CENN Daily Digest – November 5, 2004

Table of Contents:
1. Forest Reforms Seek to Curtail Catastrophe
2. The Man Behind the Oil
3. BTC/SCP and `Mercy Corps’ have brought the villages back to life
4. Russia and Armenia to create railway company
5. Conflicting reports on Armenia’s chemical giant
6. Armenian Energy Minister Expected to Visit Baku
7. Home Made Vinegar proves Effective in Controlling Weeds
8. Opening of Direct Railway Communication Between Armenia and Russia in
Economic Interests of Russia
9. Armenia to Expand and Improve International Youth Cooperation
10. There are Some 8-12 Caucasian Leopards in Armenia: Data of Zoologist

12. EIA Report of the “Draft Project of the Algeti Hydropower Station in
Tetritskaro Region’ by the `Lampari’ Ltd


Source: The Messenger, November 4, 2004

The Georgian Forestry Department together with the Ministry of
Environmental Protection and Natural Recourses has drafted a new
legislative reform for managing Georgia’s forests. According to
specialists, the main points of the reform should be urgently passed or
else an ecological catastrophe will become unavoidable.

Although rich with forests, Georgia has seen its trees viscously
harvested over the last 15 years with little attention towards
reforestation or management of natural resources. And despite frequent
discussions of the issue, little has been done to improve the sector.

Local residents cut trees for firewood and to sell to neighbors; larger
regional clans have taken root that illegally log and sell timber abroad
for tremendous profits, especially since they pay virtually nothing for
the wood. For example the newspaper Rezonansi cites that in the resort
town of Bakuriani, every day about 50 loaded vehicles carry an average
of 12 cubic meters of timber each from local forests.

According to the law, foresters and law enforcement are responsible for
stopping the illegal logging, but limited resources make their mission
unachievable. Each state forester is responsible for 1,200 hectares but
receives a salary of as little as GEL 20 per month. As a result,
corruption has flourished and illegal logging has become a mainstay for
numerous individuals at the expense of the state budget and Georgia’s
timber resources.

“If radical changes are not introduced then the fight against illegal
cutting will become similar to [Don Quixote’s] fight against the
wind-mills,” the newspaper Akhali Taoba quoted the head of the Forestry
Department Bidzina Giorgobiani as saying.

The forest industry as a business has lost most of its aboveboard
presence, largely as a result of the lack of an effective national
forestry policy. Ideally, the forest management should be financed by
the proper use of its resources, and state income should be reinvested
in the forests via replanting.

One proposed solution foreseen in the new draft law is privatization.
However the head of the Forestry Department has stated that before laws
are passed, it would be inappropriate to comment on the issue. According
to Giorgobiani, it will be very beneficial if the forests are leased out
and the government introduces the principle of long-term use of forests.

According to the paper 24 Saati, the aim of forestry reform is to
develop such a plan, to solve the problems of environment protection, to
increase budget revenues, to support private industry and to establish
new technologies in the sector. The paper adds that the draft borrows
from the experience of developed countries like Australia, which
implemented reforms in 1996, as well as Finland, Estonia, Switzerland
and Slovenia. How Georgia will manage the reforms, and its forests,
remains to be seen.


Source: The Messenger, November 4, 2004

With the BTC pipeline nearing completion a group of Georgian journalists
including The Messenger’s Christina Tashkevich spent last week in the UK
to see how BP that leads the BTC construction operates in its home
country. They met with BP Chief Executive Lord John Browne to discuss
the pipeline, the recent surge in the price of oil, and Browne’ s
impressions of Tbilisi from his various visits.

Lord Browne states that the one million barrels of oil pre day that the
Baku-Tbilisi-Ceyhan pipeline will carry when finished `will be crucial
for the maintenance of global energy security.’ He also points to the
`environmental benefits’ of the pipeline, saying that it will displace
`some 40 tankers a year which would otherwise sail through the

Before such benefits can be realized, however, there are still many
challenges to be overcome. The BP chief executive says the main
challenge has not been so much related to construction or complex and
difficult terrain.

