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Oceanor received NORAD aid despite expert warning: - Scandalous export of technology to Indonesia

With more than 30 million NOK aid from NORAD, Oceanor has sold its high-tech environmental surveillance system to Indonesia. According to sources in NORAD, the aid funds were given in spite of the expert section being very critical to Seawatch and advised not to support the project, due to it being «totally  without developing effect for Indonesia.» NORAD on its side denies that its experts were against giving support to the Seawatch project, but refuses NorWatch access to documents in the case.
Artikkelen er mer enn to år gammel. Ting kan ha endret seg.
With more than 30 million NOK aid from NORAD, Oceanor has sold its high-tech environmental surveillance system to Indonesia. According to sources in NORAD, the aid funds were given in spite of the expert section being very critical to Seawatch and advised not to support the project, due to it being «totally  without developing effect for Indonesia.» NORAD on its side denies that its experts were against giving support to the Seawatch project, but refuses NorWatch access to documents in the case.

By Harald Eraker

Shortly after prime minister Gro Harlem Brundtland's official visit to Indonesia in the fall of last year, Oceanor signed a contract to deliver the company's Seawatch system to the country, worth more than 100 million NOK. The project consists of buoys with advanced measuring equipment, which via satellite monitors sea conditions relevant to weather forecast, algae warning and oil emergency measures etc.

The Indonesia contract implies that Oceanor shall supply 12 Seawatch buoys, which are to be placed in the areas around the country's numerous islands during the course of the next three years. Seawatch is marketed by Oceanor and Norges Eksportråd (the Norwegian Export Council) as environmental technology, an area that the ex-Norwegian Minister of Energy, Jens Stoltenberg, has emphasised when defending Norway's trade relations with Indonesia.

Last year, NORAD granted 30 million NOK worth of export credits in support of Oceanor's plans in Indonesia. The entire project is estimated to cost 105 million NOK.

NorWatch can now reveal that there was strong professional opposition to support Oceanor and the Seawatch project within NORAD. This is a case where secrecy and fear of coming forward in public dominates.

White whale
According to acting director of NORAD, Arild Eik, Oceanor's application for aid to export the Seawatch project to Indonesia was presented to NORAD's Department of Industry and Business. However, before aid was given, NORAD's expert section got the application on their desk.

According to sources that were close to the decision making process, the expert section was opposed to NORAD giving financial support to the project.

- The Seawatch technology is very advanced and complicated. Indonesia does not have the institutional premises required to use the data gathered from the Seawatch buoys in a meaningful way. This is experimenting on account of aid money; a project totally without developing effect in the country. I will characterise Seawatch as a «white whale», a NORAD source tells NorWatch, referring to the expression «white elephants», which through the years has been used to describe development aid projects that have aimed and fired far above target.

Denied insight
Sources within environmental research and business also have strong opinions about the Seawatch project.

- Seawatch is incredibly complicated high technology, which Oceanor has received a lot of money to develop. Selling the technology in Western countries has been a slow affair, and now it is being dumped in developing countries funded with developing aid money, one of the industry sources tells NorWatch.

The only person in NORAD who is willing to comment is acting director Arild Eik. He claims that NORAD's expert section never was opposed to the financial support, but wanted the issue looked further into.

- We put much emphasis on advice from our expert section. There has to exist very strong arguments in order for us to act against its recommendations, but we are not tied by their advice, Eik says.

At the same time, he denies NorWatch insight into the section's advice, arguing that they are internal documents.

Sources in NORAD repeat that the Department of Industry and Business promised support in spite of the experts' advice against.

- Of all the environmental projects that have been presented to NORAD, this is the stupidest, says a NORAD source.

With doubt
NORAD promised Oceanor financial support on October 17th last year. The following month, prime minister Brundtland was on an official visit to Indonesia. A couple of months later, Oceanor signed a contract with the governmental institute for the implementation of technology (BPPT) in Indonesia.

- I will not say that Gro (Harlem Brundtland) had an impact with regard to the deal that was made, but she has influenced the speed at which the case was processed, says the director of Oceanor, Stein Atle Andersen. He says that he is not informed about NORAD's internal evaluations, and will not comment on the criticism from the expert section.

