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Although significant oil reserves have been found in the early 1970s, these could not be developed because: 1- Chad is a landlocked country with limited domestic demand; 2- civil war prevented the creation of a stable investment environment and caused the departure of several investors. Since peace was established in 1990, investors and the World Bank returned to Chad for developing its oil reserves.

In order to justify the large investment, access to the world market was sought via a pipeline through Cameroon, which is also a relatively poor country that can benefit from the investment and transit revenues. The World Bank has been supporting natural resource extraction based development around the world and, in particular, in Africa as the primary driver for economic growth and poverty reduction in these countries. But, the Bank has also been heavily criticized for failing to achieve these goals as the revenues from resource development do not reach the majority of the society.

With the Chad-Cameroon pipeline and oil development in Chad, the Bank and the companies are following a novel partnership and revenue management approach. How is the project financing different? How will this new approach work? Will Chad and Cameroon benefit from this approach? Background1 Upon getting its independence from France in 1960, Chad has been involved in 30 years of civil war. The peace was finally restored in 1990, and the country drifted towards multiparty democracy, until rebellion broke out again in the north of the country.

In January 2002 peace treaty was signed confirming de jure reign of northern ethnicity. Chad is one of the least developed nations on earth with GNI per capita of around $200. Republic of Chad is ranked 165th of 175 countries in UN’s Survival Ranking. The agricultural sector accounts for 36% of Chad’s GDP. Cotton exports account for 50% of foreign currency earnings. Chad’s government is concerned about this dependence on cotton and wants to diversify its economy in order to mitigate vulnerability associated with volatility of the international price of cotton.

Chad’s only significant natural resources are oil deposits. Being independent since 1960, Cameroon has developed a rather stable political system, based on ethnic oligopoly. Despite of vast natural resource base (including oil, natural gas and aluminum) the country is one of the poorest in the world, with GNI per capita of roughly $600 in 2002. According to World Bank classification Cameroon is an HIPC (heavily indebted poor country) with total debt of $4. 9 billion and outstanding short-term debt over $950 million.

Cameroon is in Top-15 countries with highest HIV rate (around 12%) and in Top-30 infant mortality rate. Economic and social development information on this section comes from the World Bank web site, CIA Fact Book, and U. N. Human Development Report. © Center for Energy Economics. No reproduction, distribution or attribution without permission. Chad-Cameroon Pipeline 1 1 Case Study From Since 1990, being faced with a fall in GDP due to unfavorable prices on major exported goods; Cameroon has been engaged in several World Bank and IMF programs, aimed at poverty reduction and acceleration of economic growth.

As a result annual GDP growth averaged 2. 1% through 1990-2001, compared to 3. 4% in 1980s. Oil Development Conoco became the first foreign oil company to undertake significant oil exploration in Chad with acquisition of the Chad Permit H concession in 1969. Between 1973 and 1975, oil was discovered in varying amounts in the Doba, Doseo, and Lake Chad basins, that led to the creation of a multinational consortium comprising Conoco (12. 5% and operator), Royal Dutch/Shell (37. 5%), Exxon (25%), and Chevron (25%).

In 1981 all the exploration projects were stopped due to escalating civil war. In 1988 a convention was signed between the government of Chad and the consortium, granting exploration permit with term of validity until early 2004. Conoco withdrew from the project, and Exxon took over operations, discovering the Bolobo field in 1989 with estimated 135 million barrels of reserves. 3 Chevron, in its turn, sold its share (20% interest in the Block H hydrocarbon license containing the three fields) to Elf Aquitaine, in 1993.

Who should take the responsibility for redressing the grievance – James or Tyson? What advice do you have to redress the informal grievance?

Who should take the responsibility for redressing the grievance – James or Tyson? What advice do you have to redress the informal grievance?.

Boone Air Force Base (AFB) is a large education and training facility that supports more than 3,000 military and 1,200 civilian service personnel. Like most military installations, Boone AFB has a Child Development Center that provides federally subsidized childcare for military personnel.

Marilyn James, chief of the staffing section in civilian personnel, is ultimately responsible for making sure the more than 1,200 civil service positions at Boone AFB are filled with qualified people.

Claudia Tyson, director of the Child Development Center at Boone AFB, is an aggressive manager who has worked hard to ensure the new center will be ready to open when construction is finished in about thirty days.

John Brown is the union representative for Delgado and Jackson. He is currently running for president of the union.

Jim Smith is the staffing specialist working with the child development center.

George Jones is the base labor relations specialist.

Sheri Delgado and Dawn Jackson are the two employees whose positions were converted from part-time to full-time.

Marcia Flores is the non-appropriated fund employee who filed the informal grievance through the union.



