NABUCCO AND TURKMENISTAN Our energy security, Turkmens’ misery
Position paper | October 2010 Part 1: Why Turkmenistan The Nabucco consortium is not concealing its NABUCCO AND TURKMENISTAN ambitions to access Turkmenistan’s gas. At is important for Nabucco, the beginning of 2009, the managing director Our energy security, Turkmens’ misery and how the EU is trying of the consortium said in an interview for Radio Free Europe: “Energy sector projects are to engage with the Central long-term not short term, so we have good Asian state reason to believe that [eventually] gas from Turkmenistan will be exported to Europe via Nabucco.” Introduction The development of the Nabucco pipeline is being divided into stages. It may be starting In 2010 the prospect of supply became much Pictures reproduced The Nabucco pipeline project, named after One of the main weaknesses of the Nabucco with a modest 8 billion cubic metres per more concrete. Stefan Judisch, chief executive from the book The the opera of Giuseppe Verdi, is an almost project is its lack of guaranteed gas supply. year (bcm), but is intended to reach its final of RWE Supply & Trading, a subsidiary of Grandson Who Fulfilled 10 year old idea to bring Caspian or Middle If the project is to reach its final capacity maximum capacity of 31 bcm2. A lack of gas the German shareholder of the Nabucco His Grandfather’s Eastern gas through Turkey to the European of 31 billion cubic metres per year it has to supply contracts has been one of the main consortium, commented in May 2010 that the Dream Turkmen State Publishing Union. Its planned route is 3300 kilometres find a supplier with large, unexploited gas concerns of the Nabucco promoters for company expects to sign an agreement with Service, Ashabad 2010, long, making it one of the longest pipelines reserves. One potential supplier named very many years. Other than Iraq and Azerbaijan Turkmenistan by the end of 2010. According Turkmenistan. They outside of Russia, and it is envisaged to go often is Turkmenistan – the obscure, gas- – regarded as the first countries to provide to Judisch, delays were being caused by an present propagandised through Turkey, Bulgaria, Romania and rich country situated on the eastern side of gas– Turkmenistan is usually portrayed as overly slow process of political negotiations. images of Gurbanguly Hungary to Austria. The estimated cost the Caspian Sea. the main supplier that will allow the final “As soon as the political framework has been Berdymukhamedov, of construction is currently almost EUR 8 capacity of the pipeline to be reached3 as it created, Turkmenistan will be ready to sign the president of Turkmenistan, in his billion and the planned final capacity is 31 Until his death in 2006, Turkmenistan was has by far the biggest gas reserves out of a supply contract,” Judisch noted. Michael homeland where the billion cubic metres. The shareholders of the lead by the president for life Saparmurat these three countries, and these have not Rosen, spokesperson of RWE Supply & cult of his personality is Nabucco consortium are OMV (Austria), MOL Niyazov. His successor Gurbanguly been exploited up to now4. Trading, added that: “As a consequence, RWE widespread. (Hungary), Transgaz (Romania), Bulgargaz Berdymukhamedov has shown more is also talking intensively and constructively (Bulgaria), BOTAŞ (Turkey) and RWE openness to business dialogue with the with Turkmenistan and Azerbaijan to agree (Germany). west, including possible supply for the upon results that would lead to gas supplies Nabucco pipeline. via the Nabucco pipeline”5. Having dropped from view for many years, the Nabucco project gained a new lease of life This paper examines the less obvious Feeding Turkmen gas into Nabucco will, in January 2009 in the wake of a gas dispute aspects of the project – its possible impact though, require the construction of an between Russia and Ukraine, which left a on Turkmenistan, a country notorious for additional pipeline through the Caspian sea. number of EU member states without gas its grave human rights situation and the “There are other options that are currently supply for a few cold weeks in the middle dictatorial tendencies of its political leaders. being discussed by the shareholders. But of winter. These events triggered massive The first section focuses on the link between the [Trans-caspian] pipeline is a very stable political support for this pipeline that seeks Nabucco and Turkmenistan, illustrated by the and good solution for the transportation to circumvent Russia, especially from Eastern increased activity of political and business of gas,” commented Christian Dolezal, the Europe and the European Commission, supporters of the pipeline in Turkmenistan. spokesman of Nabucco consortium in June who view this project, a backbone of the The second section describes the appalling this year6. southern energy corridor to the EU, as proof situation regarding human rights and that a common energy policy of the EU can democratic freedoms in Turkmenistan. Indeed a publication of the German bring tangible results. Political support was The final section discusses how, with a lack consortium shareholder praises the project subsequently followed by financial support of public oversight over gas revenues in for triggering new upstream gas investments from the European Energy Programme Turkmenistan, the construction of Nabucco in Turkmenistan and new