Thursday, January 31, 2013

The Oil Road - James Marriott and Mika Minio-Paluello

The vast fossil fuel reserves of present day Azerbaijan have been exploited for centuries. In the 7th century CE camels were loaded with “bales” of oil for heating, light, warfare and medicine. Marco Polo told of a “fountain of oil…which is good for burning. In the neighbouring country no other is used in their lamps and the people come from distant parts to procure it.” As then, so too today. Azerbaijan along with Georgia, rarely figure prominently in the mind of the average European or North American, but they should. The two are part of the 2000km Baku-Tbilisi-Ceyhan (BTC) pipeline that pumps one million barrels of oil daily to be loaded at the Turkish port of Ceyhan on tankers bound for European markets. The Oil Road exposes the corrupt relationship between oil companies and governments that put millions in companies’ pockets while causing misery for those living in the pipeline’s path.

The impetus for the BTC – the Oil Road of the title – came from Washington, London and Brussels, all of which wanted an “energy corridor” that would both bypass Russia and guarantee the supply of oil and gas to the global market economy by giving governments via the oil company BP control over the supply route. In the early 1990s Azerbaijan was in a situation that Western governments and BP could exploit: the USSR had just collapsed, the local economy was depressed, and there was a desire for Western recognition as an independent country. Leader Heydar Aliyev was willing to mortgage the country’s resources to get hard currency and, hopefully, regain the land it lost during its war with Armenia. Georgia and Turkey had parallel reasons for signing on to the BTC project. The deal eventually agreed upon is referred to as the “Contract of the Century” and what the FT later dubbed “the most controversial pipeline project” in history, for what the host countries gave up and what BP was able to win.

Near the start of the authors’ journey along the pipeline route, in Baku, they spoke with a human rights activist about how oil projects allow authoritarian regimes to gain wealth from resources rather than citizens’ taxes, making the needs of the population irrelevant. “…Europe, the US and the companies wanted more oil. Heydar Aliyev offered to give them control over our oil and its export route, and in return got unlimited rights to rule this country as he wanted.” Those unlimited rights include using brute force to silence opposition to the regime on pipeline-related issues, and to remove citizens’ freedom of assembly. When in Georgia, residents told how the pipeline runs a mere 25m from their homes, and how digging the pipeline ruined irrigation channels for their crops. As they felt BP and government were not listening to their concerns, they decided to blockade the highway to their village. According to one resident, the police badly beat everyone protesting, including children.

Some people have lost much more than their freedom of assembly – they have lost the safety of their homes and land that is part of their livelihood due to pipeline construction and its security corridor. A quarter of the way into their journey an Azeri villager tells his story. During pipeline construction, a 40m wide trench was dug, the topsoil removed, and for several years until construction was completed farmers were unable to use their fields. They were meant to receive about $4000, roughly a year’s salary, but the system was not carefully administered by BP. Some families received compensation, while others did not, or the wrong people did. Similar stories arise at all points along the pipeline, with BP refusing to deal with the issues, claiming it was actually the local authority’s fault. In a small Georgian village further along, people are separated from pastures, forests and hot springs they have used for generation by armed government troops charged with protecting BP’s infrastructure.

Security along the pipeline is another feature of the “Contract of the Century”. Host Country Agreements outline the expectations of BP and show the weakness of the bargaining position of the three countries, all of which are responsible for defending the length of the pipeline using its own military forces. In Azerbaijan, this meant cutbacks to social services, agriculture and transport as funding the police and army take up close to 20% of the country’s yearly budget. In Georgia, a transit country for the pipeline, it means nearly a quarter of its budget is spent guarding a pipeline from which it receives no economic benefits.

The Host Government Agreements also contain evidence of how oil companies such as BP have been able to negotiate their way into situations where they are essentially above the law. In Georgia, the preferred pipeline pathway was to come uncomfortably close to Borjomi National Park, from whose rivers the famous Borjomi mineral water is bottled and sole, accounting for nearly 10% of Georgia’s export trade. The Georgian environment minister adamantly refused to sign off on the pipeline route until she was escorted late one evening to the president’s office and after several hours admitted that she had signed off on the route, explaining that pressure came from the company BP and was directed not just on her but to the president as well. Host Government Agreements guarantee freedom of petroleum transit, and as a result host nations gave up their power to protect their citizens from environmental damage and health hazards for 50 years. The agreements override all existing and future laws because the foreign companies want confidence.

The Oil Road brilliantly sums up the folly of a system bent on exploiting nations for profit, letting people live in poverty while millions of dollars in oil flows underground to far away markets. There are few books that have done as good a job at showing the links between companies and national governments, and providing all the evidence needed to continue the struggle against allowing this to continue. With many oil pipeline projects presently in negotiation, this is an important book for activists. While the authors do not put forward an alternative to this system, they certainly do not fail to provide motivation for the search.

An edited version of this review was previously published in Socialist Review magazine

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