Turkish Oil Project Raises

Bretton Woods Project
September 17, 2002
BP and eight other oil companies have secured complete freedom from regulation for a pipeline they propose to build across Turkey, Georgia and Azerbaijan, a group of non-governmental organizations has learned. The agreement exempts the companies from obligations under any current or future Turkish law that may threaten the project's profits, including environmental, social and human rights legislation.

The BP-Turkey agreement, known as the Host Government Agreement (HGA), creates a corridor running through some of Turkey's most politically volatile regions. The corridor would effectively be outside the national government's jurisdiction for the lifetime of the proposed project. Other provisions in the HGA include unfettered access to water, regardless of the needs of local communities, and exemption from liability in the event of an oil spill or any other harm caused by the pipeline consortium. The Turkish government can intervene only in the case of an "imminent" and "material" threat to the public, the environment or national security. There are strong similarities to clauses in the agreement for the Chad Cameroon oil pipeline.

But what would constitute such a threat remains undefined. Nor is it clear who would decide whether such a threat existed. The HGA also paves the way for the consortium building the pipeline to demand unlimited protection from Turkish security forces, without safeguards against human rights abuses. Under the vague wording of the agreement, paramilitary units could be placed along the pipeline route to pre-empt "civil disturbance" or "terrorist" activities. Anders Lustgarten of the Kurdish Human Rights Project commented that recent actions by the Turkish government, such as charging students signing a Kurdish education petition with membership of an illegal terrorist organisation, "do not instil confidence in the way such nebulous terms as 'civil disturbance' and 'terrorism' will be applied under this agreement".

The legal agreement signed with the Turkish government further props up the project by preventing the Turkish government from taking any actions that could disrupt its "economic equilibrium". Similar agreements between governments and the oil companies have also been negotiated for Georgia and Azerbaijan. Commenting on the implications for Georgia, Manana Kochladze of Green Alternatives stated: "The requirement to compensate the consortium for any disruption caused to the 'economic equilibrium' of the project by new social and environmental laws severely curtails the development possibilities for our country."

The planned 1700km oil pipeline would stretch from Baku on the Caspian Sea, through T'blisi in Georgia, to Ceyhan on the Turkish Mediterranean coast and operate for at least 40 years. The consortium is due to formally approach the International Finance Corporation for $200 million support in October, with a decision on World Bank Group support likely to be taken early in 2003. The concerns raised about the HGA mean that support for this project would put the IFC in serious contradiction with the aims of the World Bank's new human rights approach and with the IFC's own sustainability initiative.

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