(Back to news)

Thursday 20th May 2004

Parliamentary committee criticises UK government over controversial pipeline

A parliamentary committee has criticised a prominent UK government department over its conduct in providing support for BP's hugely controversial Baku-Tbilisi-Ceyhan (BTC) oil pipeline.

Addressing allegations that the Export Credit Guarantees Department (ECGD) failed to properly investigate the human rights and environmental implications of BTC before providing $150 million in cover for the project, Trade and Industry Committee chair Martin O'Neill told ECGD,

"[A]t times there is a tendency towards carelessness or a lack of attention in some respects certainly to human rights considerations and the way that we would do it. One would have looked at this [BTC] a little more carefully, even when you consider that a flagship UK company like BP was involved. If you were to look at a proposal of this nature again, we would like to think that maybe due diligence might be even more rigorous than it was at the time."

The Committee also addressed the contentious issue of the coating material used on the BTC pipeline, something Mr. O'Neill referred to as a "cause celebre". Concerns revolve around allegations by former BP senior consultant Derek Mortimore that both BP's choice of coating and its selection process were "seriously flawed". The faulty coating threatens major oil leaks if the pipeline is not dug up and recoated.

ECGD Acting Chief Executive John Weiss and Director of Strategy John Ormerod denied that the choice of coating would cause problems, and went on record to say that cracks detected in it, which led to the suspension of work on BTC for many weeks, were attributable to the application of the material, not the coating itself.

The Committee, which is shortly to publish a report on the ECGD's operations, requested a further written statement from ECGD on the coating issue, which it warned the department it would circulate for "peer review".

Hannah Griffiths of Friends of the Earth, who also testified before the Committee, noted,

"For the Committee to spend so much time dealing with the Baku-Ceyhan issue shows just how serious the problems with the pipeline are. ECGD's failures of due diligence have led to the UK backing a project which is looking more and more dangerous for the environment and local people all the time."

Anders Lustgarten of the Baku-Ceyhan Campaign, which helped raise many of the concerns about the BTC project, said,

"It would appear that ECGD has failed to tell the Committee the full truth about the dangers this pipeline poses. We look forward to ECGD's written statement, and also to helping the Committee further with its investigation."

More news>>>