The Dominion - Kristian Gravenor

Canadians Run Amok in Azerbaijan

dru — Thu, 02 Aug 2007 19:07:32 +0000

Mining, oil undermines central Asian diplomacy and trade

When Jean Chretien retired as prime minister after a decade running Canada, he did not go to Disneyland. Instead, he visited a place seldom visited by American tourists. He hopped on a flight to Ashgabat, Turkmenistan, a former Soviet Republic populated by nomadic desert tribes.

Turkmenistan is also home to sensitive post-Soviet territorial disputes, the most delicate of which is its claims to oil under the Caspian Sea. For years, the country has been slowly working towards an agreement with its Caspian-side neighbours –- mainly Azerbaijan -- over where to draw territorial boundaries and how to divide those resources.

In the midst of this delicate situation, the seasoned Canadian statesman jetted in as a lobbyist for Roger Haines's Buried Hill Energy, an Alberta-based company that was hoping to help Turkmenistan extract oil beneath the Caspian Sea.

While the high-profile lobbying barely made the back pages in Canada, the image of a longtime G-8 leader meddling in the fragile negotiations laid a wallop to the process. Chretien departed Turkmenistan after a few handshakes, but he left behind a regional diplomatic chill. Only now, two years later, has the process of determining the regional boundaries started inching forward again.

One might imagine that the Alberta oil company storming in to sensitive, decade-spanning negotiations might have broken a rule or regulation somewhere. But there are no Canadian rules when it comes to our companies extracting abroad. As industry watchdog Karen Keenan of The Halifax Initiative explains, "The Canadian government doesn't have any policy statement or regulatory oversight of how it expects Canadian mining companies to operate overseas. It's a total policy vacuum."

When it comes to mining and oil exploration abroad, Canada not only turns a blind eye to the corporate weekend in Vegas, but it often also supplies the poker chips.

"The Canadian government provides a myriad of forms of support for these companies," says Keenan, "but we and many others are saying that the Canadian government shouldn't be promoting these companies; instead they should look at them and make sure they're following standards."

The misadventure in Turkmenistan might also have cost Canadians jobs.

Azerbaijan -- which, thanks to rising oil prices, has suddenly emerged as one of the world's hottest economies --was unhappy when Canada's former leader doubted its territorial sovereignty.

Recently, according to one highly-placed source, Canada went to bat for a Canadian jet manufacturer bidding on a fat contract to supply the Azerbaijan government with jet aircraft. The would-be Azeri buyers politely reminded the Canadians of the Turkmenistan affair.

The Azerbaijanis weren't buying from Canada.

It wasn't the first time that Canada's laissez-faire approach to mining and exploration needlessly irritated the fast-modernizing former Soviet republic, which has often cited Canada as a model for its post-Soviet democracy.

The Azerbaijanis also claim that controversial Canadian miner Robert "Toxic Bob" Friedland has been mining on parts of Azerbaijan now controlled by the Armenian army. An international gold-mining tycoon, Friedland got his nickname after he tried to sell LSD to an undercover agent in Maine in 1969. He retained the moniker after a string of his South American mining operations left a wake of environmental disasters and mass protests, including a spill of three billion litres of cyanide-contaminated wastewater in Guyana in 1995.

Azerbaijani officials referred to satellite evidence that Friedland, whose mine-now-think-later policies have caused a stir in many countries, set up the Zod gold mine in the western regions of Azerbaijan.

The area is within a conflict zone where one million Azerbaijanis were expelled in 1992.

The Armenian army currently controls the area and many Azeris see the presence of Canadian miners on the spot where Azeri residents were ethnically cleansed as immensely hurtful and insensitive.

Legally, Canada can do nothing to discipline such mining and oil companies. There is, however, hope that Canuck miners might soon lose their international license to misbehave.

Last year in Canada, the Government Roundtable on Extractive Industries resulted in an unprecedented agreement between a wide-range of socially conscious do-gooders and the oil and mining industries.

In March, an impressive coalition of industry and citizen groups signed the document that would set standards on how Canadian mining corporations should operate abroad.

Although the system is toothless -- the mining companies balked at fining rule breakers -- civil groups hope that the agreement will be enshrined in law this fall and that fines for corporate mining misbehaviour will eventually follow.

Keenan is optimistic that the federal government will soon make the deal law.

"We've got mining, oil and gas companies behind this agreement, Canadian civil society, faith-based organizations, labour unions, environmental NGOs, human rights groups; they're all backing it. We've never had this kind of consensus before."

And there's hope that other Canadians can pick up the slack and help foster the sort of positive trade in Azerbaijan that Canadians can be proud of.

Ottawa entrepreneur Grant Thomas, who has visited the Caucasus half a dozen times, sees Azerbaijan's rocketing economy as having potential for more than morally dubious mining by opportunistic Canadian entrepreneurs.

"If we can mobilize the time and the attention, there are some niche areas in which Canadian companies in Canada could become a leader in Azerbaijan," he says.

Thomas's baby is called a Regional Innovation Zone, a conception that would accelerate the possibility of Canadian technology reaching Azerbaijan. He sees Canada working with Azerbaijan on such things as satellite seismic mapping and environmental clean-up technologies.

Other Canadian initiatives fostering a different kind of relationship with Azerbaijan includes the Digital Opportunity Trust, an Ottawa NGO that aims to bring computers to countries where they're scarce. Alberta businessman Donn Lovett tells the Dominion that he was enthusiastically received in a trade mission to the country.

