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Caspian agreement may trigger cascade of energy projects

The Azeri Times

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A convention on the Caspian Sea to be signed at an upcoming summit in Kazakhstan may serve as the starting pistol for a long-mulled natural gas pipeline joining Turkmenistan to Azerbaijan.

This route would, if completed, finally give Turkmenistan a direct entry point into European-bound gas transportation infrastructure through what is known as the Southern Gas Corridor. At a strategic level, there are even greater stakes in play. Success in making this pipeline a reality could trigger a cascade of undertakings to further bridge Central Asia and Western Europe.

“The Trans-Caspian Pipeline will be … a demonstration project for trans-Caspian energy transmission,” Robert M. Cutler, a senior researcher at Carleton University’s Institute of European, Russian and Eurasian Studies, told Eurasianet.

Much of Kazakhstan’s westward oil exports are now funneled either overland through Russia or in tankers across the Caspian, but the appearance of the Trans-Caspian Pipeline, or TCP, could be succeeded by oil pipelines along the same seabed. That route would circumvent Russia.

Advance indications about the new draft convention on the legal status of the Caspian Sea, which the five littoral nations are expected to sign at a summit in the coastal Kazakhstan city of Aktau on August 12, are positive.

Any kind of consensus would set aside a tussle that has been raging ever since the Cossacks serving the Russian Tsar set across the sea in the second half of the 17th century to lay waste to towns in northern Persia. After hundreds of years of conflict, Soviet-Persian treaties signed in 1921 and 1940, respectively, restored a semblance of accord that was again disrupted when the Soviet collapse led to the appearance of three new sovereign nations on the map.

This lack of clarity has held up initiatives like the TCP, which has faced stiff resistance from the likes of Russia and Iran. There appears to have been a change of mood in Moscow, however.

The upcoming convention will “solve many contentious and unclear issues about what the Caspian is and how Caspian states will in future address the exploitation of resources, the delimitation of marine space and so on,” Russia’s deputy foreign minister, Grigory Karasin told the State Duma in Moscow in June.

While the diplomatic deadlock has been overcome, the financial logic underpinning the TCP is less certain.

“In my view, [demand for Turkmen gas] is not strong enough because of two main reasons,” Yusin Lee, a professor at South Korea’s Yeungnam University’s political science department, told Eurasianet in an email. “In the first place, the European gas demand is not likely to increase much in the near future. Moreover, Turkmenistan’s competitors such as Mediterranean countries (e.g. Egypt) and Romania have recently emerged.”

One back-of-a-napkin projection volunteered by Lee envisions a gas pipeline able to carry 10 billion cubic meters annually in its early stages. If the price of gas sold in those amounts roughly approximates what Russia’s Gazprom on average now charges Europe – some $231.5 per 1,000 cubic meters – this could earn Turkmenistan around $2 billion per year, he said.

That is a tidy sum, but who is actually going to build and pay for the pipeline? Lee said he believes the project is unlikely to begin taking shape until large international companies, such as Italy’s Eni, sit up and take an interest.

“Unfortunately, however, I don’t think that these companies will appear soon,” he said.

Cutler is more upbeat, arguing that the cost of constructing the TCP in the first place will be far lower than is sometimes suggested.

“The pipeline is going to cost max $2 billion, closer to $1.5 billion. That’s cheap,” he said. “Any figure larger than that is out of date.”

And the infrastructure already in place means that the volumes Turkmenistan can export will be substantial.

“Turkmenistan will be able to export considerably more than 10 billion cubic meters annually as soon as the TCP is ready,” Cutler said.

When a firmer project budget is established, everything else should flow from that.

“Once the cost of construction is known, the price of the transit tariffs can be fixed. Once the price of the transit tariffs are fixed, then the shippers can reach agreement with Turkmenistan for sales-purchase agreements for volumes at known costs,” Cutler said. “On the basis of that, the pipeline will be built.”

One strand of objections to Caspian subsea pipelines, however, has been advanced by people concerned by what impact they could have on the environment. Although assessments commissioned by the European Union and the World Bank have ostensibly minimized those anxieties, green activists warn that the cost of something going wrong would be grave.

“Environmental risks associated with laying a pipeline across the Caspian are numerous, ranging from risks in the event of a spill to flora and fauna, including numerous endemic species such as sturgeon and Caspian seals, and to migrating birds who stop along the way in their flyover migration routes,” said Kate Watters, head of Crude Accountability, a nongovernmental group that monitors ecological issues in the region.

Champions of the TCP insist that recent advances in pipeline technology make such dangers a vanishingly small improbability.

The bear in the room

The conundrum behind all this is why Russia – long an opponent of trans-Caspian energy routes – is backing down.

