From the boat race to Azerbaijani jails: how dirty gas sells itself to elites

The Great Gas Lock-in: A new report by Corporate Europe Observatory

OpenDemocracy UK

A new report exposes the network of lobbying and hypocrisy that risks locking Europe into decades of unnecessary fossil fuel expansion.

The European Investment Bank (EIB) is at COP23, the UN climate talks in Bonn, talking about financing climate solutions.

Yet this week it is also facing mass protest over its possible multi-billion euro loan to the Trans-Adriatic Pipeline (TAP). The pipeline would transport Azerbaijani gas from the Turkish-Greek border to the heel of Italy. The $4.5bn TAP is the last leg of the BP-led Euro-Caspian Mega-Pipeline, or Southern Gas Corridor as the industry calls it. The entire Euro-Caspian Mega-Pipeline costs $45bn and is mired in human rights abuses, corruption scandals and numerous illegalities – but it’s still going ahead.

New research from Corporate Europe Observatory exposes the web of lobbying and PR that has allowed the pipeline to to get this far, roping in prestigious London universities and top politicians along the way.

The Trans-Adriatic Pipeline’s shareholders include oil and gas majors BP and Azerbaijani state-owned SOCAR (1), along with gas pipeline builders and operators from Italy (Snam, 20%), Belgium (Fluxys, 19%), Spain (Enagás, 16%) and Switzerland (Axpo, 5%).

But construction is being held up by communities along the pipeline whose livelihoods are being threatened. In Greece, farmers have been organising themselves through the courts and on the ground, while in Italy local communities have been physically putting themselves in the way of the diggers. The military has just locked down two local villages to ensure construction begins. In Azerbaijan, local activists and journalists opposing TAP and the entire Southern Gas Corridor have been thrown in jail on trumped up charges. Azeri President Aliyev has been keen to silence dissent and quash any hint his corrupt regime is rigging elections and violating human rights.

The recent Azerbaijani Laundromat scandal exposed the regime’s use of tax havens and money laundering to fund its efforts to curry favour with European politicians and other figures – buying their silence and political support with gifts and bribes. Less notorious are the softer approaches; the campaigns to make Azerbaijan and the entire Southern Gas Corridor acceptable in the eyes of the political and economic elites in national capitals and with the European Commission. The latter is lending substantial political as well as economic support to the mega-pipeline.

A key player is The European Azerbaijan Society (TEAS), an Azeri lobby group with offices around Europe. Headed up by the son of an Azeri Minister and member of President Aliyev’s inner circle, TEAS is teaming up with think tanks, lobby groups and academic institutions to organise high-level events to build credibility around the Southern Gas Corridor.

One TEAS collaborator is the prestigious King’s College London. Alongside BP and the consortium TAP AG, TEAS is an official partner and supporter of the university’s European Centre for Energy & Resource Security (EUCERS). In January 2014 they organised the European Energy Forum, putting ambassadors and ministers from TAP countries on panels alongside friendly academics, think tanks, and top executives from BP and TAP AG. The supportive European Commission was not just a speaker, but also sponsored the event’s networking session. The keynote was delivered by Michael Fallon, the UK’s then-Minister for Energy. Two months later in Parliament his government publicly championed Azerbaijan as a European gas supplier.

TEAS also targets UK decision makers through organising and sponsoring cultural and sporting events, such as the iconic Oxford-Cambridge University Boat Race in 2014 or the jazz events organised during the Conservative, Labour and Liberal Democrat party conferences.

TEAS is just one channel used by the consortium TAP AG to win support. The combined lobbying budget of TAP AG and its shareholders exceeded €6m in 2016, with 26 lobbyists on the payroll. This secured them more than 30 meetings between late 2014-2017 with Vice-President Maros Šefčovič and his cabinet, the European Commission’s Southern Gas Corridor champion.

