Builders of the Baku-Tbilisi-Ceyhan pipeline have portrayed the project as the linchpin of socio-economic development in the region. Of late, however, the BTC venture has been hit by worker discontent. Laborers in both Azerbaijan and Georgia have charged that companies involved in the laying of the pipeline are engaging in unfair work-place practices.
On February 28, about 400 workers employed by Greece-based Consolidated Contractors International Co. went on strike in the Kurdamir District of Azerbaijan. "They said they had started the protest action due to social injustice and discrimination both in terms of wages and ethnicity," Azerbaijan's ANS television reported.
Meanwhile in Georgia, controversy has hovered over pipeline construction since the start of 2004. On February 6, the Georgian Trade Union Amalgamation (GTUA), in tandem with the Tbilisi-based environmentalist organization Green Alternative, aired concerns that pipeline workers in the country faced "extreme pressure" to keep to a construction schedule that is designed to have the export route operational by 2005. Workers are seeking higher hourly wages and better working conditions.
According to Gocha Alexandria, a senior advisor to the unions, "what we have here is forced labor, prohibited by the International Labor Organization convention No. 29 on forced labor, adopted in 1930." The Georgian union organization maintains that BTC workers have to work seven-day weeks, and must work 12 hours or more per day in order to earn what it characterizes as a "minimum subsistence salary."
In addition, Green Alternative argues that contracts enforced by the BTC pipeline consortium leave workers with fewer protections against firing than Georgian labor laws allow. "The company is free to terminate an individual worker's contact at any time without compensation," said Keti Kvinkadze, a Green Alternative attorney, in a written statement. The ILO convention No. 29 defines forced or compulsory labor as "all work or service which is exacted from any person under the menace of any penalty, and for which the said person has not offered himself voluntarily."
An ILO official, speaking on background, declined to comment specifically on GTUA-Green Alternative complaint. Speaking broadly about such disputes, the official said those making complaints about forced labor "could conceivably spur an investigation that might lead to a report and, at most, a hearing in the International Court of Justice." In many cases, the ILO official stressed, governments take action to defuse such disputes before an international legal body considers the case.
The Anglo-American conglomerate British Petroleum, as BTC's lead investor, is responsible for maintaining environmental and social standards for project management. Existing BP complaint mechanisms allow for public comment and pledge to develop a response "within a seven-day time frame" to resolve community complaints. But some observers suggest that claims of unfair labor practices may fall outside the establish complaint-resolution framework, and thus may take more time to resolve.
The strike in Azerbaijan raises the question of whether work stoppages could cause construction delays. Many experts are confident that BTC management will avert serious labor trouble. "I doubt it's going to cause any kinds of problems with this project," says Julia Nanay, who covers the Caspian region for PFC Energy, a Washington-based consultancy. "Workers' rights will be resolved."
Nanay expects labor-rights efforts to target corporations rather than governments. "You're going to see people demanding a lot from these oil companies," she says, "because they haven't been able to get anything from their governments." [For background, see the Eurasia Insight archive].
But when squaring off against a public-private entity like BTC, citizens, or even a labor organization may find it difficult to force negotiations. An oil-industry newsletter assessed a workers' strike that occurred on the Georgian section in January as a minor blip in the pipeline's construction. The current schedule includes contingencies for protests and similar delays, according to industry newsletter Nefte Compass.
Green Alternative representatives say lax attitudes among international lending institutions including the International Finance Corp. (IFC) and European Bank for Reconstruction and Development (EBRD) -- have erected a barrier that will make it harder for workers to redress their grievances. "When the IFC and the EBRD came to help finance this pipeline, it was claimed that their presence would guarantee the highest international project standards. Where are these banks now?" said Kvinkadze, the Green Alternative attorney. The GTUA and Green Alternative argue that the IFC and EBRD should be exerting pressure on BTC to uphold international labor law.
At a February 3 ceremony in Baku, officials from Azerbaijan, Georgia and Turkey, along with BTC consortium rpresentatives, put the final touches on pipeline financing. "The financing package includes 208 finance documents, with over 17,000 signatures from 78 different parties," according to a statement issued by BTC. Among those loans finalized on February 3 were those provided by the IFC and EBRD.
Noreen Doyle, the European Bank for Reconstruction and Development's first vice president, cast the project's social benefit in broad terms at the February 3 signing ceremony. She cited the public hearings that preceded the bank's loan commitment as evidence of general community investment in the pipeline. [For background see the Eurasia Insight archive]. At the same time, she praised the BTC Corp. for constructing an "open and transparent business" in which "key agreements between the companies and governments have been made public and revenues paid to and received by governments will be made public."
The International Finance Corporation, the World Bank agency that loaned $300 million to the consortium for oil exploration, did not respond to a request for comment on the labor protest. The organization's loan summary highlights the availability of "a Community Liaison Adviser" and a "provision for an Independent Environmental and Social Consultant that will regularly review sponsors' implementation" of an environmental and social action plan.
Alec Appelbaum is a contributing editor to EurasiaNet.