By Lisa Abend
http://www.time.com/time/world/article/0,8599,2001197,00.html

BP is not the only oil company in trouble these days. A report by an NGO that accuses Lundin Petroleum, a Swedish-owned company based in Geneva, of being complicit in war crimes committed in Sudan has led a public prosecutor in Sweden to open an investigation into whether any of Lundin's Swedish employees broke the law.

"The purpose of the inquiry is to investigate whether there are individuals with ties to Sweden who are suspected of involvement in crime," Swedish prosecutor Magnus Elving said in a statement released on June 21. The investigation, he said, was triggered by a report published on June 8 by a Netherlands-based NGO, the European Coalition on Oil in the Sudan (ECOS), that suggests that the Lundin consortium's decision to explore and eventually extract oil from a concession in southern Sudan known as Block 5A "set off a vicious war for control" in the area. Claiming that Lundin knew or should have known of the repercussions of its actions, the ECOS report also accuses the company of contributing material that would be used in the war and of working with security forces responsible for many crimes — from widespread displacement to mass rape — committed during the civil war. Lundin denies the allegations.

"It's gratifying that something is being done in Sweden to finally look into these allegations," says ECOS spokesperson Kathelijne Schenkel. "There are big clues to what was going on in Sudan, and for the last 10 years we've been saying, Okay, the home government of these companies should be looking into what happened there." Thus far, Schenkel adds, neither of the home countries for Lundin's partners in Sudan — Malaysia, home of Petronas, or Austria, home of OMV — has opened investigations.

The 1983-2003 Sudanese Civil War, in which the ethnically Arab, Muslim government of Sudan battled with non-Arab animist populations in the south, was fanned in part by rival factions' efforts to control the country's rich oil fields. In the Block 5A area alone, an estimated 12,000 people were killed or died of starvation and 160,000 were forcibly displaced from an original population of 240,000. According to a 2003 Human Rights Watch report, none of that area's displacements occurred until 1998 — a year after Lundin started oil exploration there.

That coincidence is one of the things that ECOS would like to see investigated. "We're not saying that Lundin intended to cause these crimes," says Schenkel. "We're trying to show that there's no way they could not have known that [their exploration] was going to exacerbate the war."

Lundin is also accused by ECOS of building roads and bridges that, while ostensibly constructed to access installations, enabled the Sudanese army to conduct attacks. And ECOS also raises questions about whether the company hired security forces it knew were implicated in the government's campaign against its citizens. "It appears again and again in the U.N. reports," says journalist Kirsten Lundell, who has written a book, Blood Oil, about Lundin's activities in Sudan and Ethiopia. "They relied for their own security on the army and local militia who had previously been involved in war crimes."

The risk of that kind of abuse prompted several governments and petroleum companies in 2000 to agree to a set of non-binding principles referred to as The Voluntary Principles on Security and Human Rights. "One of its key tenets," says Mauricio Lazala of the London-based Business and Human Rights Organization, "is that extractive companies should perform human-rights checks on its private security forces."

Unlike BP, Lundin is not a signatory of the Voluntary Principles. In a statement released to its shareholders on June 8, the company denied the accusations and upheld its commitment to peace in the area (The company referred questions from TIME to the statement). "We again categorically refute all the allegations and inferences of wrongdoing attributed to Lundin Petroleum in the report," wrote chairman of the board Ian Lundin. "We strongly feel that our activities contributed to peace and development in Sudan."

The investigation is particularly sensitive because Sweden's Foreign Minister, Carl Bildt, served on the board of Lundin during the years in question, which has led opposition politicians to call for him to stand down, at least until the investigation is complete. "I think Bildt should take time out as long as this investigation is underway," says Thomas Brodström, a Swedish member of parliament for the opposition Social Democrat party and former justice minister. "We've never had someone so high up in government accused of this kind of criminal activity. It's an embarrassment for Sweden, which is always talking about defending human rights."

Still, should the case go to trial, it may prove hard to prosecute successfully. An attempt to try the Canadian energy company Talisman in U.S. civil court in 2006 for human rights violations in Sudan was dismissed for lack of evidence. And as Kevin J. Heller, a Senior Lecturer at the University of Melbourne's Law School, who has written on Sudan, emphasizes, negligence — the contention that Lundin should have known better — is not a basis for prosecution in international criminal law. "The prosecution has to show that the company was aware of a substantive likelihood that their actions would result in a crime, or that they aided and abetted the commission of those crimes," he says.

For journalist Lundell, however, no amount of denials from Lundin, or legal loopholes, will convince her that the company behaved responsibly in Sudan. In the course of her research, she interviewed a woman in Block 5A who told of fleeing her home after her village was bombed by government forces and her husband killed. "The day after the bombing," Lundell recounts, "the woman saw oil workers coming down the road. As soon as the village was empty and peace returned, the oil workers were there." To Lundell, that suggests that Lundin was communicating with the military and may even have received the all clear from the people responsible for the bombing. Whether or not Swedish prosecutors will be able to prove such accusations, Lundin's operations in war-ravaged Sudan — like BP's off-shore drilling in the Gulf of Mexico — highlight how far oil companies are willing to go in fragile environments to feed the world's reliance on fossil fuels.