infrastructure for Recovery (a grant of EUR 200 million) may lead to the strengthening of one of the such as the Trans-Caspian pipeline7. and discussion about potential loans most brutal regimes currently in existence. from Europe’s public banks: the European It is important to notice that, if it is built, The importance of Turkmenistan for Nabucco Investment Bank (EIB, up to EUR 2 billion) and Our hope is that this brief analysis will Nabucco will finish more than a 1000 has been confirmed by diplomatic efforts the European Bank for Reconstruction and go some way to put in the spotlight one of kilometres from Turkmenistan’s border, but undertaken by both political (the European Development (EBRD, up to EUR 600 million) the most overlooked aspects of pipeline it creates the conditions for the construction Commission, individual EU member states) as well as the International Financial geopolitics, and will help to answer the of a Trans-Caspian Pipeline, which could feed and business actors involved in Nabucco Corporation(the private lending arm of the question: Who pays for our so-called energy Turkmen gas into Nabucco via Azerbaijan and (OMV, RWE). Throughout 2009 and 2010 all World Bank , EUR 400 million)1 security? Georgia. have shown increased interest in contacts
2 Nabucco and Turkmenistan | Our energy security, Turkmens’ misery | September 2010 Nabucco and Turkmenistan: Our energy security, Turkmens’ misery | October 2010 3 with Ashgabat – the capital of Turkmenistan Corporation, a demand aggregator which towards multi-party democracy, pluralism – in order to create the political framework for wants to buy gas from the Caspian countries and a market-based economy in keeping with gas contracts. in order to trigger a firm commitment from Article 1 of the Agreement Establishing the their side to supply natural gas to the EU in Bank. Recent progress in the political and In April 2009, after years of delay caused sufficient quantities and for the long term10. economic spheres, triggered by the change by human rights concerns, the European in leadership in December 2006, provides an Parliament ratified an Interim Trade At the same time companies involved in opportunity for deeper engagement, though Agreement with Turkmenistan, which Nabucco have undertaken intense efforts to several challenges remain.”14 opened the way for closer cooperation. In improve their position in the hydrocarbons July it was accepted by the Council of the EU8. sector of Turkmenistan. The most visible The EBRD may be followed by the EIB This was followed by the intensification of of these is the German RWE, that in May – in recent months the EIB has stepped dialogue between EU representatives and the 2009 signed a memorandum for long-term up its activities in Central Asia, signing Government of Turkmenistan over gas issues. cooperation in the energy sector with the agreements with governments of Tajikistan This dialogue included visits made by EU Turkmen government and subsequently and Kazakhstan. The next may be with representatives to Ashgabat: a representation opened an office in Ashgabat. This was Turkmenistan. Reportedly the EIB is also of the EU Presidency (July 2009), EU Energy followed by its acquiring of exploration interested in supporting the Caspian Commissioner Oettinger (April 2010) as well rights for one of the offshore blocks in Development Corporation15. as a telephone conversation between the Turkmenistan’s sector of the Caspian Sea and High Representative for Common Foreign further intensive gas negotiations with high This situation is not being affected by the and Security Policy Javier Solana and level officials in Ashgabat. so-called ‘human rights dialogue’ between Turkmen president (December 2009). It was the EU and Turkmenistan. This process accompanied by a number of visits from EU Similar but, until now, less successful consists of yearly high-level meetings in the human rights and fundamental freedoms, delegations to Turkmenistan, including from efforts have been undertaken by the leading EU or in Ashgabat. Turkmenistan’s citizens respect for human dignity, the principles France, Germany, Italy and Bulgaria. In 2009 company in the Nabucco consortium, are not even aware that this mechanism of equality and solidarity”17. Reference to and 2010 President Berdymukhamedov also Austrian OMV11. These political and exists, nor does the European public have the same principles may be found in the met with counterparts from France, Italy commercial efforts clearly show that the access to the documents containing the founding document of the EBRD, which states and Bulgaria during his own visits to these volume of gas to be supplied by Azerbaijan content of these talks, because according to that the bank ought tofulfil its statutory goals countries9. and Iraq is not sufficient for Nabucco, and that the Council of the EU their disclosure may in the countries “committed to and applying cooperation with Turkmenistan is therefore hamper the dialogue and “the information the principles of multiparty democracy, The mechanism pursued by the European essential to supplement these supplies12. contained in the documents would therefore pluralism and market economics”18. Commission for accessing Turkmenistan’s also be detrimental to the good functioning gas is called the Caspian Development Increased European political and business of the relations between the EU and In order to observe these