The complainants are residents of Garajemirli village, Shamkir region, Azerbaijan, represented by the Oil Workers' Rights Protection Organization Public Union. The complainants have requested their identities remain confidential.
Lack of adequate land compensation and consultation
In June 2018, MIGA issued an active US$1.1 billion guarantee covering non-shareholder loans from five lender banks to the Azerbaijani state-owned enterprise Southern Gas Corridor CSJC to finance its share of the Trans-Anatolian Natural Gas Pipeline project (TANAP Project). The TANAP Project consists of the construction and operation of the pipeline, a part of the Southern Gas Corridor value chain, which aims to transport natural gas from the Shah Deniz Gas Field in Azerbaijan to Turkey and Europe.
On October 26, 2018, CAO received a complaint from 10 residents of the Garajemirli Village, Shamkir Region, Azerbaijan. The complaint raises issues of land compensation and consultation during the construction of the South Caucasus Pipeline Expansion (SCPX), passing through the complainants’ lands. According to MIGA, the SCPX is an associated facility of the TANAP Project.
On the basis that MIGA considers the South Caucasus Pipeline to be an associated facility to TANAP, CAO found the complaint eligible for further assessment on November 19, 2018 and began an assessment of the complaint. During the assessment, there was a lack of consensus amongst the parties to engage in a CAO dispute resolution process. Given that CAO dispute resolution is voluntary, the complaint has been referred to CAO’s Compliance function for appraisal in accordance with CAO’s Operational Guidelines.
CAO completed a compliance appraisal of the complaint in March 2020.
The complaint raises concerns regarding economic displacement, as well as information disclosure, community engagement, and consultation concerning livelihood restoration and compensation. While evidence beyond the complainants’ account of events is limited, these issues are potentially substantial in nature in that they may have a material livelihood impact on a significant number of households.
SCPX is acknowledged by MIGA to be an associated facility of TANAP. However, MIGA determined that its E&S requirements would not be extended to cover SCPX. This decision was based on a conclusion that SCPX would be operated by third parties over which TANAP has no operational control or leverage. Considering the ownership structures of SCPX and TANAP, CAO has questions as to the robustness of the analysis that led MIGA to this conclusion.
MIGA did not engage with public reporting of the issues related to the complaint (community grievances over compensation for land used by SCPX) either in 2015 during MIGA’s due diligence, or in 2018 during MIGA project monitoring. Underlying this lack of response was MIGA’s conclusion that TANAP had no operational control or influence over SCPX.
Nevertheless, CAO has determined that a compliance investigation is not the appropriate response to this complaint. In reaching this conclusion, CAO has considered the following: (a) that the resettlement process that gave rise to this complaint occurred prior to MIGA providing a guarantee for the TANAP project in June 2018; (b) that the MIGA guarantee was cancelled in August 2019; and (c) that IBRD requested and received from its Board of Executive Directors a safeguard policy waiver for TANAP “associated projects,” including SCPX.
The case has been closed following compliance appraisal.
Status as of March 19, 2020