Making Georgia into a "transit country" is a political and economic objective of the Georgian government, widely supported by International Financial Institutions (IFIs), the EU and the US Government. The Caspian Sea's oil reserves are considered at least as large as those in the North Sea that currently supply about 8% of the world's oil. Bringing the Caspian Sea's energy resources safely to the international market is a new world challenge. One of the main transit routes through existing pipelines and railways from the Caspian Sea to Europe is along the Georgian coast of the Black Sea, which includes a highly sensitive ecosystem - the Kolkhety Lowland.

The Kolkhety Lowland is one of the most valuable biodiversity hotspots of the Black Sea, providing a critical habitat area for numerous species of migratory and wintering birds, endemic and relict species of flora, and unique wetlands.

Already at risk due to extensive oil transit, the Kolkhety Lowland now faces further threats from of oil activities such as the Baku-Supsa Oil Pipeline (IFC/EBRD); drainage of the Kolkhety wetlands (World Bank), the Kulevi Oil Terminal construction and oil exploration plans by Anadrako in protected areas. These activities have taken place despite the establishment of the Kolkhety National Park (funded by World Bank/GEF) and the listing of unique and important wetland sites under the Ramsar Convention.

Since 1995, the World Bank has pushed through reforms that minimize the political risks of oil investment in Georgia for private investors, in order to attract more and more capital. The promotion of oil transit, combined with policy reforms and private sector risk mitigation, has given rise to a situation in which the Georgian Government is supporting all oil-related projects without calculating the cumulative environmental, economic and social impacts. New oil terminal, port and exploration projects have appeared like mushrooms after the rain.

Even more new oil projects

Meanwhile, in the village of Kulevi, in the middle of Ramsar Convention-protected territory, construction of a new oil terminal has begun, constituting a violation of Georgian legislation and International law. In the future 10 million tonnes of oil products will be shipped from here each year. The terminal has the capacity to store 100,000 tonnes of oil, which will come in by rail. The (incomplete) environmental impact assessment (EIA) for this project singles out the route through Kolkhety National Park as the best option.
The decision to construct the terminal was made by decree, without participation of the Georgian parliament. The government is trying to convince the Ramsar secretariat of the necessity of the terminal after the fact, however, without mentioning that Kulevi is in the middle of Ramsar territory.

The Georgian government intends to provide even more oil transport facilities in the future. It is researching the feasibility of a new sea harbour, oil drilling in Kolkhety National Park, modernizing an existing oil pipeline and building a refinery.

We demand that the Government of Georgia, World Bank and EBRD:

• Prepare a Strategic Environmental Impact Assessment for the coastal zone, including a cumulative full life cycle CO2 assessment;
• Prepare an Economic Assessment of Coastal Zone developments;
• Stop construction of new ports and oil terminals, as well as various projects (such as the wetlands drainage) until the above- mentioned assessments are complete;
• Apply Espoo Convention Guidelines (despite the fact that Georgia does not want to ratify it), to any new oil terminal or port construction project , as new initiatives significantly increase oil shipment in the Black Sea and Bosphorous;
• Develop fiscal mechanisms to allow the Integrated Coastal Zone Management (ICZM) Commission to establish a supreme body for issuing economic activity licenses in the area. Without the ICZM Commission's permission, no economic development should be permitted in the coastal zone;
• Support and uphold the legal framework establishing and protecting the Kolkhety National Park and the ICZM project (WB); and
• Ensure fair public participation in decision-making processes.

Documents

Kolkhety Lowland Towards Sustainable Development. www.bankwatch.org/publications/index.html

Comments on EIA of Kulevi Oil Terminal, 30 April, 2001 (only Georgian)
Comments on EIA of Kulevi Oil Terminal, 30 April, 2001 (only Georgian)

Letter to Mr. Pieter Stek, Executive Director of the World Bank, 23 May, 2001 www.bankwatch.org
Letter to Mr. Pieter Stek, Executive Director of the World Bank, 5 November, 2001

Summary of Conclusions and Recommendations of World Bank Mission concerning Kulevi Oil Terminal, 30 October, 2001

Selected Articles
WB to Denounce Kulevi Terminal Legalization (newspaper Georgia Today), 3 August, 2001
World Bank Supports Construction of Oil Terminal and Port in Kulevi (Information Agency Praim-News, 13 August 2001 Eng)
World Bank - Denouncing or Supporting Oil Terminal in Ramsar Site? - Read the article in Bankwatch mail 9 (Eng) or Bulletin [3] (Geo)