World Bank and EBRD Decisions in the Pipeline as Baku-Cehyan Disclosure Period Begins

Ever since British Petroleum CEO Sir John Browne declared that the controversial Baku-Tbilisi-Ceyhan (BTC) oil pipeline would be viable only “if ‘free money’ is offered by governments to build the line”, environmental groups have been demanding that the likely donors, the multilateral development banks (MDBs) and governmental export credit agencies (ECAs), pay serious attention to the environmental and human rights realities of BTC.

The World Bank’s private sector lending arm – the International Finance Corporation (IFC) – and the European Bank for Reconstruction and Development have now commenced a 120-day countdown to a decision on BTC funding. Now is the last chance to get serious yet CEE Bankwatch Network and other NGOs remain extremely sceptical that the development banks in question are heeding their calls, not to mention those of the pipeline-affected communities throughout Azerbaijan, Georgia and Turkey.

In addition to the unresolved conflict over the pipeline’s route through ecologically sensitive areas, new allegations of human rights violations, improper consultation, compensation, and resettlement have emerged.

The decision to begin the formal countdown for approval comes just four weeks after an international fact finding mission returned from Azerbaijan and Georgia. Among the new facts uncovered by the mission:

  • Criminal elements are extorting 10-20 percent of many Georgian landowners’ compensation payments;
  • Contracts for land compensation were not provided in advance to landowners whose lands are impacted by the pipeline. In Azerbaijan, many landowners could not read the contracts because they were in an inappropriate alphabet;
  • BTC Company appears to be in violation of Georgian environmental law and in violation of the conditional approval of the Environmental Impact Assessment for Georgia; and
  • BTC Company has failed to adequately assess landslide risks, including failing to recognize and mention one landslide prone village that lies one kilometre down slope from the proposed route.

These new findings add to an already hefty backlog of unaddressed human rights complaints across the BTC affected regions. In Azerbaijan and Georgia, currently near the top of Transparency International’s index for corrupt countries, civic dissent (or even scepticism) towards BTC has been deemed by high level government officials to be a sign of ‘disloyalty’. Indeed on Azeri television earlier this year, President Hejdar Aliyev’s son Ilham threatened to punish anyone opposed to BTC.

In Turkey, where even ethnic Turks commenting on the Environmental Impact Assessment for an infrastructure project may be prosecuted for a crime against the state, it is not hard to imagine the potential for abuse of minorities in order to “protect” a project. Ominously, the BTC pipeline skirts the predominantly Kurdish region of Turkey.

The EBRD, for one, has a mandate to foster the transition towards open market-oriented economies in “countries committed to and applying the principles of multiparty democracy, pluralism and market economics.”

“This goal cannot be accomplished by neglecting human rights and freedom of speech and ignoring situations in which people are not guaranteed the right to express their opinions without fear of punishment or harmful repercussions,” said Manana Kochladze of Green Alternative/CEE Bankwatch Network, a Georgian NGO. “We have been asking and will continue to ask the EBRD to take the necessary steps at the highest political level to ensure that the people of the region do not suffer for their views and legitimate activities.”