Baku-Tbilisi-Ceyhan Pipeline.
Turkish protestors angry over diruption of fishing grounds
Mika Minio-Paluello
The Royal Bank of Scotland (RBS), in 2004, was one of six banks* which agreed a $1.6 billion loan for BP’s controversial Baku-Tbilisi-Ceyhan (BTC) pipeline project. The pipeline stretches 1,776km from the Azerbaijani town of Baku on the Caspian Sea to the Turkish port of Ceyhan on the Mediterranean, the second longest oil pipeline in the world. Able to carry one million barrels a day, oil produced will be responsible for 160 million tonnes of carbon emissions a year, equivalent to 28% of the UK’s annual emissions.
The pipeline has taken 3 years to build and poses serious environmental, social and political problems both now and in the future. The pipeline runs through Azerbaijan, where it is helping to prop up the corrupt and authoritarian government. Human rights abuse and corruption is a serious and widespread issue in Azerbaijan, including torture of prisoners and suppression of rival political parties and journalists. The pipeline then runs through the Borjomi National Park in Georgia where it has left a hugely visible scar on the landscape. The park is also the source of Borjomi mineral water, the region’s primary source of income. A leak in the pipeline or spill could utterly devastate the communities who depend on the money from export. Other communities which stand to suffer are the Yumurtalik fishermen in Turkey. The proposed site of the tanker terminal seriously encroaches on their fishing grounds and as a secured area they are no longer allowed there. The quantity of tankers also affects them, up to 3 super tankers a day coming in and out of the port will disrupt not only the sea life in the terminal but also en route. Any spills or leaks from the tanker traffic would utterly decimate the wildlife in the area and would impact on tourism as the area would be seen as contaminated. Should any of the host governments wish to bring in methods to protect their people or environment they would find themselves heavily restricted. The legal contracts which undrwrite BTC restrict the governments from introducing any laws which may affect the profitability of the project.
RBS, along with eight of the other financial institutions involved, is signed up to The Equator Principles which set minimum standards for social, environmental and political impact for financing projects. According to surveys by international NGOs the BTC project has 157 breaches of the Principles including 90 breaches of World Bank standards.
The Oil & Gas Team, the specific office of RBS wich deals with financing fossil fuel extraction projects, were warned repeatedly about the social and environmental failures of this project yet refused to take action to resolve the situation and went ahead with providing $100 million for the project. Lawyers have suggested that if pipeline leaks result from faulty anti-corrosion paint, RBS could be liable for serious environmental crimes in Azerbaijan and Georgia.
For more information on this case study see The Baku Ceyhan Campaign’s website, or read the PLATFORM report on the Royal Bank of Scotland and on the BTC project.
*This has grown to fifteen banks, seven export credit agencies and three multilateral financial institutions. Two out of the fifteen private banks are part of the Royal Bank of Scotland Group; The Royal Bank of Scotland and Dutch bank ABN Amro. The full list is available here.