A high-level report has been released which concludes that the international oil industry - including Canada's Talisman Energy Inc. - is helping to prolong the civil war in Sudan.

The report, prepared by diplomat John Harker, stops short of recommending sanctions against Talisman - but does suggest Foreign Affairs Minister Lloyd Axworthy look at controlling certain exports to Sudan. And that Talisman should be forced to live up to its human rights obligations.

"This focus on exports to Sudan will impact on Talisman's operations in that country, operations which must comply with human rights and humanitarian law," Harker writes in his report.

Jim Buckee, chief executive officer of Talisman Energy, said from Calgary Monday he is pleased with Ottawa's reaction to the report. He said he is relieved that sanctions will not be imposed on his company.

Axworthy, responding to the report in Ottawa, said Canada would work with the United Nations, its agencies and human rights groups, to promote peace in Sudan. He strongly urged Calgary-based Talisman to do the same.

Harker was asked by the Canadian government to look into allegations that the Sudanese government was funding its 17-year-long civil war with oil profits. "The evidence we have gathered ... directs us to conclude that oil is exacerbating the situation in Sudan."

Harker's three-week mission looked into allegations of human rights abuses, including slavery. He has already accused Sudan of attacking civilians from an air field that's supposed to be used only for oil-related air traffic. The report says Calgary-based Talisman turned a blind eye to the situation and acquiesced in allowing the military to use the airstrip.

Under the Special Economic Measures Act Talisman could be liable for sanctions, but the report stops short of recommending that. Harker's says he is "reluctant to advocate immediate" sanctions. He says it would be better if the company met its "responsibilities in full."

"Talisman should make it clear that it acknowledges the destructive impact of oil extraction and will work towards a trust fund arrangement," says Harker, though there is little detail of how that fund would be set up or administered.

Axworthy says the government has no immediate plan to slap sanctions on Talisman, but it is clear Canada expects the company to do more to make certain its operations are not contributing to the extension of the civil war, or human rights abuses in Sudan.

Talisman acquired its stake in a consortium operating in south Sudan's Heglig oil field in 1998. It now owns a 25 per cent share.