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Setback for $3 Billion Pipeline Project - NGOs - Global policy Forum Setback for $3 Billion Pipeline Project
By Jim Lobe
Asian Times
July 1, 2003In 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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