ECA Watch: International NGO Campaign on Export Credit Agencies

A highly controversial proposed dam in Turkey appeared to suffer a fatal blow two months ago when one of the major construction firms involved withdrew under heavy pressure from human rights and environmental groups.

But officials high up in the Turkish government vow to continue to build the project, one way or another. The Ilisu Dam on the Tigris River would be 5,970 feet long and 443 feet high. The dam's reservoir would cover about 121 square miles of countryside and farmland.

Dam proponents say the benefits far outweigh the sacrifices of the displaced people and the environmental impacts downstream.

Criticism is being levied, however, at the Turkish government and giant construction companies, as well as at the lending institutions without which construction of this $2 billion project is almost impossible.

Further complicating the matter is a pattern of human rights abuse in the region, ancient and culturally significant archaeological sites that would be flooded and nations downstream complaining about the project.

Mumtaz Turfan, director general of the Turkish state hydraulic works and in charge of the dam project, told United Press International Turkey is currently using only one-third of its water resources and wants to build 450 dams in the next 25 to 30 years.

"Ilisu is one of the most important projects for our nation. It will bring lots of economic benefits and social benefits to the people who are living there so this is an unavoidable project for us," Turfan said. The Ilisu Dam would supply about 3 percent of Turkey's electricity.

Tarfan said people who are opposed to the Ilisu dam project are extremists who are trying to create a Kurdish republic, part of which would be insoutheastern Turkey, the region of the project.

"They are trying to rebuild the anarchic system in the world, like in Afghanistan, and they want to destroy our Turkish republic," he said.

Tarfan's remarks underscore the highly charged nature of the debate. Some opponents say dam projects and the resettlement process serve to break up the Kurdish community. The Ilisu dam would require thousands of people, essentially all of them Kurdish, to be relocated. Estimates of the number vary from 20,000 to 80,000.

Opponents, such as the Ilisu Dam Campaign, point out that untreated solid waste and wastewater from large cities, such as Diyarbakir, with a population of over half a million, currently flows into the Tigris. If the river were to be dammed, natural restorative river processes would be inhibited, leading to health problems, they say.

Critics also charge the amount of silt that would buildup in the reservoir is grossly understated by reports done on the project and that the effective useful life of the dam would be 50 to 100 years. The downstream water flow would be reduced as a portion of the water was diverted for irrigation.

About 40 miles downstream from the proposed dam site, the Tigris formsSyria's easternmost border for about 15 miles before running into Iraq. Both Iraq and Syria have protested and Iraq has said the dam would severely impact water resources downstream as well as affect the environmental balance of the entire region as a result of reduction of the quality of water.

But as severe as some of these environmental problems may be, the debate about the dam has focused more on human rights issues, archeological antiquities and the arena of international lending practices.

When British construction giant Balfour Beatty withdrew from the Ilisu project in November, it cited financial concerns. But company officials said concerns were linked to the fact it would be prohibitively expensive to meet the standards that now are emerging in export credit agencies, the publicly financed institutions that lend billions of dollars for such works or guarantee the payback of necessary borrowing.

Export credit agencies exist in most developed countries and use taxpayer money. The agencies show acute interest in projects in which a company based in their country would be involved in overseas. Many international projects, a large number of which impact the environment, would be impossible without export credit being granted.

Balfour Beatty planned to have its efforts financed by the Export Credits Guarantee Department of the United Kingdom. But this export credit agency recently had developed a set of business practice guidelines that said, in part, "We will promote a responsible approach to business and will ensure our activities take into account the Government's international policies, including those on sustainable development, environment, human rights, good governance and trade."

The person in charge of developing the business principles, and monitoring their implementation for the United Kingdom's Export Credits Guarantee Department, David Allgood, told UPI while the guidelines were not formulated as a direct result of the Ilisu project, Ilisu "helped focus people's minds," as the principles evolved.

Allwood said any one of the problems faced by Ilisu would make it a difficult project, but when added together made it a more difficult project than any other they had considered. But Allwood said the export credit agency would consider any new application for the Ilisu project on its merits. Allwood said there is a recent trend in export credit agencies to incorporate human rights and environmental guidelines.

Doug Norlan, an expert on export credit agencies and policy director at Pacific Environment, headquartered in Oakland, Calif., said some export agencies, such as Hermes Kreditversicherung-AG in Germany, are highly resistant to adopting such principles. Norlan estimated export credit agencies fund $50 billion to $70 billion of large infrastructure projects a year and have become among the biggest sources of public financing of large scale infrastructure projects in the developing world.

As far as oil, gas and mining operations, all of which have enormous environmental impacts, Norlan estimated export credit agencies collectively are supporting twice the volume of transactions as all the international development banks, including the World Bank, combined.

Some people are concerned with how their tax dollars will be spent. Nick Hildyard, a researcher with Corner House, an environmental and human rights group based in Dorset in the U.K., told UPI, "European citizens, as do American citizens, have an absolute right to raise questions about how their taxpayer's money is being spent."

The emerging standards of some lenders require people affected by a project have a seat at the table, are assured their standard of living will not be negatively impacted and have an opportunity to voice their economic, cultural and environmental concerns. The apparent failure to include the local people may have halted this project as much, if not more, than any other factor.

Sally Eberhardt, a spokesperson for the Kurdish Human Rights Project in London, told UPI previous dam projects built in the area dislocated very large numbers of Kurds.

"Huge numbers of Kurds faced inadequate compensation or simply none; were forced from their homes to lives of increased poverty." Eberhardt said Kurds in southeast Turkey have continued to suffer all types of repression including disappearances, torture in custody and extra-judicial killings and the level of intimidation for Kurds in Turkey is such that speaking out to oppose the dam has continued to be difficult in Turkey.

But some of the remaining consortium companies, such VA Technology with headquarters in Vienna, Austria, are committed to sticking with the project for now. VA Technology spokesperson Wolfgang Schwaiger told UPI, "We realize that the Ilisu project is not an easy one and is a bit problematic in that there are allegations that there are Kurds being dislocated and that there are archeological sites removed or damaged and the Tigris river diverted."

But Schwaiger said VA Technology was "very committed ... to sustainable, ecologically sound and socially sound and acceptable solutions."

"We feel it is more responsible to check out whether this is sustainable and ecologically sound rather than to run away," he said.

Environmental and human rights advocacy is beginning to hit home in the boardrooms of some of the largest lenders. Even if companies such as VA Technology stick around, there may not be the money there used to be for a project that pencils financially but can't meet human rights and environmental standards.