Schibbye and Persson were wounded and kept in the desert for a mock film used in their trial. Photo: Uppdrag Granskning/SVT
Handelsbanken sells, Swedbank holds out

Africa Oil and the banks: Hold or sell?

6:45 min

The Swedish journalists Martin Schibbye and Johan Persson travelled to Ethiopia to investigate the company Africa Oil - their subsequent imprisonment shed light on the inner workings of the African country.

But their ordeal in the conflict-ridden Ogaden region has also called attention to the very different views that Swedish financial institutions have when it comes to investing in companies that operate in conflict zones.

In July 2011, the two Swedish journalists were captured in Ethiopia just after crossing the border. They wanted to investigate refugee witness' claims that the Ethiopian military had cleared the region to make way for oil drillings.

Schibbye and Persson were particularly focused on the oil and gas company Africa Oil, which belongs to the Swedish Lundin Group. The Lundin family is Africa Oil's largest shareholder.

Last year, Radio Sweden reported that two Swedish banks had mutual funds that invested in Africa Oil despite the banks' guidelines regarding human rights. We have now learned that one of the banks, Handelsbanken, sold its shares in Africa Oil this past spring.

In a written statement, Frank Larsson, a senior advisor at Handelsbanken, says the bank had sold their shares in Africa Oil because of "an overall assessment of the company's future challenges and that the complicated operation in Ogaden was factored in".

But the other bank, Swedbank, has chosen to continue to invest in Africa Oil.

Anna Nilsson, the head of Corporate Social Responsibility at Swedbank Robur, says the bank has met with the company a number of times over the past six months to discuss their risks in the area.

"Of course it's a very sensitive area with high risks when it comes to human rights and we expect the company to take that seriously," she says.

The violence continues

But new evidence has come forth in recent weeks that bring attention to the human rights abuses that are still being committed in the Ogaden.

Swedish Television recently aired evidence from a defected Ethiopian civil servant that shows footage of entire villages in the Ogaden that have been emptied of people through executions and flight from terror.

"The first thing is, that it is well known in the Ogaden region about the genocide, and the second thing is that I was close to those people who were doing those kind of things," Abdullahi Hussein, the defected civil servant, told Swedish Television.

And Swedish Television reports that the unit that arrested and wounded Schibbye and Persson, a task force formed three years ago called the Liyu police, have spread terror through mass executions in the Ogaden.

"This year in March 2012 we found evidence that the Liyu police carried out a reprisal operation in the Gashamo area on three villages, in which they summarily executed several men. They also killed other men and they arbitrarily arrested dozens of men," said Laetitia Bader at Human Rights Watch.

Since their pardon, Schibbye and Persson say the Ethiopian military forced them to confess to working with the ONLF rebels, a group fighting for independence. They have said that Ethiopian troops denied them care and subjected them to mock executions in the desert. And video evidence backs their claims.

Despite recent reports that human rights violations may be ongoing in the Ogaden, Swedbank continues to invest in Africa Oil because is still thinks it can move the company in the right direction, says Anna Nilsson, at Swebank. "We are in dialogue and are making progress," she says.

But not all Swedish financial institutions agree with Swedbank.

Different companies come to different conclusions

Several large investors also sold their shares earlier this year in Lundin Petroleum, the company that spun off its oil concessions to Africa Oil in 2009. Among those who divested in Lundin Petroleum, were the pension company AMF, the city of Sundbyberg, a suburb of Stockholm, the trades union Handels, and the insurance company Folksam.

Folksam was especially vocal in their criticism of Lundin Petroleum for not allowing an independent investigation into the allegations that the company was complicit in human rights violations when exploring for oil in Sudan and Ethiopia.

"If we invested in Africa Oil we would certainly do a very close follow-up on their operations especially in Ethiopia, and I believe we would want to raise the same demand to them as we have to Lundin Petroleum," says Carina Lundberg Markow, the head of Responsible Ownership at Folksam. "That they should conduct an internal and independent investigation to guarantee that they haven't been involved in any violations against human rights."

Swedbank says it has met with NGOs in Sweden to discuss both Africa Oil and the Ogaden region. But they refuse to say which NGOs they have spoken to.

Africa Oil maintains that it has not committed any human rights abuses. In a written statement, Africa Oil writes: “To say that that we are operating in areas that are restricted, where others fear to tread, and where human rights abuses are committed, is wrong. We operate in the Afder Zone, a peaceful area of the geographically large Ogaden basin. We do not hide from the fact that the security for our operations is provided by the Ethiopian government, the internationally recognized legitimate authority in the country."

Reporter: Gabriel Stein

Our journalism is based on credibility and impartiality. Swedish Radio is independent and not affiliated to any political, religious, financial, public or private interests.
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