Tuesday 3 February 2004

The bank has been announced, by a BP-led consortium, as providing funding for the controversial Baku-Tbilisi-Ceyhan (BTC) oil pipeline which runs from Azerbaijan, through Georgia, to Turkey.

The pipeline will run through a number of wetlands of critical importance for protected and endangered birds such as Dalmatian pelicans, black storks and imperial eagles.

In Georgia the pipeline will go through an area of high seismic activity, landslides and avalanches. A rupture in the pipeline and consequent oil leak could have devastating consequences for the region's water supply and local mineral water and tourism industries.

The Royal Bank of Scotland has decided to fund the project despite the fact it is a signatory to a set of principles, known at the Equator Principles, which commit the bank to not funding projects, like the BTC pipeline, which have a damaging impacts on people and the environment. These principles were drawn up by banks with the International Finance Corporation, the private sector arm of the World Bank.

Other banks which are funding the pipeline and are also signatories of the Equator Principles include ABN Amro, Citigroup, Dexia, ING, KBC, Mizuho, West LB.

"The Royal Bank of Scotland's funding of this pipeline totally undermines its commitment, as a signatory of the Equator Principles, to responsible funding practices," said Jules Peck, WWF's global policy advisor. "As a test case, the BTC pipeline would seem to expose the signing of these banks to the Principles as a public relations exercise which allows them to continue with business as usual whatever the risks to people and nature."