Georgia: BTC Pipeline-31/Naokhrebi
Community association and legal representative of community
$125 million (A loan) $125 million (B loan)
The Baku-Tbilisi-Ceyhan (BTC) oil and gas pipeline is a 1,768 km long crude oil pipeline stretching from the Caspian Sea to the Mediterranean Sea. It is the second longest oil pipeline in the world and passes through Azerbaijan, Georgia and Turkey. IFC has invested $250 million since 2003 and the total project cost is approximately $3.6 billion. The project is operated by BTC Co., which comprises a consortium of 11 partners. To date, CAO has received 33 complaints in relation to the project ranging from individuals to communities to local organizations. On February 28, 2008, CAO received a complaint filed on behalf of villagers in Naokhrebi, Akhalsikhe District, lodged by two representatives – the head of a community association called “Pobresi”, and a legal representative of the population. The complaint raises issues about residents’ land rights and describes a long-running dispute over registration of lands and implementation of a purchase agreement.
On March 5, 2008, the CAO determined the complaint meets its eligibility criteria for further assessment. In April, the CAO Specialist Ombudsman traveled to Naokhrebi to work with the parties and discuss options for resolution.
The dispute involves the villagers’ claim that they were never compensated for land purchased from the state by BTC Co. for the construction and permanent operation of a gas treatment facility. BTC Co. claims it purchased the land legally and at fair market price from the appropriate Georgian government authorities, whose maps and pre-purchase documentation confirmed the land was state-owned and not in use for agricultural or other purposes. Complainants have been disputing the terms of the purchase agreement for three years, saying they are the rightful owners and users of the land. During CAO’s visit, the complainants produced maps and other land ownership documents which they say contradict BTC Co’s assertion. The case is currently being considered in the Georgian courts. The complainants had requested that the CAO Ombudsman assist them in making an out-of-court settlement offer to resolve the matter, which the CAO drafted and presented to BTC Co. during the April 2008 assessment trip. BTC Co. declined the offer on the grounds that the case would set a precedent for other similar claims which they believe have no merit, or that they underscore a lack of accountability within the Georgian government. As a result of BTC Co.’s unwillingness to pursue a negotiated settlement through the CAO Ombudsman, the Naokhrebi complaint was transferred to CAO Compliance for appraisal to determine whether an audit is warranted. CAO Compliance concluded that the case did not merit an audit. The case is closed.