- Our position is that we now has a product which enables us to do something with the environmental problems in Indonesia. We clearly are of the opinion that Seawatch technology is not too complicated for the country, Andersen says.

NorWatch has not been given insight into the final documentation either. However, the reports from Nordic Consulting Group (NCG) and Kystdirektoratet (the National Directorate for coastal matters), the two external evaluations of Oceanor's Indonesia application, are available.

The NCG report, dated January of 1995, «recommends, with some doubt, that Oceanor's application for export credits be granted».

Ten jobs
However, NCG writes in its conclusion that the following questions must be answered «before one can recommend that the application for export credits be granted»:

a) Will the project lead to a better protection of the environment, and a better use of the resources?

According to NCG, the project in itself will not lead to an improved environment or protect the existing environment. The aim of the project depends on the data reaching the users, and their ability to make use of the information.

«This should be subject to further evaluation before a financial agreement is made» NCG concludes, and refers to the criticism towards Seawatch's availability raised in connection with Oceanor exporting Seawatch to Thailand;.

b) Is the project sustainable?

NCG writes in its report that the Seawatch project in itself is not economically sustainable, which means that it is totally dependent on support from the Indonesian state after the project period of three years.

«Without a very clear commitment from the Indonesian authorities to grant the necessary financial support in the future, the project should not be started.», NCG concludes.

c) Will the project create new jobs and industry in Indonesia?

NCG's conclusions make depressing reading. The report estimates the number of new jobs to be ten (10), and expects that these jobs will not benefit the poor.

d) Will the project improve the living conditions of the poor or of the women?

It is vaguely suggested that the Seawatch system possibly and indirectly may lead to a better and more secure use of the fish and shrimp farms - as well as improving the conditions for the tourist industry - and that this possibly may lead to more new jobs and improve the living conditions for the coastal population.

Good for Norway
c) Will the project lead to positive side effects?

This is the only area of discussion which is answered positively by NCG: «If the Seawatch projects in Thailand and Indonesia is successful and according to expectations, this may lead other countries in Asia to chose this system for surveying their marine areas... Therefore, it appears that there is a good market potential for a Norwegian high technology product in Asia.». Ergo; the Seawatch project at least serves Norwegian trade and industry interests.

Nordic Consulting Group have, as described above, recommended support with some doubt, but at the same time pointed out areas which need further evaluation, and conditions for the project to receive support. However, according to director Halvard Lesteber with NORAD's section for industry and commerce, no further external evaluations have been made after the reports from NCG and Kystdirektoratet.

Arild Eik, acting director of NORAD, finds that all premises of any significance in order to support the Seawatch project are in place.

- NORAD has followed up on NCG's questions through contact with Indonesian authorities. We have not done further evaluation, but have considered Indonesia's follow-up measures to be serious and adequate, says Eik. He has no written documentation to share with NorWatch on this.

Specifically to NCG's questions, Eik says:

- Indonesia itself has paid 93 million NOK for Seawatch, and included the project in the country's new 5-year plan. This is evidence that the project has a high priority, and we have no reason what so ever to doubt that they will drive the project forward. What exactly does NCG mean by an economical guarantee from Indonesia for future operation of the project? A closed account with money allocated for Seawatch in the future? NORAD can not ask for anything like that.

Concerning the few jobs NCG believe the project will lead to, Eik says that primarily, Seawatch is an environmental project with long-term benefits. The same argumentation goes for the issues regarding the poor and women. As such, Eik does not agree with NCG's vague suggestions.

- We see it as likely that Seawatch will have long-term positive consequences, which will benefit the poor and women as well, the acting director of NORAD concludes.

No insight
NCG points out to NorWatch that as NCG is employed by economists, they mainly have looked into the financial sides of the Seawatch project. Consequently, neither the NCG nor the Kystdirektoratet reports can be seen as environmental impact assessments of the Seawatch project.

In other words: The only environmental evaluation of the project is the one carried out by NORAD's own expert section; an evaluation which concluded against giving approval to Seawatch's Indonesia application, according to internal NORAD sources.

- If NORAD argues so strongly that this is an environmental project, why will not Arild Eik make public what the experts has expressed about the issue, one of the NORAD sources asks rhetorically.

Norwatch Newsletter 11/96