`Finishing the project on time and on budget has required the project
leaders to develop all the skills of statecraft,’ Lord Browne said in a
recent speech.

However, Browne positively evaluated the company’s relations with the
new government of Georgia, saying his company is building `realistic and
good’ relations with the new government.

Browne says that BP is constantly working with the government on the
security of the pipeline and these measures are `already in place.’ He
adds that the company continues to have consultations with the
government on its oil spill response plan. `This spill will not happen.
But you must have a plan,’ Lord Browne told the Georgian journalists.

Asked how BP can help the governments of the three countries to manage
revenues from the BTC pipeline, Lord Browne told The Messenger `the
company will help governments to demonstrate how they use these

The BP Chief Executive believes there are a few sectors that could be
prioritized when the government allocates the recourses. He singles out
the education sector, the creation of an `environment where people can
create their own business,’ and social projects such as the restoration
of hospitals.

Lord Browne also shared his impressions of his several visits to
Georgia. He recalled his first visit to Tbilisi a few years ago when the
country was hit by the energy crisis. `Tbilisi looked like a person who
was tires,’ he said adding though that he was always surprised by the
Georgian people’s generosity, especially given Georgia’s problems.

However, a more recent visit brought very different impressions. `Now
Tbilisi has become younger, fresher and brighter,’ Lord Browne thinks.

While the group of Georgian journalists were in the UK, two issues
involving BP were headline news – BP’s third quarter profits and the
recent surge in the price of oil Lord Browne addressed journalists from
the UK on both these issues.

BP announced what Browne described as `very strong’ results for the
third quarter, with operating profits up to USD 3.9 billion, an increase
of 43 percent over the same period last year. The dividends of the
company paid in USD dollars are up 9 percent from last year and the
company’s cash flow equaled USD 6.1 billion that as used or capital
expenditure, dividends ands tock buybacks of USD 2.2.5 billion involving
241 million shares.

One issue Lord Browne had to address as well was the recent increase in
the oil price. `The recent surge in the price of oil above USD 50 a
barrel raised many questions about future prospects and whether or not
there has been some fundamental change in the oil market,’ said Lord

According to him, this year has been `an exceptional year’ for the price
of oil. Lord Browne recalls that in the late 90s and early 2000s oil
consumption growth was only half that of world economic growth.

`This year is an exception and oil consumption is expected to grow
almost as fast as the economy as a whole — by around 3.4 percent
compared with 4 percent GDP growth,’ he explains. Lord Browne thinks
that the most important factor behind this is the demand for energy
intensive products in China is particular.

`Oil production has responded to this demand, and despite disruptions in
one location or another, supplies have been maintained. Production grew
by 2.7 million barrels a day in 2003 and is expected to grow by 3.4
million barrels a day in 2004 – which will be the fourth largest annual
rise in history,` Lord Browne said.

OPEC production of oil is `close to an all time high,’ and Lord Browne
notes that `non OPEC oil production continuities to expand as well.’

`Between 2000 and 3000, non OPEC daily production increased by around
one million barrels each year and this outpaced the growth in demand by
around 100, 000 barrels a day each year.’

Lord Browne says then, that the surge in oil price has been despite this
large rise in oil supply. `To some degree this is because the rapid
recent rise in demand has eaten into global spare oil production
capacity, now estimated to be 1 million barrels a day, compared with a
average over the last decade of 3 million barrels day,’ he explains. As
spare capacity has reduced, `prices have responded to and in a more
sensitive way.’

Lord Browne thinks that the prices are likely to stay above USD 30 a
barrel in medium term as demand for crude oil continues to grow.

Lord Browne estimates that capital expenditure of the BP group will be
above USD 14 billion in 2004 ad could be around USD 14 billion in 2005.
`That is higher that we previously estimated,’ he said.

He mentions some new projects of the company in the sector. For example,
BP and the Russian Rosneft have made a significant discovery at
Sakhalin, `This opens p further exploration promise in this area.’

Despite these new projects, UK newspapers noted that BP investment had
increased at only a fraction of the rate that its profits have risen,
and this provoked some criticism.

