FOR IMMEDIATE RELEASE
Saturday 26th June 2004
Environment and human rights groups have called for suspension of construction on major BP oil pipeline, following new evidence published in today’s Independent of major technical failures on the project.
Four senior pipeline experts who worked on the Baku-Tbilisi-Ceyhan (BTC) pipeline in Turkey have revealed a catalogue of incompetence, cost-cutting and shoddy workmanship, which raises major questions about the safety of the pipeline.
All four have successful careers of over 20 years in pipeline construction, and have said this is the worst project they have ever worked on. Their revelations include:
o not hiring proper specialists to advise on engineering, including on crossing seismic faults in the earthquake-prone region;
o using inappropriate materials and construction methods, which will not perform the function they are needed for;
o not following construction design specifications and procedures;
o failing to carry out checks or keep records on construction quality;
o using staff without proper training or qualifications;
o ignoring environmental or health and safety requirements;
o causing bankruptcy of local business suppliers along the route.
Two of the experts were sacked for raising concerns about the problems.
The Baku Ceyhan Campaign has talked to all four whistleblowers, and is now calling for an urgent halt to construction activities until the problems are resolved. The findings run counter to repeat BP promises that this would be an environmentally and socially beneficial project.
Hannah Griffiths, Friends of the Earth, commented, “BP and financial institutions have ignored the warnings on this pipeline. Now the extent of company failings and consequent environmental risk have come to light, work on the project must be stopped until these issues are sorted out.”
Kerim Yildiz, Executive Director of the Kurdish Human Rights Project, added,”Villagers we have interviewed have consistently told us they were not properly consulted, nor informed of the risks of this pipeline. These new findings show the risks are even greater than we had feared”.
Greg?Muttitt, of PLATFORM, said, “BP has tried to create a reputation as being better than other oil companies. But, thanks to the professional integrity of these four and other experts, we now hear about the shocking reality. It is to their credit that they have taken personal risk to inform the public of these serious issues.”
Anders Lustgarten, of the Baku Ceyhan Campaign, added, “We have already heard of faulty weld coatings being used in the Azerbaijan and Georgia sections of this pipeline, which BP has tried to claim were one-offs which are now rectified. This new dossier shows that in fact the whole pipeline is rotten.”
Nicholas Hildyard, of the Corner House, commented, “We know the banks are already concerned about the risk their reputations from this project. BP has told them all is in order. It isn’t, and the banks should now undertake their own investigation.”
For more information
Hannah Griffiths, Friends of the Earth: 07855 841 994
Greg Muttitt, PLATFORM: 07970 589 611
Dear Colleagues,
As you know, companies investing in developing countries often do not have to meet any meaningful environmental or social standards, as national law is weak and no binding international standards apply to investment. Increasingly, however, because of civil society pressure public and private financial institutions are requiring some minimum environmental and social standards for projects they support. As a result, although we may not have
the global standards for international investment we want, environmental and social standards set by the World Bank Group are increasingly the ‘de-facto’ global standard for international finance.
The International Finance Corporate (IFC), the private sector lending arm of the World Bank Group, has become the leading environmental and social standard-setter for international project finance. Not only is the IFC an important global financier in its own right, but IFC standards are increasingly being accepted by both public and private financial institutions. For example, twenty-five commercial banks that are involved in over 80% of all internationally financed projects have agreed to follow IFC environmental and social standards. Many export credit agencies also benchmark their environmental guidelines to IFC standards.
Starting in July, IFC will begin a process to update and revise these environmental and social policies, as well as over 70 technical pollution standards. The policies will address a range of issues from human rights and labor, to community involvement and benefits policies, to biodiversity and climate change. They will determine if any areas in the world should not be touched by investment or are too environmentally vulnerable that they should be avoided altogether, as well as determine if affected communities and indigenous peoples have the right to say no to development in their area. The pollution standards will also set international benchmarks for emissions of toxic pollutants such as lead, mercury and others in a variety
of industrial sectors.
The IFC process provides a critical opportunity for civil society groups to push for *more rights, rules and responsibilities* in the international investment system.
Below/attached is a global sign on letter to the IFC as they begin this process, to put on record some key issues that civil society groups expect them to address.
The deadline for endorsement is Friday, July 2, 2004. To endorse the letter, send an email to: [email]sign-ons@verizon.net[/email] <mailto:sign-ons@verizon.net> with your name, organization and country.