One theory advanced by analysts positing a geopolitical angle is that Moscow may be trying to mollify the EU, which has thrown obstacles in the way of the Nord Stream-2 pipeline, an in-development Baltic Sea route that is integral to Gazprom’s European ambitions.

And Azer Ahmadbayli, an energy expert who writes for Baku-based Trend news agency, has argued in a recent article that Russia is interested in diverting some of Turkmenistan’s gas away from the Chinese market, where almost all of it currently flows.

“Russia has found that the transformation of Turkmenistan – the world’s 4th natural gas reserves holder – into China’s raw material base could negatively affect the volume and price of future Russian gas supplies to China via the ‘Power of Siberia’ pipeline,” Ahmadbayli wrote on July 17.

Cutler pointed out that the “people who make things happen don’t have the luxury of thinking in that way.”

“The people who have to negotiate on Nord Stream are concentrated on Nord Stream. People who have to negotiate Turkmenistan are attending to Turkmenistan,” he said.

Then again, there are those who believe Moscow stands a good chance of killing off the TCP at birth by simply resuming purchases of Turkmen gas — something it stopped doing in January 2016. Russian Deputy Energy Minister Anatoly Yanovsky hinted in late July that his government may resume negotiations in the fall on buying gas from Ashgabat.

“Gazprom could offer either to buy the gas at the Turkmen border at a premium, or to transit it on terms favorable in comparison to the southern corridor,” Simon Pirani, a senior visiting research fellow, wrote in a survey paper in July. “While Gazprom would prefer not to encourage a direct competitor, it might prefer to profit from offering that competitor limited access to a route to Europe that it controls, rather than allowing a new route to be opened up.”

Peter Leonard is Eurasianet’s Central Asia editor.

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Azerbaijan

The US Calls Azeri Government to free All Individuals Imprisoned for Exercising Their Fundamental Freedoms

The Azeri Times

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The US welcomes the release of the opposition politician Ilgar Mammadov from imprisonment in Azerbaijan and calls on the authorities to remove accusations from him, as well as to release all other persons arrested for the implementation of fundamental freedoms.

This was stated by the Department of State spokeswoman Heather Nauert.

“The United States welcomes the decision of the Azerbaijani Court of Appeal to release Republican Alternative Party Chairman Ilgar Mammadov, whose conviction and imprisonment for over five years raised serious concerns about the rule of law in Azerbaijan. We call on the government to drop the charges against him, in keeping with its international obligations and the rulings of the European Court of Human Rights.

We urge the Azerbaijani authorities to release all other individuals who have been imprisoned for exercising their fundamental freedoms,” Nauert said in the statement published on the website of the US Department of State.

According to local human rights defenders, there are at least 150 political prisoners in Azerbaijan.

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The true price of Azerbaijani cotton

The Azeri Times

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The fall in oil prices during the last few years has forced the government of Azerbaijan to seek alternative revenue sources. Baku placed its bets on cotton, without heeding the consequences – human rights violations, rising costs of agricultural produce and even the threat of boycotts by major buyers. After the mass poisoning of cotton workers this summer, Meydan TV reporters started to wonder: what is the price this country has to pay for growing cotton?

Criminal proceedings after poisoning allegations

“We all started to have bad stomachaches, then foam came out of our mouths. We got scared and left the field. Those who were not affected took us to a hospital,” recalls Gulnara Gardashova.

The 33-year old is one of the Azerbaijani cotton workers who was poisoned while working on the fields this summer. There are said to be hundreds of people like her, though the government is concealing the actual scale of what is happening.

On 10 July, 25 other people were poisoned along with Gulnara, working on cotton fields in the village of Simada in the southwestern Saatli district.

“Before we started working, the farmer told us that he had sprayed the soil with a chemical two weeks earlier, and that it was safe to resume work after two days. But it seems that the effect of the chemical lingered.”

Gulnara and the others affected were taken to the local hospital. She said their condition was taken seriously, which is why they were sent to the Clinical Medical Center in Baku.

When talking to reporters, Azer Magsudov, head of the clinic’s Toxicology Department, confirmed that those affected were feeling “lightheaded and sick” but rejected the suggestion that this was due to poisoning. He did not specify what caused the symptoms. Similarly, doctors in other hospitals who treated the patients with the same symptoms told journalists that the cause was excessive exposure to the sun, not poisoning due to pesticides.

The Azerbaijani Prosecutor General’s Office has launched criminal proceedings into negligence by officials and potential violations of procedures in combatting plant diseases and pests. On 10 August, the Prosecutor-General’s Office said it had completed a preliminary investigation in the criminal case regarding 10 people – agronomists, heads of centers for the protection of plants, and other officials. All of them have been charged with violating occupational health and safety rules, and their cases have been passed on to courts in Saatli, Imishli and Tartar districts.

