When Talisman Energy purchased a 25 per cent stake in the Greater Nile Petroleum Operating Company (GNPOC) in Sudan for C$278 million ($290 million) in 1998, the Canadian oil and gas producer was almost immediately battered by shareholder activists who believed oil production from the project was providing financing that was prolonging Sudan’s civil war.
In November 2001 the Presbyterian Church of Sudan filed a $1 billion class-action lawsuit in the US, alleging that Talisman had helped Sudanese government officials ‘bomb churches, kill church leaders and attack villages in an effort to clear the way for oil exploration’. The company’s reputation had been tarnished, and it had to act.
Although Talisman tried to address the issue by voluntarily preparing annual ‘corporate responsibility reports’, developing a GNPOC Code of Ethics, implementing human rights training and openly complying with the International Code of Ethics for Canadian Business, selling the tainted assets and starting a campaign to restore the company’s reputation were the only real fixes for the problem.
In October 2002, the company announced a deal to sell its interest in GNPOC. In a statement, Talisman president and CEO Jim Buckee underlined the major reasons why: ‘Talisman’s shares have continued to be discounted based on perceived political risk in-country and in North America to a degree that was unacceptable for 12 per cent of our production. Shareholders have told me they were tired of continually having to monitor and analyse events relating to Sudan.’
Buckee also used the sale of the assets to establish Talisman’s commitment to CSR. ‘We have long argued that Talisman’s presence in Sudan has been a force for good and we have taken steps to ensure that the benefits created through our involvement will continue to improve the lives of the people of Sudan both now and in the future,’ the statement read.
Talisman made good on Buckee’s promise by funding medical assistance, shelter, clean water and vocational training projects in Sudan, as well as in other under-developed areas around the globe, all while the genocide lawsuit against the company was winding through the US courts. The company also continued to issue annual corporate responsibility reports and conducted risk assessment studies on internal conflicts, employee safety, human rights and security issues, as it did prior to doing business in Colombia.