For a period of nearly twelve months a constellation of forces seemed to operate in harmony: the international NGO coalition, the Georgian environment minister, the outraged Tbilisi professionals such as Mirian, the businesses who bottled Borjomi water, the villagers along the pipeline route, and the wider public who was angry with President Shevardnadze. This combined opposition came close to preventing public funds being provided from the World Bank, the EBRD, and possibly the export credit agencies.
Without public finance, which brought with it the political backing of states such as Germany, France, Italy, the UK, the US and Japan, the loans from private banks would have been far less likely – at least not with the interest rates BP desired. The company and governments of Britain, the US and the EU were concerned by the threat that these forces of civil society posed to the project and to this particular vision of the Oil Road.
John Browne, then CEO of BP, recalled the NGO campaign in his autobiography: ‘So began a battle. Jim Wolfensohn, President of the World Bank, and the executive directors of the Bank came under enormous pressure not to finance the pipeline.’ Browne described his conversations with Wolfensohn.
He called me one evening at my London apartment. He was very agitated: ‘We cannot get this through’. He was worried that he could not carry his board because of the intense lobbying by various NGOs. My response was predictable: ‘We need to get this done. In the end we need to say what we are doing is right. We should not be scared off by people, some of whom are making things up.’ What else could I say? . . . Jim Wolfensohn and I were long-standing friends but the intensity of the negotiations nearly made us fall out.7
At the time those of us in the NGO coalition had no idea of the personal closeness of Browne and Wolfensohn; nor did we understand quite how hard the company was fighting back against us. Browne later wrote: ‘As I had learned, from bitter experience, we could not ignore any of them [the NGOs]. We had to take all their concerns seriously, engage in discussion and attempt to resolve differences.’8
Browne’s references to ‘engagement’ are given a different twist by a BP-produced document obtained by Nick Hildyard of the Corner House and Doug Norlen of Pacific Environment. The document includes a slide from a presentation given by an unnamed member of BP staff to civil servants and representatives of institutions who planned to lend funds to the pipeline. It illustrates the company’s real ‘engagement’ plan. Published in the illustrations of this book, the slide shows a page divided into four quarters with different civil society organisations mapped across them. Each NGO is placed in a quadrant according to how the company felt it should address its concerns. In the top right-hand square are the logos of large bodies considered to be most sympathetic to BP, such as Amnesty International, the Open Society Institute and WWF. The names of the Corner House, the Kurdish Human Rights Project, CEE Bankwatch, Georgia Greens (referring almost certainly to Green Alternative) and Friends of the Earth are situated in the bottom left-hand square, as they are considered to be the least sympathetic. A note in the margin indicates that there is ‘no need to engage [them] actively’. Instead, BP’s advice was to only ‘engage opportunistically’. The document reveals that the company was briefing the banks and export credit agencies on a strategy to neutralise opposition by co-opting large NGOs and marginalising others.
This strategy employed in London and Washington has remarkable echoes of the processes in Baku, where the government nurtured the ‘pro-BTC coalition’ while denouncing activists like Mayis.
By the spring of 2009, the area around Dgvari had undergone three years of construction work and three years of the pipeline pumping oil. As had been feared, during the building of the line, landslides had become worse and cracks had appeared in the walls of the houses. Roman Gogoladze, a farmer, was quoted at the time: ‘Big powers – the oil companies and the government – are destroying our homes and our land. They are playing their money games and ignore people like us.’9 The village had not been resettled. There had been talk of a $1 million offer of aid from BP, negotiated by the World Bank, but it had never materialised. As we drive back down the mountain track, Manana explains that the villagers’ hospitality has evaporated, as they feel bitter towards strangers bearing promises.
