The Oil Road

by James Marriott

  Şükran has a nuanced understanding of her role. ‘I have maintained my funding for the work because I argue that this is not charity but a tool for risk management: to create a safe pipeline environment. I’m trying to show the oil men that it is in their interests to support my work.’ She believes that the projects reduced opposition along the pipeline’s route, as well as the number of court cases, and that her team provides an early-warning system of any social and political problems that might arise.

  We are interrupted by a call on Şükran’s mobile; a colleague from the World Bank in Washington wants to chat. Şükran says she will ring back in half an hour, and tells us we need to wrap up. What we had planned as a one-hour meeting has stretched out to three hours. She finishes off by saying: ‘I’m coming from a left-wing oppositional perspective, so I can understand why people are unhappy with multinational corporations. Yashar Kemal is one of my favourite writers. We did a project in his village, a biogas project.’ She walks us to the elevator, and then nips off for a quick Marlboro before her next meeting.

  Outside, the traffic is heavy, and we wander down the pavement reflecting on the conversation. Şükran has such dedication to bringing ‘progress’ to rural Turkey. Despite the complaints about projects, such as the artificial insemination scheme near Hasköy-Hoçvan, we can see that Şükran probably improved the investment programme compared to what it would have been otherwise. And yet, this ultimately reveals what her job is intended to achieve: in softening the rough edges of this twenty-first-century Oil Road, Şükran’s team legitimises the pipeline, monitors and prevents opposition.

  15 THE TRENCH SIDES COULD COLLAPSE ON TOP OF CHILDREN

  BTC KP 1,547 – 1,734 KM – YAYLACI, TURKEY

  We travel in a hired car south-east from Ankara. It is 500 kilometres of slow driving to the point where we rejoin the pipeline, not far from where we left it at Sivas. We pass the time talking with Mehmet Ali about growing up in Turkey. He was born in the industrial city of İzmit, near İstanbul, in 1985. The state had only recently conducted elections after three years of military rule, and the army still effectively controlled the country.

  Mehmet Ali explains that when Atatürk established the Turkish Republic in the ruins of the Ottoman Empire, he orientated the country away from the Middle East. He promoted a European idea of modernity, and actively suppressed any role for Islam in public life. The secular state, enforced by the army, was the supreme authority. As in the Soviet Union, industry was designated as the road of ‘progress’. Indeed, under Stalin’s guidance, the USSR provided the new republic with $8 million in gold roubles, and in 1933 the first Turkish Five-Year Plan was announced, drawn up along Soviet lines.1 One result of the Plan was the building of an enormous textile factory at Kayseri in Central Anatolia, to process the raw materials from the cotton fields further south. It was a modernist town with factory, workers’ housing, social club, cinema and infirmary. This icon of Nationalist industrialisation2 was constructed in the same period as Soviet Sumqayit and Gәncә. As the economy of the country altered, consumption of oil dramatically increased, coming in rising quantities from the wells around Baku.

  We drive through Kayseri, once the Roman city of Caesarea. At the crossing-point of an east–west road, and the route north from the seaports on the Mediterranean, it was visited by Venetian traders such as Marco Polo. Mehmet Ali points out that the city is now known as the heartland of the ultranationalist MHP party.

  After World War II, when Turkey’s allegiance shifted towards the US, the state became a bulwark of the West against the Soviets over the border in the Caucasus. Its international role in NATO reinforced the position of the military within the country. During the Cold War, in the 1970s and 1980s, Turkish party politics was dominated by two men, Bülent Ecevit and Süleyman Demirel – the first being elected prime minister five times, and the second seven times. But the military continued to hold the strings in the background throughout these decades.

  In the twenty-six years of Mehmet Ali’s life, in which he attended school, studied at METU and avoided conscription in the army, the country has seen the slow growth of Islamist politics. Meanwhile, the collapse of the Soviet Union suddenly reduced the importance of Turkey’s position in NATO, and the state seized upon a new geopolitical role as guardian of the future Oil Road to the West.