More examples are given in the report, but the gas industry in general is a major player in Brussels, convincing the EU that gas is a ‘clean’ fuel (despite its methane emissions making it as bad for the climate as coal). If the gas industry and it’s PR bedfellows get their way, the result will be a completely unnecessary gas infrastructure building programme, with TAP just one of many new projects. In fact, European gas demand has fallen 13% since 2010 while liquified natural gas (LNG) infrastructure is being used at less than 25% of its capacity.

The new pipelines and gas infrastructure will lock Europe into 40-50 more years of fossil fuels and the social and environmental consequences it entails. Gas expansion is not something the EIB should be funding. Around Europe groups are calling on the public bank to not fund TAP or any new gas infrastructure. Given their posturing at COP23 around climate solutions, pulling out of gas should be a no-brainer.

*Jo Ram is a campaigner at Platform. Pascoe Sabido is a researcher and campaigner at Corporate Europe Observatory.



A letter from an inmate of the Southern Gas Corridor

OpenDemocracy Russia and Beyond

20 January 2017

International investment in fossil fuel extraction is making me and other Azerbaijani political prisoners hostages to the Aliyev regime.

Though respectful of the memory of Nelson Mandela, the mass media have occasionally shed light on the late South African leader’s warm relationship with scoundrels such as Muammar Qaddafi and Fidel Castro, as well as his refusal to defend Chinese dissidents. These events have been evoked to invite critical thinking about an iconic figure and balance his place in history.

Most readers of these articles judge a figure they previously held as an idol as hypocritical or tainted. They do not ask questions about the roots of a particular contradiction. In the case of Mandela, the dictators above had supported the anti-apartheid struggle of the African National Congress, while several established democracies indulged the inhuman system of apartheid because of the diamond, oil and other industries, and particularly because of the Cold War.

After only four years in prison, even on bogus charges and a politically motivated sentence, I am nowhere near Mandela in terms of symbolising a cause of global significance. Republicanism in my country, Azerbaijan — where the internationally promoted father-to-son succession of absolute power has disillusioned millions — is hardly comparable to the fight against racial segregation. Still, I can, better than many others, explain the flawed international attitudes that help keep democrats locked in the prisons of the “clever autocrats” who are, in turn, courted by retrograde forces within today’s democracies.

In this letter I will focus only on one tension of the struggle we face here in Azerbaijan — between our democratic aspirations that enjoy only a nominal solidarity abroad, and the attempt to build a de facto monarchy which receives comprehensive support from foreign interest groups.

To be precise, I will tell the story of how plans for a giant pipeline that would suck gas from Azerbaijan to Italy, the Southern Gas Corridor (SGC), impacts on Azerbaijan’s political prisoners.

I will tell the story by discussing my own case. But before I tell it, you need to know what the Southern Gas Corridor is and why my release is crucial for the morale of our democratic forces. Indeed, Council of Europe officials say my freedom is essential for the entire architecture of protection under the European Convention of Human Rights, but there is still no punishment of my jailer.

What is the Southern Gas Corridor?

The Southern Gas Corridor is a multinational piece of gas infrastructure worth $43 billion US dollars. It is designed to extract and pump 16 billion cubic metres of natural gas every year from 2018, sucking hydrocarbons from Azerbaijan’s Shah Deniz gas field to European and Turkish markets. The EU, Turkey, and the US are all eager to connect the pipeline to Turkmenistan so that to an extra 20-30 billion cubic metres of Turkmen gas can be added to the scheme.

The significance of the SGC is twofold. First, the project could provide up to 8-10% of EU’s gas imports, thus reducing the union’s dependence on Russia. Secondly, it will become another platform for geopolitical access (Russians would use a slightly ominous word “penetration”) of the west to Central Asia.

How did SGC encourage more repression?

Any rational democratic government in Baku would opt for the SGC without much debate and then turn its attention to issues truly important for Azerbaijan’s sustainable economic development. The revenue generated by the project would not be viewed as vital for the country when compared to the country’s economic potential in a less monopolised and more competition-based economy.

