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Major European loan to controversial Azerbaijani gas pipeline risks fuelling corruption, human rights abuse and climate change

Prague, Brussels – A USD 500 million loan approved today by the European Bank for Reconstruction and Development (EBRD) for the construction of the Trans Anatolian Pipeline (TANAP) would enable this massive fossil fuels project while overlooking the continued repression of civil society and media in both Azerbaijan and Turkey.

Traversing Turkey, from its border with Georgia to the border with Greece, the 1850 kilometre long TANAP is the central piece of the Southern Gas Corridor, the largest energy project the EU is currently pursuing.

The controversial pipeline is planned to ship 6 billion cubic metres of Azerbaijani natural gas to Turkey every year. TANAP is also intended to feed the Trans Adriatic Pipeline with additional 10 billion cubic metres destined for Europe, despite repeated warnings that new gas deliveries could jeopardise the EU’s commitments under the Paris climate accord.

International civil society groups condemn the decision of the EBRD’s board of directors to approve the loan, and called on the bank to condition disbursement of the loan on the promoter, the Azerbaijani state-owned company Southern Gas Corridor JSC and both Azerbaijani and Turkish governments ensuring full compliance with international human rights, social and environmental standards, including standards on transparency of extractive revenues and civil society participation as stipulated by the Extractive Industries Transparency Initiative (EITI).

In March, Azerbaijan decided to quit the EITI, after its membership had been suspended due to the regime’s ongoing crackdown on journalists and rights defenders in the country. EBRD officials have repeatedly voiced the bank’s commitment to the EITI, but have so far failed to demonstrate how granting Azerbaijan financial support for the realization of the Southern Gas Corridor can help address the regime’s alarming human rights record.

In early September, an investigation by a number of media outlets revealed the USD 2.9 billion Azerbaijani Laundromat, a slush fund allegedly operated by the Azerbaijani regime, with the aim of buying influence among key European decision makers. According to the investigation, Kalin Mitrev, Bulgaria’s director on the EBRD’s board received nearly half a million dollars through the scheme.

The generous financial support for the TANAP project agreed today follows three earlier loans the bank has extended to the Shah Deniz II project, the gas production project off the coast of Azerbaijan that is intended as the source of the Southern Gas Corridor. With it, the EBRD’s overall investment in the Southern Gas Corridor now amounts to more than USD 1 billion.

Anna Roggenbuck, Policy Officer at CEE Bankwatch Network, says:

“With this loan, the EBRD has showed disrespect to its fundamental principles of multiparty democracy, the rule of law and respect for human rights. We regret to see the extraction and import of additional fossil fuels into Europe, benefiting only a handful of corporations and oppressive governments, is valued more than sustainable development and freedom of ordinary people.”

Xavier Sol, Director of Counter Balance, says:

“We witnessed today a historical mistake by the EBRD. By approving this loan, the bank is showing its poor consideration of climate challenges, as well as its disregard to the problematic human rights situation in Turkey and Azerbaijan. The strategy of ‘constructive engagement’ with the Erdogan’s and Aliyev’s regimes does not stand: giving a blank check to these regimes is likely to reinforce repression on the ground.”

Tim Ratcliffe, senior campaigner at 350.org, said:

“With significant amounts of existing gas infrastructure sitting idle, and demand across the region falling, there is simply no reason for public banks such as the EBRD to be sinking money into climate-wrecking fossil fuel projects. Rather than a European dash for gas we need investment in just renewables to provide clean, affordable energy for everyone.”

For more information contact:

Anna Roggenbuck
EIB Policy Officer, CEE Bankwatch Network
annar@bankwatch.org
Mobile: +48 509970424 Office: +48 91 831 5392

Xavier Sol
Director, Counter Balance
xavier.sol@counter-balance.org
+32 2 893 08 61

Mark Raven
European Communications Specialist, 350.org
mark@350.org
+447841474125 (UK) +90544145425 (Turkey)

Bulgaria to carve motorway through nature haven

Friends of the Earth Europe & CEE Bankwatch Network

The Bulgarian government has yesterday evening (12/10/2017) announced it will construct an international motorway partially through EU protected wildlife haven Kresna Gorge, threatening tragedy for one of Europe’s most biodiverse nature sites.[1]

The 16km-long Kresna Gorge is a hotspot of magnificent and irreplaceable Bulgarian and European biodiversity, home to 35 protected habitats and 92 protected species. According to expert estimates, twice as many butterfly species live in Kresna Gorge than in all of the UK.[2]

The plan concerns the last remaining section to be built of the European E79 highway, which links Germany with Bulgaria and Greece, and has been funded with 800m EUR of EU taxpayers money.