We make our way to Atskuri and spend an afternoon talking with Zuzunna, a secondary school teacher. After the political battle over BTC in 2002 came those struggles over the construction of the pipeline. She talks of how the company used heavy lorries to bring materials and equipment into the mountain villages. In Atskuri the trucks had passed just below an ancient hilltop fortress. The vibrations caused regular landslides and rock-falls onto the homes below. Following Zuzunna’s leadership, residents blocked the road. Once again, complaints were raised with the European Bank for Reconstruction and Development and the World Bank. The villagers demanded that BP reroute its vehicles and take responsibility for repairs. They were partially successful: the company put up signs saying: ‘Trucks, don’t go this way, take the other road’, but the instruction was not enforced, and many of the drivers ignore the signs.
As trenches were dug across the Borjomi region and pipes laid, there were repeated blockades of roads and construction sites as villagers challenged the prioritisation of a company and its investors over their own livelihoods. As at Krtsanisi and Rustavi, resistance was met with a harsh response from the police. ‘When we protested against the pipeline, the police came and beat people up’, proclaimed the villagers of Dgvari.10 There were reports of intimidation towards those who raised concerns, with BTC employees allegedly threatening physical violence or a reduction in the compensation that landholders were due.11 Ed Johnson, the head of BP Georgia, complained in 2004: ‘Every single day there is a disruption that has something to do with getting more from the government or from us.’12 In all, more than 300 direct action protests took place in Georgia alone between 2003 and 2005.13
As we talk, the TV is on in the background, showing Russian news. At around 6 p.m. Georgian time – 3 p.m. in the UK – reports start coming through of the G20 protests in the City of London. ‘Why are people in London protesting?’ Zuzunna asks. At that point, the Camp for Climate Action had set up its tents on Bishopsgate, metres from the EBRD and RBS. Criticised for giving loan finance to BTC, as well as other fossil fuel projects, an RBS branch had already had its windows smashed, and the riot police were forcing protestors back with their batons. We talk about the connection to Atskuri and the anger of people towards the banks.
ბორჯომი (BORJOMI), GEORGIA
In a basement bar in Borjomi, we share homemade red wine and cheese kachapuri with Manana and Keti. It is a local dive with fairy lights and a soundtrack we recognise from Mimino, a Soviet hit comedy about a Georgian helicopter pilot who leaves his mountain village for adventures on international planes. Keti begins to tell us ‘the story of Green Alternative and the drunk BTC workers’.
In 2004, a local Green Alternative volunteer was having a drink in a nearby bar when she overheard a group of BTC foreign workers talking about their jobs. She brought them a round of drinks, whereupon they announced that they would be in the area longer than expected, because they had received orders to dig the pipeline up again – something needed fixing. Then they went tight-lipped. Even when plied with more vodka shots, they refused to talk. The emails flew back and forth between Manana in Georgia and campaigners in England, but no one knew what the cause was.
Manana, Keti and their colleague Nino decided to dig deeper. They drove into the Borjomi mountains, looking for workers excavating pipes. Following close by the line, they came across sections that, previously buried in the ground, were now exposed and surrounded by freshly dug earth. As they passed one of these sites with labourers at work, the car ‘broke down’. Their driver Ramazi got to work under the bonnet, while Manana and the others acted like lost tourists, taking photographs of the forested slopes and the construction site. ‘The workers thought it was so strange – three girls lost
in the mountains. But they were not suspicious at all, because Ramazi played his part so well, and we took lots of photos. But then, when we returned to the car – it was actually broken!’
