Towards a Political Ecology of Oil in Post-communist Georgia : the conflict over the Kulevi Oil Port Development

The establishment of a new oil terminal near Kulevi on the Black Sea coast of Georgia has become a highly controversial mega-project, and this article explores its political and environmental significance in the context of rising global demand for the region's oil and gas reserves. The Kulevi Terminal is intended to be a storage facility and a transfer point for black oil, fuel oil and other oil products delivered from Azerbaijan, Turkmenistan, and Kazakhstan, after extraction from the Caspian Sea and Black Sea fields (Skhireli 2003). It will also serve as an outport for Georgian petrochemical production, especially from the Samgori field in the east of the country. Its location is in Khobi region on the mouth of the Khobi River (Figure 1). The capacity of three existing oil terminals in Georgia (in Batumi, Poti, and one recently constructed in Supsa) has proven insufficient to meet both regional and interregional trans-shipment demand for a variety of reasons, not least the rush by Western oil interests to re-articulate the Caspian fields into global energy networks as quickly as possible.2 The throughput capacity of the Kulevi terminal will be around 6 million liquid tonnes which will rise to 10 million tonnes following the planned second stage of construction. This project also includes construction of rail-receiving and loading facilities, an oilstorage facility with its own tank farm, and two 250-meter piers, with associated pipelines and pumping stations. Further, there will be 19 storage tanks with a total capacity of 380,000 cubic metres (Krebs & Joosten 2006) thus drastically exceeding the capacity of Supsa Oil Terminal (40,000 cubic metres) (Gegeshidze et al. 2002). Each tank is serviced by a railway that will transport up to 10 million tons of oil during the first operation year (IA Prime-News 2004b) with a final planned capacity of 35 million tons of oil. Since the facility is located on an ecologically-sensitive estuary, oil tankers with a capacity of 100,000-150,000 tons must transport the oil through a National Park marine reserve and a Ramsar wetland on the way to and from the Black Sea (Zenith-Gamma 2001).


