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WWF: Citigroup, World Bank to Fund 'Disaster in Waiting'

WASHINGTON -- Decisions by Citigroup and the World Bank to underwrite the construction of an oil pipeline across some of the most ecologically sensitive wetlands and mountains in the Caucasus raise serious questions about the professed commitments of both institutions to protecting the environment, World Wildlife Fund said today.

Carrying Caspian crude oil from Baku in Azerbaijan to the Turkish city of Ceyhan near the Mediterranean coast, the 1,000-mile long pipeline will cut across the Caucasus, traversing an important protected area near Georgia's oldest national park and other critical habitat areas for endangered species such as the Caucasian leopard, the Dalmatian pelican and the imperial eagle. The wetlands are also important for many migratory bird species that cross the eastern Mediterranean en route to winter feeding grounds in Africa.

"A pipeline rupture in such a sensitive area could have devastating consequences not only for wildlife, but for the region?s mineral water and tourism industries," said Francis Grant-Suttie, World Wildlife Fund's director of private sector initiatives.

The risk of a disaster is magnified by the fact that the region is both geologically and politically unstable, with frequent earthquakes, landslides and the possibility of sabotage once the pipeline is built. "Geologically, this is one of Europe's toughest neighborhoods; environmentally, it's one of the most sensitive. This pipeline will be like an artificial fault line running through some very unstable territory. It will be a disaster waiting to happen," Grant-Suttie added.

Some of the risks could have been reduced, and the environmental impact greatly mitigated, if an alternative route, supported by WWF and other conservationists, had been chosen. "We were never against the pipeline per se, because we recognize its importance to the regional economy. But the current routing poses unacceptably high risks. Had the funders adhered to international best practices, an alternative route would have been chosen," Grant-Suttie said.

The funders include Citigroup and the International Finance Corporation, an arm of the World Bank, which both profess to adhere to high standards for environmental stewardship. Indeed, only last month Citigroup announced that it was adopting the strongest set of environmental policies of any financial institution in the world. "The standards announced by Citigroup are laudable, but unfortunately it doesn't appear they were applied in this case," Grant-Suttie said.

The pipeline is being built by British Petroleum. Other funders include the Royal Bank of Scotland, ABN Amro, Dexia, ING, KBC, Mizuho and West LB.