VZCZCXRO5343
OO RUEHGI RUEHMA RUEHROV
DE RUEHNJ #0596/01 3481317
ZNR UUUUU ZZH
O 141317Z DEC 09
FM AMEMBASSY NDJAMENA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 7508
INFO RUCNFUR/DARFUR COLLECTIVE PRIORITY

UNCLAS SECTION 01 OF 02 NDJAMENA 000596 
 
SIPDIS 
 
STATE FOR AF/C 
STATE FOR EEB/EPPD 
STATE FOR S/USSES 
 
E.O. 12958: N/A 
TAGS: AMGT BEXP ECON EINV ELAB ETRD KSEP SENV CD
SUBJECT: UPDATE ON AWARD FOR CORPORATE EXCELLENCE ENTRANT 
ESSO/CHAD 
 
REF: STATE 125948 
 
¶1.  (U)  This message responds to request in reftel for 
current information about past-year candidates for the 
Department's Corporate Excellence Award, in the case of 
Embassy N'Djamena, Esso Exploration and Production, Inc., 
Chad (Esso Chad). 
 
¶2.  (U)  A) Is the company still working in the region? 
Answer:  Yes. 
 
¶3.  (U)  B) What community-based programs and corporate 
social responsibility activities has Esso Chad continued or 
added in the region since being selected for the ACE program? 
 
--Good corporate citizenship:  Esso Chad remains the largest 
and most visible U.S. commercial presence in Chad and the 
region.  It continues to make significant contributions to 
the financial stability and welfare of communities where its 
operations are located.  In 2009, it held over 460 public 
consultation sessions with Chadian and Cameroonian citizens 
in its oilfield development and pipeline areas.  20,000 
people attended these and similar sessions during the last 
two quarters of 2008 and first two quarters of 2009.  Esso 
Chad is pursuing major community compensation programs for 
villages in its sector of operations.  The consortium's land 
use outreach plan represents one of the most thorough 
censuses of affected populations ever undertaken by a private 
firm in Africa.  Survey teams have now completed a two-year 
project to interview all 2600 households and map all land use 
in villages most affected by drilling and pipeline projects. 
All villages in the area of impact appear viable, with farm 
livelihoods intact.  Households most at risk due to 
preexisting social factors (e.g., widowhood, population 
crowding) have been "red-flagged" for intensive follow-up. 
Some villages in impacted areas have chosen to receive 
community compensation, which offers broad options ranging 
from school construction to water well drilling and 
reforestation.  Individual compensation permits options such 
as technical assistance with maintaining traditional 
livelihoods and housing construction.  Esso Chad's 
compensation plans have been undertaken in consultation with 
the World Bank, which prepares formal documentation. 
 
--Exemplary employment practices:  Esso Chad is one of the 
most highly respected international employers in Chad and 
Cameroon, and one of this Embassy's formal comparators for 
compensation to locally-engaged staff.  Chadians and 
Cameroonians held nine of ten jobs with Esso Chad at mid-year 
2009, with wages for the 12 months preceding July 2009 
totaling approximately $53 million.  Seventy per cent of 
Chadians and Cameroonians working for Esso Chad occupy 
skilled or semi-skilled positions, and 6 per cent are in 
supervisory slots.  Esso Chad is known for its on-the-job 
training programs, including in English language training. 
As workers who can function in English are at a premium here, 
Esso Chad has effort much effort in providing teachers and 
course materials to its workers.  This will leave a legacy 
from which other American companies can benefit in the 
future.  Esso Chad has upheld American standards in terms of 
worker entitlements to wages, safety and health (see below). 
 
