Chinese and local employees work on a crude oil pipeline in a CNPC project in Chad. Photo: CFP

 A source with China National Petroleum Corporation (CNPC) said Thursday the company did not pay a $1.2 billion fine issued by the Chadian government for ­alleged environmental violations, because the firm had been waiting for "justification" in an escalating dispute that Chad has taken to a French court.

This is in response to a Reuters report Wednesday (US time) that said CNPC, China's largest oil and gas producer by output, has asked the Chadian government to drop its $1.2 billion claim before an arbitration court in Paris - the International Arbitration Chamber of Paris.

The dispute goes back to July 2013 when the Chadian government said it discovered that a large volume of crude oil had been dumped into pits in the Koudalwa region, where CNPC has owned licenses for a number of oil blocs since 2009.  According to Reuters, the company's operations in Chad were suspended by the country in August 2013, before being allowed to resume in October 2013.

However, due to what it claims were "non-respect of its obligations and repeated violations of environmental norms" by CNPC, Chad then fined CNPC $1.2 billion in March 2014, according to Reuters.

 "After CNPC resumed its operations, we received a punishment notice from the environmental authority. But the notice did not specify the reason of the fine, and a request for more clarification was turned down," the source told the Global Times Thursday, noting that CNPC hopes the Chadian government could provide a report to justify its claim.

"We had an internationally recognized third-party inspection body to provide a review proving the soil near the site of the incidents meets relevant environmental standards after remediation efforts followed after the incidents," said the source, who requested anonymity because he was not authorized to comment on the issue.

A Reuters report on Sunday said Chadian side decided to take their complaint to a Paris court, "according to terms of contract agreed with the CNPC," citing Abdoulaye Sabre Fadoul, secretary-general of the Chadian government.

Another Reuters report on Wednesday said CNPC hopes the Chadian government could "cancel its decision."

Experts say as more Chinese companies set foot in overseas markets, there are more cases of companies neglecting their corporate social responsibility (CSR), and these cases are more common in the energy and resource sector.

Zhang Ning, a researcher with the National Academy of Economic Strategy at the Chinese Academy of Social Sciences, said Chinese companies should be aware of such issues.

"Because China's environmental standards are lower that those of Western countries, and China's State-owned companies are backed by the government in the home market, they sometimes might overlook environmental issues," Zhang told the Global Times Thursday.

In recent years, environmental pollution issues have obstructed major projects involving Chinese companies abroad.

Struggles over alleged environmental damage have disrupted the operation of Wanbao Mining, a Chinese State-owned company that operates the Letpadaung copper mine in Myanmar, since the project began in 2012.

Aluminum Corporation of China had to halt its $4.8 billion Toromocho project in central Peru on March 28 due to an environmental spillover in which waste water was discharged into the nearby highland lakes.

Now, as big Western oil firms have held a tight grip over many of the world's oil reserves, competition is mainly occurring among companies from emerging economies in oil fields in underdeveloped countries, Zhang said.

"As oil is so vital to the economy, CSR issues are closely watched by competing countries and Western media, driven by [nationalist] interest," Zhang noted.

This is a warning to Chinese companies to pay close attention to the improvement of environmental standards during operations, shoulder social responsibility and build a friendly relationship with the local community, Zhang said.

As of 2013, China's foreign direct investment has totaled $90.2 billion, with $20.2 billion having gone to the mining and oil and gas exploration sector, a report by the Ministry of Commerce in April 2014 showed.