principles, and interest in Turkmenistan is accompanied Turkmenistan.”16 at the same time develop better business by a changing approach from Europe’s relationships with Turkmenistan’s multilateral development banks, the EIB and With few other obvious reasons for the government, these institutions claim that the EBRD13. European Commission and European after the death of the former president for companies to be taking an intensified political life – Saparmurat Niyazov – the authorities In March 2010 the EBRD, a public bank in and business interest in Turkmenistan, it started implementing democratic reforms. which EU countries have the majority of the becomes ever more clear that this increased Contrary to Niyazov, his successor sharees, decided on changing its approach interest in the country is aimed at its gas Gurbanguly Berdymukhamedov places towards Turkmenistan. Previously the reserves, rather than its people. a lot of importance and attention to good EBRD explicitly excluded investments into relations with the west, and has expressed Turkmenistan’s state-owned sectors (except, a willingness to reform the country. since May 2008, engagement with state- Nevertheless, more than three years owned banks as partners for SME credit Part 2: How democratic is of his rule so far have not brought any lines) because of human rights concerns. substantial positive change for the citizens of The EBRD’s new country strategy for the current president of Turkmenistan. Turkmenistan endorses reforms conducted by Turkmenistan? Ashgabat, while stating that some problems Under its current president Turkmenistan still remain. The text of the strategy begins In their external actions the EU institutions, remains a one party state, with farcical with the following paragraph: “Over the including the EIB, are supposed to be guided elections and no legally acting civil society years the Bank has been concerned with by the principles of “democracy, the rule of organisations. Political prisoners remain in Turkmenistan’s failure to make progress law, the universality and indivisibility of prison as under Niyazov.
4 Nabucco and Turkmenistan: Our energy security, Turkmens’ misery | October 2010 Nabucco and Turkmenistan: Our energy security, Turkmens’ misery | October 2010 5 Well-known prisoners include Annakurban In an open letter of autumn 2009, To put this into context, MSF still operates in Amanklychev and Sapardurdy Khajiev, international NGOs wrote: “The totalitarian Burma (Myanmar) and the failed who have worked with human rights strengthening of diplomatic and business state of Somalia. organisations, and the political dissident contacts has not, as some hoped, led to Gulgeldy Annaniazov. Independent-minded improvements in fundamental rights of In April 2010 MSF released a report that individuals stay silent for fear of prosecution. people in Turkmenistan. We, the signatories, provides more explanation for this decision. In the most recent Freedom House survey call upon governments and commercial It states: “The people of Turkmenistan are measuring countries’ political rights and civil companies to use their access to Turkmen being failed by their health care system, by liberties, Turkmenistan received the worst authorities not only for commercial interests, their government, and by the international possible score, the same score indeed as North but also to improve the lives of the over community.”26 Publication of the MSF report Korea and Burma19. 5 million Turkmen citizens living under was followed by attacks on civil society in this government, and to call for access to the country. The government initiated a There is a complete lack of media freedoms Turkmenistan by international civil society wave of interrogations against citizens in in Turkmenistan. All print and electronic and human rights organisations.”22 the country who may have had in any way media are controlled by the state. Any contributed to the report. Local sources report public expression of alternative opinions is that many activists and health practitioners impossible. Access to the country is closed for Developments in 2010 are being called for interrogation. Further, international orgnisations including Human their testimonies are validated through Rights Watch, Amnesty International and the On March 23, the board of directors of questioning other individuals and International Confederation of Red Cross and the EBRD finalised a new strategy for thus initiating a wave of interrogation Red Crescent. Médecins Sans Frontières was Turkmenistan, praising the country’s concrete steps that should be taken by the compelled to leave the country in December political and economic reforms23 introduced Government of Turkmenistan. These include: 2009. since 2006. Since then, official propaganda The people of the unconditional release of all political from Turkmenistan’s government has “ prisoners and prisoners of conscience; the In the last press freedom index published sought to exploit the new EBRD strategy Turkmenistan are being removal of all obstacles to free travel; free annually by Reporters Without Borders, as proof of western acceptance of its access for independent monitors, including Turkmenistan was ranked 173rd out of 175 very gradualist reform steps. An official failed by their health International Red Cross; open and democratic countries20. A study made by Freedom House, governmental source24 has noted: “The