Jeremy Warner of the Independent wrote, `Many companies faced with such
a strong price for their basic product would let rip on investment in an
attempt to exploit it. BP is resisting the temptation.’ He warned, `If
demand for oil continues to accelerate, than the Browne strategy will be
open to criticism.’

The Sun, however, defended Browne in an implicit attack on the British
government’s tax regime. `Never forget that 75% of the cost fro a tank
of petrol goes to the government. And the more profit BP makes, the more
tax it pays, `the paper suggested.

Lord Browne, however, is optimistic regarding BP’s performance over the
rest of the year. `It has been a good quarter leading to strong
distributions to shareholders and with prospects of more good
performance for the rest of this year,’ Lord Browne said. He also adds
plans for 2005 are in line with the company’s strategy.


Source: The Messenger, November 4, 2004

Our reader already know about the Community Investment Program (CIP) –
East implemented by Mercy Corps is partnership with Constanta
Foundation, Technical Assistance in Georgia, Curatio International
Foundation and Elkana and funded and supported by BP and its partners in
BTC/SCP pipelines and the target of this program was improving of all
the social service infrastructure and livelihood options in all
communications in the CIP intervention area. Mobilized communities in
rural areas implemented projects that improve local infrastructure,
promote access to social serves and strengthen community organization

Inhabitants of village Akhtagla, Gardabani district, lived with lot of
difficulties that are characterized for rural area in Georgia – people
were villages because of lack of economic opportunities and lot of
social problems here. One of the main problem in village was school
rehabilitation. School was build with stone in 1970. During that period
the structure was the largest building in village. The school was and
still is the focal point of many of communications events. It was badly
in need of repair and had not seen much in the way of improvements for
the better part of twenty years Children in Akhtagla were not able to
attend school regularly: during rainy water was leaking into the
classrooms and they wee freezing in winter

`Local authorities did not have make any repairs’ – explained Mr.
Seifadin Guseinov, inhabitant of Akhtagla, the leader of local community
initiative group, `But that has all changed thanks to the help we have
received from the pipeline projects. Through mobilization process leaded
by Mercy Corps and Akhtagla community and with BTC/SCP funds, community
was able to debilitate the school. The village celebrated this event’ –
and had no hesitation in saying. – BTC/SCP and `Mercy Corps’ have
brought our village back to life.’

Construction of pipeline saves the village from the serious problems

Within the framework of the Community Investment Program -East initiated
and funded by BP and its partners in BTC/SCP projects Mercy Corps and
its partner organizations have been implanting various activities for
the communities along the pipeline route with the aim of mobilizing and
empowering them. Mobilzed communities in rural areas implemented
projects to improve local infrastructure, promote access to social
services and strengthen community organization skills.

For villages of Tetri-Tskaro district – Marabda, Durnuki, Khaishi,
Tsintskaro, Chivchavi, Kosolari, located along BTC/SCP pipeline,
agriculture is the only source of income `Major problems related to
agricultural development is lack of high quality seed,’ – said head of
local Sakrebuli Guladi Umpriani. `High quality seed distributed by Mercy
Corps has addressed our need and we consider this as important activity.
Yield is expected to increase by three times and when sold next year
will result in added profit to the farms’ – he further added.


Source: RBC, Novebmer 3, 2004

In the course of today’s working meeting in the Armenian capital of
Yerevan, Russian Railways President Gennady Fadeyev and Armenian Prime
Minister Andranik Margarian signed letters of intent to create a joint
company using attracted private capital. The company will deal with
cargo transportation between Armenia and Russia, the press service of
Russian Railways reported.

According to Fadeyev, this project will stabilize the transportation
system in the Caucasus. In his turn, Margarian pointed out that Armenia
was interested in participating in the project concerning the
north-south transportation corridor and in widening cooperation with


Source: Haykakan Zhamanak, Yerevan, November 2, 2004

One can hardly think of a plant’s obituary being announced.

This is precisely what the director-general of the Armenian power
network, Yevgeniy Gladunchik, did yesterday [1 November].