Introduction
The establishment of a new oil terminal near Kulevi on the Black Sea coast of Georgia has become a highly controversial mega-project, and this article explores its political and environmental significance in the context of rising global demand for the region's oil and gas reserves.The Kulevi Terminal is intended to be a storage facility and a transfer point for black oil, fuel oil and other oil products delivered from Azerbaijan, Turkmenistan, and Kazakhstan, after extraction from the Caspian Sea and Black Sea fields (Skhireli 2003).It will also serve as an outport for Georgian petrochemical production, especially from the Samgori field in the east of the country.Its location is in Khobi region on the mouth of the Khobi River (Figure 1).The capacity of three existing oil terminals in Georgia (in Batumi, Poti, and one recently constructed in Supsa) has proven insufficient to meet both regional and interregional trans-shipment demand for a variety of reasons, not least the rush by Western oil interests to re-articulate the Caspian fields into global energy networks as quickly as possible. 2The throughput capacity of the Kulevi terminal will be around 6 million liquid tonnes which will rise to 10 million tonnes following the planned second stage of construction.This project also includes construction of rail-receiving and loading facilities, an oilstorage facility with its own tank farm, and two 250-meter piers, with associated pipelines and pumping stations.Further, there will be 19 storage tanks with a total capacity of 380,000 cubic metres (Krebs & Joosten 2006) thus drastically exceeding the capacity of Supsa Oil Terminal (40,000 cubic metres) (Gegeshidze et al. 2002).Each tank is serviced by a railway that will transport up to 10 million tons of oil during the first operation year (IA Prime-News 2004b) with a final planned capacity of 35 million tons of oil.Since the facility is located on an ecologically-sensitive estuary, oil tankers with a capacity of 100,000-150,000 tons must transport the oil through a National Park marine reserve and a Ramsar wetland on the way to and from the Black Sea (Zenith-Gamma 2001).
The Terminal development began in 1999 and is considered by Tblisi-based Georgian political elites and international development agencies to be critical to Georgia's post-communist economic transformation (Jackson 2004).Physically, the growing network of pipelines and electricity transmission lines developed under TRACECA is re-knitting a political state that has long been driven by separatist movements, particularly in South Ossetia, Abkazhia and Ajaria (Jackson 2004).Moreover, energy receipts have been central in lowering the chronic poverty that characterised the 1990s, although approximately one third of the population still lives below the poverty line and average household income is still less than US$200 per month.In 2005 the Baku-Tblisi-Ceyhan pipeline opened and is now providing a strategic alternative to pumping oil out through Russia via the old "Druzhba" pipeline network. 3There is also a strong "pull" factor in the sense that Turkey sees pipeline development as part of a process of establishing regional hegemony in the Turkic speaking Caucasus (Bishku 2001).
Georgia has exploited its favourable geopolitical location to encourage the proliferation of these industrial transit routes across the country (Gegeshidze et al. 2002;Slaney 2004).A great deal of government effort has gone into facilitating pipelines, railways, and highways, and the transfer of gas, oil, water and other products.According to the President of Georgia (since January 2004), Dr. Mikhail Saakashvili, the Kulevi Project is strategically important for Georgia, since its "construction means the growth of economy, cargo turn-over, and trade…" (Khonelidze 2004). 4Different financing organizations, including the World Bank, have invested in such transportation, storage, and transformation-related developments with a view to stimulating investment and boosting of the Georgian economy5 .For example, TRACECA 6 , an internationally funded mega-project, is explicitly conceived as a modern "Silk Road" crossing Georgia and comprising the Baku-Supsa oil pipeline, Baku-Tbilisi-Ceyhan and Baku-Tbilisi-Erzerum gas pipelines.At the same time America's economic and political interests have labelled TRACECA-related developments as "not just another pipeline; it is a strategic framework that advances 1 Gachechiladze: Department of Environmental Sciences and Policy, Central European University, Budapest, Hungary -ephgam01"at" phd.ceu.hu or maya_gachechiladze "at" yahoo.fr.Staddon: Dept. of Geography & Environmental Management, University of the West of England, Bristol, UK -caedmon.staddon"at" uwe.ac.uk.As Daniel Yergin (1992) points out prior to the Russian Revolution of 1917 the Caspian oil fields were one of the major world centres of the incipient petro-economy, pre-dating the Middle Eastern oil-fields by a generation.As hinted above, the Kulevi facility potentially impacts upon some environmentally sensitive areas, including the Kolkheti Wetlands.The Wetlands and the marine environment have been protected as Ramsar registered wetlands since 1996 and as the Kolkheti National Park since 1992, and their conservation is financially supported by the World Bank and the Global Environmental Facility (GEF). 7hough the wetlands were compromised by drainage works during the early Soviet era, they are now the subject of a long-term restoration programme and still retain a great deal of biodiversity value including several types of grasses and reed marshes, and several species of the endangered Black Sea dolphins.There is also an historically important cultural landscape associated with locally-organised extractive land uses including peat-cutting and pastoralism.Unfortunately, the moral and legal obligations of the Georgian government occasioned by the Ramsar listing, the establishment of the National Park, and environmental protection laws have not been adhered to, and nor have the livelihoods of local communities been respected.
Georgia, like many developing post-communist nations, tends to support transit (especially oil) projects "without calculating the cumulative environmental, economic and social impacts" (Kochladze 2001; see also Bradshaw 2006;Staddon 1998).This has led to a rising tide of protest about the violation of regulations, health risks, and environmental damage, and several major conflicts.NGOs like Bankwatch have expressed real concern that the pace of the oil facility development, in particular, overrides environmental protection efforts and marginalize local people and their livelihoods (Bankwatch, ND).Local environmental journalists note the presence of the oil-hungry USA in support for further oil facilities in the Black Sea region.There is thus a demonstrable need to study systematically the conflicts revolving around the Kulevi Oil Terminal -over time, across the different actors and stakeholders, and with an attempt to understand their interests and perspectives.Construction of oil terminals is set to continue in the Caucasus Region, and information and experience of actual problems might help avoid potential problems for similar developments.
Map 1: Map of Georgia with location of Kulevi terminal area highlighted (Source: authors) Although a comprehensive political ecology of Georgia has yet to be written, this article begins the project by presenting an analysis of the conflict over the Kulevi Oil Terminal Project.We argue that Kulevi needs to be seen as part of a struggle between different stakeholders with different power resources operating at different spatial scales.With Blaikie (1999) and Black (1990) we contend that it is vitally important to maintain analytical focus on Kulevi as a social situation representing a regional concretisation of political economic forces whose interest lies in a particular re-articulation of Georgia into the global political ecology.Moreover, though the oilfields themselves are not at Kulevi, there is a very real sense in which recent developments here mirror those Watts has so powerfully analyzed in Nigeria and elsewhere (Watts, 1987;2005).For the people of the local communities proximate to these oil related developments, oil may well turn out to be the "devil's excrement" just as it has done for so many Nigerian communities.
Within the general framework of political ecology we have deployed a 'meso-level' model for analysing environmental conflicts originally developed by the African Peace Forum (APF), specifically for thinking about conflict situations (APF et al. 2004).It has been selected for this research due to its clarity in the depiction of structural interactions around a central conflict problematic.It not only gives a conceptual framework to guide the process of identification and tracking of multi-level connections between its elements, but also leaves ample space for deeper analysis through other theoretical models, in our case political ecology.In a nutshell the APF framework suggests that research into conflict situations can been conceptualised in terms of a four-fold matrix: conflict profile, actors, causes and dynamics of conflict.We have already begun to outline the conflict profile and will complete this task in the next section.In common with political ecology, the APF framework takes actors and their motivations to be central to understanding conflict situations.Somewhat innovatively the term "actors" refers here to all those engaged in or being affected by the conflict, including the non-human actors such as wetlands grass species, birds and the oil facilities themselves.As recent developments in critical social theory have pointed out, it is often the case that non-human actors (e.g.pipelines, pumping and storage stations, etc.) exercise a conditioning influence on processes otherwise seen as "purely human" (Blaikie, 1999;Murdoch, 1997).Similarly non-humans such as wetlands, grass and bird species can also impact on the dynamics of resource development conflict, a point we explore further in section four.All of these actors have interests, goals, positions, capacities and relationships and it is the ever-shifting constellations of these that are a primary object of inquiry.It follows from the preceding that attention to "causes" is not something understood as external or separate from the identification of actors themselves.Structural and proximate causes are intricately linked to their 'carriers' or agents.Finally, a focus on conflict dynamics puts all of the above 'in motion' as it were.
It was essential to collect information from as many sources as possible (APF et al. 2004).One of the authors (Gachechiladze) consulted primary and secondary sources, including records of historical development, Environmental Impact Assessment (EIA) documentation, the World Bank's and Bankwatch reports on the project, a number of critical letters from NGOs and responses to them from the officials, reviews, and the scripts of Georgian-language TV programmes.She interviewed the consultants involved at different stages of the project evolution, and had e-mail correspondence and personal communication with NGO representatives.Due to time and geographic constraints, ethnographic research in and around the Kulevi Terminal site itself was limited, and more stakeholders were consulted in the capital city, Tbilisi.The scenarios developed in the Conflict Dynamics section of this paper are sketches (mini-scenarios, though reviewed by several stakeholders), since the preparation of full scale scenarios is a vast undertaking demanding the participation of a large expert team.