  It was during these changes in the 1990s that Turkish governments enthusiastically supported US plans for the BTC pipeline, signed the Host Government Agreement drawn up by George Goolsby, and accepted the financial terms of the BOTAŞ Turnkey Agreement hammered out by Richard Morningstar and Peter Bellinger. Fittingly, at the key moment in November 1999 when Turkey signed its Host Government Agreement in İstanbul, Demirel was president of the Republic and Ecevit was prime minister. Both sat alongside their former Soviet enemies, Eduard Shevardnadze and Heydar Aliyev, while President Bill Clinton looked on.

  We stop for the night at Pınarbaşı, ten kilometres from BTC and Block Valve 36 in LOT C, the section of the pipeline that reaches the Mediterranean. We drive south the next day. The mountains to our east are tipped with light, glowing just before sunrise. A dawn breeze is slowly dispersing the last shreds of mist on the peaks around us. Hawks soar in the moist, warm wind that has climbed from Turkey’s southern coast up the slopes of the Taurus. These mountains are the last link of the great chain that stretches across Asia, spreading from the Himalayas. A blanket of Taurus Pine, cedar and oak covers the steep hillsides and deep valleys, with the occasional red-brown crags, limestone precipices and plunging waterfalls breaking the dense forests. On the flat land high between the peaks, villagers work the red earth. When it rains, this fertile soil turns to thick, sticky mud.

  On a wet night in July 2004, eleven-year-old Kubilay Erekçi and Nurullah Keskin failed to return to their parents’ homes in Yaylacı in the Northern Taurus. Many of the village’s 150 families turned out to search for them. An eight-year-old friend of the boys said he had seen them playing near the open, flooded pipeline trench earlier in the day.3

  Ray Cooper, BOTAŞ’s acting site manager, was phoned about the missing children that evening at 9 p.m. He rang various officials working for BOTAŞ and another Turkish company, Limak, the construction subcontractor. Then he set up a ‘crisis centre’ at the distant workers’ camp, near Azizli. An excavator and pumping equipment were sent to Yaylacı, and the search quickly focused on a particular ditch that was gradually drained. Once Cooper realised the children could have drowned on the construction site, he requested Jandarma protection for his workers.

  Finally, just before midnight, two small bodies were pulled from the water, still clothed. Company staff had already gone, the ditch having been evacuated once it seemed likely that the boys had died. Photographs of a digger with its cab windows smashed suggest why.

  How had these deaths happened? Heavy rains the week before had caused a stream diverted by construction to swell. Slipshod planning meant the water flooded the uncovered pipeline trench, which, dug a month previously, had been left unfilled. The children of Yaylacı had been playing around the construction site since work began, but this new two-metre-deep pool provided a more exciting playground. Erosion from the rain widened the trench as the sides collapsed. A photograph taken by a BTC health and safety officer on 7 July shows two boys in swimming trunks standing on the pipeline next to the flooded trench; their names are not recorded. Two days later, Nurullah and Kubilay found a wooden pallet by the pipes and dragged it to the site to use as a raft. Once on the water, their makeshift boat could not hold the two of them. The trench’s steep, high sides meant that the boys were in a death-trap.

  We have driven all day to return to Yaylacı, and the air of a wet evening is filled with the scent of thyme and marjoram. Near the middle of the village, a line of tall poplars provides scant cover from the downpour. Our boots are overwhelmed by the red mud flowing down the road, so we take shelter in a barn. The smell of greased farm machinery mingles with that of nearby anim
als. We have arranged to meet several villagers, who now join us and Mehmet Ali in the barn to escape the rain. Still angry, they explain how, once the bodies were returned to the families and the site was cleaned up, BP and Limak denied all responsibility for the boys’ deaths. The two bereaved families were forced into a protracted court battle in search of some level of recognition and justice. Only in 2007 did the companies accept limited liability and settle out of court.

