Annex 2
Letter to the Rt Hon Hilary Benn MP, Secretary
of State for International Development, 23 October 2003
BAKU-TBILISI-CEYHAN
OIL PIPELINE
Further to our meeting with officials from DFID
and other departments on Monday 20 October, we are writing to
express our grave concern over the terms of reference that DFID
has set for the independent consultant's review of the Environmental
Impact Assessment (EIA) for the Baku-Tbilisi-Ceyhan oil pipeline
project. We would also seek to draw your urgent attention to the
human rights abuses that have followed the flawed elections in
Azerbaijan and the implications of this for any decision on funding
of the pipeline.
As stated on DFID's website, the TOR for the
consultant's review is to "assess how the EA is compliant
with IFC and EBRD policies, procedures and guidelines". However,
it is clear from conversations with Mr Ron Bisset, the consultant
undertaking the review, and from Ms Cund's interventions at our
Monday meeting that the scope of the review is limited to an examination
of whether or not the EIA complies with World Bank and EBRD standards
on paper: consideration of potential violations arising from implementation
of the project is specifically excluded.
We find this completely unacceptable. There
is ample evidence, provided by NGOs to both DFID and other departments,
that many of the claims made in the EIA with regard to the extent
and nature of consultation have proved false when checked out
through field visits. Indeed, the evidence shows that implementation
of expropriation and compensation along the Turkish section of
the pipeline is flawed and falls foul of World Bank guidelines,
despite a moderate degree of compliance reported in the project
documents; and that many claimed mitigation measures are inappropriate
given conditions on the ground. Furthermore, doubts have been
expressed about the thoroughness of the IFC's own investigations
into the alleged violations of World Bank standards.
In such circumstances, to base any decision
on funding the project on the EIA's "paper compliance"
with IFC and EBRD standards is likely to be at best unsafe, at
worst highly damaging to the interests of the poorest sections
of the affected community. We would therefore urge you to insist
that the project's compliance with IFC and EBRD policies, procedures
and guidelines is assessed against implementation on the ground,
and would further recommend that this is "ground-truthed"
by visits to the region by DFID staff themselves.
The case for such an assessment is made all
the stronger by the recent IFC Compliance Advisor Ombudsman's
report to which we referred in our letter of 8 October. Given
the widespread evidence found by the CAO of IFC staff failing
to apply safeguard standards, it is imperative, in our view, that
the World Bank's board take action to verify staff claims as to
project compliance with regard to both project design and implementation.
A failure to do so might reasonably be interpreted as a signal
that the findings of the CAO are not being taken with the seriousness
they undoubtedly merit.
Moreover, DFID's refusal to investigate the
implementation of the project effectively negates the IFC's own
principal justification for its involvement. Having belatedly
recognised that it has come on board too late to effect fundamental
project decisions like routing and legal framework, the IFC now
claims its involvement is necessary to improve the standard to
which the project is implemented. It is surely impossible to demonstrate
this function if DFID refuses to look at how the project is being
implemented already.
We would therefore urge you to ensure that the
assessment commissioned by DFID of the EIA is broadened to include
a thorough investigation of the 173 violations of World Bank,
EBRD and host government law identified by NGOs and furnished
to you.
We recognise that a full assessment of project
implementation will take time. It is for that reason that we are
requesting that the UK Government press the boards of the IFC
and EBRD to delay their consideration of potential public funding
for the project for a further six months. Given that DFID has
undertaken no field investigations at all on the project—despite
NGO requests dating back over a year—and that winter is
fast approaching in Northern Turkey, we believe that a delay of
six months is the minimum that would be required to identify the
measures that are undoubtedly needed to bring the project into
actual (as opposed to "virtual") compliance with IFC
and World Bank guidelines and, perhaps more significant still,
host government law.
We note that DFID's narrow interpretation of
the TOR for the review of the EIA is already being interpreted
in some quarters as reflecting either a lack of "joined up
government" or, less charitably, an attempt to limit inquiry
in order to push the project through the IFC and EBRD, whilst
appearing to give the issue of compliance proper consideration.
Given DFID's well-earned reputation for promoting sustainable
development, it would be regrettable if such an interpretation
were to gain wide currency, particularly when the remedy—a
full assessment of the EIA and a delay in order to ensure that
it is properly carried out—is readily to hand.
Finally, we would draw your urgent attention
to the rapidly deteriorating human rights situation in Azerbaijan,
which, in our view, considerably alters the context in which the
BTC project is being implemented. Following the presidential elections,
which international observers reported being marred by widespread
fraud, hundreds of opposition leaders and activists have been
arrested in what Human Rights Watch describes as "a massive
and brutal political crackdown". We believe that to approve
funds for the BTC project in these circumstances would be to send
a signal that drastically undermines the UK Government's stated
commitment to encouraging good governance through its development
aid. Again, the case for a delay in any decision on funding would
appear overwhelming.
| 
