Yet More Problems For The Baku-Ceyhan Oil Pipeline

BP Financial Completion Ceremony Postponed At Last Minute

Press release from:
Baku-Ceyhan Campaign
Kurdish Human Rights Project
Friends of the Earth
PLATFORM
Cornerhouse

Oil giant BP, the main sponsor of the hugely controversial Baku-Tbilisi-Ceyhan (BTC) oil pipeline, suffered an embarrassing setback today with the postponement of the planned signing of a $150 million export credit deal with the UK Export Credits Guarantee Department. It is understood that BP and the ECGD have still to reach agreement on the environmental and social conditions attached to the loan by the ECGD.

According to the ECGD, BP and its partners had intended to reach financial closure on the £3.7 billion pipeline by 16 January [1]. However, today's delay makes this impossible.

Throughout its history, the BTC project has been riddled with allegations that it will lead to human rights violations, environmental destruction and the further destabilisation of the politically volatile Caucasus region. Human rights and environmental campaigners have described the decision to grant public funding to the project as politically motivated, citing a recent report which found no fewer than 173 violations of World Bank safeguards to which the project legally must adhere.

BP refused to give any reason for the postponement, but several factors in addition to failure to meet ECGD conditions may be at least partially responsible. Last week Cornerhouse and the Kurdish Human Rights Project announced that they would spearhead a legal case over BTC on behalf of affected people in the European Court of Justice. A longstanding case against BP in the Georgian civil courts, alleging that the company exerted undue pressure on the country's environment minister to approve the pipeline route through Georgia's main national park, also comes to trial next week [2].

"The ECGD set more stringent conditions that the World Bank and EBRD," comments Nick Hildyard of The Corner House. "This is to be welcomed. If the delay is because ECGD are sticking to those conditions, it is to the Department's credit."

Campaigners also pointed to the wider implications of the delay. "Perhaps this will give private banks considering backing this project a moment to reconsider whether they really want to be involved in a project which carries such a massive political and reputational risk," said Greg Muttitt of PLATFORM.

"Backing BTC, which massively boosts climate change emissions and increases political repression in developing countries, totally undermines all the claims banks and companies have been making about how committed they are to sustainability," said Hannah Griffiths of Friends of the Earth. "If they decide to fund this project, we can only conclude that all they are committed to is greenwash."

Kerim Yildiz of the Kurdish Human Rights Project noted, "The court cases dramatically increase the political risks faced by the pipeline's financial backers. It is a risk the banks need to consider very seriously."

NOTES FOR EDITORS:

[1] See ECGD statement of December 17 2003 at http://www.ecgd.gov.uk/btc_-_note_of_decision.doc

[2] A case brought by the Georgian environment group Green Alternative will begin in the Georgian Court of Abandonment on Tuesday 20th January, which argues that the deposed Shevardnadze regime approved the pipeline in breach of Georgian environmental law. More info: Greig Aitken, CEE Bankwatch Network, Tel: + (420) 545 214 431, and see www.bankwatch.org/issues/oilclima/baku-ceyhan/mpress.html