The Oil Road

by James Marriott

  We watch opposition leaders take turns to climb the stage on the parliament steps, face the crowd and denounce Saakashvili. Many hope for a repeat of the Rose Revolution’s mass street protests that deposed the previous president, Eduard Shevardnadze, in 2003. There is tension in the air; the crowd is both angry and anxious. The last big protests were met with a police crackdown. Spetznaz riot forces chased people from central Tbilisi into outlying areas, where they set upon small groups of them. Everybody wonders whether the spetznaz will be deployed again, and how much violence the government is prepared to use to clear Rustavelis Gamziri.

  The police presence seems surprisingly light. A few heavily armed guards watch from the top steps of the parliament, in front of its firmly closed front gates. Apart from that, there is barely a police officer in sight. ‘That doesn’t mean they’re not nearby,’ comments a friend. ‘Saakashvili will have hundreds of them on standby, waiting.’

  Sure enough, exploring around the back of the parliament building, we find an unguarded gap in the wall. Peering through it, we can see scores of police in body armour crouching behind shields. Some practise swinging their heavy wooden batons. Those that have lifted their helmet visors reveal balaclavas masking their faces. Tanks and water cannons are lined up in rows, ready to go.

  The riot equipment is an indicator of how Saakashvili has built up certain key support communities since coming to power, especially among the security forces, whose agencies’ budgets have increased tenfold in recent years. Everywhere there are new police stations with enormous glass windows. The running joke is that these buildings are the major achievement of the Rose Revolution, and that the large glass walls represent Saakashvili’s understanding of increased transparency.

  Although almost everybody we meet wants to see Saakashvili gone, nobody wants the previous president, Eduard Shevardnadze, to return. Like Heydar Aliyev in Azerbaijan, Shevardnadze dominated the Georgian political scene throughout the 1970s and 1980s. The two Caucasus leaders had parallel careers – usually as rivals, on rare occasions cooperating. Shevardnadze headed the Georgian Communist Party from the early 1970s, before being promoted to the politburo of the USSR in 1978, four years ahead of his Azeri contemporary. Shevardnadze, a legendary master of intrigue, acquired the soubriquet ‘the White Fox’. But he was also seen as ruthless in cracking down on both corruption and dissidents.

  As Brezhnev succeeded Khrushchev as general secretary of the USSR, Soviet institutions became increasingly ossified: corruption and disillusionment were pervasive. But Shevardnadze, along with his politburo colleague Mikhail Gorbachev, recognised the need for change, stating, ‘We can’t go on living like this.’ During long walks on the Black Sea coast, the two planned a new movement, centred around perestroika – meaning ‘restructuring’ – and glasnost – meaning ‘openness’. Together they built a political project based on the vision of a democratised socialist republic, which aimed to roll back the power of Party bureaucrats, bring a halt to repression and introduce greater freedoms and rights. The transition proposed was deep, yet the pair remained inspired by the pre-Stalinist possibilities of Soviet socialism, which they believed could still present an alternative to capitalism.

  In 1985 Gorbachev was appointed general secretary of the Soviet Union, and quickly moved to secure Shevardnadze’s promotion to foreign minister. Their gain was Aliyev’s loss, for he too had hoped to take the controlling position in the USSR. So while Shevardnadze was implementing perestroika, facilitating German reunification and the Soviet withdrawal from Eastern Europe, Aliyev was part of the authoritarian ‘old guard’ that resisted any change, and was ultimately ejected from the politburo over corruption.

  Shevardnadze’s ‘Sinatra Doctrine’ – that Eastern European countries should ‘do it their way’ – led eventually to Georgia declaring independence in April 1991. But the new leader, Zviad Gamsakhurdia, soon alienated his own supporters with an aggressive ‘Georgia for the Georgians’ agenda. Within a year, he was forced to take shelter inside the parliament building as an uprising swept the city. The ‘Hundred Metres War’ shut down the heart of Tbilisi, with heavy firing across the street we are standing on, until Gamsakhurdia eventually escaped during a lull in the shooting.