Meanwhile, Karen Keenan hopes that one day soon, Maple Leaf miners will no longer be able to undermine Canada's reputation and interests abroad. "The Canadian government is finally saying that maybe we should revisit our rules to see if our standards are high enough to bring us real benefits."

Baku Women

Disputed Territory in Azerbaijan

Waiting For War?

hillarybain — Tue, 13 Feb 2007 16:05:49 +0000

Azerbaijan's refugees see little hope

Azerbaijan has been enjoying the sunshine these days. After several lean years, oil revenues have started flowing into the former Soviet Republic and a fresh breath of hope hovers in the air like the construction cranes that seem to dot every horizon.

Optimism isn’t prevalent everywhere, however, and the problem that has dogged the country since it was founded in 1991 remains. Armenian military forces continue to occupy about 20 per cent of the country, displacing about one million Azerbaijanis--fully one-eighth of the country’s entire population--who are now living in makeshift structures. For years, these internally displaced Azeris lived in villages in a bucolic land-of-plenty in Western Azerbaijan. Today, war has forced them into abandoned train cars--without plumbing or electricity.

Last summer, I strolled through one of these Azerbaijani train yards and stumbled in on a family of three: a man, wife and tiny undernourished-looking son, who has lived all of his nine years making like an immobile king of the road in a big metal tin. They showed me around their train-car home, debating whether the searing summer sun was worse than the punishing winter cold.

The Azerbaijan government is slowly building newer refugee settlements, but it’s a half-hearted effort, as most Azeris want the internally displaced people to be allowed to return home to the land that Armenia now occupies.

The troubles began in a region of Azerbaijan called Karabakh when the Soviet Union was splitting up. The Azerbaijani province had a majority Armenian population that Armenia had its eye on. Azerbaijani-Karabakh residents were forced to flee when Armenia invaded, as the country had the upper hand in the early skirmishes. As they left their homes, many were shot dead along the highway and what became known as the Khojaly massacre became a powerful rallying symbol for Azerbaijanis. In the ensuing battles, Armenia managed to take much extra territory around the Karabakh province as a sort of military buffer zone.

Karabakh has since become an independent republic but its attempts to become a legitimate country have stalled; not a single country recognizes it.

The adjoining areas taken by the Armenians have long been assumed to be a bargaining chip that Armenia will return only after Azerbaijan surrenders the Karabakh province to the Armenians.

An attempt to settle those areas by paying Armenians to move to the occupied territories of Azerbaijan has largely failed. Few have taken the government up on the offer, however, and the once-thriving Azeri towns are now empty and decaying without water or electricity.

A few years ago, Armenia’s president was rumoured to have agreed to withdraw from the occupied territories of Azerbaijan and was quickly deposed for his efforts, to be replaced by the hard-line, former Karabakh resident Robert Kocharian.

Azerbaijan’s president Heydar Aliyev and his successor-- his son, Ilham -- have vowed not to give up an inch of Azerbaijani soil. They have managed to get several resolutions condemning Armenia passed at the United Nations Security Council, but that has had little effect.

Armenia has also suffered its disappointments. Its military victory has become an economic burden, as neighbouring Turkey and Azerbaijan have cut diplomatic ties with Armenia and imposed a trade embargo.

In spite of the mutually damaging status quo, the standoff appears destined to continue. A peaceful resolution is nowhere on any horizon.

After years of international pressure to come up with a negotiated settlement, many in Azerbaijan now feel that the only way for the occupation to end is if Azerbaijan restarts the war that claimed an estimated 30,000 lives until hostitilies ended with the 1994 ceasefire. Bullets are no longer flying, but the war of words has never stopped and the animosity between the countries has continued. War would not be a hard sell to much of the general public.

University of Montana Professor Thomas Goltz was on the front lines of the Karabakh War, which he reported on in the influential Azerbaijan Diary. He has mixed feelings about Azerbaijan's possible attempts to recapture its occupied territories.

"I remain really ambivalent about that and it comes from hating this thing called war on a profound, visceral level. I’ve just seen way too much of it. At the same time, I can understand my Azerbaijani friends and their frustrations with the negotiating process. And whether that means they’ve got to include the threat of renewed violence in order to get back the occupied territories and maybe Karabakh, I’m not going to second-guess them. It’s just that if it does go bang, it’ll be really nasty, as both sides are determined and entrenched. If Azerbaijan were to go forward, they’d be going forward against an entrenched opposition that has been there for 10 years waiting for an attack and they’ll be attacking uphill, which isn’t ideal."

Last summer, Azerbaijan loudly announced that its new military budget is larger than the entire Armenian government budget.

Thomas de Waal, perhaps the world’s leading expert on the conflict, recently predicted that the conflict will remain in a deadlock. He cites three reasons: there is no dialogue or the slightest sign of goodwill between the two countries; neither government could withstand the public perception of giving in that compromise would require; and Azerbaijan will not likely go the military route now, as it would be costly and damaging at a time when the country is finally developing some infrastructure and creating a bit of wealth.

The Azerbaijani refugees now sit hoping for a day when they can finally return to their homes behind Armenian lines, but barring an unforeseen event, that day will not come soon.

Woman Living in a Azerbaijan Refugee Settlement

Internally Displaced Azerbaijan Children