Further Dimensions of the Conflict: environmental and community
The Kulevi Terminal development is, as we have outlined, is of significant international, state, and local social-economic interest -a key development associated with the Georgian national development strategy.The State Minister of Georgia, Mr. George Arsenishvili referred to it as a "very important strategic establishment in Georgia" (Turabelidze 2001).Interviews and written sources stress a range of positive effects that might flow from it.They include, the improvement of the economic situation of the region through attraction of investments and taxation; income from rail transportation of freight of around US$80 million annually, beginning in 2005; and an increase in income for the local population, throughout direct and indirect employment (Krebs & Joosten 2006, Kochladze 2001, Zenith-Gamma 2001).To sum up, the development has been praised by both government and foreign investors (largely institutional investors such as the World Bank) as economically and socially beneficial (Zenith-Gamma 2001) with an annual income of US$78-200 million expected against the total investment of US$120 million (Kochladze 2001).
Yet the Kulevi Project has also generated heated debate and protest, larger with respect to its potential environmental impacts.It violates a number of international and domestic agreements including the Ramsar convention as well as Georgia's own national law on "Systems of Protected Territories" (Law of Georgia, 1996b) and stands out as an exception to the detailed environmental management schemes developed for the entire Black Sea coastal zone.The main conflicts have been among the local population of Kulevi village and between the locals and the main developer, who (as we shall see) has changed several times over the course of the project's ten-year history.The developer has also conflicted with a neighbouring military base.In this section we focus on the environmental and community dimensions of the Kulevi controversy, thus setting the stage for the subsequent analysis of conflict dynamics and potential short and long term futures.

Environmental Dimensions of The Kulevi Project
Firstly, the putative environmental impacts of Kulevi.The consultancy Zenith Gamma Ltd., that produced the government-mandated Environmental Impact Assessment in 1999-2001, stated that if planned and implemented properly, the construction and operation of the terminal (including mitigation measures) would not cause irreversible damage to the local ecology.They explicitly ruled out negative impacts such as substantial changes in local climatic conditions, destruction of archaeological and cultural objects, devastation of any species of flora and fauna, loss of valuable natural landscape, invasion and spreading of non-native species and degradation of existing economic infrastructure.Meanwhile, its negative effects were assessed as being remediable or reasonable, given the economic gains that would result.There is even the suggestion that environmental quality in the vicinity could be improved by a sequence of special protective measures associated with the terminal project (Zenith-Gamma 2001), including soil and water reservoir treatment, vegetation cover establishment, etc.This suggestion is based on the pre-existing, and apparently unsustainable, pattern of exploitation of natural resources revealed during the first comprehensive study of the state of the environment in Kolkheti Wetlands resulted in degradation of natural landscapes (including drainage of wetlands, forest cutting, peat extraction, construction of drainage channels, changes of river flow regimes due to the short cuts in meandering, etc.) (Geoinformation Center 1996).Though the project's location impinges on Ramsar-registered sites, this fact has been underemphasised by the central authorities, essentially because the implementation of the Kulevi Oil Terminal Project is defined as a matter of "urgent national interest".Article 2.5 of the Ramsar Convention (Convention on Wetlands 1971) states: Any Contracting Party shall have the right to add to the List further wetlands situated within its territory, to extend the boundaries of those wetlands already included by it in the List, or, because of its urgent national interests, to delete or restrict the boundaries of wetlands already included by it in the List and shall, at the earliest possible time, inform the organization or government responsible for the continuing bureau duties specified in Article 8 of any such changes.This was explained in a letter from the Ministry of Environment of Georgia to the Ramsar Secretariat in 2000.A special accent was put on the crucial national need for a new port at Kulevi due to the restricted capacity of Batumi, Poti, and Sokhumi ports, all constrained by surrounding urban growth and suffering from badly outdated infrastructure.In addition, all three have low "exploitation parameters" (the depth of navigation channels and restricted manoeuvring area inside the port, limits services to smaller tonnage ships, etc.).As the Ministry of Environment stated, these factors caused "urban-ecological conflict situations" 8 and therefore the construction of the Kulevi Oil Terminal and Kulevi Port, which is to become one of the deepest ports on the Black Sea (Kochladze 2001), was deemed to be essential to Georgia's overall energy strategy as well as regional economic development strategy.Put another way: the government claimed that development of Kulevi was necessary also in order to avoid "urban-ecological" conflicts elsewhere along the coast.
To make the Kulevi Terminal one of the most efficient on the Black Sea and to allow large tankers to access it, a 28 metre (about 95 feet) deep water navigation channel has to be dredged inside the marine part of the Kolkheti National Park and Ramsar wetlands site in addition to a new 12.5 km long railway to run inside the same zone (Krebs & Joosten 2006).These developments are of course a serious challenge to the existing environmental protection designations, including the Ramsar and national park listings.
Ramsar Site N°893 "Wetlands of Central Kolkheti", designated in 1997, encompasses three peat marsh areas (Pichora-Paliastomi Anaklia-Churia, and Nabada), the Paliastomi Lake, the Black Sea coastal area, the adjoining wet forests, and the mouths and lower parts of the Khobi and Rioni Rivers, covering a total of 33,710 ha in the administrative regions of Khobi and Lachkhuti and the territory of the city of Poti (55,500 ha including the marine fraction).According to the Ramsar database, the site supports a wealth of relict and endemic flora and fauna species.Vegetation consists of typical bog and peat land species, with freshwater marshes supporting reed beds and brackish areas supporting halophytic plants.Various species of water birds use the site for wintering.Nesting bird species occur in internationally important numbers, and include white-tailed sea-eagle and osprey.Human activities include tourism, small scale fishing, agriculture, timber cutting, peat extraction and hunting.Bronze Age artefacts are also found at the site.Since 1999, the main part of the Ramsar Site has been included in the Kolkheti National Park, which represents a part of the Georgian Integrated Coastal Zone Management Programme (ICZMP) part funded by the Global Environmental Facility and the World Bank.The National Park also includes the Kolkheti State Nature Reserve (500 ha) established in 1947 (Salathe 2005).