The “Save Kresna” coalition alleges that construction of the motorway through  Kresna Gorge would have devastating effects on rare wildlife, on local people who will be cut off from accessing their homes and businesses, and on the development of sustainable eco-tourism in the Gorge. NGOs have proposed multiple alternatives that are more sustainable environmentally and socially and would bypass Kresna Gorge.[3]

On 12 July 2017 CEE Bankwatch Network, Friends of the Earth Europe, and the “Save Kresna” coalition filed a legal complaint to the EC, claiming that the plans already break EU nature laws, and they will file new documents to challenge the decision in the coming days.[4]

The European Commission will next be expected to pass judgement on the decision on funding for the EU motorway and to assess compatibility with EU nature laws.

Robbie Blake, nature campaigner for Friends of the Earth Europe, said:

“It is distressing to see the Bulgarian Government decide needlessly to destroy this European natural jewel with this motorway. The European Commission must not allow Kresna Gorge’s stunning endangered wildlife to be massacred using EU taxpayer funds – it would be a crime under EU nature protection laws and much less damaging alternatives exist.”

Anelia Stefanova, Programme Director CEE Bankwatch Network, reacted:

“The Bulgarian Government has taken an outrageous decision that breaches EU law, destroys European natural heritage, and violates the rights of local communities. The European Commission has no choice now but to seriously consider the case and block Bulgaria from using EU funds to break EU laws.”

For more information, contact:

Robbie Blake
Nature campaigner for Friends of the Earth Europe,
robbie.blake@foeeurope.org
+32491290096

Anelia Stefanova
Programme Director CEE Bankwatch Network
anelias@bankwatch.org
+39 333 809 24 92

Notes

[1] Link to decision: http://www.moew.government.bg/bg/vees-odobri-iztochen-variant-g-10-50-na-lot-3-2-na-magistrala-struma/

First Bulgarian media coverage: http://bnr.bg/post/100883647/ekspertniat-ekologichen-savet-kam-mrrb-odobri-iztochnia-variant-za-izgrajdaneto-na-am-struma

[2] http://www.nmnhs.com/butterfly_areas_bg/area.php?q=16_kresna_g

[3] http://www.foeeurope.org/bulgaria-risks-unecessary-breach-nature-laws-threatens-800m-eu-funding-020317 ; http://kresna.org ;

https://bankwatch.org/project/kresna-gorge-struma-motorway-bulgaria

[4] http://www.foeeurope.org/Legal-complaint-lodged-protected-Bulgarian-gorge-120717

Azerbaijan’s Laundromat scandal raises concerns over the EU’s growing business ties with the authoritarian regime

Brussels – Adding up to the list of shady practices of Azerbaijan’s authoritarian regime the Azerbaijani Laundromat corruption scheme raises serious concerns over the EU’s intensifying relationship with the government in Baku. In particular, the latest revelations, cast even more doubts over the already controversial Southern Gas Corridor, the largest energy project the EU is currently pursuing together with Baku. Record loans in European public money [1] are currently being considered for sections of this mega pipeline, where Azerbaijan’s state-owned energy firm is a key shareholder.

Uncovered by a recent joint investigation led by OCCRP, the Laundromat is a USD 2.9 billion-worth international system of money laundering that over two years (2012-2014) fuelled the Azerbaijani “influence machine”, and was used for bribing European politicians and generating benefits for the country’s elite close to President Ilham Aliyev.

The Azerbaijani regime has long been cracking down on journalists, civil society members and political proponents. The new revelations add to several earlier corruption cases allegedly enabled by Azerbaijani money. In May, Malta’s Prime Minister called early elections after allegations his wife and government officials had received Azerbaijani money. In April 2016 the Panama Papers investigation revealed offshore companies linked to family members of President Aliyev. In April, an investigation published in the Italian magazine L’Espresso exposed international schemes linking Azerbaijani oligarchs with companies close to Russia’s Vladimir Putin and Turkey’s Recep Tayyip Erdogan. The indictment of Luca Volonte, formerly the chair of the center right group in the Council of Europe’s parliamentary assembly, over bribery is considered to be part of Azerbaijan’s ‘caviar diplomacy’ efforts.

Yet, the EU is worryingly reinforcing the bond with Azerbaijan, ready to turn a blind eye to the country’s human rights abuses and offer loans of millions of euros to a massive gas infrastructure project that would fill the pockets of the Azerbaijani corrupted elite.

