This report sheds light on the nature of the relationship between the oil industry and conflict in a region that has been unstable since the collapse of the Soviet Union in the early 1990s – with a particular focus on the Baku-Tbilisi-Ceyhan (BTC) pipeline (currently being built to transport oil from the Caspian to the Mediterranean). Once fully operational (2006 is predicted) the BTC will have a capacity to deliver 1 million barrels per day to the Turkish port of Ceyhan. The report recognises that construction of the pipeline is largely the responsibility of BTC Co. set up for this purpose, but directs its recommendations and analysis to BP, the largest stakeholder in the project and region, and therefore the company with highest responsibility for addressing conflict-related issues.
The research behind it grew out of two areas of International Alert’s Business and Conflict programme of work: a conflict transformation field project in the South Caucasus region; and development of tools for conflict-sensitive corporate practice, that is part of the policy project of the programme.
This introduction outlines the report’s basic framework and origins, going into more depth on available tools and frameworks for understanding corporate ‘conflict sensitivity’. Chapter 2 gives an outline of the BTC investment itself. Chapter 3 explores the context in the region and the nature of its instability, from the perspective of different actors. Chapter 4 then places the BTC pipeline and the oil industry alongside the context, beginning to draw out the two-way dynamic between the context and the BTC investment project. It attempts to predict some of the future impacts that the pipeline might have on the context and vice versa, exploring some of the areas for action that companies might contribute to if the oil industry and the BTC pipeline in particular is to be a positive influence in the region. Chapter 5 sets out recommendations that are designed to be a contribution to the search for better informed approaches to foreign investment in conflict contexts.