Once again YOUR MONEY is going towards a foreign construction project that will violate human rights, cause environmental destruction, inflame regional tensions, set back global poverty reduction, and contribute to climate change.
This time it’s the proposed Baku-T’bilisi-Ceyhan (BTC) oil pipeline, the project of a British Petroleum (BP) led construction consortium. With only 30% of the US $3.3 billion cost of the pipeline coming from the oil companies involved, much of the remainder will come from taxpayers’ pockets through institutions such as the International Finance Corporation, an arm of the World Bank.

BP has been mercilessly pursuing the Baku-Ceyhan project. Last year, in order to satisfy its commercial deadlines, BP bullied the Georgian government into approving a flawed environmental impact assessment of its section of the pipeline, threatening the suspension of the project if Georgia did not give in. The Georgian environment minister only signed the approval after the personal intervention of President Shevardnadze, following a visit by the US envoy to the region.

The pipeline would run over 1,000 miles from BP’s Caspian oilfields, through Azerbaijan, Georgia and Turkey, to the Mediterranean. For local people in the region, the future looks grim. The BTC project would exacerbate poverty in the region, add to the countries’ debts, undermine the transition to democracy, inflame the existing regional and ethnic tensions, and lead to human rights abuses. And if that wasn’t enough, Host Government Agreements (HGAs), allows the project consortium to sidestep host country laws that might threaten profits and shirk liability in the event of environmental damage such as oil spills. The consortium will also have unfettered access to water supplies, regardless of local communities and their needs.

Climate Change
And then there’s climate change. The volume of new oil transported by the pipeline every year will release 160 million tons of carbon dioxide (CO2), a key greenhouse gas, into the atmosphere – equivalent to 30% of the UK’s annual CO2 emissions. Yet despite the urgent need for change, the international financial institutions (IFIs) continue to fund the extraction of yet more oil, coal and gas for the West, and the development of dirty fossil fuel based infrastructure in developing countries, locking them into a polluting future. We are used to hearing about the potential benefits to the Developing World from oil revenue but in fact the exploitation of oil resources damages a country’s economy. Countries with an abundance of minerals or hydrocarbons demonstrate worse growth and poverty reduction than their resource-poor counterparts, as the money from such projects creates distortions in the economy and feeds corruption.

If we are serious about sustainable development, then Government must provide the funds to enable developing countries to choose climate-friendly technologies and provide clean, affordable energy sources for their citizens.

Recently, it was reported that the BTC project is to be delayed for at least six months owing, according to BP, difficulties in satisfying the requirements of the financial institutions – proof that BP are not infallible and are in fact answerable beyond their Board of Directors. Maybe the delay indicates that the IFIs and potential funders of the pipeline are seeking answers to the awkward questions about human rights abuses, security and environmental damage, that BP would rather not answer.

The British Government is in a key position to influence the lending policy of international financial institutions. They must use this influence to oppose the pipeline and encourage a change in the lending policy of the IFIs towards a sustainable energy future. Write to Clare Short, Secretary of State for International Development, House of Commons, London, SW1A 0AA, urging her to ensure that the UK Government directors in multilateral development banks vote against providing funding for the BTC project. For a standard letter see www.birminghamfoe.org.uk/letters/BTC.rtf