Bite-size Case Study

Talisman and Sudan: the role of multinationals in conflict zones

Published on May 29, 2017 Originally recorded 2011   4 min
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As we are always being reminded, businesses operate globally. International relations and politics are no longer just the domains of nation states, big multinational companies are also concerned with international politics and order. They are not above conflict of national interest and can be partisans of particular countries. There may be a few companies that are transnational and are truly separate from national interest and are citizens of the world. Most multinationals, however, have their origins and their loyalties to particular countries. Historically, multinationals were rooted in countries that developed in the West and Japan. But now companies such as Tata which has its origins in India have joined the phalanx of global corporations. Conflict, disorder, and a lack of the rule of law between and within states are not good for business. But corporations may still need to do business in regions and countries where those things are present either because such places happen to be the source of materials the corporations consume or simply because corporations need to operate within them to expand their markets. This can create dilemmas for companies when professed commitments to being socially responsible and strategic necessity clash. If a company finds itself operating in a country in which there is the conflict and absence of human rights or corruption, how should it respond? This is not a simple question to answer as the following example illustrates.
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Talisman is a Canadian oil company that was active in Sudan, a country that has been suffering a civil war between its Muslim north and its Christian and animist south for two decades. Talisman was charged by human rights groups that its presence exacerbated the civil war, that the money it paid for the oil was used to buy arms, and that its oil operations had displaced thousands of people. In 2003, in response from criticism from NGOs and the international media, Talisman withdrew from the Nile Petroleum Operating Company, the NPOC, which it owned in partnership with the China National Petroleum Corporation, PETRONAS, the Malaysian oil company, and the Sudanese state-owned oil company. Talisman sold its share of NPOC to an arm of India's Oil and Natural Gas Corporation. The organizations that then owned NPOC were all state-owned. Therefore, they do not raise their capital on the international markets nor are they accountable to shareholders. Seymour, in 2003, argued that these organizations benefited from the political turmoil in Sudan which acted to keep their western competitors out, a legitimate concern on their part because since the peace deal that brought the civil war to an end in 2005, western oil companies have shown a renewed interest in Sudan. Seymour also argued that because the companies that owned NPOC are themselves owned by governments which are often intolerant of critical voices within their own countries, these corporations are immune to the demands of human rights groups, such as having encouraged Talisman to quit Sudan. Seymour expressed it on page five of his article "Talisman is out... What Now?" In the North-South Institute biannual newsletter and I quote, "With the sale of Talisman's share, a company that its critics had ensured had an interest in attempting to moderate the government of Sudan's policies has left. What remains are companies that actively support the government of Sudan and its war against southerners, with all its attendant human rights abuses. The moral calculus is thus vastly more complex, and our celebration of Talisman's departure utterly displaced."
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Talisman and Sudan: the role of multinationals in conflict zones

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