[A-List] Destructive creation: Caspian pipeline

["Michael Keaney" <michael.keaney@xxxxxx>]

World Bank to back controversial Caspian pipeline

Rob Evans and Owen Bowcott
Wednesday October 29, 2003
The Guardian

A controversial scheme led by the oil giant BP to build a huge,
strategically important pipeline is about to win crucial backing, according
to a leaked document.
Despite widespread criticism, the World Bank is due to approve at a meeting
tomorrow a $250m (£149m) loan to a consortium to build a pipeline from Baku
in Azerbaijan on the Caspian Sea to the Turkish port of Ceyhan via Georgia.

British-based campaigners have been leading an international protest against
the scheme, claiming that the 1,000-mile long underground pipeline will
cause environmental damage, increase ethnic tensions and accelerate global
warming.

The protesters have compiled a 220-page dossier claiming that the scheme
breaks World Bank lending guidelines in 173 ways.

The pipeline is supported by the US government as an important route for
reducing its dependence on oil from the troubled Middle East. It also keeps
large quantities of oil out of the hands of the Russians who have supported
an alternative pipeline to their Black Sea port of Novorossiysk.

According to the leaked document, officials at the International Finance
Corporation (IFC), an arm of the World Bank, have recommended to their board
that the loan be approved, as it is "critical to the financing plan".

The final decision will be taken by the IFC board made up of representatives
from governments around the world. Hilary Benn, Britain's international
development secretary, is still undecided on which way to cast Britain's
vote.

The IFC is responsible for investing in private sector projects in
developing countries.

Anders Lustgarten, a spokesman for the opposition Baku Ceyhan Campaign,
which obtained the leaked document, said: "This report makes it quite clear
that the IFC's main intent is to make life easier for the oil companies.

"They simply pay service to benefiting local people for the sake of
political expediency.

"As the Iraq reconstruction is already leading to aid budgets being cut
elsewhere, why should be we obliged to pay yet more to subsidise oil
companies and US political interests in the Caspian?"

The document states that one of the project's benefits is that it has a
"strong rationale" and "represents a major opportunity to translate oil
revenues into poverty reduction". It argues that "prudent use of these
revenues" could channel millions into "addressing the needs of communities
along the pipeline route".

It also argues that the project has been carried out with commendable
transparency and "in accordance with environmental and social safeguards and
policies".
But campaigners accuse the IFC officials of painting a misleading picture of
the pipeline and failing to mention many of the risks.

"The report omits to mention that the PKK [Kurdistan Workers' party]
guerrillas in Turkey have abandoned their unilateral ceasefire and have
specifically named pipelines as a future target," said Nicholas Hildyard of
the Corner House, another of the groups opposing the scheme.

"Surely the IFC board should know that there is a good chance that their
investment will go up in smoke?"

The European Bank for Reconstruction and Development is due to decide on a
similar loan of $250m on November 11.