Such a position indicates a concerning trend in the EU’s energy choices, increasingly dictated by the questionable need for gas, for which even the most fundamental European values can be sacrificed.

Xavier Sol, Director of Counter Balance, says:

These revelations come at a time when the European Union is strengthening its ties with the Azeri regime. First of all, the EU is currently negotiating a comprehensive agreement with Azerbaijan to replace the existing Partnership and Cooperation Agreement. Secondly, the European Commission is heavily supporting the Southern Gas Corridor, a chain of pipelines aiming to channel gas from Azerbaijan to Italy.

He continues:

European public banks, both the European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD) are considering huge loans for the Southern Gas Corridor  – that are to be approved in the coming months. Such loans would send a worrying signal of political support to the Azeri regime despite ongoing human rights violations in the country.

Anna Roggenbuck, EIB campaigner at Bankwatch adds:

The EU energy diplomacy is currently leading to a concerning neglect of human rights and democracy in so-called partner countries. Therefore, we call on the European Union to uphold its values and not to provide a blank check to the Azeri regime by feeding it with public money. No section of the Southern Gas Corridor should be financed by European public banks.

Notes

[1] The EIB Board of Directors will discuss the EUR 1 billion loan on its upcoming meeting on 19 September 2017: http://www.eib.org/projects/pipelines/pipeline/20150676. The EBRD USD 500 million loan is scheduled for discussion on 18 October 2017 http://www.ebrd.com/work-with-us/projects/esia/azerbaijan-southern-gas-corridor.html

Legal complaint lodged to save protected Bulgarian Gorge from destructive motorway

Brussels/Sofia, July 6th – A legal complaint submitted today to the European Commission by NGOs [1] alleges that the construction of a controversial EU-funded motorway is already breaking EU nature laws, and warns that completing the final section through Kresna Gorge nature reserve would be catastrophic for protected animals and plants in the region. [2] The complaint calls on the Commission to investigate breaches of EU law, and could result in the Bulgarian government being taken to the European Court of Justice, and hefty fines.

The 16km-long Kresna Gorge is the most biodiverse region in Bulgaria, home to 92 protected species, and part of the EU’s Natura 2000 network of protected areas. More species of butterfly live in one square kilometre of Kresna Gorge than in all of the UK.

Two good alternatives exist to complete the E79 highway, which links Germany with Bulgaria and Greece, without disturbing the protected Gorge and in compliance with EU legislation, according to NGO experts. [3]

However in April, the Bulgarian Government announced designs to build half of the Struma Motorway through the Gorge. [4] NGOs assess that this would irreversibly damage the nature haven and would breach EU nature laws. [5]

The Bulgarian government has already pressed ahead with construction of the motorway at either end of the Gorge, funnelling extra traffic through it. The legal complaint notes that this breaches the EU Habitats Directive on two counts, and has already led to an increase in road killings and population decline of a number of protected species. [5]

Desislava Stoyanova, campaigner at Za Zemiata/Friends of the Earth Bulgaria said:

The Bulgarian government has two good options to prevent our richest nature site from being destroyed, but seems set on senselessly ploughing ahead and wiping out Kresna’s wildlife. The European Commission has no choice now but to seriously consider the case and block Bulgaria from using EU funds to break EU laws.

In December, the European Commission publicly committed to better implementing its nature laws. [7]

Robbie Blake, nature campaigner at Friends of the Earth Europe said:

Kresna Gorge is a jewel of European nature, and needlessly destroying it with a motorway would be a crime. In April this year, EC environment chief Karmenu Vella promised to step up implementation of our vital EU nature protection laws, and how he acts on Kresna Gorge will put him to the test. This is a clear-cut case: either he intervenes, or his commitment to putting our nature laws into practice will just be empty words.

A final decision has not yet been made on which route to take, with the results of a new Environmental Impact Assessment expected in the next few months. The local community and the wider Bulgarian public then will be able to express their views on this, and it will have to be approved by the EU Commission. If the Commission or European Court of Justice find that the project has breached EU nature laws, the Bulgarian government risks having to pay back some or all of the EU grant of just over €750 million.

For more information, please contact:

Ivaylo Hlebarov, Za Zemiata/Friends of the Earth Bulgaria: i.hlebarov@zazemiata.org,+359 898 252303

Andrey Kovatchev, Balkani Wildlife Society, kovatchev6@gmail.com, + 359 887 788218

Anelia Stefanova, programme director at CEE Bankwatch Network: anelias@bankwatch.org, +39 333 809 24 92

Robbie Blake, nature campaigner at Friends of the Earth Europe: robbie.blake@foeeurope.org, +32 491 290096

Notes for the editors

[1] The NGOs party to the complaint are: Friends of the Earth Europe, CEE Bankwatch Network, Za Zemiata/Friends of the Earth Bulgaria, BALKANI Wildlife Society, Green Policy Institute, Centre for Environmental Information and Education, School for Nature Vlahi.

