[A-List] Scotland: Kurdistan pipeline controversy

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

RBS attacked over 'unethical' oil pipeline

Controversial project's British investor under fire
By Rob Edwards Environment Editor
The Sunday Herald, 8 February 2004

The Royal Bank of Scotland has come under fierce attack for allegedly
breaching its environmental guidelines by investing in a highly
controversial £2 billion oil pipeline across Turkey.

The bank has been accused by environmentalists and human rights campaigners
of backing a scheme that will damage wildlife, wreck the climate and
endanger minority Kurdish communities. The bank denies the charges.

The plan to build a 1760 kilometre pipeline across Azerbaijan, Georgia and
Turkey is one of the world's most bitterly disputed energy projects. Led by
the UK oil multinational BP, it aims to pump over a million barrels of oil a
day from the Caspian Sea to the Mediterranean for use in Europe and the US.

The Royal Bank of Scotland is the only British bank named as supporting the
pipeline in a hugely complex financial package signed in the Azerbaijan
capital, Baku, last week. In November, Barclays bank disclosed that it had
decided not to fund the project.

Both banks are signed up to a set of international guidelines, known as the
Equator Principles, which prohibit investment in projects that are
environmentally and socially irresponsible. The nine principles commit the
banks to ensuring that impact on wildlife, human health and indigenous
communities are properly assessed and minimised.

But investigations in Azerbaijan, Georgia and Turkey by a coalition of
groups opposing the BP pipeline, claim to have discovered 157 ways in which
the principles have been breached. The oil project's own independent
consultants have uncovered 26 failures to comply with environmental and
social promises.

"The project is massively irresponsible and its funders are acting contrary
to the principles of corporate environmental responsibility," said Duncan
McLaren, chief executive of Friends of the Earth Scotland.

The most blatant breach of the principles is the pipeline's alleged failure
to protect the rights of ethnic minorities like the Kurds in Turkey. They
have long been the victims of torture, clearances and disappearances blamed
on the Turkish authorities.

Kerim Yildiz, director of the Kurdish Human Rights Project in London, said:
"With the Turkish Gendarmerie assigned to protect the pipeline, the human
rights situation looks set to deteriorate yet further.

" This project has already taken away people's land without proper
compensation."

The Royal Bank is also accused of failing to ensure at the outset that the
environmental impacts of the pipeline were adequately assessed. One
assessment missed a vast array of plant and animal species, argued Greg
Muttitt, from the London-based environmental charity, Platform.

He added: "They basically seem to be doing the environmental assessment as
they go, which is certainly not the proper way to do it ."

Half of the pipeline project has already been completed, according to its
managers, the Baku-Tbilisi-Ceyhan consortium . Monitoring of the
construction work so far has been carried out by consultants, Mott
MacDonald, for the project lenders.

In its most recent report , Mott MacDonald lists 26 "issues of
non-compliance" with the project's Environment and Social Action Plan. At
one site in Turkey, vehicle spillage from refuelling is said to be causing
contamination and hazardous waste is inappropriately stored . Mott MacDonald
list a further 40 issues over which it has concerns.

The Royal Bank, however, strongly defends its backing for the oil pipeline.
The fact that problems during construction were being spotted and addressed
was evidence that environmental monitoring was working, it argued.

" We have made strenuous efforts to ensure it is fully compliant [with the
Equator Principles]," a bank spokesman told the Sunday Herald.

He pointed out that the UK government, international lending agencies and
the BP-led consortium all agreed that it met "the highest international
standards". The lending group of which the bank was part had been assured by
a second report from Mott MacDonald that the project did not breach the
Equator Principles.

Unfortunately, that report is commercially confidential, prompt ing critics
to complain that the process is hardly transparent and accountable.

Tomorrow, the project will come under fire from Georgia trade unionists for
violating the rights of some the project's 12,000 workers. They claim people
are forced to work 12 to 14 hours a day, including weekends and holidays,
for a subsistence wage.

"What we have here is forced labour ," said Gocha Alexandria, senior adviser
of the Georgian Trade Union Amalgamation. "The consortium needs to take
urgent steps to ensure that labour rights are protected."