WWF urges commercial banks not to fund controversial pipeline
The pipeline's intended path in Georgia. In the background, Lake Tabatskuri.
Gland, Switzerland - WWF is urging commercial banks such as ABN Amro and Citigroup not to provide funding to the controversial Baku-Tbilisi-Ceyhan (BTC) oil pipeline running through Azerbaijan, Georgia, and Turkey being driven by major oil interests led by BP.
This call comes after the European Bank for Reconstruction and Development (EBRD) said earlier today it will invest in the project despite major concerns by NGOs, including WWF, that the project does not meet the EBRD's own standards.
WWF stresses that potential financiers are being asked to put their reputation and commercial interests on the line by funding a project that poses unacceptable levels of risk from major threats, including terror attacks linked to the rising political instability of the region.
The conservation organization also notes that its comprehensive review of the BTC scheme has revealed numerous instances where the project breaches the standards of the EBRD and the International Finance Corporation (IFC), national laws, the OECD Guidelines for Multinational Enterprises, the European Environmental Impact Assessment directive, and international best practice.
WWF deplores that attempts to resolve these issues have not resulted in satisfactory responses from BP.
WWF further believes that the significant risks associated with constructing a pipeline across areas of high seismic activity and landslides have been downplayed.
The unique nature of the geology in this area is presenting severe challenges to engineers, potentially stopping them in their tracks.
The region is subject to 300 seismic events a year, and is likely to experience an event measuring 7 on the Richter Scale during the lifetime of the pipeline.
In Georgia, tourism in the Borjomi National Park and the Borjomi mineral water industry are of particular concern.
According to WWF, any incident in this area would pollute the river systems indefinitely and wipe out the reputation of the mineral water industry, and destroy the social and economic fabric of the region.
"The commercial banks should carry out their own rigorous due diligence on the environmental and social risks identified by non governmental organizations like WWF and not just swallow what is being fed to them by BP and institutions like EBRD. They should consider such a highly questionable project in light of their stricter commercial requirements and reputation concerns," says Paul Steele, Chief Operating Officer of WWF International. "If this project is approved by the commercial banks it will set a dangerous precedent for a vast number of pipelines proposed."
According to WWF, the decision over this project will be a crucial test of the rigour of the new Equator Principles signed up to by seventeen major private banks, including ABN AMro, Barclays, Citigroup, Mizuho, HSBC Group, Crédit Lyonnais, and Crédit Suisse Group.
"Some commercial banks have recently developed more sophisticated environmental and sector specific guidelines for project finance," adds Paul Steele. "WWF will judge whether these guidelines have any teeth at all when applied to the BTC pipeline."
WWF concludes that the private sector cannot protect its reputation in the long term by hiding behind the EBRD and IFC, institutions that are subject to the bidding of their governmental shareholders.
For further information:
Chief Operating Officer, WWF International
Tel.: +41 22 364 9278
Olivier van Bogaert
Press Office, WWF International
Tel.: +41 22 364 9554