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Controversial Oil Pipeline Decision Funding Approved

Environmental and human rights groups have responded with dismay and anger to the decision last night by Hilary Benn, the new Secretary of State for International Development, to back a $250 million World Bank loan for BP's hugely controversial Baku-Tbilisi-Ceyhan (BTC) oil pipeline. The decision was today denounced by campaigners [1] as "a blatant display of political cowardice which will lead to human rights abuses and environmental destruction."

The Bank's loan follows intense lobbying by BP, which is leading the consortium to build the BTC project. While the Bank touts the project as a "milestone" which "breaks new ground on local economic benefit", furious campaigners say it is primarily driven by the American desire for secure oil supplies, and could lead to severe economic hardship for thousands of people and the destabilisation of the entire Caspian region.

The World Bank's decision to grant public funds to the BTC project is the culmination of years of pressure by the United States to secure international support for an export route for the known vast reserves of Caspian oil. In the days running up to the decision, Executive Directors of the Bank

Acknowledged the severe problems with BTC but frequently observed that the "political nature" of the project meant that there was little they could do to stop it.

The BTC project has been under siege from the start, as critics noted the relatively minor benefits and many burdens it provides to the host countries, Azerbaijan, Georgia and Turkey. Under BTC's legal contracts, the three host countries have ceded control over the pipeline's impacts on human rights and the environment to the BP-led consortium of companies in charge of it, leading to allegations of "corporate colonialism."

Most recently, BP's own consultant found that the BTC project has broken World Bank resettlement guidelines, and therefore local law [2]. The Bank is prohibited from funding projects which violate local law. This admission comes shortly after environmental groups filed a review of the project, alleging that it violates World Bank standards on no fewer than 173 counts.

"How does this project violate human rights? Let us count the ways," said Anders Lustgarten of the Baku-Ceyhan Campaign, a coalition of groups which has been publicly critical of the project. "It gives the powers of government to corporate entities; it uses taxpayer funds to subsidise another US energy grab that will make climate change even worse; and it fails local people in every way from paltry compensation to increased exposure to security forces and major accidents."

"This is a blatant display of political bullying by the US which will lead to further human rights abuses and environmental destruction in the Caspian region," noted Hannah Griffiths of Friends of the Earth. "It makes the World Bank's fine words on the environment and human rights completely meaningless. If the Bank and the UK government prefer to support big business like BP in their trashing of the planet rather than encourage sustainable development, they should just say so and not dress up their corporate welfare as being good for people."

"This was Benn's first test as development minister, and he has flunked it comprehensively," says Nicholas Hildyard of The Corner House. "He refused outright to undertake an on-the-ground investigation into the alleged violations of World Bank standards. He turned down the opportunity of improving the project by delaying funding so that the issues raised by NGO's could be addressed. And, when push came to shove, he sided with the world's richest companies rather than those who are being adversely affected by their operations."

"BP does not need this money," says Greg Muttitt of Platform. "It needs the political muscle that comes with a World Bank loan in order to enforce its will. By sanctioning the Bank's decision, `BP Benn' has jettisoned poverty alleviation in support of an offshore company, registered in a tax haven, that earns more money per minute than most of the world's poorest people earn in a lifetime."

Campaigners also pledged to continue monitoring the project and to ensuring that the rights of affected villagers are fully observed. "The World Bank says everyone along the route is happy, but we have dozens of signed witness statements from people in the region claiming their rights have been violated," said Kerim Yildiz of the Kurdish Human Rights Project. "The applicants are now seriously considering using all available national and international legal mechanisms to remedy these violations."

Notes

[1] Many of the most trenchant critiques of the BTC project have come from the Baku-Ceyhan Campaign, a coalition of NGO's opposed to public funding for the project. Its main members are the Corner House, Platform, Friends of the Earth, Kurdish Human Rights Project and Campaign to Reform the World Bank.

[2] BP's own Social and Resettlement Action Plan Monitoring Panel (SRAP) confirmed in a report published last week that the BTC project was in violation of World Bank Operational Policy OD 4.30 on Involuntary Resettlement. Because of the legal agreements for the project, World Bank policies now operate as local law along the pipeline route.

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