Ilisu Activists Damn Protocol at Balfour Beatty AGM

LONDON, United Kingdom, May 2, 2001 (ENS) - Shareholders of construction company Balfour Beatty can expect a little extra from their annual general meeting in London today. Kurdish music, dancing, a symbolic dam made from shareholder certificates and a resolution challenging the company's role in the Ilisu Dam project in Turkey are all on the agenda.

"Our resolution challenges Balfour Beatty's board to show that they care about their reputation and about their environmental and social performance," said Charles Secrett, executive director of Friends of the Earth.


The Tigris River runs through the medieval city of Hasankeyf. Part of the city would be flooded if the Ilisu dam is built. (Photos by Mehmet Masum SŁer, courtesy Save Hasankeyf Campaign)
"The Ilisu Dam would be an environmental disaster, a social evil and a threat to peace. No company - and no government - which is serious about respecting international law and ethical standards should touch it with a bargepole."

If built, the Ilisu dam on the Tigris River in southeast Anatolia, 65 kilometers (40 miles) upstream of the Syrian and Iraqi border, would generate 3,600 gigawatt hours of peak hour electricity each year.

A rockfill dam 1,820 meters (5,971 feet) long and 135 meters (442 feet) high would create a reservoir with a maximum volume of 10.4 billion cubic meters and a surface area of 313 square kilometers.

The dam would displace up to 78,000 people, according to a report last year by World Bank resettlement expert Dr. Ayse Kudat. This is three times the number originally estimated by the Turkish government.


Residents of Hasankeyf.
Much of this upheaval would occur in an area ravaged by nearly two decades of conflict between the Kurdistan Workers Party and the Turkish government. There are also concerns that if the reservoir created by the dam is filled too quickly it could leave downstream areas short of water, a possibility that has caused the Iraqi and Syrian governments to voice concern.

The Turkish government says the Ilisu dam is vital if the country is to solve its power shortage using clean fuel. Although its power consumption is only 15 percent of that of Western Europe and the United States, Turkey's rapidly developing economy is creating demands for significant increases in electricity supply.

The country plans to build two new power stations the size of Ilisu every year for the next 10 years to help meet growing demand. But in order not to be dependent on fossil fuels such as oil, gas and coal that will have to be imported for the new power stations, the Turkish government produced the Ilisu plan.

In 1997, Turkish water resources company DSI selected Sulzer Hydro of Switzerland, a leading turbine manufacturer, as main contractor for the project. Sulzer Hydro selected Balfour Beatty to lead the civil engineering part of the construction.

Other partners joining the consortium included ABB of Switzerland, Impregilo of Italy, three leading Turkish construction companies, Kiska, Nurol and Tekfen and, until last September, Skanska.


Hasankeyf's future is as uncertain as its origins. It is not known who established the city.
The Swedish construction company did not explain why it was pulling up its 24 percent stake in the consortium, but environmental groups were quick to claim that the decision was motivated by the dam's environmental and social implications.

In March this year, Friends of the Earth took the unusual step of purchasing £30,000 (US$43,000) worth of shares in Balfour Beatty in order to submit a resolution at the company's annual general meeting (AGM).

Along with more than 100 other shareholders, the group put forward that resolution today at London's Royal Lancaster Hotel, which is hosting the AGM. The resolution calls for higher standards in one area of the company's business - the hydro electric sector.

Specifically, the resolution calls on the company to adopt the 26 guidelines and principles for dam building laid down in last year's report by the World Commission on Dams (WCD).

The WCD was set up by the World Bank and the IUCN - World Conservation Union in 1997 "to review the performance of large dams and make recommendations for future planning of water and energy projects."

The Commission brought together government representatives, the private sector, academics, civil servants, non-governmental organizations, multilateral development agencies and affected communities.

Friends of the Earth calls the WCD report the "benchmark standard" in the hydro electric sector, and says Balfour Beatty's response to the report has been only "lukewarm."


Hasankeyf's hillside ruins.
In a statement advising shareholders to vote down the resolution, Balfour Beatty "welcomed the report produced by the WCD and declared its support for the efforts of the WCD to establish a framework for promoting appropriate practice in the development and execution of hydro electric schemes."

"It has also committed itself to taking the WCD principles, criteria and guidelines into account in determining whether and how it should be involved in any future hydro-electric projects."

But the company, which has a 31 percent stake in the Ilisu project, goes on to say that the WCD guidelines are still being debated and evaluated by governments, development banks and other interested parties.

The guidelines are not intended to be used as conditionalities, says the company, rather "they outline a generic approach to be used, adapted and incorporated in a manner that best meets local circumstances and developmental needs."

That view is not shared by other companies. Skanska, for instance, has adopted the WCD principles and guidelines.

Balfour Beatty is seeking a £200 million (US$287 million) export credit from the UK Government to build the dam. The governments of Austria, Germany, Italy, Japan, Portugal, Sweden, Switzerland and the United States are considering extending official export credits or guarantees of about $850 million in total.


A resident of Hasankeyf.
In its statement, Balfour Beatty said the completion of the Ilisu's Environmental Impact Assessment Report, due shortly, would be the proper opportunity for consultation and comment from interested parties.

The report, prepared by an international team of independent experts, dates back to 1997. It will identify and detail the principal environmental and social challenges associated with the project and recommend appropriate action.

"Together with the response of the Turkish authorities to the reportís recommendations, the report will, in due course, form the basis for the decisions of the Export Credit Agencies potentially involved in underwriting finance for the project and of the other parties with an interest in the project," said the statement.


Map showing the location of the proposed Ilisu Dam.
That does not satisfy Friends of the Earth.

"It is no longer acceptable - or even rational - for Balfour Beatty to put this year's bottom line before the long term needs of people and the planet," said Secrett.

"The company will continue to suffer serious damage to its reputation until it learns this essential truth."