[2] The E79 Struma motorway is part of the Trans-European Corridor 4 linking Hamburg (Germany) with Sofia (Bulgaria) and Thessaloniki (Greece). Kresna gorge is a Natura 2000 site, protected by the Habitats Directive.

The full complaint is available at https://bankwatch.org/wp-content/uploads/2017/07/complaint-EC-Kresna-06Jul2017.pdf

A summary of the complaint is available at https://bankwatch.org/wp-content/uploads/2017/07/complaint-summary-EC-Kresna-06Jul2017.pdf

[3] See map: https://cloud.foeeurope.org/index.php/s/CKVu7jRZm88MJzL

[4] Bulgarian Road Infrastructure Agency announcement: “The Proposal of Patproject 2000 Ltd. is Ranked First in the Competition for Elaboration of an Extended Conceptual Design of Struma Motorway in the Krupnik – Kresna Section”, 20.04.2017, http://www.api.bg/index.php/en/prescentar/novini/proposal-patproject-2000-ltd-ranked-first-competition-elaboration-extended-conceptual-design-struma-motorway-krupnik–kresna-sec/

[5] In 2008, the ‘Appropriate Assessment’ for the Struma Motorway project, endorsed by the European Commission, deemed that any motorway construction in the Gorge and the option to maintain the current road for international traffic (the so-called zero option) is not in compliance with the EU Habitats Directive because of the detrimental and unavoidable impacts on the protected biodiversity. The legally agreed conclusion was to route all motorway traffic outside of the Gorge by means of a bypass or a tunnel.

[6] The damage that has already occurred comes as a result of increased traffic brought on by construction at both ends of the Gorge, creating a bottleneck. Species in observed decline include land tortoises, Leopard and four-lined snakes, 12 species of bats. Comparative monitoring reports for a 10-year period suggest that some of the species, such as the four-lined snake, could have even possibly extinct from the site. The populations of other small species living along the Gorge and the existing road have experienced decreases between 50 and 93 percent.

[7] http://europa.eu/rapid/press-release_IP-17-1112_en.htm

EU urged to honour Paris Agreement, withdraw support for gas mega-pipeline

Brussels, Belgium — In an open letter released today, climate scientists, indigenous leaders, environmental and social justice groups, actors and artists call on the European Union to immediately withdraw its support for a gas mega-pipeline that would ‘destroy Europe’s climate targets’.

While European leaders criticised the United States for pulling out of the Paris Agreement, the letter points to Europe’s failure to honour the accord by supporting fossil fuel projects such as the Trans Adriatic Pipeline (TAP):

Instead of rapidly reducing emissions as the Paris Agreement demands, TAP would lock Europe into fossil fuels for decades. Given that existing fossil fuel operations already exceed the carbon budget left to avoid catastrophic, irreversible changes to our climate, there is no justification for new fossil fuel infrastructure, especially on the scale of the Southern Gas Corridor.

The signatories of the letter including renowned climate scientist James Hansen, actor Mark Ruffalo, authors Bill McKibben and Naomi Klein as well as Italian hip hop group 99 posse, call on the European Commission to withdraw its support for the pipeline. They also urge the European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD) that are considering financing the project to refrain from providing taxpayer-funded financial backing for the project.

Internationally recognised scientist Johan Rockström, director of the Stockholm Resilience Centre, endorsed the call of the letter, saying:

A roadmap to meet the Paris Agreement of staying ‘well below 2°C’ will require halving global emissions every decade. Ramping up investment in fossil fuel infrastructure such as the TAP is inconsistent with the science of 2°C and therefore inconsistent with a goal of attempting to reduce the risk of dangerous climate change.

TAP is part of the EU’s energy flagship project Southern Gas Corridor, a system of mega-pipelines scheduled to start operating in 2020 and bring 10 billion cubic metres of gas from Azerbaijan to Europe a year. Construction works in Southern Italy were met with fierce resistance. [1] Thousands of local residents came to the site every day to block the operations. The battle is expected to continue when the works are attempted to be resumed again at the end of the tourism season.

For more information, contact:

Elena Gerebizza, Energy Campaigner Re:Common, egerebizza@recommon.org, +39 340 670 53 19

Adriana Paradiso, Counter Balance, adriana.paradiso@counter-balance.org, + 32 4 655 768 76

Melanie Mattauch, 350.org, melanie@350.org, +49 151 5812 0184

Photos of the struggle against the TAP in Southern Italy are available here.