  Having resigned as foreign minister of the fast-collapsing Soviet Union in December 1991, Shevardnadze was invited back to Tbilisi by an interim Military Council established after the fighting. In March 1992, he was appointed president. Over the next twelve years, there were two conflicts in regions trying to break away from the main state of Georgia: the first war in South Ossetia, then the war in Abkhazia. Ironically, given his anti-bribery drives during the Soviet period, Georgia became increasingly corrupt during Shevardnadze’s rule. Allies and members of his family were seen to be enriching themselves at the country’s expense, controlling much of the national economy. Falsification and vote-rigging during the November 2003 elections added to the growing popular anger. These trends echoed what was happening in Baku, but Shevardnadze’s rule was weaker than Aliyev’s – in part because the latter had so carefully courted Western governments and companies.

  Protestors from across the country came to Tbilisi and surrounded parliament for twenty days. When Shevardnadze attempted to open the new parliamentary session, on 22 November 2003, oppositionists led by Saakashvili burst into the hall with roses and stopped proceedings. Shevardnadze resigned the next day, ending his long hold over Georgian politics, and the Rose Revolution was hailed as a victory.

  US enthusiasm for the toppling of Shevardnadze was built on the recognition that his position in Georgia had become untenable. But the Western powers had long been supportive of Shevardnadze, especially because of his role in bringing the BTC pipeline through Georgia. He described it himself as the ‘crowning glory’ of his presidency.

  Shevardnadze had been an eager ally to the US deputy national security advisor, Sandy Berger. Together they persuaded BP to build the initial Baku–Supsa pipeline in 1995. Over the following four years Shevardnadze supported the Clinton administration’s demands for the BTC and SCP pipelines, arguing that these would deliver not only economic benefits for Georgia, but also NATO membership. Just as Aliyev laid the political and cultural foundations in Azerbaijan for Western control of the new pipelines running from the Caspian, so Shevardnadze ensured acceptance in Georgia – the two fierce rivals collaborating together.

  In November 1999, the Çıragan Palace, a residence of the Ottoman sultan on the Bosphorus in İstanbul, was buzzing with dignitaries and political leaders. Fifty-five heads of state had gathered for a summit of the Organisation for Security and Cooperation in Europe. BP and its allies chose this occasion to sign publicly the legal treaty underpinning the BTC pipeline. Shevardnadze and Aliyev sat either side of Bill Clinton and President Süleyman Demirel of Turkey, as they put their signatures to the Inter-Governmental Agreement. US Energy Secretary Bill Richardson stressed, ‘This is not just another oil and gas deal and this is not just another pipeline. It has the potential to change the whole geopolitics in the region.’7

  He was right. Like the ‘Contract of the Centurys’ impact on the Azeri economy, these documents reshaped the future of Azerbaijan, Georgia and Turkey by entrenching the position of the oil corporations in the region. The drafting of the various agreements was carried out by Baker Botts, the firm of lawyers contracted in by BP – an element in that part of the Carbon Web related to law. At Baker Botts’s headquarters in Houston, George Goolsby oversaw the work on the pipeline.

  By the time he became engaged in the BTC, Goolsby had already been involved in Caspian oil for nearly a decade, constructing the contracts that had created the Azerbaijan International Oil Consortium and the Baku–Supsa pipeline.8 On the thirty-sixth floor of One Shell Plaza in central Houston, his office looked out over raised freeways and skyscrapers, and, in the distance, refineries and petrochemical plants stretching along Galveston Bay towards Texas City. Renowned for his perfectly coiffed hair and declamatory Texan
voice, Goolsby worked for a company that had been promoting oil interests from the industry’s earliest days. Baker Botts was founded in Houston in 1840, before the oil rush, by an ardent defender of the interests of slave-owners.9

  The İstanbul Summit came after two years of drafting the Inter-Governmental Agreement and Host Government Agreements, with Goolsby constantly shuttling between London, Baku, Tbilisi, Ankara, Washington and Houston. Creating the legal framework to maximise profits and defend BP’s interests for the coming forty years across three countries was a complex task. To make things more straightforward, the Baker Botts legal team drafted the Host Government Agreements to sidestep existing legislation in all three countries. In Goolsby’s words, ‘Without having to amend local laws, we went above or around them by using a treaty.’ 10

  The Agreements – which stand both as international treaties and private contracts with sovereign states – do this by overriding all existing and future domestic law apart from the constitutions of the states in question. The Agreements cover ‘everything from land acquisition and tax codes to environmental regulations and indemnification against liability for military security actions’.11 A new tax structure was created to override existing rates and to exempt all contractors working on the pipeline from domestic taxes. Any disputes between a host government and the oil companies were removed from the jurisdiction of Azeri, Georgian or Turkish courts. Disagreements would be settled in the international tribunals, in Stockholm, Geneva or London. ‘The foreign companies want confidence’, explained Goolsby.

