For Immediate Release
Nov. 4, 2003

Contact:
Carol Welch, Director, International Program - 202-783-7400 ext. 237 - cwelch@foe.org

Friends of the Earth Blasts World Bank Group’s Approval of the Controversial Baku-Ceyhan Oil Pipeline

Friends of the Earth today blasted the World Bank’s private sector lending arm, the International Finance Corporation (IFC), for approving $250 million in financing for the controversial Baku-Tbilisi-Ceyhan (BTC) oil pipeline. World Bank Group support is a critical seal of approval for the project’s financing from private banks.

“IFC buried its head in the sand on this one,” said Carol Welch, director of international programs at Friends of the Earth. “In the IFC’s unrelenting pursuit to approve this project, it has ignored the fact that the BTC pipeline violates its own policies in over 100 instances.”

Friends of the Earth and other environmental and human rights groups have expressed numerous concerns with the pipeline. The pipeline passes through the buffer zone of a national park in Georgia and threatens the lucrative mineral water and tourism industries. The international food conglomerate Danone pulled out of planned investments in the mineral water industry, citing the reputational risk posed by the BTC pipeline. The IFC’s confidential report to its board of directors revealed that the controversies around the pipeline’s impact on the mineral water industry have led to a request for arbitration with the London Court of International Arbitration.

World Wildlife Fund, which runs sustainable development programs in Georgia and Turkey, called for a “no” vote by the IFC Board of Directors because the IFC failed to properly assess viable alternatives to the project and to apply its policies.

Amnesty International has expressed concerns about compensation, legal assistance for affected people and monitoring and reporting mechanisms for human rights violations in the vicinity of the pipeline.

In recent reports, the World Bank’s own evaluation departments found that extractive industry projects in countries with poor governance have failed to deliver positive development outcomes, and that the Bank’s attempts to simultaneously build capacity and improve governance while promoting new investment have failed as well.

“Not only has the IFC ignored the findings of its own research, it has turned a blind eye to the Azeri president’s violent crackdown on political dissent in the recent election. There’s no question the political and human rights situation is deteriorating and this will have a chilling effect on efforts to independently monitor the pipeline’s impact,” said Welch.

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