Thanks,
Andrea Durbin and David Hunter
—————————————-
GLOBAL SIGN ON LETTER TO IFC
July 2, 2004
Mr. Peter Woicke
Executive Vice President
International Finance Corporation
2121 Pennsylvania Avenue NW
Washington, DC 20433
Dear Mr. Woicke,
We welcome the upcoming review process and opportunity to strengthen the IFC?’s safeguard and disclosure policies as well as the Pollution Prevention and Abatement Standards. We hope that the process will be participatory, and that the concerns and priorities of civil society around the world will be fully considered.
You have said this process will not lead to the weakening or erosion of any of these policies and standards. We appreciate your commitment. It is important that these policies are not only strengthened, but that the IFC uses this process to position itself at the forefront of defining what is _expected and required_ from its project sponsors in terms of socially and
environmentally responsible corporate practice.
As you know, the global business climate has changed significantly in the last ten years. Companies are increasingly obliged to address social and environmental protection issues, ensure community benefits, and respect labor and human rights. In this changing business environment, companies seek clarity and consistency in the rules they are expected to meet. The appropriate role for IFC in this changed business environment is to help in clarifying the rules for those companies operating in borrowing countries.
As a leading development institution, however, the IFC has additional responsibilities to deliver upon its development and poverty alleviation mandate. Therefore, we urge you to use this process to clearly identify IFC ‘s responsibilities in the development process as well as identifying the responsibility of the company borrowers. In this way, IFC can lead by example, establishing enhanced standards for itself and its clients and encouraging private companies to do the same.
Although we are heartened by IFC’s stated commitment to taking a principles-based approach to sustainability issues, we are concerned that this may signal a move away from clearly defined rules, rights and responsibilities. Both a principles-based approach and clear rules are
necessary to ensure that IFC-supported projects are conducted in a participatory, transparent and socially and environmentally sustainable manner.
There are many issues of importance to civil society in borrowing countries that we would like to highlight here. We hope that these issues are addressed fully in the upcoming review process.
1. The review process should result in a new rights-based approach to development-an approach that recognizes and protects human rights, labor rights, the rights of indigenous peoples and women’s rights as well as community-based rights to be fully informed and offer consent to development projects and to benefit directly from, and be an equal partner in, the
monitoring and oversight of projects. These rights should set the framework for all of the IFC’s safeguard policies and requirements of its clients.
2. The review process should address global environmental and sustainability issues, including IFC’s role in protecting biodiversity-rich areas and ecologically important and threatened areas. It should also address IFC’s role to avert the threats of global climate change by helping to reduce global carbon emissions. Further, the process should address and
protect areas important to indigenous peoples and sacred lands from unwanted development.
3. The review process should develop and apply a set of criteria or indicators of good corporate behavior for all potential project sponsors. As noted by the CAO’s own review of the safeguard policies, proven prior commitment to social and environmental standards is the most crucial factor in implementation of safeguard policies and achieving positive development
outcomes. The IFC should partner with companies that are committed to social and environmental protections; applying a set of criteria in advance will help identify the most appropriate partners.
4. The review process should result in a requirement that all projects clearly and publicly articulate the development objectives in advance of final approvals, and eval?ate each project based on those same criteria.
5. The review process should result in an integrated assessment process required for all projects with significant impact on any of these issues. An integrated assessment would address environment and social issues, including labor, gender, and human rights issues, health impacts and poverty reduction issues.
6. The review process should address the application of these standards and policies to Financial Intermediaries (FIs), some of the fastest growing lending of IFC. Not only should all IFC standards and policies be equally applied to all FI loans, this process should also
address how IFC oversees and ensures compliance.
7. The review process should result in a clear process through which the presumption in favor of disclosure can be effectively implemented.
We not only expect IFC to identify how it will release information upon public request but also to clearly specify the documents and types of information that the IFC will routinely disclose or require to be disclosed. Again, whereas sound principles are vital to securing the best transparency standards for IFC and its clients, specific rules are also needed. Full transparency and disclosure is paramount.
We look forward to IFC’s upcoming proposals for addressing these issues and to participating in this process.
Sincerely,
Natalia Ablova, Bureau on Human Rights and Rule of Law in Kyrgyzstan
Bruce Jenkins, Bank Information Center, U.S
Manana Kochdazde, CEE Bankwatch Network, Georgia
Cristian Opaso, Grupo por el BioBio (GABB) – Chile
Graham Saul, Friends of the Earth-Canada
Heffa Schucking, Urgewald, Germany
Jon Sohn, Friends of the Earth US
Mustafa Talpur, Action Aid – Pakistan