Global Policy Forum

By John Vidal

Earlier this month, the International Finance Corportion - the private arm of the World Bank - finally approved $300m of loans for the world's most controversial oil pipeline. The Baku-Tbilisi-Ceyhan Pipeline Company is now primed to pump 1m barrels of oil a day from Azerbaijan on the Caspian sea to Turkey on the Mediterranean. The announcement, made in New York, was greeted with relief by BP, the IFC and the consortium of 11 international companies behind the $3.6bn project, but with a mixture of anger, frustration, optimism and resignation by a huge range of NGOs who have acted as unofficial observers, critics, watchdogs, consultants and advisers since the project was first mooted in 1990.

Because the pipeline is travelling 1,760km through three unstable countries, skirting the heart of the Kurdish region in south-east Turkey and passing within 60 miles of Georgia's lawless Pankisi Gorge, it has immense geopolitical and security implications. The issues raised have covered the full spectrum from the environment and human rights, to security, development and compensation. And three countries ceding territory to BP made it political dynamite. Nevertheless, the main players paint the project as a triumph of combined corporate, civil society and public institution responsibility. Even their sternest critics agree that they have probably gone further than ever before to consult, be transparent, devise compensation, development and finance programmes, make sure that no one is adversely affected. It sounds impressive. Up to 450 communities, 30,000 landowners and 750,000 people along the route have been consulted, say the pipeline backers. Compensation packages have been organised, local companies and entrepreneurs have been advised how to benefit from the hand-outs, technical assistance has been given to small-scale employers, micro-finance has been offered to the poorest and advice and expertise offered about biodiversity, energy efficiency, and corporate governance.

But is all the care taken over the environmental and social aspects of the pipeline pointless? According to another group of NGOs, based mostly in Britain, they are only "bolt ons" - essential to give the banks, BP and the consortium clean hands. These groups, who range from Friends of the Earth International to the WWF, and Platform accuse the banks of political naivity, siding with the companies on a project they say will intensify tensions in the region, involve human rights abuses, and exacerbate global warming.

The human rights issue almost derailed the project. When it was first pointed out that BP was creating a "rights-free corridor", little attention was paid, but when Amnesty International raised specific legal points and accused BP of "disregarding the human rights of thousands of people in the region", the World Bank took it very seriously indeed. Amnesty warned in July that people would have to give up their land rights, there could be inadequate enforcement of health and safety legislation to protect workers and local people, and a serious risk to the human rights of any individuals who protested against the pipeline. The World Bank, stunned by the ferocity of the attack, immediately facilitated weeks of meetings between BP and Amnesty, which led to BP rowing back and being forced to clarify its intentions. It also led to preliminary talks between the banks and Amnesty to devise model agreements for future projects.

But whereas the bank was publicly appreciative of Amnesty raising the points, it was last week scathing about any NGO who questioned its premise to be in the region. "We have had a very serious campaign of misinformation [about the Kurds] directed at us," said Shahbaz Mavaddat, the World Bank project's associate director. "Opposition for the sake of it is a waste of public money." Some of the NGOs reply that their fundamental criticisms of the project remain valid. They argue that the consortium and the banks are sleep-walking into what could become a human rights and security disaster, with the pipeline becoming a focus of attacks by separatists and others. The parallel, they say, would be Colombia where pipeline security rests with quasi-militaristic units with appalling human rights records.

Greg Moffett of Platform says that it is more than likely that the project will fail because it has been approached from the wrong direction. "These mega projects are driven by commercial considerations only. Anything that happens on the environment or social side are extras." BP plays the innocent. "We're an oil company", says one of their spokesmen. "We don't have all the answers in terms of development issues. That's why IFC and EBRD are invited to give it a development focus. I think that we have broken new ground on this project. What more can we do?" The answer to that may come when the oil starts flowing.

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