  The Agreements specifically guaranteed the ‘freedom of petroleum transit’, effectively claiming a right of freedom of movement for oil itself.12 By contrast, and as a consequence of the Agreements, the three host governments – of Azerbaijan, Georgia and Turkey – all but surrendered sovereignty over the corridor of the pipeline route. In doing so, they abrogated their power to protect their own citizens from environmental damage or health hazards, and surrendered the possibility of improving regulations on the pipeline for the next four decades. Instead they locked themselves into a ‘frozen’, and drastically weakened, regulatory environment.13

  Security was a key issue, for the planned pipeline would run around and through various conflict zones. For example, at Qarabork, in Azerbaijan, it lies forty kilometres from the ceasefire line of the unresolved Nagorno-Karabakh war. The Agreements stipulated that each host government must take responsibility for defending the pipeline with its own military forces. This was the legal requirement that led, among other things, to the creation of the Special State Protection Service of Azerbaijan – whom we had nearly met in Hacalli. Careful examination of the documents by Amnesty International revealed that certain clauses risked encouraging severe human rights abuses, particularly in their call for a militarised response to ‘civil disturbances’.14 But, knowing of BP’s experiences in Colombia, Goolsby ensured that the corporation was exempt from any legal responsibility for human rights abuses committed by soldiers or police defending the pipeline.

  Some politicians in the three states were unhappy with certain clauses, but Goolsby pushed back hard, taking advantage wherever the governments had weak negotiating positions. As he explained, ‘We had to say to the government a lot, “If you don’t create a usable legal structure, no one will invest in this”.’15 But the building of these legal structures took a tremendous amount of labour. As well as his colleagues in Houston, Goolsby had access to the services of four young Azeri lawyers based in Baku working for Baker Botts, overseen by British expatriate Christine Ferguson and a pipeline expert, Anthony Higginson. Between them, Goolsby’s team put in 40,000 hours of work in the two years leading up to the signing of the Agreements in İstanbul.

  Of course, Baker Botts was merely representing its clients’ interests. But as we stand among the crowd outside the Georgian parliament on Rustavelis Gamziri, it is abundantly clear how powerless the Georgian governments have been. Unlike the Azeris, they did not possess the resources – oil and gas – for which the different corporations were competing so fiercely. Their sole asset was that of being a transit country wedged between a place of drilling and a place of consumption – an ‘energy corridor’ as delineated largely by Washington and Brussels, whose governments Georgia saw as vital allies.

  Furthermore, as Goolsby strove to create ‘a corridor of stability’ for his clients, the key state through which it passed – Georgia – was undergoing two decades of intense upheaval. In the period between John Browne’s first visit to Baku in July 1990 and this street protest demanding the resignation of the president in the spring of 2009, Georgia achieved independence from the Soviet Union, underwent two ‘revolutions’, lost a large portion of its territory in the course of three wars, and saw its industrial economy collapse. No surprise, then, that its bargaining position in relation to BP was incredibly weak.

  10 WE CLOSED IT DOWN TO THE MEDIA

  BTC KP 467 – 654 KM – ახალი სამგორი (AKHALI-SAMGORI), GEORGIA

  ‘I saw it on TV first of all . . . yes, they bombed everywhere, right across Georgia, from Mount Kazbegi to Borjomi – they were trying to create a corridor to connect up with Armenia.’ The man we are talking to has the broadest, warmest smile, revealing a gold front tooth. His jeans are faded and dirty and his brown shoes are crusted with mud. A flat black cap hides grey hair.

