On Oil Pipelines and Corporate Responsibility

Yesterday the Caspian Sea pipeline opened. As noted here, the $4 billion pipeline will deliver oil from Baku, Azerbaijan through Georgia to Turkey’s Mediterranean coast. With the ability to pump one million barrels of oil per day, the pipeline is over a thousand miles long and is expected to supply 7 percent of the world’s oil supply. It will provide an important economic mechanism to deliver oil to western markets without going through Russia to the north or Iran to the south. This pipeline will diversify the supply of oil and strengthen the economies of Azerbaijan, Georgia, and Turkey while also avoiding oil traffic through the Turkish straits. From my days in private practice I have followed this project from its inception and I am quite pleased to see it finally come to fruition.



The construction of an oil pipeline is not the kind of thing most international law academics would find significant or even interesting. That is, of course, unless we can find something nefarious going on (as was apparently the case in the Unocal/Burma pipeline project). But there is an important aspect of this particular pipeline project that is worthy of note. Throughout the entire process of construction, the project participants paid careful consideration to compliance with core environmental and social standards. The project established an independent external advisory panel called the Caspian Development Advisory Panel that included Ambassador Stuart Eizenstat among its members. The purpose of this Advisory Panel was to provide objective advise on the economic, environmental, and social impacts of the pipeline project. The panel issued numerous reports to ensure that environmental and social standards were met in the process of construction of the pipeline.



As this interim report notes, the project’s legal framework includes human rights undertakings that emerged from discussions with a number of NGOs, including Amnesty International. The human rights undertakings imposed standards that apply to project activities consistent with the highest of applicable EU standards, World Bank group standards, and international labor and human rights treaties. The Advisory Panel made numerous recommendations throughout the process of construction, including a recommendation for the establishment of an ombudsman in each host country and a special human rights coordinator to implement, coordinate, and monitor human rights commitments relating to the projects and to interact with all key stakeholders, including host governments and NGOs.



This corporate approach to environmental and human rights is worth modeling. The corporations and host governments deserve much credit for their sensitivity. They deserve recognition not only for the success in the completion of this monumental pipeline project, but also for the way it was constructed.



We in the international law field write much about corporate liability for human rights abuses. It has captured the legal academy’s imagination. But we should do a better job recognizing those instances where there is clear evidence of corporate social responsibility. Kudos to the host governments, to BP, the European Bank for Reconstruction and Development, and the World Bank’s IFC.