The full story of what was happening only emerged after investigative journalist Michael Gillard, working for the Sunday Times Insight team, tracked down Derek Mortimore, a leading pipeline corrosion engineer hired by BP. Mortimore is one of a handful of world experts called on when pipelines fail: ‘We are the real environmentalists’, he states. ‘We try to stop pipelines from rupturing.’ The most frequent cause he cites is external corrosion, mostly on account of the coating that seals the pipeline.14
According to Gillard’s investigation, in the early summer of 2002 a two-page memo from BP’s London headquarters was sent to Paul Stretch, then BP’s technical manager at Villa Petrolea in Baku. The memo compared anti-corrosion coatings supplied by four companies. At stake was a multimillion-dollar contract to coat the ‘field joints’ on the BTC pipeline. Each section of the pipeline, each length of steel pipe, comes wrapped in plastic to protect it from external corrosion. After the steel ends of two sections are welded together, this so-called field joint – the most vulnerable place on any pipeline – is coated to seal the weld itself from corrosion. ‘To ensure full protection, the field joint coating must adhere to both the steel and its plastic jacket for the entire design life. In this case, forty years underground.’15
Both Paul Stretch and Rod Hensman, BP’s senior project engineer in Azerbaijan, were alarmed that the memo seemed to be pushing hard for a liquid epoxy paint called SPC 2888, named after its Canadian manufacturing company, Speciality Polymer Coatings. It was a coating whose effectiveness on a plastic-wrapped pipeline like BTC was unknown. The two managers contacted Mortimore, who was already advising BP on its Caspian offshore operations, for a second opinion.
Mortimore quickly pointed out that the proposed SPC 2888 coating was entirely unsuitable: ‘Liquid epoxy paints have very limited flexibility and adhesion when applied to plastic-coated pipelines and would not protect the field joint from rapid corrosion. I felt BP would be burying thousands of environmental time bombs.’ Comparative laboratory tests, he said, had deemed SPC 2888 ‘poor’ on key issues, and raised serious questions over its ability to stick: the liquid epoxy coating came off the pipe in large pieces. The bond would be ‘particularly reduced’ in cold weather, according to Mortimore, who predicted that the sealant would crack during the winter months – clearly a problem in the mountains around Borjomi.
Yet when the BP project team in London produced its assessment of the comparative tests, they omitted from the ranking table any results where SPC 2888 had failed or performed badly, thereby allowing it to come first out of all the competing coatings. The UK parliament Select Committee on Trade and Industry would later hear how BP ignored the concerns raised, and chose this coating as the only sealant to be used on the 60,000 field joints in Azerbaijan and Georgia.16 Alarmed about the decision, Mortimore wrote to John Browne to warn of disaster, but was told there was ‘no value in a meeting’.17 Precisely why the company stuck so closely to the Canadian company has never been clarified.
The first field joint was coated in August 2003. By mid-November that year, Mortimore’s predictions were coming true. Routine pipeline patrols discovered that sections of the pipe, welded together but not yet buried below ground, showed cracked field joints, with rust seeping through the coating. SPC 2888 was peeling off.18 With the pipeline already mired in controversy, BP tried to keep this failure a secret – especially from the World Bank, the EBRD and export credit agencies. For despite the company’s success in the battle over Borjomi, and construction of the pipeline being well underway, the financing deal with the Lenders Group was still not completed.
In February 2004, as pipeline workers were dispatched to construction sites to excavate trenches and reapply the coating, BP finally signed the formal package for a $2.6 billion loan at a ceremony in Baku. Representatives of all the lenders were there, and it took two full days to sign the documents with the 17,000 signatures required. The pipeline’s financing had finally been concluded after a two-year battle, and the objections raised from so many quarters had contributed to the delaying of BTC by about a year.
Only twelve days after the ceremony, Gillard’s exposé ran in the Sunday Times, featuring the testimony of Mortimore, now a public whistleblower. In response, BP mobilised its supporters. The UK’s then trade minister, Mike O’Brien, insisted that the pipeline was still safe, while the British Export Credit Guarantee Department argued that the flaws were merely an ‘application problem’ caused by workers not warming up the coating properly. The experts critical of BP’s decision countered that this would not solve the problem of liquid epoxy ultimately not sticking well to plastic: ‘The chemistry’, they said, ‘is totally wrong.’ With delays mounting, BP developed a novel approach to resolving the remaining problems. Inspectors assessing the pipe joints were given clear guidelines: even if the coating ‘peeled in large pieces’ from the pipe, it should be designated ‘a pass’.19
Back in the Borjomi bar, Manana and Keti have little faith in BP’s promises that the issue has been dealt with. ‘Now that the pipeline’s buried and invisible, everything is supposed to be fine. But we know that the coating is flaking off and that there could be a leak at any point.’
