CENN Daily Digest – 04/06/2004

Table of Contents:
1. NGO Targets Pipeline Disclosure
2. BTC Sangachal Terminal Construction Works Fits The Schedule
3. Rigid Tariff Policy of Russia
4. Caspian Sea States to Discuss the Sea’s Status
5. Creation of Alternative Energy Sources is Dictate of Time
6. Stockholm Convention on Persistent Organic Pollutants
7. Transport corridor North-South actively operating, developing
8. Switzerland provides Armenia with 6.5m Swiss aid
9. KFW Bank to give 4.7m euros to reconstruct of Alaverdi substation
10. Germany to loan Armenia 4.7 mln euros for power station
11. International Press Release by: Bankwatch (Czech Republic), Campagna
Per La Riforma Della Banca Mondiale (Italy), Amis De LA Terre (France),
Both Ends (Netherlands)


Source: Georgia’s English Language Daily, `The Messenger’, April 6, 2004

The Krtsanisi-Mtasminda District Court satisfied the appeal of the
Georgian NGO Green Alternative (GA) on April 2, 2004 and called for
parliament to guarantee the official publication of the
intergovernmental agreement on the BTC construction.

The agreement signed between Georgia, Azerbaijan and Turkey and its
appendixes were ratified by the Parliament on Amy 31, 2000, but the
Georgian government has not officially publicized these documents.

According to GA, `the public should be aware and interested of what is
written in these documents,’ because this agreement describes the legal
aspects behind the BTC project. As the representative from the NGO
stated: `maybe the document was not publicized because the government
should pay money for printing it and it is large.’

Meanwhile, BP claims it `did everything’ to make the public aware of the
text of the agreement and points to its online document collection. As
Rusudan Medmariashvili from BP explains, the company has a text of the
agreement on its website `presented in two languages’, Georgian and
English. She adds it is impossible to publicize the complete text of
agreement itself `is a large volume’.

Mrs. Medmariashvili says the agreement between governments is available
in the collection of the government to make such documents public’. The
text of the agreement as well as other documents on the BTC pipeline can
be found on: in Turkish, Azeri,
Georgian and English.

The environmental NGO actively working on monitoring the BTC pipeline,
GA has frequently appeared in court to challenge the pipeline project.
In late March the group appeared in the court on another case regarding
the BTC that it finally lost. GA brought a case against the Ministry of
Environment of Georgia and the BTC Co., in Tbilisi Regional Court. The
NGO asked the court to annul the document issued by the Ministry on
November 30, 202 that permitted the construction of the BTC pipeline on
Georgian territory.

GA claimed the permission was issued in violation of Georgian
legislation and citizens’ constitutional rights. It also claimed that
the process lacked transparency and that the public should have been
informed about the government’s decision.

As a result, the NGO claims the Aarhus Convention was violated a UN
sanctioned document that provides for proper access to information in
decision-making processes regarding environmental issues.

Defendants at the BTC Co. said it took all necessary measures to ensure
the proper access to information and public participation and therefore
met all obligations of the Georgian government.

In response to the court verdict, the environmental group argues `the
judges were biased’ and that is why they gave wrong interpretation to
the articles of the Georgian Constitution and the Aarhus Convention.

According to GA it plans to apply to the Supreme Court as well as to the
Aarhus Convention committee in Denmark to appeal the Tbilisi Regional
Court decision on that case.


Source: State Telegraph Agency of the Republic of Azerbaijan, AzerTag,
April 5, 2004

The construction works, carried out on Sangachal terminal, within the
Baku-Tbilisi-Ceyhan project, fits the schedule.

How report experts, 60% of works on BTC head pumping station PS-A1
construction works have been completed by the present time. The station
will consist of four main and one additional pump. The pumps have been
delivered to the terminal and installed, currently; they are being
connected to the pumping station.

An alliance Spie Capag/Petrofag is the contractor on the BTC pumping
stations construction on the territory of Azerbaijan and Georgia, which
at the same time carried out construction of the Georgian pipeline

The length of BTC pipeline is 1,762 km, diameter is 42 inches, has eight
pumping stations (4 on the territory of Turkey, 2 on the territories of
each Azerbaijan and Georgia) and 98 stations with stopcocks.

Sangachal terminal extension works have been completed by 90% within the
project of full-scale ACG (Azeri-Chyrag-Guneshli) field’s development.
According to experts, the frameworks of the first and second oil storage
reservoirs each with an 800 thousand barrel (110 thousand tons) capacity
have been already assembled. Currently the reservoirs are painted. Apart
from that the construction of associated water storage reservoir with a
50 thousand barrel capacity has started. In particular, the reservoir
foundation is being prepared.

