainly women and children – had arrived in Bentiu. Regardless, due to the declining stability in the region, WFP had to evacuate all their personnel from Bentiu, limiting them to solely emergency operations in the area.   

During the offensive military operation, the Sudanese army accidentally bombed the Thar Jath rig site on the 16th of February 2000. Following this incident, the government profusely apologized to the company, admitting to Lundin Oil AB representatives that the bombs had been designated for a village 40 km south of Thar Jath. In internal security reports from Sudan Ltd., H&SE-personnel assumed that the intended target of the bombing had likely been the civilian village of Koch. They stated that an attack on the village would have been damaging to rebel leader Riek Machar, whom the government needed to weaken in order to clear the road being built by Sudan Ltd. under the aforementioned “Security and road-agreement.”  

A week later, two meetings took place between Sudan Ltd. and the government to address the attack on the rig site. Both Ian Lundin and Sudanese Minister of Energy and Mining, Awad El Jazz were present. Throughout the meetings, Ian Lundin presented several conditions that the Sudanese government needed to meet for Sudan Ltd. to resume operations in Block 5A. These conditions included the government providing written assurances that Sudan Ltd.’s operations in Block 5A would be given the highest priority to ensure their safe conduct.  He also asked for a further 12-month extension to the first commitment period of the EPSA, that seismic operations would be delayed until next season, and that a rig road previously agreed upon would be finished by March 15th at the latest. The prosecution highlighted that Ian Lundin did not, however, threaten to invoke force majeure as a consequence of the attack, even though the prosecution implied the incident would have enabled them to do so under the terms of the EPSA. 

These conditions – which the prosecution referred to as demands – formed the basis of point 9d of the indictment. The prosecution argued that in presenting these terms to the Sudanese government, Ian Lundin aided and abetted the Government in carrying out their subsequent offensive military operations, since the attacks were carried out to comply with his demands.   

Continued Security Concerns

The prosecution held that the Sudanese army continued its offensive military operations following the bombing of the Thar Jath rig site, as detailed in point 6b of the indictment. An internal security report from the 1st of March 2000, by Canadian oil company Talisman, which was then operating in the concession blocks surrounding Block 5A, expressed concern that civilians from that point on had become legitimate military targets. The author of the report stated that, “[I]f [he] was a security advisor for Sudan Ltd., [he] would recommend that work be suspended for the season. If they do go back to work, there will be more serious incidents and there will only be a matter of time before an expat gets killed. It will take this to get everyone’s attention.”  

The prosecution also presented reports from Sudan Ltd., stating that additional troops had arrived in the area, and that the security level for Block 5A should remain at the highest level – immediate evacuation. “Due to the very high level of military activity in the area […] activity in the block remains suspended.” The prosecution argued that these reports indicated that in the spring of 2000, the military still did not have full control over Block 5A, which had led to the government not being able to fulfill their obligations towards Sudan Ltd. However, the military seemed to be mobilizing additional forces in order for them to meet their commitments.   

The World Starts Taking Note of Lundin Oil AB 

It was around this time, in the spring of 2000, that the world started taking note of Lundin Oil AB’s operations in Block 5A. During the previous years, international reports from the UN and NGOs, as well as international media, had begun to cover the Sudanese military’s methods of warfare, as well as the alleged connection to the oil industry, but Lundin Oil AB’s name had largely been left out of such coverage. However, by May 2000, Lundin Oil AB was identified as one of the companies active in the region.  

On the 3rd of May 2000, Amnesty International published a report detailing the oil industry’s connections to the human rights violations taking place in Sudan and the effect it had had on the civilian population. The report claimed that “[O]il and control of the oil-rich areas in the south of the country are central to the armed conflict which continues to devastate the lives of countless civilians in Sudan.” The same day, two interviews were published in the Swedish newspapers “Finanstidningen” and “Dagens Nyheter”. The articles were both written in response to the report from Amnesty International as well as a new documentary by Bengt Nilsson, covering Lundin Oil AB’s operations in Block 5A. Ian Lundin was quoted in both, stating: “We do not want to get involved in politics. We cannot control how the government uses the revenues from oil exploration, but to the best of my knowledge 99 % of it goes to paying international debts and building infrastructure. The Sudanese regime is not that oppressive – there is freedom of speech in the country.” He also contested the criticism, asking: “The United States of America has also received criticism from Amnesty – are companies not supposed to invest there either?”  

However, Ian Lundin’s statement sharply contradicted the images featured in the aforementioned documentary, which the prosecution presented to the court. In one particular scene, a child soldier could be seen listening to Ian Lundin giving a speech at the inauguration of a new bridge built by Lundin Oil AB in cooperation with the Sudanese Government.  

The prosecution alleged that the media attention led to Lundin Oil AB having to develop a new public relations strategy for the upcoming year. Christine Batruch, who has been called by the prosecution to testify in the proceedings, wrote a report for Lundin Oil AB following the coverage in May 2000. In 1999, she was employed as a consultant for Lundin Oil AB and was later hired as the company’s Corporate Social Responsibility advisor. Quotes from the report were cited by the prosecution, among them the following excerpt: “The exploration of oil from Sudan while the country is at war is attracting both foreign presence and negative attention. As indicated in the December report, until Lundin Oil became the object of media attention there was no reason in attracting it by launching a PR action. […] Given the latest development, the company is required to opt for a new strategy.” Batruch’s recommendation was for the company to adopt a “wait and see-policy” during the rainy season to determine whether there would be any significant developments requiring more drastic action, rather than to pull out entirely of the region. In the report, Batruch did note that the “pull-out” option was the favored position of many NGOs, as well as a legally viable option due to the force majeure clause in the EPSA. However, she did not consider this option to be economically viable since Sudan was one of the key areas of development within Lundin Oil AB.  

The prosecution held that these responses to the international critique showed that Lundin Oil AB, despite the serious allegations and warnings from both international organisations and their own security personnel, tried to downplay the alarming threats to both civilians and the company in order to continue their operations in Block 5A.      

Next Report

In the next report, we will continue to provide coverage of the prosecution’s upcoming presentation on the substantive aspects of the Lundin Oil Trial.