Btc Pipeline: Turkish Delight or Russian Roulette?

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INTRODUCTION

Baku-Tbilisi-Ceyhan (BTC) pipeline is an oil pipeline that transports crude oil Caspian Sea to the Turkish coast, over three countries.

BTC Company is a joint venture company responsible for the construction and operation of the whole $4bn pipeline, led by BP as majority shareholder.

Spread across Azerbaijan, Georgia and Turkey largest cross-border infrastructure construction project in the world dubbed the “contract of the century”. Financing was agreed after over two years of appraisal of the potential environmental and social impacts relating to the project.

An underlying strategy is to reduce dependency on OPEC oil producers in the turbulent Middle East and to avoid Russia seen by America as a resurgent superpower.

Aside from indirect benefits; Georgia and Turkey gain financial benefits through transit fees and Azerbaijan through the royalties and tax revenues,

However, BTC co. encountered several social and environmental issues during the construction of the 1768km pipeline. Limited routing options meant encountering geo-hazard risks, potential harm and disturbance of communities and natural habitat, temporary land acquisition, revenue management and a volatile political environment.

Thus this project received intense scrutiny by stakeholders and press for its lack in humility and effectiveness in resolving political, social, developmental and security concerns.

THE OBJECTIVE/GOALS

Stakeholder map.

A visual mapping of parties that affect or about affected by an organization, strategy and in this case a project. Helps us identify the expectations and power of different stakeholders, this understand what ethical issues dilemmas are to be understood and resolved.

METHOD / FRAMEWORK FOR ANALYSIS

We have chosen a normative approach (what should be done) for our analysis as opposed to a descriptive approach (how it is done). Generate solutions that enforce behaviorally standards; as we already have detailed evidence showing how it is done.

Moral absolutism will be used by clearing stating what is right and wrong; which be rationally determined in order to come up with a universal applicable solution. This helps us come up with an objective stand-point on the subject.

There will be examination of traditional ethical theories such as consequentialist and non-consequentialist approaches and stakeholder theories and new age concepts namely, corporate citizenship to help us justify our absolute perspective in solving the ethical dilemmas.

THE MAIN ISSUES AND DILEMMAS BP FACE IN THIS CASE

Political instability
Pipeline Security
Human Right Abuses
Corruption
Poor governance
High expectations from local community
Environmental Risks and Risk Assessment
Intense scrutiny by pressure groups and media
Land Acquisition and Land Compensation

HOW WOULD YOU EVALUATE BP’S APPROACH TO SOCIAL, ENVIRONMENTAL AND ECONOMIC IMPACTS OF THE PROJECT FOR THE LOCAL COMMUNITY?

BP set up a Regional Sustainability Development program (RSDP) to proactively address issues.

| Social 1) Community Investment Program ($20m addressed to social issues)-in Azerbaijan set with largely international groups-in Turkey with local Turkish organizationswith universities and private consultants firmsBP set up a monitoring and complaints procedure | Economical 1) Regional Development Initiative ($25m designed to accompany over 10yrs after opening) 2) Set up of local coordinators and in consultation with...
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