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Setback for $3bn pipeline
project
By
Jim Lobe
WASHINGTON - In a breakthrough for both
judicial independence and the environment in the former
Soviet republic of Georgia, the Georgian district court
has granted an environmental group the right to sue the
country's government for approving the controversial
US$3 billion Baku-Tbilisi-Ceyhan (BTC) oil pipeline
project.
Construction on the 1,800 kilometer
pipeline, which has enjoyed strong support from the
United States and is led by British Petroleum (BP), has
already begun and is due to be completed in 2005. One of
the biggest foreign direct investments in the Caucasus
region, it is designed to ship oil and gas from the
Caspian Sea off Baku, Azerbaijan, via Georgia to the
Turkish port of Ceyhan on the Mediterranean so as to
avoid both Russia and Iran, and from there it will be
transported to European and world markets.
The
project has been controversial virtually from the moment
it was proposed in the mid-1990s, both because of its
expense compared to the alternatives of using Russian or
Iranian pipeline networks, and because much of the
region that it will traverse is considered
environmentally and even seismically sensitive.
The Georgian non-governmental organization (NGO)
Green Alternative has opposed construction of the
pipeline along the route carved out by BP (formerly
British Petroleum), the lead company in an energy
consortium that also includes ConocoPhillips, Statoil,
Unocal, Inpex and Delta Hess. All of the companies are
also named as defendants in the suit.
Green
Alternative filed the suit a month ago, charging that
approval of the project last November 30 by the Georgian
Ministry of Environment and Natural Resources violated
Georgian law. The suit alleges that Georgian citizens
were denied their rights to access to information and
meaningful participation in the decision-making process
as set out in the Georgian constitution, a 1998
international convention ratified by Georgia in 2000,
and specific environmental laws.
It also charges
that the Environment Minister, Nino Chkhobadze, was
pressured by the oil companies into approving the
pipeline without a proper assessment of its
environmental impact. It cites a letter dated November
26 - four days before the ministry granted approval -
from Chkhobadze to BP's chief executive officer Lord
Browne that "BP representatives are asking the Georgian
government to violate its own environmental
legislation".
"The environmental permission was
issued following huge pressure from the project sponsor,
BTC Company," said Manana Kochladze of Green
Alternative. "Georgian legislation, the state
constitution, as well as the host country's government
agreement strictures on access to information have all
been brushed aside. The high-level political pressure
was the main reason behind the Ministry of Environment's
failure to provide the information to the public before
the decision was made," she noted. Green Alternative is
asking that the government re-open the environmental
assessment process with proper public hearings and
consultation. On Friday, the district court ruled that
the case could go forward, although no trial date has
yet been set.
The pipeline has been criticized
by NGOs in all the countries through which it passes, as
well as several international groups for some time.
Earlier this month, for example, Amnesty International
warned that compensation terms agreed to between the
consortium and Turkey were potentially problematic,
since Ankara is obliged to pay the companies for any
delay in the construction and operation of the pipeline.
"This means that if Turkey at any time wants to
intervene ... for example to protect worker safety, to
inspect the project, to call for young people not to be
employed on the project, or to ensure good compensation
for the [30,000] people who have to give up their land
... it will have to pay compensation," Amnesty's Sarah
Green told Radio Free Europe (RFE). "Now, this is a huge
disincentive [for Turkey] to protect human rights." She
said an explicit clause protecting human rights should
be inserted in all of the pipeline projects' documents.
The issue is particularly sensitive in the
Kurdish region of eastern Turkey through which the
pipeline is supposed to cut on its way to the
Mediterranean coast, according to the London-based
Kurdish Human Rights Project. It, as well as 71 other
human rights and environment NGOs, called for a
moratorium on the pipeline early this month, arguing in
part that appropriate consultation between the project
promoters and the public in much of eastern Turkey was
impossible given the heavy military presence and the
history of repression against the Kurdish minority
there.
Among the environmental problems cited by
the critics is the decision to lay the pipeline along
the Kura River in Azerbaijan and across a proposed
national park (the Gobustan Semi-Desert Sensitive
Habitat) and through Borjomi in Georgia, a protected
area that produces mineral water for export. All of
these resources would be threatened by oil spills.
"BP gives no data proving that this route is
best," according to Kochladze. "When you're going to put
an oil pipeline right next to a river, you had better be
able to show a good reason for doing so."
BP and
its consortium members have insisted that they will
comply with international environmental and human rights
standards. But their performance to date has not
inspired much confidence, according to the NGOs.
Communities in both Georgia and Azerbaijan have
complained that the companies have failed to repair
roads used in construction so far; that permanent jobs
promised by the consortium failed to materialize, and
that contributions to promised social and investment
programs have also lagged.
The consortium still
needs substantial financial support from international
financial institutions (IFIs). They are asking the
International Finance Corporation (IFC), the World Bank
arm that provides loans and guarantees to the private
sector, and the European Bank for Reconstruction and
Development (EBRD) for hundreds of millions of dollars
in various kinds of assistance. Among other groups,
Friends of the Earth International (FoEI) is
spearheading opposition to the project at the IFIs.
The fact that the Georgia case is now proceeding
in the court could affect the speed with which the IFC
and the EBRD decide whether to back the project,
according to the NGOs. Decisions had been expected by
the end of summer.
Last April, FoEI and other
groups submitted complaints to the governments of
France, Germany, Italy, Britain and the US charging that
BP and its partners were violating the "Guidelines for
Multinational Enterprises" of the Organization for
Economic Cooperation and Development, particularly by
its imposition of project legal agreements with the
three governments involved that required the latter to
pay compensation for any problems caused by compliance
with their laws over the next 40 years, including laws
that have yet to be enacted.
"This
pipeline would make BP the effective governing power of
a large swathe of three countries, with a right to
decide which laws apply and which don't," said FoEI's
Tony Juniper. "This
is hardly what we would call corporate
responsibility."
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