“We are very much worried about what is taking place with [Armenia’s
chemical giant] Nairit today. I am afraid I won’t even be able to name
the owner of Nairit. Its last owner [Russian] Volgaburmash has abandoned
Nairit. In other words, today Nairit has no owner. It is being provided
with power, we have to supply the power to protect the environment. The
plant has not been operating since August. The promise made by the
previous owner was a bluff. We did everything we could for Nairit to
function. All in vain. Nairit is not working. Today an order was given
to disconnect Nairit. The plant is dead, unfortunately. This is a great
loss to us,” Mr Gladunchik told a press conference yesterday.

But did Nairit really die? It is clear that the report was a little bit
exaggerated. “The statement that Volgaburmash rejected the Nairit shares
does not correspond to reality,” the leader of the “Haykapbank”, Arutyun
Mesropyan, said. This bank is connected with Nairit in so many ways that
both have became the property of Volgaburmush. According to Mesropyan,
they did not receive any official statements from Volgaburmush that it
is no longer interested in Nairit. “Moreover, talks are under way,”
Mesropyan said, but he did not divulge any details of the talks or named
the parties involved. As to the statement that Nairit has not been
functioning since August, Mesropyan said the plant can resume work any
moment now, but he did not explain why it does not do so.

Yesterday Gladunchik said that Nairit is now the biggest debtor to the
Armenian energy network. It owes about 800m Armenian drams or more than
1.5m US dollars. That is why the director of the Armenian energy network
read out the obituary about Nairit.


Source: Assa Irada, November 3, 2004

An international conference with participation of Caspian and Black Sea
countries’ ministers for energy and transport will be held in Baku on
November 12-14, according to the Ministry of Transport.

A meeting of energy ministers from Azerbaijan, Belarus, Georgia, Iran,
Kazakhstan, Moldova, Russia, Turkey, Turkmenistan, Ukraine and
Uzbekistan will be held on November 12 and 13. The Armenian energy
minister is expected to attend the meeting as well.

Another meeting to be attended by transport ministers from Azerbaijan,
Belarus, Bulgaria, Georgia, Iran, Kazakhstan, Kyrgyzstan, Moldova,
Russia, Romania, Turkey, Turkmenistan, Tajikistan, Ukraine and
Uzbekistan will be held on November 13 and 14.

Prospects for cooperation among regional countries will be discussed in
both meetings.


Source: ArmenPress, November 3, 2004

The Marketing Assistant Project (MAP), administered by the US Department
of Agriculture (USDA) Yerevan office, said two groups of fresh herb
growers recently participated in an experiment that has profound
implications for improving crop management.

They sprayed their own commonly made household vinegar (acidic acid) on
weeds in their plots of tarragon and within one hour saw dramatic
results: the weeds that they normally must remove by hand hoeing every
10 days were rapidly dying.

“The results are simply dramatic” was the reaction of Alvard Tovmasyan
and the 10 women of Nalbandian Village who witnessed the demonstration.
The participants in Mrgashat Village echoed the same reaction. Four
concentrations of vinegar were demonstrated: 6%, 10 %, 15%, and 20%.

Dr. Sergey Yeritsyan of the Armenian Agricultural Academy (AAA)
carefully prepared them. Growers under the supervision of Dr. Hrant
Terlemezyan did the actual spraying. Nuneh Sarukhanyan of Agrogitaspir
served as extension leader for the project.

According to Sarukhanyan, the random plot findings showed that vinegar
concentrations of 15% and 20% had the most immediate effect on weeds.
However, spray drift caused slight damage to the tarragon. The 10% and
homemade 6% concentrated vinegar worked slower and also proved
effective, however they caused no damage to the tarragon crop.

The idea for the demonstration came from Paul Sommers and Felix

Vardarian of USDA/MAP. “The idea was to validate research conducted by
the USDA National Research Center at Beltsville under Armenian
conditions,” said Mr. Sommers.” Vinegar is bio-safe, low cost, and is
traditionally made by farm families. This successful exercise has great
implications for reducing one of the most labor demanding and costly
aspects of growing quality crops-weeds.