elections, freedom of religion, and the Freedom of the Press 2010: A Global Survey of Board of Directors of the European Bank for care system, by their development of a genuine civil society. Media Independence, included Turkmenistan Reconstruction and Development (EBRD) has in the 10 worst-rated countries in the world21. unanimously approved a new strategy for government, and by the In the resolution the European Parliament Turkmenistan for 2010-2013 and expressed underlines that “the ITA is not a blank its full support to the large-scale political international community cheque” for Turkmenistan” and calls “for and economic reforms implemented in ” strict monitoring and regular reviews of Turkmenistan.” . developments in key areas in Turkmenistan throughout the country. On April 16, two and, if appropriate, for a suspension of the In the same period the EU’s Energy days after the visit of Oettinger, President agreement if there is evidence that the Commissioner Günther Oettinger has visited Berdymukhamedov signed a decree ordering conditions are not being met”. Ashgabat to discuss the issue of gas supply the liquidation of several medical centres in to Europe. Despite a call from Heidi Hautala, Ashgabat. According to local sources, these One year after the approval of the the chairwoman of the Subcommittee on centres were involved with MSF’s work in the ITA, and more than three years after Human Rights in the European Parliament, country27. Berdymukhamedov became president, it is to include human rights in the agenda of increasingly clear that promises of political this official visit, there are no indications In April 2009 the European Parliament gave reforms have not been delivered and that that this was fulfilled.25 a green light to the Interim Trade Agreement such promises are serving as a smokescreen (ITA) with Turkmenistan, which opens the for business engagement. Nevertheless Parallel to this, a new crackdown on civil door for more intensive trade relations with the EU intends to move its relations with society was taking place. As mentioned the EU and promised upgrading of relations Turkmenistan even one step further towards above, in December 2009 Médecins Sans with Turkmenistan. When approving the normalisation. In autumn 2010, the European Frontières (MSF) left the country saying agreement, the European Parliament saw it Parliament is to decide on ratification of a that lack of will to cooperate from the side as “a potential lever to strengthen the reform Partnership and Cooperation Agreement of government was preventing them from process in Turkmenistan”28. The resolution with Turkmenistan, a step strongly endorsed fulfilling their mission. accompanying the approval defined by the European Commission.
6 Nabucco and Turkmenistan: Our energy security, Turkmens’ misery | October 2010 Nabucco and Turkmenistan: Our energy security, Turkmens’ misery | October 2010 7 Part 3: Gas revenues – In 2006, in the report “It’s a Gas”,31 the Nonertheless there are no signs that the new President international NGO Global Witness exposed scheme differs from the previous one. Berdymukhamedov how they strengthen the the mechanisms of accumulating revenues inaugurating the Golden Age Lake. regime from the exporting of oil, gas and cotton on Both sources in Turkmenistan, as well as extra-budgetary accounts held by Deutsche in the international financial institutions As shown above, the need to access Bank in Frankfurt under the previous and EU institutions, unofficially admit Turkmen gas has already weakened president of Turkmenistan. Theoretically that they have not seen any documents Western determination to politically these accounts belonged to the state, but defining the way the new fund is managed. influence Ashgabat in order to improve its in practice they were controlled by the late According to Jan Šír: “(...) senior government appalling human rights situation as well president himself. At least USD 3 billion was members have been since repeatedly as political and civic liberties. The most accumulated on these accounts in Deutsche quoted as reporting about financial means obvious indication of this tendency was the Bank in a so-called Foreign Exchange Reserve being transferred from the state budget to acceptance of the Interim Trade Agreement Fund. It seems that they were never reported the Stabilization Fund on a regular basis between the EU and Turkmenistan by the in the state budget. starting from 2009. The published Law “On EU foreign ministers on July 27, 2009 that Turkmenistan State Budget” for both 2009 ignored the resolution of the parliament by According to estimations from the Global and 2010 does not seem to support this claim making no reference to human rights29. Witness report, in 2005 70 percent of though.”33 Nor is there any information Turkmenistan’s income comes from its about what happened with the money While closer cooperation in the gas sector has natural resource exports – yet this wealth accumulated in Deutsche Bank after the already started to decide the shape of EU- hardly ever reaches the people. The report death of Niyazov. Turkmenistan relations, there is a threat that further shows that 75-80 percent of all in the future it may strengthen the regime in governmental spendings took place It seems again that declarations about more frittering it away on huge white elephant a more direct, economic way. Turkmenistan’s off-budget. The money was