Ashley Nancy Reynolds
For years in the Kazakh village of Sarykamys, people would go to sleep in their beds and never wake up again. It was not the peaceful end to a long life, but a sudden end that struck people as young as 25. The locals called it the “death of shift workers”.
Many of those who died worked in the Tengiz oil field, which had been developed near the village along the shore of the Caspian Sea. Environmentalists linked the sudden deaths to the release of toxic gases like hydrogen sulfide, as a result of drilling.
Since the development of the oil field, in 1993, 5.5 percent of Sarykamys’ population has died, possibly as a result of pollution from oil field operations, and by the early 2000s doctors said that 90 percent of the village’s population had developed illnesses. Official statistics, however, undercounted the number of deaths as a result of the drilling, only counting the people who died at work.
In the end, the entire population of the village was forced to relocate, with many residents reportedly not receiving proper compensation. Though the oil field was conceived as a development project, supported by the European Bank for Reconstruction and Development (EBRD), for the people living closest to it, it was devastating. It also exemplified the flawed model of development, which organisations such as the European Union and private institutions, continue to push in many parts of Eurasia.
Our recent research into the 30 largest extractive companies in Armenia, Georgia and Kazakhstan found that at least 11 had received investment from Western European financial institutions, including the EBRD. All of the recipient companies have faced allegations of human rights abuses and poor access to information.
Some accusations are particularly severe, such as those surrounding the tailings dam at Teghout in Armenia. The dam is at risk of collapse and could result in a catastrophe akin to the Brumadinho disaster in Brazil, in which the release of industrial waste from a breached dam killed 270 people and buried whole villages.
KazMunayGas, Kazakhstan’s state-owned oil company, which also has projects funded by Western European institutions, has been linked to a network of abuses, including corruption, the murder of human rights defenders, torture, the mass poisoning of children and environmental destruction.
Across Georgia, Armenia and Kazakhstan, we found numerous projects of concern and received complaints from local activists, NGOs and journalists about abuses by extractive projects. They told us that human rights are routinely being sacrificed in the name of development. The right to drinkable water, breathable air and the life of local communities are repeatedly violated by many of these projects.
In these countries, EU funds can be spent without accountability and are not pegged to the bloc’s values. And that is a problem. Development is and must be about improving people’s lives, and looking at how people who live near the site of these projects are affected. The EBRD, and comparable institutions, must start holding themselves accountable and commit to the due diligence requirements of the Aarhus Convention, signed in 1998 to protect environmental rights. They must act swiftly on complaints of abuses.
The EBRD, which is backed by the EU, is particularly culpable, given that it has invested in at least eight of the extractive companies we investigated. Its backing of one project, the Amulsar gold mine run by Lydian in Armenia, raises real concern.
This project planned and sought the use of cyanide to leach gold concentrate, but, as a 2018 study found, 85.7 percent of respondents from communities near the mine reported ill health as a consequence of their work at or in proximity to the site. Residents reported asthmatic attacks, lung disease and headaches.
The community felt it was being ignored by the company running the mine. Residents were attacked and beaten by police and Lydian’s security guards for speaking out. In 2020, after international condemnation, the EBRD eventually relented and announced it would terminate its investment at Amulsar.
While this decision by the EBRD is welcome, there are many more projects funded by European investors, which create tensions and destroy the environment, particularly in areas outside the EU. This fundamentally undermines the EU’s self-positioning as a socially responsible entity that values human rights, including in its business activities.
European investors, including the EU, continue to hold significant leverage over companies operating on the eastern border of the bloc and beyond, placing them in a unique position to prevent and address human rights violations. They can, and must, do better by following due diligence requirements and ensuring that opportunities for abuse are minimised at the outset.