A French company CMP Enterpose realizes the construction of storage
reservoirs on Sangachal terminal. The contract includes the construction
of two oil storage reservoirs each with a 110 thousand ton (800 thousand
barrels) capacity and the smaller associated water storage reservoir
with a 50 thousand barrel capacity. The oil storage reservoirs must be
ready by June 2004. As per the estimation, the cost of works will make
$16 million.

In the future the construction of another 800 thousand barrel capacity
reservoir is planned, which will allow bringing the oil storage
capacities to 2.5 million barrels.

The Sangachal terminal extension is run by Azfen/Tekfen. Its total cost
will equal approximately $345 million. The new terminal total area will
make 540 hectares.

On the peak of ACG oil extraction in 2008 the terminal capacity will
reach 1 million barrels of oil and 700 million cubic feet of natural gas
per day.


Source: Russian Information Agency, NOVOSTI, April 5, 2004

Russian deputy foreign minister Viktor Kalyuzhny believes that the
reason for the connection of Kazakhstan to the Baku-Ceyhan pipeline is
the rigid tariff policy of Russia, he said at a press conference in RIA
Novosti on April 5, 2004.

“We should be more flexible in the issues of the tariff policy. This
will make Russia attractive for the transit of energy products through
its territory,” Kalyuzhny pointed out.

According to him, the Russian northern route Baku-Novorossiisk can
ensure the transportation of all the oil produced in the Caspian region.
In particular, Kalyuzhny is of the opinion that the Russian Transneft
Company may be in charge of transporting the energy products.

“It has a great backlash of possibilities for this,” he said


Source: Iran Press Service, April 5, 2004

Kamal Kharrazi, the Foreign Affairs Minister of Iran called Monday for a
“friendly and just” solution to the crippling problem of dividing the
Caspian Sea waters.

Arriving to the Russian Capital for taking part at a meeting of foreign
affairs ministers of the world’s biggest land-locked lake littoral
states to discuss the Sea’s legal status as from Tuesday, he said Iran
was working hard to find a “just solution acceptable to all neighboring
states”, but did not spelled out details of the solution Iran is

Sources close to the meeting told Iran Press Service that the ministers
are expected to discuss ways of removing obstacles to the sharing of the
waters and its huge energy resources, including finding a “viable”
convention on legal regime” of the Caspian Sea.

While Russia, Kazakhstan and Azerbaijan have already defined their deep
water borders and exploits its natural resources, including oil and
natural gas, Iran calls for a condominium, or common sovereignty, over
the Sea and has made it known that it will reject any unilateral action
for energy exploration before the issue of the legal regime is settled.

Iran insists that the waters must be divided on equal shares of twenty
per cent for each coastal nation while it would not get more than 13 if
the waters are allocated according to each country’s coast that give
Kazakhstan 33 per cent, Russia 19, Azerbaijan 18 and Turkmenistan 17 per

Two years ago, Iran threatened Azerbaijan with military action with
sending gunboats and warplanes after oil exploring ships working for
Azerbaijan’s State Oil Company started working in waters that Iran
claims sovereignty.

For its part, Turkmenistan, due to disputes with Azerbaijan, has also
refused to define its water borders with other neighbors.

“This meeting is considered as a good opportunity for exchanging views
on issues of the Caspian Sea at the foreign ministerial level”, he told
journalists on his arrival, adding one has to held each other in trying
to find a solution that would satisfy all parties”.

The Caspian Sea is believed to hold the world’s third-largest oil and
natural gas reserves and a general consensus of territorial issue is
seen as vital for the development and export of the region’s natural

But observers noted that for the first time, Tehran was not trumpeting
on its known position of sharing the waters, softening its attitude that
has kept many international oil companies from entering the lucrative

“The Islamic Republic always supports the resolution of issues relating
to the Caspian Sea and in Moscow too would outline its stances and call
for the exploitation of Caspian resources by all its littoral states and
cooperation among them in various fields”, the official news agency IRNA
quoted Mr. Hamid Reza Asefi, the senior spokesman for the Iranian
Foreign Affairs Ministry as having said.

The meeting would also examine the possibility of holding the next heads
of state meeting of the Caspian littoral countries in Tehran, he added.

“The five states have tried to keep a lid on their differences since the
legal regime of the land-locked waters was catapulted to the core of the
dispute following the collapse of the Soviet Union”, IRNA noted in a
dispatch from Tehran.

Kharrazi also voiced Tehran opposition to the presence of foreigners in
the region, a reference to the presence of American forces in
neighbouring Azerbaijan.

