The activities of Eni in Congo-Brazzaville

The activities of the Italian energy giant Eni in Congo-Brazzaville are an interesting example of the dubious behaviour of European transnational corporations when operating abroad, in particular when operating in developing countries.

 

An overview of the situation

In May 2008, Eni announced a new agreement for $ 3 billion investment in tar sands, palm oil for bio-diesel and electricity in Congo-Brazzaville. Eni ranks among the world's largest companies in the energy sector and has a strong presence in Africa with a market share of 1 million barrels per day and reserves of 5 billion barrels.

In terms of profits Eni is the 26th largest company in the world. The Italian government, which holds 30% of the shares, remains the largest shareholder of Eni. Congo-Brazzaville is a country where 70% of the population lives below the poverty line although the country is the fifth largest oil producer in sub-Saharan Africa. The country has a fragile ecosystem, with two thirds of the country covered with tropical forests which are a key resource for the local population and play an essential role in protecting the climate balance.

None of the terms of the agreements between Eni and the Congolese government have been made public because of a confidentiality clause in the contract. This goes against Eni's ethical code which states that " Eni’s business and corporate activities has to be carried out in a transparent, honest and fair way" (p. 11) and "Eni undertakes to provide outside parties with true, prompt, transparent and accurate information" (p. 21). The secrecy of the agreements is even more worrisome considering that Congo-Brazzaville is a country with one of the highest corruption rates in the world.

The agreement was signed without consulting the civil society in the regions involved in the agreement. This also violates the ethical code of Eni that affirms that "systematic methods for involving Stakeholders are adopted, fostering dialogue on sustainability and corporate responsibility" (p. 13) and "Eni encourages dialogue with Institutions and with organized associations of civil society in all the countries where it operates" (p. 21). Farmers whose land has been destroyed to enable exploratory missions have complained that they had not been warned in advance of the destruction of their land and that they have not received any compensation, either from Eni or from the Congolese government.

The extraction of tar sands

The agreement between Eni and the Congolese government foresees the extraction of tar sands in an area of 1790 square kilometres. Producing a barrel of oil extracted from tar sands generally causes an emission of greenhouse gases 3 to 5 times higher than "normal" oil extraction. Moreover, the production of a barrel of oil extracted from tar sands requires the use of 2.5 to 4 barrels of water. In Canada, the only country in the world where it is practised at the moment, the extraction of oil sands has led to pollution of water and the environment, the destruction of forests and increases in diseases such as cancer. Also, once land was used for the extraction of tar sands it was practically impossible to reuse it or to cultivate it again.

The chairman of Eni, Paolo Scaroni, stated in public that Eni would not extract tar sands from tropical areas in the Congo. However, according to an analysis made by the Heinrich Böll Foundation[1] of Eni's internal documents, at least 50% of the area designated for the extraction of oil sands is either tropical forest or agricultural land.

In Congo there are neither laws nor the means to force multinationals such as Eni to protect the environment. One can only rely therefore on the conscience of the companies.

The practice of gas flaring

Eni continues the practice of gas flaring in the Congo. Gas flaring is a practice that oil companies use in oil fields, where gas emerges together with the oil and where it is more profitable to just burn the associated gas, rather than capture it for use or re-injection into the soil. The practice is highly controversial because of its impact on the environment and the greenhouse gas emissions that it causes. In the West, 99% of the gas is used or re-injected into the ground, but in Africa the practice of gas flaring remains widespread. In 2009 it was estimated that flaring in the M'Boundi oilfield operated by Eni since 2007 burned more than 1 billion cubic meters of gas per year. Eni formally declares its commitment not to practise gas flaring anywhere in the world, but unfortunately has not yet made the necessary investment to end this practice in the Congo. In 2007 a law prohibiting the flaring of gas was adopted in Congo. However, the law provides the possibility of special permits that allow this practice to continue. Because of the confidentiality agreement between Eni and the Congolese government, it is not known whether Eni has requested the special permit, nor which arguments may have been advanced to justify the request and under what conditions the permit was granted.

Residents in villages near the M'Boundi field - the direct victims of the consequences of gas flaring - have complained about the impact on their health and their land. Unfortunately Eni dares to deny that the gas burned in the Congo has adverse effects on health, arguing that the local population only suffers from typically tropical diseases. However, the testimonies received speak of bronchitis, respiratory problems, headaches, skin infections and other serious diseases and the pollution of rainwater and harvests.

Also the continuation of the practice of gas flaring is not in line with Eni's ethic code stating that "Eni’s activities shall be carried out in compliance with applicable worker health and safety, environmental and public safety protection agreements, international standards and laws, regulations, administrative practices and national policies of the Countries where it operates" (p. 39).  

The production of biofuels

Eni and the Congolese government signed a Memorandum of Understanding for the cultivation of palm oil on about 70,000 hectares. This investment should lead to the production of about 340 000 tonnes of crude palm oil a year. Unfortunately we do not have details of where the project is to take place. There is a strong concern that it could lead to the destruction of tropical forests or the forced displacement of local populations. All Eni has asserted is that tropical forests, agricultural areas and areas of high environmental value are excluded. In 2009 during a meeting with the Fondazione Culturale Responsabilità Etica Eni affirmed that the project would be carried out by a consortium with among others the Congolese Ministry of Agriculture and international organizations including the European Union. However, the EU delegation in Congo seems to be totally unaware of the existence of such projects and of such a consortium.

 

 

AEFJN's activities

In March 2010 the Italian antenna of AEFJN sent a letter to Eni expressing its concern about the impact that the activities of Eni in Congo would have on the local population and the environment. A similar letter was sent to the Italian Ministry of Environment, as the Italian government is the main shareholder of Eni. In his letter of reply Eni merely generically affirms that "the presence in Congo is based on the desire to contribute to sustainable growth and sustainable in accordance with local stakeholders" without providing any specific answer to our concerns. The Italian government has not responded to date. The Italian Antenna also participated in a debate on Eni's activities abroad, organised during Terra Futura in Florence in May 2010. The international secretariat of AEFJN in Brussels met with several Italian members of the European Parliament in order to express its concerns about Eni's activities.


Thomas Lazzeri