often spent transparency were a smokescreen for the projects. budget is already highly dependent on its developing the personality cult of the leader, continuation of business as usual. Under hydrocarbons sector30, which is controlled by including glittering palaces, barely used President Berdymukhamedov gas and oil The Golden Age Lake is planned to cover an the state apparatus without any oversight complexes of hotels and restaurants and an revenues remain as secret and beyond area of 2000 square kilometres, and it will from society. This makes gas exports infamous gold statue of the president that the control of citizens as they were under take more than 13 years to fill it by collecting effectively a matter of life and death for the rotates to face the sun. These resources were Niyazov. water from all around the country that regime. Better access to a wealthy and stable further used to maintain the police state should go for irrigation purposes34. Despite European market will make its life a lot conditions that oppress the country’s citizens There are enough arguments to support criticism from local activists, the project easier. and monitor their lives for any sign of dissent. the view that Turkmenistan’s authorities has not undergone any publicly-known On top of this not only does the management conducted some economic reforms mainly assessment of environmental and social Construction of the artificial Golden Age Lake of Turkmenistan’s oil and gas revenues aimed at improving conditions for foreign impacts. The negative implications of this in the Karakum desert. remain a mystery, but the overall investments in the country. The most construction are already visible. Problems information about the budget remains important reform was the unification of with access to water have appeared in scant. Contrary to public statements made the exchange rate in May 2008 and the some regions of the Karakum desert, where by President Berdymukhamedov in August introduction of a new foreign investment channels have raised the water table along 2007, until now no proper budget has been law. Unfortunately, similar to the Chinese their length, spoiling drinking water wells published by Turkmenistan’s government. model, these changes were not followed in some settlements with the salinated The only available information is a vague by political reforms, better observance of water from the channel. This has forced sector-by-sector breakdown32. human rights or by greater transparency in communities to leave the places of their managing gas and oil revenues. traditional life and work. There have also Has anything changed after the death been numerous biodiversity losses in the of president Niyazov? In October 2008, Karakum desert as a result of constructing Berdymukhamedov, the new president, Lake on the Desert the network of channels that supply the announced th establishment of a reservoir with water35. Stabilisation Fund, a new transparent One of the grandiose ideas of the late mechanism for accumulating gas and president Niyazov – and continued by There are more fears about the impact of the oil revenues. It was supposed to replace Berdymukhamedov – is the construction of construction. A large part of the water is lost the extra-budgetary funds, especially the Golden Age Lake in the Karakum desert. during the transport as a result of leakage the Foreign Exchange Reserve Fund, and It is only one of the plethora of examples of to the ground and a high evaporation rate. serve channelling revenues into long- how the Turkmen regime fails to use money Furthermore, evaporating water leaves salt term investments such as infrastructure. to improve the lives of its people, instead on the ground increasing its salinization – a
8 Nabucco and Turkmenistan: Our energy security, Turkmens’ misery | October 2010 Nabucco and Turkmenistan: Our energy security, Turkmens’ misery | October 2010 9 by the German car manufacturer Daimler. the use of the monies for public benefit. This Control over the country’s huge hydrocarbon In April 2010 the U.S. Justice Department would require a substantial change in the resources remains in the hands of few. found Daimler guilty of violating U.S. anti- political and social landscape of the country The situation remains grave despite the corruption legislation, whereby companies first. Without pluralism in public life and an increased political and business presence of operating in the U.S. that have offered bribes effective mechanism for citizens to change western actors in Ashgabat. in other countries – namely, in this case, their government, there is no prospect Turkmenistan – are judged to be in breach of currently to ensure that they are the ones Closer cooperation with Turkmenistan the law. The German company is to pay the who can decide and ultimately benefit. is often described as a way to influence U.S. government almost USD 200 million in the regime and to change it for the better. fines. Even the imperfect international Indeed the supporters of the Nabucco mechanism for more sustainable use pipeline claim that western political and Documents released by the Justice of oil and gas revenues – the Extractive business engagement in the country Department provide a host of details of Industries Transparency Initiative (EITI) – will bring about some kind of natural Daimler’s illegal activities in Turkmenistan, can not be applied in Turkmenistan in the transformation