Russia that is also against the presence of foreigner in the region has
warned the United States to `not interfere in talks on delineating the
oil-rich Caspian Sea.

“The countries of the Caspian region should settle the problems by
themselves, in a family way, so to speak, without attracting mediators,”
Russian Deputy Foreign Minister Viktor Kalyuzhny, a presidential envoy
on the Caspian basin, said in an interview published in Nezavisimaya
Gazeta, adding that “the external factor will only cause problems”.


Source: State Telegraph Agency of the Republic of Azerbaijan, AzerTag,
April 5, 2004

Natural climatic conditions in Azerbaijan open wide possibilities for
use solar and wind energy as alternative sources. According to Chair of
the Milli Majlis Standing Commission on Natural Resources, Energy and
Ecology Asya Manafova, the `State Program of Social and Economic
Development of Regions of the Azerbaijan Republic’ underlines the
necessity of use of the alternative energy sources to supply to the
country’s population with electric power in full measure in 2004-2008.
`No state duty will be collected for import of necessary technical
equipment for creation of alternative energy sources,’ she said.

(POPs) to enter into force on 17 May 2004

Geneva/Nairobi, 18 February 2004 – The 2001 Stockholm Convention on
Persistent Organic Pollutants (POPs) will become legally binding on 17
May 2004, the United Nations Environment Program (UNEP) announced today.

The 90-day countdown to the treaty’s entry into force was triggered on
17 February 2004 when France became the 50th state to ratify the
agreement. `Of all the pollutants released into the environment every
year by human activity, POPs are the most dangerous. For decades these
highly toxic chemicals have killed and injured people and wildlife by
inducing cancer and damaging the nervous, reproductive and immune
systems. They have also caused uncounted birth defects,’ said UNEP
Executive Klaus Toepfer.

`By committing governments to eliminating production and environmental
releases of these chemicals, the Stockholm Convention will greatly
benefit human health and the environment. It will also strengthen the
overall scope and effectiveness of international environmental law,’ he
said. Governments will pursue a rapid start to action under the treaty
when they meet for the first session of the Conference of the Parties to
the Convention (COP 1) in Punta del Este, Uruguay in early 2005. One of
this meeting’s priorities will be to assist countries to combat malaria
by replacing DDT with the increasingly safe and effective alternatives.
The COP will also establish a Committee for evaluating other chemicals
and pesticides that could be added to the initial target list of 12 POPs
(these are aldrin, chlordane, DDT, dieldrin, endrin, heptachlor, mirex,
toxaphene, polychlorinated biphenols or PCBs, hexachlorobenzene, dioxins
and furans).

Still another key goal for the COP will be to finalize guidelines for
promoting `best environmental practices’ and `best available techniques’
that can reduce or eliminate releases of dioxins and furans (perhaps the
most toxic of all the POPs) from a wide range of industrial and other

Every human in the world carries traces of these chemicals in their
bodies. POPs are highly stable compounds that can last for years or
decades before breaking down. They circulate globally through a process
known as the “grasshopper effect”. POPs released in one part of the
world can, through a repeated process of evaporation and deposit, be
transported through the atmosphere to regions far away from the original
source. In addition, POPs concentrate in living organisms through
another process called bioaccumulation. Though not soluble in water,
POPs are readily absorbed in fatty tissue, where concentrations can
become magnified by up to 70,000 times the background levels. Fish,
predatory birds, mammals, and humans are high up the food chain and so
absorb the greatest concentrations. And when they travel, the POPs
travel with them. As a result of these two processes, the Inuit and the
animals they consume in the Arctic — thousands of kilometers from any
major POPs source – suffer particularly high levels of POPs in their
bodies. But POPs are equally dangerous to people working with pesticides
or living near POPs sources, particularly in developing countries, where
a lack of equipment and expertise leads to accidental exposures.

Most of the 12 chemicals will be banned immediately. However, the use of
DDT for disease vector control under World Health Organization
guidelines is considered an acceptable purpose because it is still
essential in many countries to control malaria transmission by
mosquitoes. This will permit governments to protect their citizens from
malaria – a major killer in many tropical regions – until they are able
to replace DDT with chemical and non-chemical alternatives that are
cost-effective and environmentally friendly. So, contrary to some
claims, no one will die of malaria because of the Stockholm Convention.
In fact, the Convention should help direct research and development
towards more effective means of malaria control.