Scale of poisonings remains unclear

There is no official information about the number of people affected. Media reports and eyewitness testimonies suggest that there have been at least 400 cases this summer alone. Among the victims are children, who often help their parents on the fields. In Saatli, a Meydan TV correspondent saw three teenage girls weeding a cotton field.

So far, the poisonings occurred in four districts: Imishli, Saatli, Tartar and Yevlakh.

In June, around 80 cotton workers were poisoned working on fields in the Imishli district. Since the official narrative of sunstroke had not yet been established, the head of the local hospital, Eynulla Gasimov, shared his assessment freely:

“In Soviet times, people used to get poisoned by pesticides. Such incidents still happen today, and this is one of them.”

The main buyers and distributors of pesticides are agro-industrial unions. Since they are controlled by the government, it is difficult for journalists to obtain information about the specific types of pesticides used on the fields.

In a recent investigative report, Ifact.ge published pictures of chemical containers found on Saatli cotton fields. They contained Rifle 48 EC, which contains the herbicide Trifluralin. The EU banned it ten years ago, but it is still permitted in some countries – including the United States and Turkey – provided that workers spraying it wear protective clothing.

Контейнеры от химикатов, найденных на хлопковых полях Саатлинского района Фото-ifact.ge

Other pictures show empty chemical containers scattered around fields in Imishli. The labels indicate that the farmers used domestic pesticides made by the Azerbaijani Gilan Holding.

An OCCRP investigation recently revealed a link between Gilan Holding and the daughters of the Azerbaijani president, Arzu and Leyla Aliyeva, who are its main shareholders.

Agrarian expert Vahid Maharramov believes that it will the source of the pesticides will remain a mystery.

“Those guilty of what happened are so powerful that law-enforcement agencies are not in a position to deal with them.”

Fotolar ifact.ge saytına məxsusdur

The area of land on which Gulnara Gardashova and 25 other cotton workers were poisoned belongs to farmer Latif Khalidov.

Farmers used to buy pesticides for their fields without knowing about potential health and safety risks.

“We are ordinary people. We do not know what kind of chemical this is, if it is safe or not, we were not warned when we bought it. We saw that it did not have any effect on the weeds after we sprayed it, so we decided to clear the field of weeds manually. We hired some workers, and this is the result.”

After the first mass poisonings, cotton workers started to be more careful. Workers told reporters in Saatli that now, they ask if a pesticide has been sprayed, and if so, they refuse to enter the field.

“Farmers sow cotton out of fear of losing their land”

Lawyer Khalid Bagirov believes that violations of labor rights are particularly common in the agricultural sector: “People do not have labor agreements and they never have insurance. A person who spends the entire day weeding cotton fields under the baking sun makes eight to ten manat (four to five euros).”

But not all cotton workers are paid. In the past few years, employees of public-sector organisations and students had to work on cotton farms without getting paid. Economist Natig Jafarli says that the state not only forces citizens to work on fields for free (which is illegal) but also urges farmers to sow cotton:

“As a result of the land reforms, land in Azerbaijan has long become private property. However, in 2016, as a result of the referendum and under the pretext of efficient land use, the state imposed restrictions on the right of ownership. Executive authorities abuse these changes to legislation and make farmers sow certain products. Most farmers sow cotton out of fear of losing their land.”

Economist Togrul Mashalli believes that the government’s interventions in cotton-growing decreases the industry’s output and profitability. In 2017, the per hectare output actually decreased compared to the previous year, falling from 1,730 tons o 1,510 tons, despite all the efforts.

“When the executive authorities are forcing the farmers to sow cotton, the farmers either do not know how to increase their output, or what kind of pesticides they should use. Consequently, they fail to produce quality output, and they don’t make a decent profit either.”

Natig Jafarli does not believe that profit is the government’s main goal. “They view cotton-growing as a social project. Their aim is to create a lot of jobs, even if those jobs are paying low salaries, because they want to reduce social tension in the regions.”

In Azerbaijan, the official unemployment rate is just 5%, but analysts dispute those numbers. They say that the very methods used to calculate it do not conform to international standards, and therefore do not reflect reality.

For many Azerbaijanis living in the regions, the economic situation leaves no other choice. Most of the cotton workers who were poisoned have now returned to the fields. Some say they are still unwell but must work to provide for their children. One of the women, Hagigat Mammadova, says that after she was poisoned, her arm went numb and she is now unable to weed.

“Now I do not have an income, and nor do I have money to continue my treatment,” she complained.

A threat of boycott?