Source: ARKA, November 3, 2004

Opening of direct railway communication between Armenia and Russia in
economic interests of Russia, as Gennadi Fadeev, President of Russian
Railways said during his meeting with
Armenian PM Andarnik MArgarian, Armenian Government Public and Press
Relations Department reports. He said that during his visit to Yerevan
he plans signing a joint statement with Ararat Khrimyan, Head of
Armenian Railways on establishing of a joint Russian-Armenian cargo
operating company. They also reached agreement on establishing a working
group that will be in charge of financial, economic and other issues.
Later in Fadeev’s words there will be prepared a document on cooperation
in the field of cooperation in sphere of railway communication between
Armenia and Russia.
In his words, Margarian said that stimulation of railway communications
is an important factor in development of trade and economy and
increasing of cargo transportations between Armenia and Russia.
The sides mentioned important role of re-operation of transport
communication in establishing peace in the region and settlement of
regional conflicts.


Source: ARKA, November 3, 2004

The RA Government confirms its wish to expand and improve international
youth cooperation, as stated Andranik Margaryan, the RA Prime Minister,
in his message to the participants of the 12th meeting of Council of
Heads of CIS State Institutions for Youth Affairs, which was read by
Lilit Asatryan, the RA Deputy Minister of Culture and Youth Affairs. The
message also says that Armenia is ready to develop cooperation taking
into account the increasing role of youth on the contemporary stage of
society and state development in general. At that, the cooperation
should be based on principles of equality, through extended contacts
between government bodies and NGOs, which carry out and assist the
implementation of state youth policy. `I believe that cooperation in the
sphere of youth is called to promote the strengthening of mutual
understanding and friendship between peoples and establishment of
all-human values ‘, the message states.

As a significant achievement of the Council of Heads of CIS State
Institutions for Youth Affairs, the Prime Minister mentioned the draft
of Agreement of CIS member-countries on cooperation in the area of work
with the youth and project on establishment of inter-branch council on
youth affairs of states-participants of CIS, prepared for approval by
the Council of Presidents of CIS countries.

12th meeting of the International Council of Heads of CIS State
Institutions for Youth Affairs opened today in Yerevan. Delegations from
Russia, the Ukraine, Moldova, Tajikistan, Belarus and Georgia take part
in the current session of the Council in Yerevan.


Source: Arminfo, November 3, 2004

Population of the Caucasian leopard which is on the verge of
disappearance is restored in Armenia, WWF Representative in Armenia
Karen Manvelyan told ARMINFO that in conformity with different
calculation of zoologists in Armenia, there are some 8-12 Caucasian
leopards in the country, with the biggest of them has a 2 meter length
and weights 90 kg. Restoration of the leopards’ population in Armenia is
carried out under the program of WWF, which allocated $16,000 for its
implementation. Manvelyan said that under the program, measures are
taken to estimate the zone of leopards’ inhabitancy, and groups
combating poaching are formed at Shikahogh forest reserve, Syunik
region, Armenia. Manvelyan said that restoration of the population of
leopards is closely connected with population of Bezoar goats,
moufflons, toe deer, wild boars that are also on the verge of
disappearance. Manvelyan said that a forest reserve “Arevik” is expected
to be created for protection of the leopards at Zangezur mountain range.


Source: `Sakartvelos Respublica’ (`Republic of Georgia’), November 3,

In accordance with the Georgian legislation, `Lampari’ Ltd. submitted
EIA report to the Ministry of Environment of Georgia to obtain an
environmental permit for the activity of second category — Draft
Project of the Algeti Hydropower Station in Tetritskaro Region.

EIA report is available at the press-center of the Ministry of
Environment (68, Kostava str., VI floor) and at the Department of
Environmental Permits and State Ecological Expertise (87, Paliashvili
Str., Tel: 25 02 19). Interested stakeholders can analyze the document
and present their comments and considerations until December 21, 2004.

Public hearing will be held on December 21, 2004 at 12:00, at the
conference hall of the Ministry of Environment.

Caucasus Environmental NGO Network (CENN)

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

From: Emil Lazarian | Ararat NewsPress