Marilyn James, the new chief of staffing at Boone AFB, has been on the job for less than a week and she is already facing her first serious crisis. This morning, she received a call from John Brown, the union representative. Brown asked for an appointment to discuss a grievance involving the selection process for two positions at the Child Development Center. To get the facts, James held a long meeting with George Jones, the base labor relations specialist, and Jim Smith, the staffing specialist serving the Child Development Center. They provided James with the following background information.


The Child Development Center provides federally subsidized childcare for military personnel. The subsidy is not paid directly to users. Instead, the Air Force pays for construction, repairs, utilities, food and other supplies, and a portion of the staff for the center. The manager, the training specialist for the center, and one-third of the childcare providers are civil service employees. The remaining employees are paid through fees charged to users. This latter group of employees, referred to as “non-appropriated fund employees”, is paid the same as the civil service employees. However, they are governed by a different personnel system that is closely modeled on the “at-will” concept used in the private sector. As a consequence, they have far fewer benefits and protections than do their civil service co-workers. Hence, non-appropriated fund employees have a strong desire to move to civil service positions when they become available.


The new Child Development Center, which is currently nearing completion and scheduled to open in thirty days, will almost double current capacity. As a consequence, the Air Force approved the addition of two new, full-time, civil service positions for childcare providers. The manager of the center, Claudia Tyson, had heard from a peer at another base that she could split the full-time positions into part-time positions and gain flexibility in staffing patterns while still being able to work the part-time employees up to a maximum of thirty-five hours per week. Tyson called Smith, and he advised that this action would be OK. Tyson split one of the new full-time positions into two part-time positions and worked with the staffing specialist to advertise and fill those positions. Two new part-time employees hired in this process have been on the job for about a month now, and Tyson is very happy with their performance. She kept open the other position, intending to fill it when the new center was closer to completion.



The day after the two new employees were hired, Smith discovered during a routine conversation with the payroll office that he had given Tyson bad advice. While she could indeed split the two positions, by law she could not work the part-time employees for more than twenty-five hours per week. When informed of the mistake, Tyson was furious and told Smith that if that was the case, she was not interested in having part-time employees. When asked what he would do to fix this problem, Smith advised her to convert the one split position back into a full-time position. He would place one of the new employees in the reconverted full-time position; the other employee could be placed in the still vacant full-time position. He assured her the positions did not need to be re-advertised. Satisfied, Tyson agreed to this solution and the two of them then completed the appropriate paperwork to make the changes. Smith admitted he had not reviewed either the regulations or the local union contract before advising Tyson to take this action.



Two weeks later, Marcia Flores confronted Tyson with an informal grievance.  She is a non-appropriated fund employee working in another unit at Boone AFB who had wanted to apply for one of the two full-time civil service positions as a childcare provider. In the grievance, Flores claimed that Boone AFB and Tyson had violated Air Force regulations and the union contract by not properly opening and advertising the two new full-time civil service positions at the Child Development Center. Tyson told Flores that she could “do nothing to help her” because she was “only following HR’s instructions.”


As a consequence, John Brown, the union representative, asked for a meeting with James, the new chief of the staffing section; Tyson, the director of the Child Development Center; Sheri Delgado and Dawn Jackson (the two employees placed into the full-time positions) and Marcia Flores (the grieving employee) to work out a fair solution at the informal level of the grievance process. Flores demanded the two positions be re-opened and properly advertised.


The Boone AFB labor relations specialist, George Jones, advised James that, while the contract does not cover this specific situation, the intent of its provisions on selection is to ensure that all employees are afforded the opportunity to apply for all vacancies. He is deeply concerned about the possible impact and adverse publicity, since Brown, the union representative, is running for president of the union. He recommends the positions be reopened and advertised as requested by the union.


Smith, on the other hand, was adamant that he advised the only fair solution since, if the positions were re-opened and advertised, the two incumbents (Delgado and Jackson) might lose their jobs. Further, he is convinced the HR office will lose all credibility with management if the positions are re-opened and advertised, and the Child Development Center could lose two good employees.



Who do you think is right – Jones, the labor relations specialist, or Smith, the staffing officer?  How would you assess the strengths and weaknesses of both recommendations?

Who should take the responsibility for redressing the grievance – James or Tyson? What advice do you have to redress the informal grievance?

If you do decide it is best to re-open and advertise the positions, how will you convince management to accept this decision? What should you do with Delgado and Jackson who are already in the positions?

If you think Smith provided management with bad advice, do you think he should be disciplined?  What about Tyson? Should she share some of the blame?

What should HR do to rebuild relations with the union and with management? How can such problems be prevented in the future, and what process would you recommend be put in place regarding such personnel decisions? 

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