  We have come looking for a line of bomb craters – possibly caused by Russian jets during the August 2008 South Ossetia war. Manana has brought us to a cluster of shacks and rusty wire fences in search of someone who might have actually seen the planes. As we near the first shed, we realise it is a sty. A piglet roams about outside a pen within which lies an enormous sow. Five dogs come running towards us, fast, barking. They look alarmingly keen to bite. Thankfully, seconds later, the man in the black cap appears and whistles to his hounds.

  This little cluster of farmed plots is on disused land. The pipelines run at right-angles to the valley, down one side and then up the far slope. We have been following the oil and gas corridor for the last two or three hours, via the marker. Post numbers 26 and 27 lie on the eastern and western lips of this valley. It must be over three years since they buried the pipeline and finished the works here, and everything looks remarkably discreet. We are surprised at how quickly it has been swallowed up by the landscape. Only by looking carefully can one follow the route across the grazing land – a slight dip, a discolouration in the grass, a greater density of stones.

  Eight months ago, on 8 August 2008, the Russian Army advanced into South Ossetia, eighty kilometres north-west of our current location, and routed the Georgian Army. There was much speculation as to whether they would capture, bomb or destroy the BTC pipeline, so carefully created to be outside the Russian sphere of influence. Any Russian attack on the pipeline itself would have undermined Georgia’s reputation as a reliable and secure ‘transit corridor’; on the other hand, it might have brought immediate military intervention from the US or NATO, in order to back up the fast-collapsing Georgian forces.

  Various Georgian ministers did in fact claim that the BTC pipeline route was bombed by Russian aircraft, but that there had been no direct hits. A British journalist filed a report describing a neat line of bomb craters crossing the BTC route. The Georgian state hailed this as evidence, while the Russians continued to deny it, Putin snidely asserting: ‘We are treating our energy facilities carefully and we do not intend to cause damage to anything.’1 BP sided with Russia. ‘These reports are groundless’, stated Tamam Bayatly, the company spokesperson in Villa Petrolea. ‘No explosion occurred in Georgian sector of BTC.’2 A BP briefing to the pipeline investors claimed that media coverage referring to bombings was ‘fanciful’.3

  So what really happened? The journalist who filed the report was the Wall Street Journal’s Guy Chazan, based in London. Before setting off on our journey we met him in a pizza restaurant near St Paul’s. Showing us sketches he had made at the time of the line of craters
, Guy explained how there were two attacks on BTC. The first was in the early morning of 9 August, around the 25 km marker. The second was on 12 August, by the 27 km marker. Guy, an experienced journalist and a Russophile, had been visiting the Caucasus since the early 1990s – almost two decades. He undoubtedly knew what he was looking at.

  Who, then, dropped the bombs? And why did BP issue such a strong denial that there had been any attack? It is just possible that the Georgians dropped the bombs themselves, to leverage greater Western support. A Russian attack, however, seemed far more likely. But this gives rise to another question: were the bombs meant to blow up the pipeline, or merely intended to demonstrate that Russia had the power to do whatever it wanted?

  We had come to Georgia expecting to see a line of craters – to take photos, to try to work out whether or not the Russians had aimed directly at the pipelines, and to ask local villagers what they remembered. But things are not that simple.

  We had left the Green Alternative offices in Tbilisi earlier that day with Manana and Keti. Their driver, Ramazi, is a neat, short man in a striped French-style black-and-white jersey. His grip on the wheel is loose and the car swings in erratic directions. This is extreme driving. We try to focus on other things. But with the vehicle jerking from side to side and bouncing over potholes, it is a hair-raising ride.

  Our first sighting of the pipeline is by the main road just outside Rustavi, whose tower blocks rise like a wall from the flat, dusty steppe. We are about to pull in off the highway to take a look at a pipeline block valve behind its wire fence when we spot two vehicles beside it. One is a military jeep, the other a white BTC four-by-four. The people in them are staring at us: time to drive on rapidly. As in Azerbaijan, there is no formal law, nor any signs saying that a citizen cannot approach or photograph the pipeline, but we know from experience to avoid state and corporate pipeline patrols. After all, the pipeline corridor defined by the Host Government Agreement is effectively an autonomous space set apart within Georgian national territory – a semi-forbidden zone.