South Sudan and the battle of winning the oil lottery

Oil production has been the key major factor in the development of South Sudan since July 2011. Even then, oil production was linked with serious human rights abuses, such as forced displacement and environmental pollution according to human rights groups.
Independence brought the opportunity to ‘get it right’, yet the challenges remain enormous. As the legal framework evolves, the government is keen to attract investment for the development of the country and has started to create a conducive environment for investments.
Those plans were jeopardized by the outbreak of the coronavirus and expert started predicting what that could mean for the South Sudan economic growth. Many, who predicted a doom for the country were probably put to shame after a projected revival possibility uncovered by Africa Oil & Power.
South Sudan has surprisingly exhibited resilience and capacity to implement its oil development plans by the year 2021. But it will not be all milk and honey as a lot of work still needs to be done to improve the legal framework for the protection of the environment and the interests of communities.
According to a qualitative baseline assessment commissioned by the Catholic Organization for Relief and Development Aid (Cordaid) in three counties of Upper Nile State and Unity State to gain a better understanding of the institutional context, the current stakeholder dynamics and the impact of oil production at the community level remained a cause for concern.
Through a participatory approach the baseline assessment marked the beginning of Cordaid’s long-term engagement with the communities and civil society organizations, as well as with the most relevant stakeholders such as the government and the oil companies.
As the oil industry is expected to pick up again, the human health should not deteriorate. It is compelling to say that a constructive and inclusive dialogue between communities, state institutions and oil companies is possible and urgently needed to prevent social and environment-related tensions as previously witnessed.
The Cordaid assessment was clustered in five areas, namely: people’s perception of the oil business; the benefits of oil production; the various impacts of oil production; mitigation and prevention of harm measures; and the current state of stakeholder engagement.
The perception of the communities in the three oil-producing counties, the organization says is shaped by high expectations, lack of information, false information, bad experiences and fears. “The people whom the team met in all three counties felt that the losses and problems caused by the oil business outweighs by far the benefits.”
Astonishingly, the assessment team found few benefits related to oil production. Access to employment in the oil companies is very limited and, being a highly capital-intensive industry, the oil companies do not need many labourers.
In addition, very little development has been realized with the oil-producing states’ share of revenue. The social infrastructure and services offered by the oil companies are limited and there is widespread dissatisfaction regarding their quality. The opportunities that come as positive side effects of the oil business are still very limited.
Last year, The Associated Press uncovered shocking environmental impact of oil business on the health of members of the community in form of health defects, prompting the government to take relevant measures to eliminate that concern. However, no comprehensive research was done to back such a claim.
Cordaid says it is very likely that toxic produced water, drilling muds, oil spills and chemicals have polluted the environment in and around the oil fields. Oil production pollutants are suspected by communities to have caused many new health problems, such as increased infertility in women, a higher number of miscarriages, and eye and skin problems.
According to medical staff in Melut and Koch, a link between the pollution caused by oil production and some of these health problems cannot be excluded. Communities are not made fully aware of hazards associated with the production of oil.
As the country plans a further development of the industry, this should be synchronized by legal framework which protects residents of the oil-producing communities from the danger of pollution. This way, the boom of the oil industry will work to the advantage of both the government and the citizens.