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Oil Companies Colonise Turkey: MAI by the Back Door?

BP and other oil companies have secured complete freedom from regulation for a pipeline they propose to build across Turkey, a group of non- governmental organizations has learned. The agreement, which was published in Turkey's Official Gazette on 10 September 2000 but only recently obtained, exempts the companies from obligations under any current or future Turkish law that may threaten the project's profits, including environmental, social and human rights legislation.

The only Turkish law not superseded by the agreement is the Constitution. [1] The planned 1700km oil pipeline – backed by BP (UK), Unocal (US) Statoil (Norway), Turkiye Petroleum (Turkey), ENI (Italy), TotalFinaElf (France), Itochu Oil (Japan), Delta Hess (US/Saudi Arabia) and the State Oil Company of Azerbaijan – would stretch from Baku on the Caspian Sea, through T'blisi in Georgia, to Ceyhan on the Turkish Mediterranean coast. Slated for completion in 2005, it would operate for at least 40 years.

The route chosen is one of the most expensive possible for Caspian oil exports. According to BP Chairman John Browne, its profitability will be dependent on ‘free public money’ [2] – much of which will come from western funding sources, including the World Bank and export credit agencies. The legal agreement signed with the Turkish government further props up the project by preventing the Turkish government from taking any actions that could disrupt its “economic equilibrium”.

Non-governmental organizations charged that the agreement was "colonialist" and reminiscent of the discredited OECD proposal for a Multilateral Agreement on Investment (MAI) which was rejected in 1998.[3] “The MAI was rightly rejected by governments under pressure from civil society," said Nick Hildyard of the Corner House. "Now these companies are trying to revive the MAI by negotiating directly with undemocratic governments." The BP-Turkey agreement, known as the Host Government Agreement (HGA), creates a corridor running through some of Turkey’s most politically volatile regions. The corridor would effectively be outside the national government’s jurisdiction for the lifetime of the proposed project. “Turkey is now divided into three countries”, said Hildyard: “the area where Turkish law applies; the Kurdish areas under official or de facto military rule; and a strip running the entire length of the country from North to South, where BP is the effective government.” Other provisions in the HGA include unfettered access to water, regardless of the needs of local communities, and exemption from liability in the event of an oil spill or any other harm caused by the pipeline consortium.

The Turkish government can intervene only in the case of an “imminent” and “material” threat to the public, the environment or national security. But what would constitute such a threat remains undefined. Nor is it clear who would decide whether such a threat existed. Local communities and neighbouring countries appear to be left without recourse for damages.“This is a clear example of why the Earth Summit must deliver global rules on corporate accountability," said Tony Juniper of Friends of the Earth. "Left to their own devices, corporations are quite happy to put profits before people. BP wants to waive the rules, destroying the environment and trampling on the rights of local communities with impunity.” The HGA also paves the way for the consortium building the pipeline to demand unlimited protection from Turkish security forces, without safeguards against human rights abuses.

Under the vague wording of the agreement, paramilitary units could be placed along the pipeline route to pre-empt “civil disturbance” or “terrorist” activities. Since the pipeline cuts repeatedly through villages and bisects established ownership patterns, people could find themselves cut off from their families or land and be forced to trespass regularly on oil company property in their daily lives.

Anders Lustgarten of the Kurdish Human Rights Project commented that Turkey "has recently charged students signing a Kurdish education petition with membership of an illegal terrorist organisation, and charged a father who named his daughter after a Kurdish character in a popular soap with sabotage of the state." "These precedents do not instil confidence in the way such nebulous terms as 'civil disturbance' and 'terrorism' will be applied under this agreement," Lustgarten added.

Similar agreements between governments and the oil companies have also been negotiated for Georgia and Azerbaijan. Commenting on the implications for Georgia, Manana Kochladze of Green Alternatives stated: “The requirement to compensate the consortium for any disruption caused to the 'economic equilibrium' of the project by new social and environmental laws severely curtails the development possibilities for our country.”

[1] For a detailed analysis of the Host Government Agreement, contact

[2] Financial Times, “Wisdom of Baku Pipeline Queried”, 4th November 1998.

[3] Negotiated in secret, the MAI was roundly rejected by national parliaments and the public after its contents were leaked to non-governmental organisations and broadcast on the internet. The agreement would have empowered private investors to extract compensation from foreign governments for legislation that adversely affected their investments, regardless of the public interest. The HGA has similar provisions.

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