Company failed to respond to alleged intimidation by Turkish security forces along its UK-backed Caspian oil pipeline

Ruling places BP in breach of loan agreements, say campaigners

A BP-led consortium is breaking international rules governing the human rights responsibilities of multinational companies in its operations on the controversial Baku-Tbilisi-Ceyhan oil pipeline, the UK Government ruled today [Wednesday 9 March 2011]. Environmental and human rights campaign groups, who filed an official complaint against BP, say the ruling puts the oil giant in breach of loan agreements – including a multi-million pound loan from UK taxpayers.

Villagers living along the flagship oil pipeline owned by the consortium have had an eight-year struggle to hold the companies accountable for alleged human rights abuses associated with its development. The controversial Baku-Tbilisi-Ceyhan oil pipeline brings up to one million barrels of oil a day from the Caspian Seaa, cross Azerbaijan and Georgia to Turkey from where supertankers ship it to Europe.

The UK government has ruled that BP’s consortium broke international rules governing the human rights responsibilities of multinational companies.

The ruling follows a Complaint lodged under the OECD Guidelines for Multinational Enterprises lodged by six public interest groups in April 2003. The UK government backed the pipeline in 2004 through its Export Credits Guarantee Department (ECGD).

The ruling states that BP failed to investigate and respond to complaints from local people of intimidation by state security forces in Turkey guarding the pipeline. Local human rights defender Ferhat Kaya, for instance, was detained and allegedly tortured by the paramilitary police for insisting on fair compensation. Villagers allege that they are routinely interrogated when they raise concerns over the pipeline.

The pipeline passes through an area of north-east Turkey with a substantial Kurdish minority who have been subject to state repression for decades. Since the pipeline’s inception over a decade ago, human rights campaigners in Turkey and the UK have highlighted the risk of local people, particularly Kurdish minorities, being intimidated by state security forces. Today’s ruling has found that, despite widespread awareness of this “heightened risk intimidation”, BP failed to put in place mechanisms to investigate allegations of abuse and ignored those brought to its attention.

The Complaint argued that such intimidation deterred local people from participating in BP’s consultations about the pipeline’s route and compensation negotiations for loss of land and livelihoods.

BP has consistently promoted the BTC pipeline as “world class” in its approach to human rights. According to its legally-binding commitment to comply with the Voluntary Principles on Security and Human Rights (an international code of conduct for multinationals operating in the energy sector), BP should “consult regularly” with local communities about the impacts of pipeline security arrangements and should record and report credible allegations of abuse by security forces to the authorities.

The UK government has now ruled that BP conspicuously failed to implement these undertakings in the north-east region of Turkey by failing to respond to allegations of intimidation and to put in place flexible enough mechanisms to investigate such allegations in areas where local people consider the local authorities do not protect them.

The ruling sets a major precedent. In future, to comply with these corporate social responsibility guidelines, multinationals will have to take into account the human rights context in which they operate, including the risk of intimidation, when designing and implementing corporate grievance mechanisms. Such mechanisms need to be robust enough that people can report intimidation without fearing further reprisals.

Given BP’s legally-binding commitment to ensure that the BTC project complies with the OECD Guidelines, today’s ruling from the UK government potentially places the company in breach of its contracts with the major international financial institutions (IFIs) that backed the project with taxpayers’ money in 2004. In addition to the UK’s export credit agency, these include the International Finance Corporation of the World Bank, the European Bank for Reconstruction and Development (EBRD) and other European and US export credit agencies.

The failure of BP to adhere to the OECD Guidelines and the Voluntary Principles, as required under the project agreements, also raises major concerns over the due diligence undertaken by the IFIs before supporting the pipeline.

Nicholas Hildyard of The Corner House says:

“Public funders knew about the intimidation, but failed to check whether BP had adequate procedures in place to address and remedy it. They ploughed ahead with the project anyway for political reasons. Western governments appear to have been willing to sacrifice the human rights of those living along its route in order to grab the Caspian’s oil for the West.”

Rachel Bernu of Kurdish Human Rights Project says:

“It has taken eight years for the claims of villagers facing repression in this isolated area of Turkey to be recognised. We hope this ruling marks a turning point for the governments and companies involved so that those affected receive just compensation, and human rights are not only respected, but also promoted through investment in future.”

James Marriott of Platform says:

“This ruling shows that BP’s pipeline allowed and enabled repression of local communities. Yet EU governments and companies continue to push for new pipelines to suck oil and gas westwards from distant places of extraction. BTC stands as a warning that these planned ‘energy corridors’ risk becoming ‘corridors of militarisation and human rights abuse’.”

Friends of the Earth’s Policy and Campaigns Director Craig Bennett said:

“Using taxpayers’ money to fund this pipeline at the expense of people’s human rights and the planet is a stain on this country’s reputation.

“This pipeline would not have been built without public funding – Ministers must come clean about what action it will take against BP for breaching its loan agreement.

“The only real way to stop this cycle of exploitation is to wean us all off our fossil fuel dependency by investing in safe, clean and ethical technologies of the future.”

Commenting on the ruling, Nick Dearden of Jubilee Debt Campaign says:

“This long-awaited ruling underlines the need for urgent changes in the UK’s export credits system. Empowering British companies to violate the national laws of other countries goes against the most basic form of social and environmental responsibility. Without effective safeguards, projects like BP’s one are bound to happen again.”

Peter Frankental of Amnesty International UK added:

“The UK government’s condemnation of BP for breaching internationally recognised human rights standards on the BTC pipeline begs the question of why taxpayers’ money, in the form of export credit guarantees, was used to fund such a project in the first place. If such support had been withheld until BP had addressed the human rights context of their pipeline project, then these violations might never have occurred. It is time the UK’s Export Credits Guarantee Department was reformed to prevent this from ever happening again.”

The ruling gives BP three months to introduce new grievance mechanisms in Turkey.

ENDS

For more information and press enquiries, please contact

Nicholas Hildyard, The Corner House:
+441258 473 795
+447773750534
http://www.thecornerhouse.org.uk/resources/results/taxonomy:87

Rachel Bernu, Kurdish Human Rights Project
+442074053835
rrbernu@khrp.org
http://www.khrp.org

James Marriott, Platform
+441634713050
+442074033738
http://www.carbonweb.org/showitem.asp?article=5&parent=66&link=Y&gp=3

Nick Dearden, Jubilee Debt Campaign
+447932 335 464

http://www.jubileedebtcampaign.org.uk/TAKE%20ACTION%3A%20End%20Britain%2…