Campaigners challenge legal basis of Baku-Ceyhan pipeline

21 July 2003

Just after key project documents were released in June campaigners in Georgia and the UK filed legal challenges to the Baku-Ceyhan oil pipeline, raising awkward questions for the World Bank Group and other potential financiers. A Georgian NGO argues that the environmental clearance for Georgia was granted after the consortium placed undue pressure on its government. Seventy-two human rights and environment groups from 29 countries have issued a call for a moratorium on the pipeline, arguing that it would worsen the human rights situation along the pipeline route, and that the lack of freedom of speech in the region made proper consultation impossible. In the UK Friends of the Earth delivered 4,000 letters of opposition to the project to the Department for International Development which leads on the UK decision on whether to back the project.

The formal 120 day public disclosure period for assessments relating to the Baku Ceyhan oil pipeline started on 11 June when the Environmental and Social Impact Assessments were made available. The pipeline, to be built by oil companies in a consortium led by BP, is to run for 1,000 miles through Azerbaijan, Georgia and Turkey. Campaigners are questioning the requests for finance for the project from the International Finance Corporation (IFC) and the European Bank for Reconstruction and Development (EBRD).

On 27 June the Georgian District Court granted a Georgian NGO, Green Alternative, the right to commence a legal action against government agencies and the BTC Company under Georgian law. This alleges that the environmental clearance for the pipeline project granted last November violated the statutory rights of Georgian citizens under their constitution and national environmental protection law. They also say it breaches Georgia’s commitments under the Aarhuus convention on the right to informed participation in environmental decisions. Manana Kochladze of Green Alternative commented, “the environmental permission was issued following huge pressure from the project sponsor, BTC Company. Georgian legislation and the state constitution have been brushed aside”. Green Alternative is requesting a re-opening of the environmental permission process with proper public consultation procedures.

Leading human rights and environmental campaigners and local people affected by the pipeline recently made a detailed legal submission to the European Commission. They argue that it compromises human rights and environmental protection agreements, and violates Turkey’s accession agreements for entry into the European Union. They warn that, if the Commission does not take appropriate action, they will consider legal action, including a court case at the European Court of Justice.

Under the project agreements, Turkey exempts the pipeline consortium from all Turkish laws that might affect the project. Turkey would also be obliged to compensate the consortium if new laws were introduced that affected the profitability of the project. A legal opinion by Philip Moser, an expert in EU law, concludes that “the pipeline project agreements represent a step in entirely the wrong direction. The implementation of this project involves actual and/or potential breaches of EU, Human Rights and International Law.”

Turkey has also undertaken to implement EU laws on environmental impact assessments, which this project is alleged to violate on nine counts, including lack of proper consultation with affected people. The European Commission has powers to act in the event of Turkey breaking its accession agreements, including freezing financial assistance. The campaigners argue that the Commission has “a duty to act in circumstances such as these”.

The legal challenges to the pipeline were given further backing by a detailed report from Amnesty International’s business section. This report, Human Rights on the Line, the Baku-Ceyhan oil pipeline project, finds that “Under the present framework of protocols and agreements that circumscribe the project, mechanisms for protecting human rights are being systematically undermined”. It argues that “the project in its day-to-day operation is excluded from certain important regulations by the state, even when these would translate international standards into Turkish law”. “The effect of being faced with punitive costs for protecting the human rights of those affected by the pipeline is likely to have a chilling effect on Turkey’s ability to improve its general human rights record.” For up to 60 years Turkey will be effectively unable to improve environmental standards in the pipeline zone. The Host Government Agreement freezes the regulatory framework and allows no stricter standard to apply unless it can be shown that the threat to the environment is ‘imminent and material’, a high standard to apply.

A recent fact-finding mission by NGOs to the region pointed out further social and environmental problems including that:

  • 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 the conditional approval of the Environmental Impact Assessment for Georgia; and
  • BTC Company has failed to adequately assess landslide risks, including failing to mention a landslide prone village one kilometre below the proposed route.

The disputes are likely to intensify in the weeks running up to the decisions by the IFC and EBRD boards, expected in early October, on whether to back the project.