BTC KP 625 – 812 KM – ციხისჯვარი (TSIKHISDVARI), GEORGIA
Early the next morning we head into the mountains along a potholed road in the lee of snow-capped Mount Karakaja, brilliant white against the blue sky. The road winds up and up, passing beyond the forested Mtkvari River valley into steep pine-clad hills. The depth of the snow increases steadily.
Onwards across a high alpine pasture, we reach an upland plateau where modern hotels sit cheek-by-jowl with fields ploughed by oxen. Spring is strengthening its hold as we watch: rivulets of fresh meltwater run through small coppices, and yellow and purple flowers emerge from the snow. Ramazi turns a sharp corner at the last minute, and we are faced with the unlikely sight of two brand new concrete silos and a bright yellow JCB excavator beside them.
Ten minutes further, things became clearer: there is a substantial building site with heavy trucks and diggers, thick-set guys in dark glasses, orange jumpsuits and white helmets with BTC logos. But the pipeline has been pumping for three years, so what is this construction work, we ask Manana.
She explains that BP is building six enormous dams to hold back oil in case of a leak. This mitigation system is not a direct response to the concerns about the pipeline coating failing, but rather an answer to the protests about the threats to the Borjomi catchment. Here, in smooth grey concrete painted with black bituminous sealant, with rusting reinforcing bars and thick-walled pipes, is BP’s solution. Each dam is built across an existing stream, and the structure has sluice gates that are left open. If the pipeline cracks higher up the mountainside and thousands of barrels of crude spills into one of these streams, the sluice gates are to be shut and the oil prevented from running down the mountain. The works seem incongruous here. We look at them with a feeling of ambivalence, for they represent the product of the campaigning of which we were a part.
We drive past the construction site and stop at the edge of the next settlement. There is a weathered bust of Stalin balanced on a fence post overlooking the track. A group of villagers nearby complain about the trucks clogging up their roads, and cracking the walls and foundations of their homes.
Further up the mountain Ramazi guides the car through the mud and into a wide valley of pasture, with the snow having only recently melted and the grass dun green, criss-crossed with fences of pale, sun-bleached pine. All around us, a great ring of mountains with bald peaks rises above the pine forests. Between the meadows and the forest lies the Greek village of Tsikhisdvari. These are descendants of Pontic Greeks, who first settled on the Black Sea coast nearly 3,000 years ago. In the turbulence created by the Tsarist conquest, they
moved up into these high mountains. Decades later many were deported under Stalin, but those families that remained or returned built colourful houses with pyramidal roofs of corrugated iron. Some are painted a shade of bright blue, reminiscent of homes in the Cyclades.
Walking along the muddy village street, we come upon a large house full of people, its doors wide open. A crowd is gathered outside. Manana discovers that this is a wake – a young relative of the household has died in Greece. She explains that in the post-Soviet years many of the Tsikhisdvari residents have returned to Greece, if ‘returning’ can be used to describe a migration somewhat similar to the idea of Anglo-Saxon Londoners relocating to Germany. As the crowd begins to thin, we start talking to a woman with wispy red hair. She invites us to her house for coffee. A doorway in the fence on the main street takes us into her yard, where several neat piles of fresh logs, an axe and a black woolly dog share the shade. Inside the house we are joined by her daughter-in-law.
The room is spotless, with wide wooden floorboards painted brown. There is a divan with covers on it, a wood-burning stove, a sideboard with six carefully tended cactuses. The radiant woman with the red hair becomes a whirl of activity, hurrying back and forth, bringing food to the table – much more than a cup of coffee. Keti, Manana and Ramazi join us at the table, laden with sweet pickled walnuts, piles of chocolate sponge, glasses of deep red grape juice and shots of grape liqueur. It turns out that she is originally from Borjomi town. She had followed her son up the mountain when he moved here for work and then settled down with his village sweetheart.
The Oil Road Page 23