Communities near the Kulevi Oil Terminal
Although the Terminal is located in relatively sparsely populated territories its operation and construction, especially of a railway and roads, will affect the adjacent regions of Khobi (41,00 people), Senaki (52,200 people) with its port Poti (47,300 people), Lanchkhuti (39,000 people) and Zugdidi (172,200 people) (DoS 2006).Each region consists of a regional center and between 56 and 63 smaller towns and villages.Some villages, including Akhalsopeli and Nigvziani up to the town of Senaki, are located on the route of the planned railway and are mainly of an agricultural character.Some others, e.g.Qariata or Khorga lay along the proposed road road which will follow the route of the railway.Other communities that are concerned by the development reside in numerous small villages on the right bank of the Khobi Tskali River.
The socio-economic situation, demography, and cultural and traditional beliefs are rather similar in the regions near to the Terminal, with the exception of the urbanised areas around Poti port.Moving from the epicentre to the periphery of the development's location, the Kulevi village area is comprised of homesteads scattered over approximately 5 hectares.No special social research was conducted here when preparing the project and no statistical data is available from either the Georgian Statistical Department or from the consultancies involved in the EIA process.The latter argue that the socio-economic evaluation of the project required a more general approach to engage the wider population, and finally this was merged with a general (coarse-grain) social assessment.The Ministry of Environment of Georgia, in its report to the Ramsar Secretariat, only presented an aggregate sociological survey of the larger community groups in Khobi region.This sociological enquiry revealed that the wetland ecosystems are important for the livelihoods of a large number of the villagers for farming, hunting, fishing, grazing and access to fuelwood (Salathe 2005).
The population of the region includes minority groups of Russians, Amenians, Azeris, Ukrainians, and others.The majority of the population speak Georgian, which is also a common language of communication used by different ethnic communities.Most of these communities have been in place for a considerable time, either from pre-Soviet times or from that period of Soviet history when heavy industrialisation was taking place, often concomitantly with Stalin's policy of breaking down regional identities.By the 1980s fully 53% of the population, nearly the whole of the economically active population of the Khobi region, were employed in the state sector (around 20,000 jobs).This was similar in the industrially developed region of Poti (54,2% of the population) (Zenith Gamma 2004).
In early 1990s the unstable economic and political situation in Georgia's post-communist transition caused a drastic decline in the rates of employment, a fall in the birth rate and number of registered marriages, and a rise in debts and bankruptcies.Many industrial and agricultural facilities of the region were abandoned or sold; the production profile was lost.Anthropogenic pressure at the local level has increased as natural resources and products have become more important for survival.The unexpected jump from a well developed industrial society back to a heavier reliance on agriculture has been economically and socially traumatic for the majority of village residents.Consultants report an increase in suicides, alcoholism, and heart attacks.Significant youth outmigration has resulted in both a decline in locally-available labour and a rapid ageing of the remaining population (this is replicated elsewhere in the ex-communist rural regions (see Staddon, 1999).Average monthly household incomes in 2005 were extremely low -305 GEL or US$175.About 35% of the population lives below the government-mandated subsistence minimum (Georgia Statistics, 2006).
In sum, the main income source of the local communities has reverted to farming and retail trading with a focus on production of primary food products.The traditional regional specialization in production of tea, lemons, and other subtropical crops has shifted to edible crops -soy, corn, and beans.There has also been a development of the cattle, poultry and dairy sectors with the Khobi region becoming a leader for chicken and egg production in Western Georgia.Simultaneously, the Poti port facilities (comprising bulk, liquid, ferry and container facilities) have struggled to continue operation in the face of substantial capital and labour shortages.Current cargo turnover is in the area of 3 million tonnes (bulk) and 1.1 million tonnes (liquid), which is close to the capacity of the current facilities (compared with Kulevi's planned 10 million tonnes liquid).No data is available even today on the exact rates of employment in the region, or differentiation by professions or age.The strong state employment rate has certainly fallen.The salaries of teachers or medical staff, for example, have fallen below the minimum national level or have been suspended.
The last two decades have seen this loss of guaranteed employment translate into increased exploitation of wetland resources by the local communities.Dictated by the political and economic situation, resource use has been rather chaotic, uncontrolled, and less than sustainable.How the Kulevi Terminal and its facilities will affect everyday life has generated fears, arguments and expectations.While some individuals perceive the development as part of their future prosperity, others are afraid of its adverse impacts on their conventional livelihoods.

Institutional Actors involved in the Kulevi conflict
Definition of the key actors involved in the Kulevi case study is not difficult, though understanding their sometimes contradictory motivations and actions is more so.While the main actors of the Kulevi Project have been revealed above, they are presented in more detail in Table 1.9It shows that most stakeholders have somewhat contradictory positions, motivations and behaviours which may also have changed over time.They tend to be adjusting to each others decisions in a reactive or a defensive way, to temporarily mitigate their circumstances (to behave tactically), to avoid fines, or to abrogate responsibilities.The various actors tend to state their positions and undertake corresponding actions, then, if others with more power or influence act against them, strategies change (at least formally) to avoid risk or to claw back advantage or power.This form of reflective behaviour is discussed by Beck (1997), Giddens (1999), Fairclough (1992) and other important theorists; its features are also explored in Payne and Calton's multi-stakeholder dialog theory (2004).
We identify six broad classes of actors in the Kulevi conflict:

•
The developers Each of these is further subdivided into discrete actors, including those such as the local military base and the Georgian Ministry of the Environment, which find themselves in uncomfortably conflicted positions.
In Table 1 we present a synopsis of the basic interests, positions and actions of the key stakeholders.
Although recent Presidents of Georgia are not distinctly mentioned in Table 1, they (both the ex-President Eduard Shevardnadze and the current President Mikhail Saakashvili) have played a significant role in initiation and realization of the project.The highest level of country's decision making has hardly given weight to ecological factors when balancing political and economic interests, and it seems to have paid scant attention to Georgian environmental law.It is also arguable whether it has been a specific 'realpolitik' choice of Georgian leaders to sacrifice wetland and lowlands in this case, as part of consolidating emerging energy collaboration with the Black Sea based EU members, such as Romania.
It is worthy to mention the rather (too) flexible position of the Ministry of Environment in this case.At the outset of the development, it found itself hemmed in between the President's Decree, decisions of the local authorities and its international and national responsibilities (e.g.under Ramsar).One step that the MoE undertook under the pressure of NGOs and the local population, involved a "notification of disapproval" sent to the local municipalities regarding the sale of the Ramsar Sites without approval from the Ministry.However it is also unclear whether or not any administrative sanctions were ever imposed.How the MoE managed to further manoeuvre to reconcile the situation, partially through the timely manipulation of influence and procedural 'levers' is discussed in the following section.Presently, the MoE has progressively become more responsible over its Ramsar Convention obligations maintaining active communication and cooperation with the Ramsar Secretariat.This is in part because such responsibilities are a precondition for the World Bank support to the country.The Government in general is well aware that the World Bank requires a "compliance and enforcement policy", even though it still supports the Kulevi project.
The developers of the project have, perhaps not surprisingly given the nature of the project, comprised an ever-changing consortium of Georgian, trans-Caucasian and international interests.Originally a joint venture with the Georgian government, the company has been through several transformations and is currently a wholly-owned subsidiary of the Azeri State Oil Company.Previously it had been a joint venture with "Agromar Oil Handelsges.m.b.H." (Austria) and "Georgian Railway" Ltd. (Kochladze 2001).Later "Terminal 2000 Ltd. " was re-named the "Black Sea Terminal Ltd." (BST 2004).Meanwhile, Argomar Oil Ltd. is in liquidation (Krebs & Joosten 2006).
In the preceding section we introduced some of the purely 'local' dimensions of this conflict, a task significantly hampered by the lack of good primary data about Georgian coastal communities (in any language!).Nevertheless it is clear that local positions on the development are mixed and indeed internally conflictingl.On the one hand some local leaders have sought to profit from the development (perhaps realising that they could not stop it) by selling needed land to the developers (whether or not they actually could do so legally is a moot point) and by cooperating in other ways.On the other hand,

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Government of Georgia Parliament
Income of State budget and international reputation of Georgia; did not fundamentally change during the "Rose Revolution" of 2002.

Supports the MoE
Together with the MoE makes public statements.

The Ministry of Environment
Fear of losing face/image in international environmental circles has stimulated the MoE to prepare a "Terms of Reference" for a compensation package as required by provisions of the Ramsar Convention in 2001.
Supports the project; allows the developer to break laws and takes part in finding detours or overcoming international/local obligations; tries to minimize the MoE's costs related to project.
Inconsistent and contradictory in its statements (e.g.despite the issuance of the Terms of Reference and of the 30 April 1996 resolution of the Georgian Parliament stating that the Kulevi Terminal is in a Ramsar area, the MoE and the Georgian Parliament committee made public statements that the Terminal is not within the borders of the Ramsar site (Decker & Kochladze 2002)).

Ministry of Energy
Financial interest: expects high income after Kulevi terminal is in operation.
Supports the project, as well as other projects of a similar profile as they contribute to the energy sector reforms started after Georgia obtained Energy Sector Adjustment Credit 1999 and membership in TRACECA.

Ministry of Defence
Required special agreement for allowing a project to proceed.

Opposed the development, later changed position
Negotiates with the developer, agrees with other Ministries.

World Bank (GEF, TASIC)
The World Bank plays a marginal role, tending to balance between desired benefits and its policy in the region: at times it supports the government in oil terminal construction policies10 and at times listens to NGOs and local society, though it writes letters in support of the project (World Bank 2001b).
Contradictory: claims that the ICZM coastal management program is at risk; complains about project's noncompliance with the ICZM and yet does not attempt to stop the project; doubts whether the Georgian government intends to meet its Ramsar obligations.
Plays a mediation role between the MoE, the Ramsar Secretariat and local communities; Acknowledges the violations related to the project; supports NGOs claims and provides help through case study and consultations to the MoE.

Ramsar Secretariat
To enforce proper implementation of Ramsar Convention.
Firstly expressed discontent with decisions of MoE; later proposed assistance including advisory missions.
Requires MoE to comply with its obligations; cooperates with World Bank; surveys at the local level, undertakes studies of possible compensations and mitigations attendant on construction.

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Georgian Consultancies (Zenith) Gamma Ltd
Compiled EIA; elaborates monitoring and action plans.
Claims that environmental impact can be mitigated ACTA Consultants Ltd.

Fulfils study for a compensation package
Stated that a compensation plan is comprehensive.
Submit the elaborated documents to the developer and the MoE, conduct public hearing for the concerned parties (more formally).

CEE Bankwatch Network Green Alternative
Claim that the Kulevi project does not meet the requirements of the Ramsar Convention Criteria.
Oppose the project; point to violations, working at different levels: activating locals, writing letters to officials, involving national community.
Cooperate with the Information Center of the World Bank, "in contrast" with the MoE and the developer.

Local population
Residents of the village of Karieti, Khobi region, blocked the access road to the Kulevi terminal and did not let trucks with construction materials in it.
Contradictory due to personal interest: hostility between those working for the project and those who do not work (Kochladze 2001).
Demanded that the sponsor renovate the road damaged due to the intensive movement of trucks and address a problem of possible deterioration of local flora and fauna.

Local municipality
Claimed it has a right to privatize lands since Kolkheti Park's borders have never been formally adopted.
Supports the MoE and developer.Helped the government to organize a land auction and sold the land for the Kulevi Terminal to the project sponsor (Decker & Kochladze 2002).

Military base
Obeys the Ministry of Defense.Depending on decisions of the MoE.

6.The Developers
Black Sea Terminal Ltd.
Confident in financial and environmental soundness of the project; determined to proceed.