  Yet the companies’ internal investigation reports, which we have obtained through Freedom of Information requests and brought with us, show that they fully understood their responsibility. Memos describe how, a month before the accident, the site was already ‘attractive to village children’ who ‘persistently play around the trench’. The Limak environmental officer had several times raised ‘her concern that the trench sides could collapse on top of children’. Handwritten notes accompanying the photograph of the playing children read: ‘I tried to scare them by telling them the police would take them to the station’; and then: ‘the issue of kids swimming in open trenches had been raised continuously in meetings with the contractor . . . Had action been taken this could have been [avoided].’4

  The internal investigation made attempts to divert blame onto the villagers. They asserted that parents did not know where their children were, and that the ‘children did not heed previous warnings’. But the documents reveal that the project’s own safety procedures were not enforced, and that the required ‘barrier’ of posts and tape was not properly erected. They also raise questions over whether lessons were learned by the companies after a child was crushed by a pipe further up the line, beyond Erzurum, during the previous autumn.

  BISHOPSGATE, LONDON

  Five days after Kubilay and Nurullah drowned, BTC Co.’s finance manager, John Wingate, wrote a letter to the French bank Société Générale, the coordinator of the Lender Group of institutions helping to fund the pipeline, stating: ‘We regret to inform you of the drowning of two children on the BTC Project in Turkey.’5 Someone in the SocGen office then made fourteen A4 copies, and forwarded these on to the other lenders in Europe, Japan and the US. One of those copies was sent to Baba Abu at the Royal Bank of Scotland (RBS) on the top floor of 135 Bishopsgate, in the City of London.

  Abu was then an associate director at RBS, which had the largest oil and gas banking division in the UK. On the day the letter arrived this division, overseen by Steve Mills, was engaged in projects across the world. Mills might have been assessing the reasonable returns for an Exxon offshore oilfield in Nigerian waters, while his deputy Colin Bousfield submitted a bid to finance the Angolan state oil company. Maybe advice specialist Michael Crosland was working on the loan agreement that made the Qatargas II project a reality. The global reach of this London office, together with its twins in Houston and Aberdeen, had led RBS to market itself as ‘The Oil and Gas Bank’. The BTC pipeline loan was just a small part of its business.

  In June 2003, RBS adopted the ‘Equator Principles’:6 weak, self-regulatory guidelines covering loans to infrastructure projects by private banks. These Principles, currently adopted by seventy-two bodies, were created following public campaigns over environmental and social impacts caused by bank lending. To some extent they were established in order to head off calls for a more robust set of standards and legal accountability. For the Principles focused primarily on monitoring and assessing the impacts of projects, rather than fundamentally changing the way the infrastructure was constructed.

  BTC was the first major scheme to come to the private banking sector for loans after the Principles were established. Naturally, BP was determined to secure financing for the pipeline on the best terms. If the plan for BTC was shown to be compliant with the Principles, then a wider range of institutions would feel happy to finance it. However, Nick Hildyard of the Corner House, Greg Muttitt of Platform and Antonio Tricarico of the Italian group CRBM also recognised that BTC would be a test case as to whether or not the Principles had any teeth. Greg forensically scrutinised the pipeline documents, and highlighted 157 violations of the Principles.7

  Despite an intense campaign publicising these violations, executives from RBS joined colleagues from other private banks in February 2004 at the official signing of the BTC loan agreement in Baku. This ceremony at the Gulustan Palace, overseen by President Aliyev, effectively marked the end of the long battle over Borjomi, but took place in the shadow of the scandal about the pipeline sealant. Together with the EBRD, the World Bank and the export credit agencies, fifteen major private banks combined to offer BP a $2.6 billion loan towards construction costs. BP had successfully persuaded the banks to ignore the concerns raised by campaigners and trust it that the pipeline complied with the Equator Principles.

  Sheltering from the rain in Yaylacı, we look at the single sheet of A4, sent from Paris five months after the signing of the loan agreement, announcing that the eleven-year-olds Kubilay and Nurallah had drowned in the pipeline that RBS had helped to make possible. We find ourselves wondering how Abu received the news, how he relayed it to the rest of the oil and gas team, and what kind of connection was felt between the office in Bishopsgate and these muddy fields.

  Viewed from a desk in London, BTC just becomes one of many industrial projects funded by RBS. Moreover, accidents are bound to happen, and BTC Co. was seemingly conducting a thorough investigation of the incident. The internal report clearly laid the blame on the subcontractor, Limak, for not filling in the ditch.