of the repressive regime. including the delivery of an armoured foreseeable future. One of the criteria for But it is difficult to imagine how western oil luxury sedan to “a high-level executive the implementation of EITI is that “Civil and gas companies, busy with courting the official” in 2000 valued at USD 300,000. society is actively engaged as a participant country’s unpredictable decision-makers The document says that Daimler officials in the design, monitoring and evaluation to obtain and maintain their access to gas explained that if the car wasn’t offered, of this process and contributes towards reserves, can ensure that more democracy is “all of Daimler’s sales to the Turkmen public debate.”41 In Turkmenistan, where brought to Turkmenistan. government would be in jeopardy.”39 civil society does not exist and public debate devastating process well known in Central contains only one, governmental voice, Business efforts go hand-in-hand with Asia. Another problem is the concentration As reported by sources in Turkmenistan, it will take years before this criterion is political support, while human rights and of pesticides and fertilizers that will be state officers at all levels, including law fulfilled. Hence, transparency commitments democracy issues are left for so called collected by the channel and finally end enforcement agencies, are involved in can not be used as a figleaf for gas ‘human-rights dialogue’ – isolated, once- up in the reservoir, making it unusable for corruption and arbitrary racketeering. There cooperation with Turkmenistan. a-year meetings between the EU and irrigation are no incentives to fight corruption. On Turkmenistan’s officials, with the details of top of this there is even no anti-corruption On top of this there is extensive literature the discussions kept secret. This Soviet-style construction may end up to legislation in Turkmenistan. In the current describing the negative correlation between be an environmental and social catastrophe, environment and with the intensification oil revenues and the state of democratic The continuation of the current European as has happened with the nearby Aral Sea. of business relations with Turkmenistan, institutions42 as well as media freedom.43 approach towards Turkmenistan could result “Trying to find value in this lake may be especially in the governmental controlled There is no reason for not applying the same in a freezing of the situation in the country. like trying to put lipstick on a pig,” says hydrocarbon sector, corruption may be thinking to gas revenues. The higher the Michael Glantz, director of the U.S. National another mechanism for sustaining the resource rent is, the weaker the democratic Center for Atmospheric Research’s Center for regime. institutions and independent media are. Capacity Building in Boulder, Colorado36. Good business practice, however, for example adherence to the OECD Guidelines Conclusions and recommendations Corruption for Multinational Enterprises40, is completely meaningless in a country like Turkmenistan More than three years after the death of Corruption is common in Turkmenistan – that has no anti-corruption legislation. President Niyazov, Turkmenistan remains it constitutes an integral part of the way Furthermore, environmental and labour one of the most repressive regimes in the business is carried out in the country. The legislation is void in the absence of world with one party, no free media and no rate of corruption in Turkmenistan has been independent environmental organisations civil society. Promises of transformation recognised as one of the highest in the world and trade unions that could seek to towards democracy have not been delivered. by Transparency International37. The U.S. counterbalance the power of the state. Department of State on its website simply “It is thus difficult to conclude at this stage states that the corruption in Turkmenistan that the character of the post-Nyazow “is pervasive”38. Some of the cases of Transparency is not enough regime in Turkmenistan has undergone corruption in Turkmenistan have even liberalization in any meaningful sense gained international prominence. Even if Turkmenistan’s government of the term.” Thus wrote the authors of commits to publish oil and gas revenues it the report “Dismantling Totalitarianism? Turkmenistan’s officials use cars provided is difficult to imagine that this will result in Turkmenistan under Berdimuhamedow”.44
10 Nabucco and Turkmenistan: Our energy security, Turkmens’ misery | October 2010 Nabucco and Turkmenistan: Our energy security, Turkmens’ misery | October 2010 11 Involvement in talks about gas supplies has According to a 2008 letter from the European Footnotes already weakened European criticism of Insulation Manufacturers Association Ashgabat’s violations of human rights and to European Commission President José 1 EBRD, EIB and IFC start appraisal of Nabucco pipeline, press 22 A Call for Access to Turkmenistan, Open letter of releas of the EBRD from 6.9.2010. international NGOs, 29.9.2009 http://www.crudeaccountability. the principles of democracy. A major flow of Manuel Barroso: “Simple and cost effective org/en/index.php?page=a-call-for-access 2 Intergovernmental Agreement regarding Nabucco European money from gas purchases could energy efficiency measures like better pipeline signed by Austria, Hungary, Romania, Bulgaria and 23 An overview of economic reforms in Turkmenistan can be further strengthen the regime, leaving it insulation, glazing and more efficient Turkey on 13th of July 2009 in Ankara. The Nabucco Pipeline found in the upcoming article: J. Šír, Turkmenistan - A Promised with even fewer incentives to change than lighting could deliver savings equivalent to Agreement was ratified by Turkey, as the fifth and final of Land for Making Business? Macroeconomic Reforms under the five signatory transit country parties to do so, on 4 April Berdymukhammedov, China and Eurasia Forum Quarterly, 2010. 