The first phase of ACG- the Chirag Early Oil project marks the beginning of big lending to the region by the International Finance Corporation (IFC) and the European Bank for Reconstruction and Development (EBRD), setting a precedent for future investment. However, the results of the first portion of the project show that there are many very serious negative consequences to its development.
Firstly, though the banks committed to use only the “Best Available Technologies” for the project, but in fact fell back on the much-inferior “Best Available Technology Not Entailing Excessive Costs” practices. This has already resulted in accidents and oil spills. Additionally, drilling wastewater was discharged directly into the sea, despite the Environment Impact Assessment (EIA)’s statement that “water will be discharged 50 meters below the Caspian mean level to prevent damage to the productive biological zone”. The Western Route Export Pipeline (WREP) puts five sensitive conservation areas in danger, while the Northern Route Export Pipeline (NREP) has already had an accident in 1997, when 1,000 tons of oil were accidentally discharged from a corrosion hole. The WREP has been the site of several oil spills: one in 2002 in western Georgia, where two tons of oil spilled over 100 square kilometers, and most recently in 2005 when 60 tons of oil spilled in the Georgian Gardabani reserve, near a local village. Both spills are thought to have been staged purposely.
Finally, there has been a thorough lack of transparency and disclosure throughout this project. The EIA investigation yielded results that were not previously available to neither the citizens nor the banks, and major environmental decisions were made unilaterally, without the banks’ and citizens’ participation.