During the Soviet years, Azerbaijan successfully grew cotton. The industry declined in the 1990s, but recently underwent a renewal. Three years ago, the government indicated that cotton could become an alternative to energy after the decline in oil prices and declared cotton a strategic industry. Last year, the president issued a decree saying that output should grow to 500,000 tons a year by 2020.

The key buyers of Azerbaijani cotton are Turkey and Russia. Exports are growing: in 2016, the country exported 89,400 tons of cotton worth 24 million dollars and 207,000 tons worth 52 million dollars in 2017.

For cotton to grow, land is needed, and the numerous cotton plantations in Azerbaijan have already caused a noticeable reduction in pastures.

Хлопкоробы на поле, Саатлинский район, Июнь 2018. Фото:Мейдан ТВ
Хлопкоробы на поле, Саатлинский район, Июнь 2018. Фото:Мейдан ТВ.

Agrarian specialist Vahid Mahharamov estimates that a total of 50,000 hectares of pastures are being used as cotton fields, while the import of animal products into the country has tripled in the past two years. This has caused prices of staple products like meat, milk, herbs and melons to shoot up; people are paying three times as much as they used to.

Cotton Campaign coordinator Kirill Boychenko has described how the cotton industry works in Uzbekistan and Turkmenistan:

“In Uzbekistan, the government sets quotas for the production of cotton. Farmers who do not own land but lease it from the government are obliged to grow and sell cotton for low prices that do not match actual market costs. Each year the government forces students, teachers, medical workers and other public and private sector employees to collect cotton, and makes farmers fulfill the output norms. If they refuse, they are punished. In Turkmenistan, the situation is even more difficult. In addition to forcing adults, they are also relying on children. According to international conventions and recommendations, cotton-growing is a poisonous activity, and child labor is not acceptable.”

Cotton Campaign was established in 2005 to eliminate forced child labor in Uzbekistan and Turkmenistan. According to Boychenko, about 300 companies including major world clothing brands have already refused to buy cotton from these countries because of child labor. Starting in 2018, the United States banned cotton imports from Turkmenistan.

“I really hope that Azerbaijan will not go along the same path”, concludes Kirill.

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Azerbaijan

Boss sues cleaning lady for her interview with Meydan TV

The Azeri Times

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The chairman of the Gazakh District Utilities Services is suing an employee for 10,000 manats ($5,900) for claims that she made in an interview with Meydan TV.

On 26 July, Meydan TV published an interview with Royala Azimova, a cleaning lady at the utilities service in the Azerbaijani region of Gazakh. Azimova claimed that the organization’s chairman, Arif Heydarov, did not distribute the bank cards with which employees in Azerbaijan normally receive their salaries. According to Azimova, Heydarov kept the cards and withdrew all the salaries himself, keeping the lion’s share. Azimova said that she received 52 manats ($30) per month out of her official monthly salary of 122 manats ($72).

Azimova told Meydan TV that just before losing her job she confronted her boss. “This time, when the boss called me in and gave me half my salary, I said that I want my full salary. I’ve got three kids at home and my husband is disabled and can’t work. How long will I sweep the streets while you take my salary? He said that that’s the rule here, and if you don’t like it you’re welcome to leave.”

Now Heydarov is suing Azimova at the Gazakh District Court for 10,000 manats (($5,900) in damages for libel and insults to his dignity. In the lawsuit, Arif Heydarov denies Azimova’s allegations that he stole money from his employees’ salaries. “On 26 July I was told that Royala Azimova had had an article published about me on the Meydan TV website, the Qazaxlilar Facebook page, and Xalqxəbər.az,” the document reads. “I purportedly took her salary from her, gave her 52 manats and kept the rest. All employees, including Royala Azimova, received their salaries from Kapital Bank using their plastic cards. People who posted comments on those libelous and insulting articles used indecent and insulting phrases about me.”

The regional executive authorities declined to comment on the lawsuit, stating that the court will have the final word.

Royala Azimova’s husband, Mirjafar Huseynzadeh, told Meydan TV that he recently had a run-in with his wife’s former boss. “Using obscenities, [Heydarov] insulted me for our complaints to the press about him, and the two people who were with him came at me and grabbed one of my ears each and pulled,” Huseynzadeh says. “Arif Heydarov said that if I complained to anyone again, he would have my ears cut off.”

Huseynzadeh is disabled and unable to work. “We have three ill children, and my wife started working so our family could somehow meet its demands,” he told Meydan TV. “My pension is 165 manats ($97), and it’s not enough to support the family or to buy medicines. Arif Heydarov has no idea about our situation… If the court satisfies his suit, we’ll renounce our citizenship and go to embassies to seek asylum. An official demanding 10,000 manats from a hungry family that lives an intolerable life is the greatest disgrace.”

The Gazakh District Court will hold a hearing on Arif Heydarov’s suit against his former employee on 3 September.

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