Claims a purely economic interest, but points to local economic development spin-offs.
Tense relations with some of the local population; Consent of the local municipality and the MoE several acts of local resistance were reported when the population of the village of Karieti in the Khobi region blocked the access road to the Kulevi terminal, obstructing trucks carrying construction materials.Although these actions were sporadic and poorly organized they obviously reflected the protest of at least some local residents against the immediate short term impacts of the construction project.No physical injures have resulted from these protests as the Terminal tried to negotiate and promised to resolve the issues.Such situations are acknowledged in the literature on the conduct of oil-industrial complex actors, which points to the state's ambivalent protection of, or compromise of, civilian security (Watts 2005).

Direct and Indirect Causes of Conflict
Understanding the nature of the conflict over Kulevi is complicated by the complex political geography(ies) of postcommunist Georgia as well as the relative lack of voice for local communities available through formal procedures (or even representation by international environmental bodies).In this context it is not at all surprising that some local residents have adopted the sorts of spontaneous direct action tactics profiled by Staddon (1998) in Bulgaria.In this section we discuss four primary vectors of the conflict over Kulevi: the violation of Georgia's Ramsar obligations, the violation of national environmental protection legislation, the involvement of international economic and environmental organizations, and the reactions of local residents and municipal authorities excluded from the process to date.

Abrogation of Legal Requirements to Conduct EIA
The Kulevi Oil Terminal was originally approved by Presidential Decree #1081 on 8 September, 1999.Consequently, the construction of the oil products terminal and its harbour was started in the village of Kulevi in 2000, by "Terminal 2000" Ltd.As pointed out above this happened before the project went through State Ecological Expertise (SEE), which uses the EIA and, thus broke Georgian law 11 .The full scale EIA was later conducted by the consultancy "Zenith Gamma" Ltd in 1999-2001 (the baseline data collection required this amount of time).The SEE approved the EIA with specific approval conditions on the protection of biota.This concerned the period of, as well as the management and monitoring phases and with a requirement to develop a compensation plan.However, a formal permit was granted by the Ministry of Environment to proceed with the development several days before the EIA was approved.Of course this could be seen as a manifestation of corruption, such as seems usual for often-fraudulent oil-related deals (Watts 2005).Beyond oil, however, there is a long history of post-communist governments manipulating their own laws in order to progress lucrative projects, as Staddon (1998) has found with respect to water developments in Bulgaria.
In 2002 construction of the Terminal ceased due to a lack of finance, and a withdrawal of interest by some contractors and subcontractors.It restarted again in 2004 when a new investor (Georgian oligarch Mr. Badri Patarkatsishivili, in alliance with western partners) took over the project (Salathe 2005).Further, frequent changes of project sponsors have occurred for financial and political reasons.The latter include the reallocation of political powers, changes of government, and the frequent restructuring of the network of oil and gas speculators.More recently the Kulevi Terminal changed owners again -it was sold to the Azeri State Oil Company in January 2007.This decision was, according to Patarkatsishivili, dictated by the political situation and a necessity to rebalance the investment in-flows from two "petrostates" -Kazakhstan and Azerbaijan. 12Patarkatsishivili's "Black Sea Terminal" Ltd will remain a contractor for the remaining construction of the Kulevi terminal.However, new owners have engaged Azeri and Turkish workers and this may increase competition for jobs with the local population, and lead to social unrest among the workforce.
During the standstill period the supplemental parts of the legally required EIA were developed by the same consultant based on the remarks and advice of two British consultancies: the Centre for Environment, Fisheries and Aquaculture Science (CEFAS) and Ecoscope.Those parts are devoted to the details of the railway and marine accesses and include a more thorough description of mitigation measures to be implemented during the construction and operation stages.
The EIA history has been exceptionally long for this development because each party of the conflict have anticipated the EIA as a support to its arguments, and sought to manipulate it in their 11 As per the laws of 1996 on Environmental Protection (10/15/1996), Environmental Permits (10/10/1996) and State Ecological Expertise (10/15/1996), the Kulevi Oil Terminal Project belonged to the Category 1 due to its scale and importance, and should thus have been subject to a full environmental assessment.12 See an interview with the former owner of the Kulevi Oil Terminal, B. Patarkatsishvili http://www.today.az/news/business/36579.html.absence of a detailed business plan or feasibility study for the Kulevi Project that might underpin a loan request (Decker & Kochladze 2002).

The Kulevi Project breaks national regulations
At the national level several causes of conflict can be distinguished.The most evident has been the almost complete lack of public information about this huge project, and its clear violation of Georgian law.The interest of Georgian citizens, supported and represented by environmental NGOs, coincided with external pressure to prepare a full-scale and independent EIA for the Kulevi Oil Terminal.However, an EIA was indeed completed and submitted two years after the Presidential Decree authorized its implementation, and one year after the actual construction had started.In other words, the environmental consequences of the development were not predicted and evaluated before it was cleared and ground was broken on the project.We note that in repeatedly using the "national interest" argument in defense of its actions the Georgian government was acting in common with other postcommunist governments (Staddon, 1998).It was also making a claim that would be difficult to combat.If the Georgian government claims that it is in the national interest to build something, only a national coalition of citizen-interests could effectively counter this strong claim.
Furthermore, the terms of Article 4.2 of the Ramsar Convention have turned out to be seeds of new discord (see the preceding section above and also the Ramsar Convention Manual ( 2004)).While in 2001 the Ramsar Secretariat required the Ministry of Environment to prepare a compensation plan for loss of the Wetlands "as soon as possible", works in this direction started only recently.In 2005 the developer, "Black Sea Terminal Ltd", contracted "ACTA Consultants Ltd." in order to have them undertake a study for the Ramsar compensation package as per the terms of reference prepared earlier by the Ministry of Environment, and to include the wishes of the Ramsar Secretariat (Salathe 2005).
However, Georgia is a small country (69,700 sq.km.) and nearly all wetland areas have been already designated as Ramsar sites.Most environmental experts think, therefore, that it is hardly feasible that any comprehensive biophysical compensation package for the Kulevi Terminal could be satisfactory.Disputes on compensation have endured, until the Ministry of Environment put forward an ultimatum in date and "ACTA Consultants" Ltd. started preparing the compensation plan.
In addition, the CEE Bankwatch network (an NGO in Tbilisi) has highlighted the continued delays in the submission of proposed changes to the existing Ramsar site boundaries of Kolkheti Wetlands to the Parliament of Georgia and the consequent failure of the Parliament to formally ratify them (Kochladze 2001).Similarly CEE Bankwatch points out that not only has the Georgian government (and the World Bank) been remiss in allowing the project to go ahead without all appropriate environmental assessments and Ramsar compensation plans, but the Georgian government has also issued oil and gas exploration licences for virtually all of marine areas of the Kohlketi National Park.