In addition to banning uses, the treaty focuses on cleaning up the
growing accumulation of unwanted and obsolete stockpiles of pesticides
and toxic chemicals. Dump sites and toxic drums from the 1950s, `60s,
and `70s are now decaying and leaching chemicals into the soil and
poisoning water resources, wildlife, and people. In the case of PCBs,
although they are no longer produced, hundreds of thousands of tons are
still in use in electrical transformers and other equipment. Governments
have until 2025 to phase out these uses, which gives them time to
arrange for PCB-free replacements. Not later than 2028, governments must
dispose of these PCBs in an environmentally sound manner.

Fortunately, there are alternatives to POPs. The problem is often that
high costs, a lack of public awareness, and the absence of appropriate
infrastructure and technology have often prevented their adoption.
Solutions must be tailored to the specific properties and uses of each
chemical, as well as to each country’s climatic and socio-economic

To ensure that such solutions are exploited, donors have pledged to
contribute hundreds of millions of dollars in new funding over the next
several years. The Global Environment Facility is the principal entity
of the interim financial mechanism of the treaty. It has already
mobilized resources to support POPs projects in more than 100 countries.
Backed by an alliance of developed and developing countries – and with
both industry and environmental groups on board – the Stockholm
Convention holds the promise of a POPsfree world for future generations.

For additional information, please contact:

Eric Falt, Spokesperson/Director of UNEP’s Division of Communications
and Public Information, on
Tel: +254 20 623292,
Mobile: +254 (0) 733 682656,
E-mail: [email protected];

Nick Nuttall, UNEP Head of Media, on
Tel: +254 20 623084,
Mobile: +254 733 632755,
E-mail: [email protected]; or

Michael Williams in Geneva at
Tel: +41-22-917 8242, +41-79-409
Mobile: 1528 (cell) or [email protected].
See also


Source: ITAR-TASS News Agency, April 5, 2004

The transport corridor North-South “is actively developing and already
the operational project,” Russian Deputy Foreign Minister Viktor
Kolyuzhny said on Monday. Russia and Iran initiated the creation of the

“The project is operational, evokes great interest, but additional
efforts to create the fleet of ferry boats and unify the tariff policy
of states concerned will be needed,” he emphasized.

Meanwhile the deputy minister noted that many countries wish to join the
project. “Russia has already considered and put forth a proposal to
include Azerbaijan and Armenia in the project,” the diplomat pointed


Source: ArmenPress, April 5, 2004

The governments of Armenia and the Swiss Confederation signed on April
3, 2004 an agreement on technical, financial and humanitarian
cooperation as part of the regional cooperation in the framework of
which Armenia will receive 3.5 million Swiss Frank as a technical aid
and 3 million Franks as a humanitarian assistance. Armenian Finance and
Economy minister Vartan Khachatrian and Head of Policy Department at the
Swiss Foreign Ministry Blez Goden signed the agreement.

The focus of the cooperation program, which will be implemented in
Georgia and Azerbaijan as well, will be on promoting quality of
governance, effective exploitation of natural resources and the disaster
consequences. The program also aims at promoting the economy and
integrating Armenia into the world economy.

Switzerland has assisted Armenia since 1988 earthquake, mainly in the
form of humanitarian assistance. Starting 1991, major focus was on
long-term development programs. During 1993-2001, the government of
Switzerland provided Armenia with 23-25 million dollars of humanitarian
assistance within the framework of regional programs.


Source: ArmenPress, April 5, 2004

Armenian finance and economy minister Vartan Khachatrian and Germany’s
ambassador Hans Wulf-Bartels signed an agreement by which the German KFW
bank will allocate a 4.7 million euro credit for reconstruction of a
major power sub-station in the northern Armenian town of Alaverdi to
ensurea better transmission of Armenia-generated electricity to
neighboring Georgia.

A KFW representative in Armenia, Karapet Gevorkian, recalled that KFW
had already released loans for major reconstruction of two other major
sub-stations in Vanadzor and Kamo. The reconstruction of Alaverdi
sub-station will increase its reliability and capacities to allow an
uninterrupted transmission of electricity to Georgia and through it to
also other countries.

The project is part of a major program aimed to reform the power grid.
Unlike other previous two loans this one is given not to the government,
but to High Voltage Electricity Lines Company with the government
assuming to guarantee its return. The loan is given with two-year grace
period, for five years at 2 percent of annual interest rate.

The amount of German loans to Armenia since 1995 has amounted to 110
million euros.


Source: Information Agency, Interfax, April 5, 2004

The German government is to allocate a 4.7 million euro loan to Armenia
for an upgrade of the Alaverdi-2 power station, from which electricity
is delivered to Georgia.

German Ambassador to Armenia Hans Wulf Bartels and Armenian Finance
Minister Vardan Khachatrian signed the loan agreement on April 5, 2004.

