Private Sector


Baku-Tbilisi-Ceyhan pipeline

Who is responsible?

17 November 2003 | Guest comment

Around the world, when politics and money prevail, the environment is the last issue considered. The legacy of oil exploitation and transportation during the Soviet era has already caused significant damage to the South Caucasus’ valuable and sensitive environment, and directly impacted the lives of millions living in the region. The residue of past damage still remains.

The IFC and EBRD have officially announced financing of the 1770-km long controversial Baku-Tbilisi-Ceyhan (BTC) pipeline. In total, international financial institutions committed themselves to finance $500 million of the $3.6 billion project. However, this decision had been predictable, as the Boards of the IFC and EBRD approved not just another pipeline, but, in the words of Bill Richardson, former US Energy Secretary, the “strategic framework that advances America’s national security interests”. That is why the top officials of those institutions and staff believe that “the involvement of the public sector multilateral institutions provided the best prospect [the pipeline] would be built and operated to the highest social and environmental standards”.

It is very difficult to find out what is the basis of this confidence. Could it be the triumph of nepotism in Azerbaijan made evident through the transfer of the presidency from father to son? Dozens of deaths and the arrest of opposition party members after the election? Allegations of corruption and kidnapping against the father and son Alieyvs? Or maybe the basis of confidence is Georgia – where the government of President Shevardnadze falsified the results of the election leading to mass protests demanding his resignation?

Can you imagine if they start digging a huge trench right next to us? All of this land will come sliding down.

The question is hard to answer, especially taking into account that until now all the efforts of the IFC and EBRD to ensure that the project met the highest international social and environmental standards addressed process rather than results.

Two multi-stakeholder meetings held in each country did nothing to help the residents of Dgvari village to feel more secure. The village is located in Borjomi Gorge in Borjomi-Kharagauli National Park, famous for its mineral waters, spas and unique flora and fauna. Many Georgians would call this place a paradise, but soil erosion and severe landslides have made it a living hell for the villagers. Despite the fact that the village is located 900 metres from the pipeline it is impossible to find out the impact of the pipeline on the village in the thousands of pages of impact assessment. “Every time it rains or snows, the landslides increase”, says Beso Gogoladze, local community leader. “Can you imagine if they start digging a huge trench right next to us? All of this land will come sliding down.”

From the beginning, the pipeline idea has been promoted as environmentally sound, with supporters arguing that it would reduce tanker traffic along the Bosphorous. While there is no indication of decreased tanker traffic in the Bosphorous, there are intensive negotiations with Kazakhstan in order to guarantee delivery of oil from the Karachaganak fields in Kazakhstan to the pipeline via the Caspian Sea. Shifting increased tanker traffic from the Black Sea to the Caspian Sea can not be called environmentally sound policy.

In the end, what have the IFC and EBRD Boards approved? Overruling national legislation, running the pipeline within protected areas, threats to human livelihood, increased dissatisfaction and strikes of local communities – these are the immediate outcomes. For the long-term, there are serious concerns that the Host Government Agreements will adversely impact future sustainable development in the region.

In recognizing the BTC pipeline as ‘best practice’, IFC and EBRD staff have dismissed the concerns of ordinary people, local community groups, national and international NGOs, and independent experts like the Dutch Commission for Environmental Impact Assessment.

The only question is who will be held responsible from the EBRD and IFC if the project fails to demonstrate positive local and regional development impacts or if the environmental impact proves disastrous.

Manana Kochladze
Regional Coordinator for Caucasus
CEE Bankwatch Network