 
--Provision for safe and healthy workforce:  Esso Chad 
remains a leader in the nation in insisting that all workers 
be trained in safety procedures and in providing them with 
protective equipment and clothing.  The firm's overall safety 
record remains well ahead of industry benchmarks: its 
drilling operation maintains a record of no lost time since 
drilling began in 2000 (24.6 million work hours without a 
major on-the-job accident).  In mid-2009, following two 
accidents resulting in four lost-time injuries in 
non-drilling sectors, the firm's safety advisers launched an 
OSHA-based enhanced accident prevention program.  Esso Chad 
provides free health care for its employees at project 
clinics, a valued job benefit in both Chad and Cameroon, 
where rural health services are uniformly rudimentary. 
Project clinics provided 28,200 health care visits to workers 
in the four quarters preceding July 2009, the bulk of these 
involving health conditions unrelated to employment.  Esso 
Chad has devoted considerable attention to malaria reduction 
among its workforce, with the malaria incidence rate per 
200,000 workers dropping from 12 to 0.3 between 2002 and 
¶2009. 
 
--Responsible environmental protection and practices:  Esso 
Chad's environmental protection performance, always strong, 
has improved significantly over the past five years, with the 
monthly average for non-compliance situations dropping from 4 
per cent in 2005 to 0.7 per cent in the first half of 2009. 
(Definitions of non-compliance situations follow OSHA 
standards.)  This year, the firm has undertaken major 
spill-prevention projects along the length of its pipeline 
route from Chad's Doba oil fields in the southwest, through 
portions of Cameroon, to its marine terminal south of Douala 
in the Gulf of Guinea.  The 17 major locations where the 
Chad-Cameroon pipelines crosses rivers received their first 
five-year inspection this year; preventative retrofits are 
under way for nine high-priority valve locations following a 
small spill in 2008.  Esso Chad's new drilling projects -- 90 
new wells in 2009 -- have been undertaken in a manner 
designed to minimize land use impact. 
 
--Contribution to overall growth and development of the local 
economy:  In 2009, the Esso Chad consortium will expend 
roughly $1 billion, which includes $600 million in new 
capital investments and $400 million in operating costs, to 
continue oil exploration and production operations in Chad, 
whose total GDP is currently estimated to be around $16 
billion.  Esso Chad spends approximately $231 million for 
goods and services purchased on the local economy yearly. 
Esso is responsible for 60 per cent of Chad's oil output; oil 
revenues account for approximately 70 per cent of the 
nation's overall yearly income. 
 
--Innovative programs with measurable results:  As provided 
in Chad's national laws governing management of oil revenues, 
five per cent of oil-related income must be dedicated to 
projects in the oil-producing region.  These funds are 
maintained by a Chadian national body known as the Comite 
provisoire de gestion de revenues petroliers affectes a la 
region productrice.  Beginning in 2008, the Comite began a 
microcredit small business program, which has made loans to 
more than 400 local cooperatives with 6300 members. 
 
--Contributions to local science and technology:  In addition 
to investing in physical infrastructure projects such as 
construction of schools, Esso Chad has provided many schools 
in its area of operations with computers, and has inaugurated 
vouchering programs for gifted students.  It has also 
sponsored Chad's first Master's Degree program for engineers. 
 
 
--Compliance with U.S., international, and local laws:  Based 
on Chadian law, Esso Chad pays royalties of between 12 and 15 
per cent to the GoC on gross sales revenue from crude oil. 
Beginning in 2006, it has also paid income tax on net 
profits, as well as permit fees, duties, employee taxes, fees 
for work permits, etc.  Corporate income tax payments afford 
the GoC a major and needed revenue stream, considering the 
country's extreme poverty.  Embassy knows of no instances of 
Esso Chad's failure to comply with U.S. or international law. 
 It adheres to OSHA guidelines for occupational safety and 
health benchmarks, despite that these are far from prevailing 
standards in Chad or Cameroon.  Esso staff have been very 
supportive of the U.S. Embassy as a mission, and have 
collaborated closely with us on such matters as real estate 
exchanges. 
 
¶4.  (U)  C) In-country contact information for Esso Chad: 
 
Stephane de Mahieu, General Manager. 
Esso Exploration and Production Chad, Inc. 
Rue de Bordeaux. 
P.O. Box 694. 
N'Djamena, Chad. 
Telephone:  235 252-5064. 
 
¶5.  (U) Minimize considered. 
 
 
NIGRO