  But the investigation did not ask whether this slipshod work was partly driven by the pressure on Limak from BOTAŞ to cut construction costs. That pressure was itself a direct result of the actions taken by BP, alongside Peter Bellinger and Richard Morningstar, to create the terms of the Turnkey Agreement. This agreement was crafted to ensure that the financial architecture of the pipeline would attract loans, such as that made by RBS. And it was the private banks’ drive for greater profits that helped form that architecture.

  This piece of paper, it seems to us, links the boys’ death to BTC Co. in Baku, to Société Générale in Paris, to RBS in Bishopsgate, and beyond that to the headquarters of BP in St James’s Square, and the offices of Bellinger and Morningstar in Ankara. But the reality of Kubilay and Nurallah stuck in the ditch and slowly sinking fails to break through the dry language of the incident report.

  RBS itself has undergone a major convulsion since the ‘credit crunch’ of autumn 2008. After gambling on subprime loans, the bank was rescued from collapse by a bailout with £45 billion of British public money. But public accountability has not increased. The bank has continued to fund oil companies breaking into the Arctic, drilling along the conflict-ridden Congo–Uganda border and extracting Canadian tar sands. The bank is still receiving repayments and interest on its loan to BTC.

  While the ‘incident’ has long since been forgotten in London, Paris, Baku and Washington, in these mountains the impact of the pipeline remains live and present. In Yaylacı, the scars are visible. The village road had coped with decades of tractors and car use, but the rumbling construction lorries left permanent, wide cracks in nearby homes, and weakened their foundations. We have seen such fissures before, in the walls of houses in Dgvari and Atskuri in Georgia, and we have heard the same stories of the companies denying responsibility. The residents of Yaylacı explain that they feel manipulated: ‘They always use our weakest point, saying, “This is for the state, for the well-being of the state.” They know that we don’t want to undermine the Turkish state.’

  BTC KP 1,654 – 1,841 KM – AKIFIYE, TURKEY

  Akifiye is encircled by thick pine forest. Only one road goes in and out of it. A narrow stream flows under a tarmacked bridge just where the village begins. On one side of the road we can see the pipeline’s marker posts. On the other is Gazi Temur’s café, the villagers’ informal meeting place. Gazi seats the three of us at one of his wooden picnic tables, while his friend Fahri explains that this is a Çerkez village. The Çerkez, or Cir
cassians, once ruled the north-western Caucasus: present-day Kabardino-Balkaria, North Ossetia, Abkhazia and parts of Georgia. For a hundred years they held the encroaching Tsarist Russian Empire at bay, before their final defeat in 1864. Over half a million Çerkez were subsequently expelled from their native land. They resettled in the Ottoman Empire, spreading through present-day Jordan, Syria, Bulgaria and Turkey. Fahri emphasises that the Çerkez are not a Turkic people, although they speak Turkish as their primary language. Clearly the residents of Akifiye remain proud of their cultural and ethnic identity.

  We are joined by two older men returning from their fields, just as Gazi brings out hot tea. He explains that when BTC staff held meetings about the pipeline here outside his café, they distributed shiny brochures. These were informative about the permanent and temporary acquisition of land, but they did not mention that the village would be turned into a construction site: ‘Until the trucks arrived, we weren’t expecting them. We didn’t know what rights we had and what to ask for.’ The heavy vehicles tore up the recently asphalted road, which had not been designed for such usage. Fahri tried to persuade his friends to block traffic and insist that BP construct a new road around the village, as nearby villages had done successfully. ‘We asked them to bypass the cemetery and the stream. They agreed to the first, but not the second.’ Gesturing at the water flowing under the bridge, Fahri informs us it has burst its banks every spring and autumn since the construction work artificially straightened its course, ruining the crops on the nearby fields.

  All the men are worried about the risk of a spill if there is an earthquake in this tremor-prone region of Turkey. Gazi is especially worried, with his café so close to the pipeline. ‘Nobody came to explain what will happen if there’s a spill. Not being informed about the dangers makes me worry even more . . . We are also worried about how climate change will affect us. The last two years, there has been much less rain. We don’t know if this is because of the shifting climate. If it stays dry, this will ruin our corn production. We only have two streams, and no water storage system. We are doubly threatened here, by climate change and by the pipeline.’