Delay Urged on Caspian Pipeline Financing

AP ^ | 10/30/2003 | BRUCE STANLEY

[a_Turk]

LONDON - Critics of a U.S.-backed plan to build a pipeline transporting Caspian Sea oil to Western consumers are urging the World Bank (news - web sites)'s private investment arm to delay a decision on whether to help finance the $3.6 billion project.

Environmentalists and human rights groups contend the pipeline, which would carry crude from Azerbaijan to Turkey's coast, endangers villages and wildlife in its path, and could spark conflict in a region already seething with ethnic tensions.

The International Finance Corp., the World Bank's Washington-based private investment arm, was to have made a decision this week on lending money for the project, but put off a vote until Tuesday. Critics of the project want the bank to delay a decision for several months.

Support for the 1,095-mile pipeline is strong, particularly in Washington, which is eager to reduce U.S. dependence on Middle Eastern oil, and from BP PLC, Unocal Corp. and other big oil companies participating in the project.

Some of the pipeline's staunchest backers are people in the region who envision the money from oil exports as a ticket to prosperity for their underdeveloped countries.

Although the International Finance Corp. is considering a comparatively small loan of $150 million, its participation would be a valuable imprimatur for the pipeline.

The European Bank for Reconstruction and Development, which lends money to speed market reforms in formerly communist countries, plans to decide about a separate loan for the same amount on Nov. 11. Together, the two government-owned banks would provide $300 million of the $2.6 billion in loans the project is seeking.

Once completed, the pipeline will allow crude from oil fields off Azerbaijan's Caspian coast to reach Western markets without having to pass first through Russia or Iran. The pipeline, which is already 15 percent complete, is projected to open in 2005.

It will transport up to 1 million barrels of oil a day across the flatlands of Azerbaijan, through the mountains of southern Georgia, beneath the wheat fields and goat pastures of eastern Turkey and on to the Turkish port of Ceyhan.

The Baku Ceyhan Campaign, an umbrella of four non-governmental organizations, claims to have obtained a leaked report from International Finance Corp. staff that deliberately misleads the bank's executive board about the project's impact on human rights and the environment.

"We don't feel that it's possible for the IFC board members to come to a decision without being properly apprised of the risks. For this to happen, they need to delay for at least three months," said Anders Lustgarten, coordinator of the London-based Baku Ceyhan Campaign.

Lustgarten's group compiled a dossier of 173 cases in which it contends the planned pipeline violates the World Bank's own lending guidelines. The IFC has responded with a report challenging the alleged violations.

"We really do take these ... concerns very seriously," said Ted Pollett, an International Finance Corp. social development specialist who has traveled seven times to the region to assess the project's impact on farms and villages.

BTC Co., the private consortium behind the pipeline, says it has consulted all 450 communities and 30,000 landowners along its planned route.

"Wherever possible, we've sought to avoid villages and areas of environmental sensitivity. We've taken enormous care to make sure we've not disadvantaged anyone," BTC spokeswoman Clare Bebbington said.

Critics counter that the consortium, led by Britain's BP, consulted less than 2 percent of the affected population and has failed to adequately compensate for land to be expropriated for the project.

"BP is taking a very naive attitude ... about the impact of its investments on the human rights situation," said Baku Ceyhan Campaign spokesman Greg Muttitt. In particular, he said, Kurds are vulnerable to mistreatment by security forces guarding the pipeline in eastern Turkey.

More worryingly, the finished pipeline could prove a magnet for attacks by nationalist groups and even by al-Qaida terrorists, Muttitt argued.

But some in the region question the motives of the pipeline's foreign critics. "I think, frankly speaking, they are not so sincere in talking about these problems," said Azay Guliev, head of the National NGO Forum of Azerbaijan. "We are fully supportive of this project."

[a_Turk]

ping..

[marron]

Thanks for the ping.

The enviros will never back any pipeline anywhere, ever. That means they can and should be simply ignored.

Conversely, I can guarantee that they will never speak up to oppose any pipeline within Saudi territory. They will probably remain equally silent about pipelines in Russia and China.

Their political biases are quite transparent.

Their concern for the Kurds is laudable if sincere, but misplaced. This project is going to put thousands of Kurds to work, short term, and probably hundreds to work long term. Nothing will do more for the Kurds than this project. You cannot overestimate the effect that having a real job has on a person. And you can't overestimate the effects of a pipeline as it brings jobs into remote country, and forces the paving of all-weather roads in rugged areas that have previously been rather remote.

This is an important project, for the good it will do, and you can expect to see its opponents throw everything at it to stop it. There will be environmentalist lawsuits, and PKK sabotage. But the pipeline is worth building even in the face of determined opposition.