However, since the moment when a Russian government plane took Ilham Aliyev’s barely breathing father from a Turkish military hospital to the best clinic in America, in order to smooth the transition of power, the absolute ruler of Azerbaijan has been trained to deal with great powers first and then use such deals to repress domestic political dissent second. He has kept the country’s economy almost exclusively based on selling oil and gas and importing everything else.

Recently, Aliyev has been trying to present the SGC as his generous gift to the west so that governments will not talk about human rights and democracy in Azerbaijan. At one point Aliyev was even considering unilaterally funding the entire project.

Since 2013, Aliyev has instigated an unprecedented wave of attacks on civil society, which he used to illustrate the seriousness of his ambition for energy cooperation with the west.

In the middle of this tug of war, Azerbaijan suddenly found itself short of money due to falling oil prices. It could not fund its share in the parts of SGC that ran through Turkey (TANAP) and Greece, Albania and Italy (TAP) without backing from four leading international financial institutions — the European Bank for Reconstruction and Development, European Investment Bank, World Bank and Asian Development Bank.

During 2016, these institutions said their backing was subject to Azerbaijan’s compliance with the Extractive Industry Transparency Initiative (EITI) [link by CB ed.]. In September, Riccardo Puliti, director on energy and natural resources at the EBRD, cited the resumption of the EITI membership of Azerbaijan as “the main factor” for the prospect of approval of funds for TANAP/TAP.

Together with EIB, EBRD wants to cover US $2.16 billion out of the total US $8.6 billion cost of the TANAP. TAP will cost US $6.2 billion.

What is the Extractive Industry Transparency Initiative?

The EITI is a joint global initiative of governments, extractive industries, and local and international civil society organisations that aims, inter alia, to verify the amount of natural resources extracted by (mostly international) corporations and how much of the latters’ revenue is shared with host states. Its purpose, in that respect, is to safeguard transnational businesses from future claims that they have ransacked a developing nation — for instance, by sponsoring a political regime unfriendly to civil society and principle freedoms.

In April 2015, because of the unprecedented crackdown on civil society during 2013-2014, the EITI Board lowered the status of Azerbaijan in the initiative from “member” to “candidate”. This move, alongside falling oil prices, complicated funding for the Southern Gas Corridor. International backers were reluctant to be associated with the poor ethics of implementing energy projects in a country where already fragmented liberties were degenerating even further.

Hence, during 2016, several governments, especially the US, put strong political pressure on Azerbaijan. This resulted in a minor retreat by the dictatorship. Some interest groups claimed at the EITI board that this was “progress”.

The EITI board assembled on 25 October to review Azerbaijan’s situation. I appealed to the board ahead of its meeting.

Why did my appeal matter?

My appeal was heard primarily because, until I was arrested in March 2013, I was a member of the Advisory Board of what is now the Natural Resource Governance Institute (NRGI), a key international civil society segment of EITI.

In addition to my status within the EITI, the circumstances of my case — which was unusually embarrassing for the authorities — also played a role:

i) The European Court of Human Rights (ECHR) had established that the true reason behind the 12 court decisions (by a total of 19 judges) for my arrest and continued detention was the wish of the authorities “to silence me” for criticising the government;

ii) The US embassy in Azerbaijan had spent an immense amount of man-hours observing all 30 sessions of my trial during five months in a remote town and concluded: “the verdict was not based on evidence, and was politically motivated”;

iii) The European Parliament’s June 2013 resolution, which carried my name in its title, had called for my immediate and unconditional release — a call reiterated in the next two EP resolutions of 2014 and 2015 on human rights situation in Azerbaijan;

iv) Since December 2014, the Committee of Ministers of the Council of Europe had adopted eight (now nine) resolutions and decisions specifically on my case whereby it insisted on urgent release in line with the ECHR judgment.

Due to an onslaught by civil society partners during the 25 October debate, the EITI Board refused to return Azerbaijan its “member” status.

Indecision in America

I am very much obliged to the US embassy for conducting the hard labour of trial observation, but the US government representative’s stance at the EITI board meeting in October was a surprising disappointment.