46 today. 500 million cubic meters of gas per day.” 2010. Pursuant to its commencement terms the Nabucco 24 EBRD approves new strategy for Turkmenistan for 2010-2013, Pipeline Agreement may therefore be expected to enter This is almost seven times the amount of gas Turkmenistan.ru, 10.4.2010. into force on the 1 June 2010. Text of the agreement: http:// If the political dialogue with Turkmenistan planned to be delivered by Nabucco when www.mfa.gov.hu/NR/rdonlyres/1C1C5D2A-DC4E-425F-9D56- 25 Letter from Heidi Hautala to Commissioner Oettinger: is to bring any results for changing this it reaches its optimal capacity. We could, 056B0DB09D8F/0/090714_nabucco_agreement.pdf http://bankwatch.org/project.shtml?apc=162059-2207750--- 1&x=2234528&d=o corrupt and undemocratic regime, a clear then, achieve the goal of energy security by 3 First Nabucco Gas Will Likely Come From Iraq, Reuters, signal has to be given now. Negotiations rationalising our energy use with the effects 2.10.2009. 26 Turkmenistan’s opaque health system, Médecins Sans Frontières April 2010. over the supply of Turkmenistan’s gas becoming visible almost immediately, not 4 BP Statistical Review of World Energy, June 2009. 27 Turkmen Civil Society attacked following International 5 Project participants: Postponing agreement with to Europe should be preceded by the in five or ten years time as will be the case Criticism of Turkmenistan Health System, CIVICUS press release Turkmenistan to have no impact on dates of final investment 16.4.2010, http://www.civicus.org/press-release/1334. formulation of measurable benchmarks with Nabucco. decision on Nabucco, trend.az, 7.5.2010. to show the transition of Turkmenistan 28 European Parliament resolution of 22 April 2009 on the 6 Nabucco official: Trans-Caspian gas pipeline - stable solution Interim Trade Agreement with Turkmenistan, P6_TA(2009)0252. towards becoming a more democratic state. Unlike big fossil fuel investments, for transporting Turkmen gas to Europe, trend.az, 9.6.2010. 29 Reaching out to Turkmenistan – the wrong way, European These demands should be made public. Only concentration on energy efficiency will 7 Nabucco: The most commercial Southern Corridor gas pipeline Voice 30.7.2009. when they are met, should the EU move to not only contribute to energy security and project, presentation from RWE Supply & Trading GmbH dated 20.11.2009, http://www.rwe.com/app/Pressecenter/Download. 30 There is no reliable data about Turkmenistan’s gas and oil initiate business negotiations, including emission reductions, but can also deliver aspx?pmid=4004206&datei=1 revenues available. Estimations for the year 2005 can be found mechanisms like the Caspian Development numerous ancillary benefits (“double further in the text. 8 Critical comment by Human Rights Watch: Reaching out to Corporation and support for projects of the dividend”) for social cohesion and economic Turkmenistan – the wrong way, European Voice 30.7.2009. 31 It’s a Gas. Funny Business in the Turkmen-Ukraine Gas Trade, Report of Global Witness, 25.7.2006; Southern Gas Corridor, principally Nabucco. development such as reducing energy 9 Monitoring of Turkmenistan’s Press. 32 Global Witness’ comments to the draft version of the bills for households and providing new 10 Caspian Development Corporation (CDC), Eurogas Turkmenistan country strategy of the EBRD. Such conditions should include as a employment and business opportunities, preliminary remarks, June 2009. 33 J. Šír, Turkmenistan - A Promised Land for Making Business? minimum: especially in the small- and medium-sized 11 OMV strives to implement oil and gas projects in Macroeconomic Reforms under Berdymukhammedov, China Turkmenistan, www.trend.az, 18.2.2010. enterprise sector. This is a sector on which and Eurasia Forum Quarterly, 2010. 12 The Southern Gas Corridor is an initiative of the EU for gas The establishment of a nationwide, the European public banks – the EBRD and 34 President inaugurates Turkmen lake, Turkmenistan.ru, supply from Caspian Sea region and Middle East regions to the 17.7.2009. transparent process to review all cases of the EIB – should be concentrating their EU. It is not entirely clear which projects fall under the initiative. political imprisonment in order to establish efforts and their resources. The final declaration of the Southern Corridor summit under 35 Turkmen activists’ comments to the draft version of the the real number of prisoners held on the Czech EU presidency in Prague in May 2009 mentioned Turkmenistan country strategy of the EBRD.. Nabucco, Italy-Greece-Italy interconnector and Trans-Caspian 36 Richard Stone, A New Great Lake – or Dead Sea?, Science politically motivated charges, and to ensure energy transportation projects. magazine 23.5.2008 that victims of abuse are provided redress; 13 Taken together the countries of the EU have a majority stake 37 Corruption Perceptions Index 2009, Transparency in the bank. The lifting of travel bans on students, International. 