The Kulevi Project's interaction with the World Bank
The World Bank's Technical Aid to the Commonwealth of Independent States (TACIS), and the Global Environmental Facility jointly fund the planning and implementation of the Integrated Coastal Zone Management Program, as well as the project that established the Kolkheti National Park.These two commitments, the ICZM and the National Park project, overlap with each other and would be complicated enough to manage on their own.But when the World Bank also sponsors and actively supports the TRACECA and other oil and gas infrastructural initiatives its position as a broker of sustainable development in the region, the relationship becomes impossible.
In 1998, the World Bank and GEF approved support to the ICZM project.One of its main goals was to protect the natural environment and to support sustainable natural resource management.A secondary aim was to strengthen the capacity of Georgian institutions to manage the coastal resources of the Black Sea (Kochladze et al. 2001).The successful implementation of the Georgian ICZM program in the Kolkheti National Park and the Kobuleti Nature Reserve has been jeopardized, however, insofar as "short-sighted and obscure economic interests …have higher priority than unique ecosystems of national and international importance" (Krebs & Joosten 2006).
The territory envisaged for the Kulevi Oil Terminal partially occupies those of the Kolkheti National Park, but the extent of overlap is unclear.In this regard the World Bank mentions that: …a site survey is needed to define the boundaries of the Kolkheti National Park, and at the same time classification of the territories under the Kolkheti National Park should be considered in conjunction with a socio-economic review of the area with the aim of identifying appropriate multiple use areas within the park boundaries… (World Bank 2001b).This statement suggests some past failures of land management, acknowledges them, and asks that they be addressed.The World Bank also questioned the functions and rights of the local municipality over land management and ownership of the Kolkheti Wetland and adjacent territory.Uncertainty about the land boundaries and ownership has led to a number of complaints from the local population made to the municipalities.

Local level problems with the Kulevi Terminal
The Terminal is also located close to the training ground of a military base, some 2-3 km away.Established during the Second World War, when the river estuary, surrounding waters, and the coastal zone were used as a haven for submarines, this land has long been an important military training area (Kochladze 2001).Military training has occasionally occurred here, on a rectangular polygon territory 3-4 km along the sea coast and 1 km inland.The planned railway that will service the Terminal is to be constructed along the coastline and on the land of the military base.This implies that sea coast land will be transferred to the now-private developers; that, for the period of construction, artillery training should be suspended; and lastly that once in operation there will need to be some rigorous system for controlling the activities of competing land uses.Yet, strangely, the rather long period of negotiations between the project developers and Georgia's Ministry of Defence has resulted in an agreement which stipulates that all oil shipments should be stopped five days before any military training starts (Kochladze 2001).Indeed, if Kulevi develops into anything like its published capacity, it is difficult to see that military use of this land can continue at all.
From the point of view of environmental impacts on the local ecosystems, the construction of the railway represents a short-term stress while the military exercises spread over many years have created a long-term ecological disturbance and changes to the landscape.Motsereliya (1989) comments that the marshlands have suffered multiple disturbance and that a long-term mitigation programme is necessary to rebuild soil structure; there is also evidence of long-term chemical degradation (Botsou et al, 2006).As if that were not enough, the site, to contain stored and piped oil, is adjacent a zone of significant seismic risk.
The local population appears to be divided over the importance of the wetland ecosystem.There is a long history of local appropriation of wetland resources through activities such as farming, hunting, fishing, peat collection, etc. (see Section 2).Most development-driven changes to the established livelihood of the local people are perceived as an encroachment on their rights.Unsurprisingly, the power relationships have been such that local people are fearful that the development of oil infrastructure could devastate or affect the wetlands and thus their livelihoods (Salathe 2005).The developer has responded by saying that the provision of new infrastructure (roads, water supply system, sewage, etc.) and new jobs will actively improve, rather than diminish, local opportunities, and thus the pressure on the wetland will decrease.This however does not seem to address local concerns about traditional livelihood activities such as peat collection or fishing.As a next step for compromise, the developer has had to propose individual compensation and mitigation measures, and public meetings, to explain and agree on the certain aspects of these.These steps are currently in the process of discussion and gradual realization.