Mary Warlick, the representative of the US government, insisted that Azerbaijan has made progress worth of being rewarded by EITI membership. Obviously, she was speaking for that part of the US government that wants the SGC pipeline to be built at any cost to our freedom.

A month later, in a counter-balancing act, John Kirby, spokesman of the US Department of State, called on Azerbaijan to drop all charges against me.

Samantha Power’s Facebook posting of my family photo on 10 December, the International day of Human Rights, was also touching. Power is US Permanent Representative at UN. Two years ago, she already mentioned my case in the EITI context at a conference.

Complementing her kindness, around the same time Christopher Smith, Chairman of the Helsinki Commission of the US Congress, in an interview about fresh draconian laws restricting free speech in Azerbaijan, repeated his one year old call for my release.

Yet, on 15 December, Amos Hochstein, US State Department’s Special Envoy on Energy, assured the authorities in Baku that “regardless of any political changes, the US will remain committed to its obligations under the SGC”.

Indecision in Europe

I could set out a similar pattern of European hesitation beginning with my first days in jail.

To be concise, though, let me recall only the fact that on 20 September (the same day that Rodrigo Duterte called the European Parliament “hypocritical” for its criticism of the extra-judicial executions in Philippines), a conciliatory delegation of the EP in Baku not only agreed to hear a lecture from Ilham Aliyev on “[EP] President Martin Schultz and his deputy Lubarek being enemies of the people of Azerbaijan”, but even praised the lecture as a “constructive one”, in the words of Sajjad Karim, the British MEP who had led the delegation.

The aforementioned three resolutions of the European Parliament were thus crossed out as I observed from behind bars.

Two presidents of the Parliamentary Assembly of the Council Of Europe (PACE) [link by CB ed.] have visited me in prison, but this only highlighted the irrelevance of the body to the situation on the ground. They never stopped talking of how constructive or how ongoing their dialogue with the Azerbaijani authorities has been.

New threats

Our narrow win at the EITI Board exposes us to two new threats. (I do not discuss here the extraneous threats, which may originate from, for example, rising oil prices or collapse of the nuclear deal with Iran, i.e. anything adding confidence or bargaining power to the regime in Baku.)

One is that at the next EITI board meeting in March 2017, those driven by pressing commodity and geopolitical interests may outnumber or otherwise outpower the civil society party. If Ilham Aliyev proceeds with his cosmetic, fig leaf “reforms” or releases those political prisoners who have already pleaded for pardon or surrendered in any other way, the probability of my freedom being sacrificed will arise again.

The other threat is that instead of battling at the EITI, those interest groups may ask the international financial institutions to disconnect the SGC loans from Azerbaijan’s compliance with the EITI. These institutions are easier to convince as they are full of short-termist bank executives, rather than civil society activists concerned with the rule of law, transparency and public accountability.

The second scenario may already be in effect as rumours suggest that the World Bank has endorsed a US $800m loan to the TANAP. If so, then the postponed energy consultations between Baku and Brussels at the end of January may put the loans back on the EITI-friendly track. Political prisoners of Azerbaijan are not worth of the amount of money involved in the SGC, but European values probably are.

Deep jail horizon

Of 11 other members of the ruling body of my civic movement, REAL, three had to flee the country after my arrest, two were jailed (for 1.5 years and one month on charges not related to my case), two are not permitted to travel abroad (again on separate cases); one of them cannot even leave Baku.

From time to time, activists spend days under administrative detention designed to scare others. Nonetheless, we live in a world different from the one which tolerated and even fed apartheid.

Mandela’s fight promoted an agenda and international institutions where we can defend the values of freedom from encroachment by dictators and their business partners. This is why we should not consider the means of resisting oppression or seeking solidarity with other international arrangements any less conventional now. The problem is that when others see that our peaceful efforts are not fruitful, they turn to more radical means to end injustice.

*Ilgar Mammadov is an Azerbaijani politician, activist and leader of the opposition Republican Alternative (REAL) movement. In March 2013, Mammadov was arrested on trumped-up charges before presidential elections. He remains behind bars.