Notes to editors

[1] For an overview about the struggle against the construction of the TAP in Southern Italy, see 350.org: Local residents in Salento resist mega-pipeline and Counter Balance: Italian communities block pipeline works to save ancient olive trees for a more detailed account.

[2] People across the world are invited to add their names to the open letter at 350.org/no-tap-letter

 

Image (c) Alessandra Tomassi

Commission pitch for Europe’s future funding must be a People’s Budget

Brussels – In advance of Wednesday’s release by the European Commission of a reflection paper on the future of Europe’s finances, a growing movement of civil society across Europe has launched its own call for a reformed EU budget that unlocks a positive, people-centered and sustainable future for a new Europe.

Coinciding with the publication of the Commission’s reflection paper, the People’s Budget [1] campaign calls for a rethink of the EU budget [2] to guide a sixth scenario for Europe, and demands that citizens and civil society be allowed into the Future of Europe debate, which is currently happening behind closed doors.

The launch of People’s Budget provides input [3] to the last piece of President Juncker’s White Paper on the Future of Europe [4], which should provide a first look at the possible financing arrangements for the five scenarios outlined by the Commission in March for the future of the European Union.

With none of the five scenarios from the Commission’s March White Paper addressing citizens or the root problems facing Europe, more than 250 organisations released a sixth scenario [5] last week, endorsed by the People’s Budget, to outline a Europe based on principles of democratic participation, reversing inequalities, and placing sustainable well-being at the very heart of the European project.

For CEE Bankwatch Network, David Holyoake said,

The EU budget is a sort of mirror of the European project, what and who it values and ignores. Around 11 per cent of Europeans are affected by energy poverty, and the EU budget does very little about it. An innovative EU budget would mean a greater number of ordinary households and communities can access finance for priorities such as the clean energy transformation. Through genuinely involving citizens in EU spending towards a brighter future, the Commission has golden opportunities to rebuild common dreams and a sense of ownership in the EU project.

For SDG Watch Europe and Friends of the Earth Europe, Leida Rijnhout, said:

The European Union needs a bold vision for the future that puts social and environmental wellbeing at the core – and it needs a budget to match. The implementation of the 2030 Agenda for Sustainable Development should be absolutely key for a future that serves people and the planet, not vested interests. After the European Commission’s lacklustre five scenarios, more than 250 organisations from across Europe are backing a sixth scenario of a Europe which stands for peace, justice, long term sustainability, and wellbeing for all.

Klara Hajdu of CEEweb for Biodiversity said:

Meaningful reform of the EU budget reform is not easy and involves more than simply throwing money at the causes of poverty and climate change. We need a new approach, based on a set of sustainability principles [6], that ensures all EU spending and lending delivers tangible benefits for people and improves or does not harm the environment. We need the right tools for this and so we call for sustainability proofing the future budget in a stepwise process with a clearly defined methodology.

For more information contact

David Holyoake, CEE BankWatch Network
david.holyoake@bankwatch.org
+32 470 36 98 17

Leida Rijnhout, Friends of the Earth Europe/SDG Watch Europe
Leida.Rijnhout@foeeurope.org
+32 494 89 30 52

Klara Hajdu, CEEweb for Biodiversity
hajdu@ceeweb.org
+36 20 3889437

Notes

[1]  www.PeoplesBudget.eu a full recording of today’s launch briefing can be found online at: https://www.youtube.com/watch?v=EvMnVU_wcq8

[2] An integral component of the reflection paper will be the EU’s long-term budget – also known as the Multiannual Financial Framework (MFF) – which defines the EU’s spending priorities over a seven-year period. Preparations for the next MFF beyond 2020 are underway, with a proposal for the next MFF expected before the end of 2017.

[3] See more information about our vision for a reformed budget with illustrative examples and some key policy asks from campaign partners http://www.peoplesbudget.eu/wp/wp-content/uploads/Sustainability-principles-explained.docx

[4] More information about the Future of Europe process if available at https://ec.europa.eu/commission/white-paper-future-europe/white-paper-future-europe-five-scenarios_en

[5] More information is available here: http://www.foeeurope.org/Over-250-NGOs-launch-alternative-vision-Europe-200617

[6] Sustainability principles for the future EU budget endorsed by SDG Watch Europe: https://docs.wixstatic.com/ugd/09175c_4ebc89cfca2444e7953c576dfc393fa5.pdf