Conclusion
Today there is no dispute about the cancellation of the Kulevi project.In this regard, NGOs and the project's other main critics have lost their struggle against the terminal, and are now fighting a rearguard action for better accountability and consideration of environmental factors.The discourse has shifted to the environmental quality of the project, minimization of its negative impacts and the maximization of positive ones, and the extent to which Georgia is fulfilling its obligations under international agreements.
Any "window of opportunity" is now about strengthening collaboration between the stakeholders and incorporating the Kulevi Terminal issues within the ICSM program/process.This is being addressed in part by the Ministry of Environment, who is arranging meetings and field trips for the Ramsar representatives and interacting with an increasing number of Georgian stakeholders (Salathe 2005).Furthermore, according to the Georgian consultants the "Action Plan for Oil Spill Emergences" is being prepared to meet international safety standards, taking into consideration the measures envisaged in the ICZM program.Thus, the input from actors' participation, more sophisticated and comprehensive Environmental Impact Assessment studies, and a compensation package, might serve as a mutually satisfying solution to most problems.
The Kulevi Oil Terminal Project has played a very important, but controversial, role in the advancement of environmental policy in post-communist Georgia through forcing improvements in its integration with socio-economic objectives at different spatial scales and articulation with regional and international priorities.While economic and occasionally social benefits were prioritized against environmental ones in forcing through approval for this major project, concerns about its environmental impacts have reached the international stage and stimulated negotiation among stakeholders.This period of negotiations over the last eight years has proven to be one of the crucial breaking points shaping cognitive re-structuring of Georgian attitudes to mega-projects and the impacts of economic development.
However, the case has also revealed the weakness of Georgian law and lack of political commitment, and sometimes a lack of interest in complying with international agreements.The most striking detail has been the fact that in spite of several legal violations of varying severity, and mounting tensions because of them, no sanctions or fines have been imposed and no guilty parties have been identified.Not surprisingly, this fact has provoked dissatisfaction among the Georgian population and accusations of corruption by the state and corporate figures have entered national discourse.In that respect, the Kulevi Oil Terminal could be seen as an example of what might happen when strategic decisions are taken by an elite in a non-participatory and non-transparent way.This echoes the general criticism that local groups and communities are not adequately consulted before decisions are made in many oil and gas transportation programmes (WWF 2005).
We have tried to illustrate, however, that there are now opportunities to reconcile the parties affected by this project.The time at which details of the environmental compensation plan will be disclosed, is approaching, giving hope for a peaceful and environmentally sound resolution of the Kulevi problem with the Ramsar Secretariat.The Secretariat also expects the Government of Georgia to submit an updated map of the revised Ramsar site boundaries in due course (Salathe 2005).While problems of regulation are more straightforward in the way they can be tackled once oil transport begins, the social impacts of the project require further consideration.A range of conflicts at the local level can be resolved, as the case of the military territory shows; however the political ecology of local discontent over impacts and restrictions of access are bound to continue.
In the case of the Kulevi Terminal three alternative completion scenarios are at least possibleimmediate termination, sub-optimal completion (from the point of view of the developer), or optimal completion.Simply put, the project could be terminated, that is to say given up as a bad job by the now-beleaguered Saakashvili government.The obvious downside of this scenario is that it leaves the works only partially completed thus compromising the natural landscape, and it will involve writing off large sums of investment capital.Alternatively, the government continues on its apparent path of "suboptimal" completion which may incur additional costs and environmental risks, with no guarantee that the benefiting actors will apportion any of their profits to the management of these risks.Finally, we argue that an optimal completion could involve: • completion of the construction with the highest possible environmental standards; • adoption of mitigation and compensation measures recommended by the Ramsar Secretariat; • diversion of some of the proceeds from completion and operation to local budgets for economic development.As the scenarios show there will inevitably be some tension around a project of this magnitude.However, its extent and significance varies depending on which scenario is fulfilled.
The Kulevi Project signals some important lessons for avoiding similar problems for other developments in the South-Caucasus region, where similar issues are arising with increasing frequency as oil is still seen as a "center of political and economic calculation" (Watts 2005) and as demand for resources exploitation grows in this region (Cheterian et.al. 2004).This preliminary research into one aspect of the political ecology of Georgian oil has sought to consider multiple dimensions revolving around the project since, as Harvey (1996) and others remind us, "all ecological projects (…) are simultaneously political-economic projects (…) and vice versa".By applying this approach, the paper has hopefully contributed to deeper and broader understanding of the roots and the consequences of regional disturbances borne under intensifying environmental pressure, and will make the signals of conflict more perceivable for professionals and the general public.

Abstract
Since 1998 the growing importance of the Caspian Sea's oil reserves for the international markets has put a new pressure on Georgia's energy transit capacities.One of the new transit facilities -the Kulevi Oil Terminal located on the country's ecologically-sensitive central Black Sea coast -has emerged as a controversial development evoking several cross-cutting environmental policy, economic and political conflicts at the international, national, and local levels.This paper explores and tracks the nature of this multi-level environmental conflict over land-use and reveals it to be a complex product of the interplay between social, political and economic power.From a political ecological perspective it is possible to interpret the controversy over Kulevi as a 'regional' conflict of interests between different land managers.Our analysis discloses the links between these conflicts and their triggers at different spatial scales with a view to articulating an emerging political ecology of oil for Georgia and the Caucasus.The paper reflects on how the threat of economic loss has forced environmentally unfriendly decisions in the region, causing internal problems and a derogation of the reputation of Georgia at the international arena.Several suggestions for resolution are offered, but their success depends on the contribution of the main players in the conflicts and their commitment to fulfill their obligations.Keywords: Georgia, Oil, Kulevi, Political Ecology

3
Western oil interests are increasingly concerned about what they see as the intransigence of the Putin government in Russia and are therefore keen to have alternative transit routes for Central Asian energy resources.See the World Bank's "Georgia-Energy Transit Institution Building project" of March 13, 2001.http://tinyurl.com/3cb9a36 Transport Corridor Europe Caucasus Asia; the EU -Tasic project.See http://www.traceca-org.orgPolitical ecology of oil in Georgia Journal of Political Ecology Vol 14, 2007 59 America's national security interests.It is a strategic vision for the future of the Caspian region."(Kochladze 2001).

Map 2 :
Territory of the Kolkheti National Park with the Kulevi Terminal's Location (Source: authors) As can be seen from Map 2, the required areas around the Khori River and further to the west are well inside both Kulevi Park and the Marine Reserve.The establishment of marine access to the terminal, alongside the construction of a new railway, will utilize a huge part of the protected area and Ramsar Advisory Missions in 2000 and 2001 investigated possible replacement wetland areas to substitute for this.Nevertheless, construction began in 2000 and, with some interruptions, was largely completed by late 2006.To date several parts of the National Park and Ramsar-listed wetland have been compromised, including the Churia peatland and adjacent coastal fringe for port construction, waterway dredging and associated road and rail construction.