14 Strategy for Turkmenistan, EBRD, accepted on March 23, 2010. activists and relatives of opposition 38 http://www.state.gov/r/pa/ei/bgn/35884.htm members, and the dismantling of the system This general recognition was heavily criticised by a number of international NGOs in their comments to the draft version of the 39 Ashgabat on receiving end of Daimler bribes – US federal that allows for interference with citizens’ strategy. The majority of them claim that promises of greater court documents, Eurasianet, 30.3.2010. freedom made by the Turkmen government have not been ability to leave and return to Turkmenistan; 40 Text of the OECD Guidelines for Multinational delivered. A list of the organisations that commented on the Enterprises, http://www.oecd.org/document/18/0,3343, Allowing activists, civic groups, and strategy can be found on bank’s website: http://www.ebrd.com/ en_2649_34889_2397532_1_1_1_1,00.html journalists to operate freely and without about/strategy/country/turk/comment.pdf 41 http://eiti.org/eiti/principles fear of persecution; 15 Caspian Development Corporation (CDC), Eurogas preliminary Ensuring access to the country, including remarks, June 2009. 42 M. Ross, Does oil hinder democracy, World Politics 2001, Vol. 53, No. 3. to places of detention, for independent 16 Letter from Secretariat of the Council of the EU to CEE Bankwatch Network, 22.3.2010. http://bankwatch.org/project. 43 G. Egorov, S.M. Guriev, K. Sonin,Why resource-poor dictators human rights monitors and the extension shtml?apc=162059-2207750o--1&x=2234537 allow freer media. A Theory and Evidence from Panel Data, American Political Science Review 2009, Vol. 103, No. 4. of invitations to all United Nations monitors 17 The Treaty on European Union, Article 21. who have requested access45. 44 S. Horák, J. Šír; Dismantling Totalitarianism? Turkmenistan 18 Agreement Establishing the European Bank for under Berdimuhamedow, CACI-SRSP Silk Road Papers March Reconstruction and Development, Article 1. 2009. Before these conditions are met, energy 19 Freedom in the World 2010, Freedom House. 45 From the statement of the French League for Human Rights, security for Europe could be achieved by 20 Media freedom index, Reporters Without Borders 2009. Human Rights Watch, International Federation for Human different means. http://en.rsf.org/spip.php?page=classement&id_rubrique=1001 Rights and Reporters Without Borders, January 2010. 21 Restrictions on Press Freedom Intensifying, Freedom 46 Europe’s biggest strategic energy reserve – its buildings, open House, 29.4.2010. http://freedomhouse.org/template. letter from European Insulation Manufacturers Association to cfm?page=70&release=1177 European Commission President José Manuel Barroso, 9.10.2008.
12 Nabucco and Turkmenistan: Our energy security, Turkmens’ misery | October 2010 Nabucco and Turkmenistan: Our energy security, Turkmens’ misery | October 2010 13 Notes CEE Bankwatch Network is an international non-governmental organisation (NGO) with member organisations currently from 12 countries across the central and eastern European region.
We monitor the activities of the international financial institutions (IFIs) which operate in the region, working to prevent the environmentally and socially harmful impacts of international development finance, and to promote alternative solutions and public participation.
Our campaigning on major fossil fuel projects backed by the IFIs has included the Baku-Tbilisi-Ceyhan pipeline, where we have sought to mitigate the social and environmental impacts of this 4 billion euro project that public banks such as the European Bank for Reconstruction and Development have dubiously dubbed a “development” project.
We have also worked with international partner organisations on the Sakhalin 2 Phase 2 oil and gas project in the Russian Far East. Our efforts have helped to protect the few remaining Western Pacific grey whales that feed off the coast of Sakhalin Island, and helped contribute to the non-financing of the controversial Shell-led project by the European Bank for Reconstruction and Development.
Find out more about our fossil fuels campaign and policy work at:
www.bankwatch.org/project/oilandclimate
14 Nabucco and Turkmenistan: Our energy security, Turkmens’ misery | October 2010 Nabucco and Turkmenistan: Our energy security, Turkmens’ misery | October 2010 15 Burma Equatorial Guinea Libya North Korea Somalia Sudan Turkmenistan Uzbekistan
The least free countries rated in Freedom House’s “Freedom in the World” rankings for 2009
For more information: Piotr Trzaskowski Energy and Climate Coordinator CEE Bankwatch Network ul. Wspólna 41 lok. 72, 00-519 Warszawa Tel: +48 228 920 086 Email: [email protected]
This position paper has been produced with the financial assistance of the European Union. The content of this position paper is the sole responsibility of CEE Bankwatch Network and can under no circumstances be regarded as reflecting the position of the European Union.
Bankwatch is also grateful to the following donors for their ongoing support of our work: Charles Stewart Mott Foundation, European Climate Foundation, International Visegrad Fund, Oxfam Novib, Sigrid Rausing Trust, VROM – Dutch Ministry of the Environment and Spatial Planning.
Design: www.rjones73.carbonmade.com Position paper | October 2010