The loan will be disbursed through KfW of Germany for 12 years at 5%
annually with a two-year grace period, Khachatrian said at a briefing.

The upgrade will increase the reliability of the power station and equip
it with modern European equipment as well as increasing its capacity, he


Make poverty alleviation a priority! Support renewable energies and
phase out oil projects!

Yesterday the European Parliament approved a resolution in support for
the adoption and implementation of the two-year-long highly professional
multi-stakeholder analyses by the Extractive Industries Review of the
Bank’s involvement in financing extractive industries report
recommendations. The day before the European Commission, called by the
Green Group to answer before the European Parliament, expressed its
strong support for the full implementation of EIR recommendations.

The independent study was commissioned by WB President Wolfensohn in
2000 to examine the World Bank Group’s (WBG) support for oil, mining,
and gas projects within the context of the World Bank’s affirmed mission
of poverty reduction and promotion of sustainable development. The
recommendations of the review team, led by Emil Salim, former
Environment Minister of Indonesia, are up for decision after the Spring
Meetings of the Bretton Woods Institutions in May.

An overwhelming majority of Euro Parliamentarians from all political
groups demanded yesterday in the resolution, that the World Bank Group
has to change his energy lending priorities and reform its social and
environmental standards, along the report recommendations, in order to
make financial support for oil gas and mining conditional on ‘good
governance’, respect for human rights by companies and governments,
pro-poor achievements and sustainable development.

`The European Parliament resolution calls on the Irish Presidency to
consult with relevant ministers of Member States on the Extractive
Industries Review in order to reach a common position in support of the
report’ says Jaroslava Colajacomo of the Italian based NGO Campagna per
la riforma della Banca Mondiale `this is an important message from the
Parliament to the EU Councill. We hope that this time European
countries, which hold almost 30% of the vote on the Boards of the World
Bank and the IMF, would use their leaverage in the World Bank
decision-making process if a concerted EU approach were achieved.
Moreover we strongly hope for a transparent and participatory
consultation process to be set up by the Bank for the full
implementation of the EIR recomendations’.

` We welcome the fact that the resolution calls on the Member States to
raise the findings of the report in other national or international
financial forums, such as the EIB, EBRD, national credit agencies’ says
Sebastien Godinot of FOE France ` and we hope that the official position
expressed by the Commission will be reflected in the future
implementation of EU environmental and social guidelines for economic
and development cooperation and notably in its cooperation with the
European and international financial institutions’.

`The Irish Presidency recalled the Member States’ obligations in the
framework of the Kyoto Protocol and of the Johannesburg Summit
Commitments and that the EIR findings are consistent with those
recognized needs,” says Petr Hlobil of Bankwatch, `We therefore appeal
to the Council and the member states to follow up on their commitments
when acting in the World Bank Board of Directors to phase out World Bank
financing for oil projects until 2008 and to increase financing for
renewable by 20 percent year on year.’

`The support from the European Union for the EIR will be good news for
civil society all over the world, especially in the south, where
millions of affected people are strongly opposing the devastating
effects of extractive industries’ says Pieter Jansen of Both ENDS,

Today more then 100 Members of Parliament worldwide from left to right,
sent a petition to Mr. Wolfensohn asking him to adopt all the EIR
recommendations. The petition was initiated in February by Members of
the European Parliament on the occasion of the visit of Mr. Emil Salim
EIR Eminent Person to Europe.

The Commission in all international fora will defend European MP, Ms.
Monica Frassoni President of the Green/EFA Group, committed to call on
Mr. Prodi to make sure that this line.

For more information:
Jaroslava Colajacomo – Campagna per la riforma della banca Mondiale
Italy –
+39 (0)6 7826855 / (mobile) +39 338 3279035
Sebastien Godinot – Friends of the Earth France – + 33 6 68 98 83 41
(Mobile) / + 33 1 48 51 18 92

Pieter Jansen – Both ENDS Netherlands – (mobile) + 31 6 20712191

Petr Hlobil – CEE Bankwatch Network Czech Rep. – (mobile) + 420 603

Manana Kochladze

Regional Coordinator for Caucasus
CEE Bankwatch Network

Visiting address: Rustaveli avenue. 1. Entrance I. Floor 4
Mailing address: Chavchavadze 62, Tbilisi, Georgia, 380062
Tel: 99532 93 24 03; 99 04 72
Fax: 99532 22 38 74
E-mail: [email protected]

Caucasus Environmental NGO Network (CENN)

Tel: ++995 32 92 39 46
Fax: ++995 32 92 39 47
E-mail: [email protected]