Investors must act to ensure respect for human rights as Sudan oil war trial looms

Two executives of the Swedish oil company Lundin Energy are being investigated as suspects in a war crimes investigation into alleged involvement in the Sudan civil war. A motion tabled at the company’s latest AGM accused it of seeking to deny and delay justice for victims of the war and proposed that the company apply a human rights approach to the legal defence strategy. Investors must seriously consider their exposure to human rights risk as this landmark case draws near.

More than 20 years have passed since Lundin Energy (then Lundin Oil) was prospecting for oil in Sudan. At the time a brutal conflict was raging in the country. According to the 2010 report Unpaid Debt, approximately 160,000 people were forcibly displaced and 12,000 killed in the Lundin oil concession area in Sudan where the presence of oil companies changed the conflict into a war for oil.

These atrocities have been thoroughly documented by reliable sources and led the Swedish Prosecution Authority to initiate an investigation into links between Lundin and reported war crimes. In 2016, the CEO and Chairman of the company, Alex Schneiter and Ian Lundin were designated as suspects in the investigation.

‘Infringes on basic human rights of victims’

Formal charges against corporate actors involved in aiding and abetting war crimes are exceptionally rare, but after a decade of investigations the prosecutor is now preparing to bring charges in this landmark case.

According to Lundin Energy shareholder Egbert Wesselink, from Dutch peace group PAX, the company’s defence lawyers have long sought to have the case dismissed or delayed through a “hostile and uncooperative legal strategy” that “infringes on basic human rights of victims”. To address this, he proposed in a motion to the AGM on 30 March 2021:

“… that the company aligns its legal defence strategy with its human rights policy. In human rights cases, its legal counsels will equally defend and protect the right of suspects to a fair trial, and the right of victims of investigated abuses to access to justice and prompt redress. In the ongoing war crimes investigation, this includes immediate and unrestricted sharing with the Prosecution Authority of any information that is relevant to the investigation, and avoidance of delays.”

Powerful institutional investors

Since its very first days in Sudan, Lundin had the backing of powerful institutional investors, including major Swedish banks and state pension funds. Research published by Swedwatch in 2017 shows that many of these actors invested in the company after connections between Lundin and war crimes were made public.

“The fact that these investors are not acting on the serious allegations against the company makes you question if and how they assess how their investments impact human rights,” says Swedwatch Programme Officer Olof Björnsson.

In recent years, many Swedish investors have reduced their holdings in Lundin, but a number of international investors, including major British and American banks and pension funds, continue to own shares in Lundin and support the company’s management and its policies.

When the trial starts, it will send a strong signal to these and other investors, to identify and address their exposure to human rights risks, especially regarding extractive companies who operate in conflict zones.

“Swedwatch welcomes a legal process that can shed light on the company’s alleged involvement in the atrocities of the oil war in Sudan. The victims of the war in the Lundin concession area have waited decades for justice,” added Björnsson.