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4 Oct 2023

Nora Mardirossian, senior legal researcher at Columbia Center on Sustainable Investment (writing in a personal capacity),
Phil Bloomer, Executive Director, Business and Human Rights Resource Centre

Conflict and exodus in Nagorno-Karabakh: bp’s urgent responsibilities

Azerbaijan is prosecuting direct ethnic cleansing of Armenians in Nagorno-Karabakh. Over 80% of the 120,000 population has already fled the region as Azeri military enter towns and villages, with growing allegations of abuse. Following months of blockade leading to hunger and suffering, the ethnic Armenian population has no trust in a future under the rule of Azerbaijan’s President Ilham Aliyev, with the blockade already characterised as a ‘genocide’ by former ICC prosecutor, Luis Moreno Ocampo.

Yet with vast oil and gas wealth, Azerbaijan has powerful foreign business partners, with bp preeminent amongst them. In 1994, the two parties signed a “Contract of the Century” – a production sharing agreement for the development of oil fields in the Caspian Sea. Since then, bp has become Azerbaijan’s largest foreign investor, investing over $84 billion into projects it operates in the country.

Amidst this long-running crisis and exodus, what are bp’s responsibilities? The international standards for business conduct in conflict regions are set out by the United Nations Guiding Principles on Business and Human Rights. They call for heightened human rights due diligence from companies in high-risk areas, adding that companies must “identify and assess their adverse impacts on human rights and conflict, act to cease or prevent them, and track and communicate the measures taken”. OHCHR issued further guidance in August 2023.

bp has a substantial set of risks in its relations with the Azerbaijani State and its investments in areas recently recaptured by Azerbaijan. In UN language, bp is at least ‘linked’ to the conflict and has a responsibility to uphold human rights – and to use its substantial leverage to end abuse and violence. However, bp’s signature was absent from corporate signatures on the recent letter to President Aliyev appealing for urgent de-escalation of tensions and a commitment to human rights – a deafening silence from bp, given the company’s substantial leverage.

Just months after Azerbaijan’s military takeover of territory in 2020, bp signed an agreement with Azerbaijan to build a 240-megawatt solar power plant in Jabrayil in the Karabakh region to fulfil Azerbaijan’s new action plan to establish a “Green Energy Zone” and sell more energy to Europe. Later that year, bp’s then-CEO Bernard Looney and President Aliyev hailed “bp’s strongest in the world partnership with Azerbaijan” and discussed plans to expand renewable energy, including in these conflict-affected zones. In 2022, bp’s regional president for Azerbaijan, Georgia and Turkey, Gary Jones, spoke of turning Karabakh into “the heart of sustainable development” because the ‘liberated territories’ are “blessed” with “abundant renewable energy resources”. He called it the “perfect opportunity for a fully net-zero system”.

bp agreed to develop solar energy on the contested land (just recently acquired by force) and publicly spoke out in support of Azerbaijan's plans to further develop the region's energy resources. While net-zero and energy diversification ambitions are laudable, bp must clarify how they address the enormous risks and tensions generated by demand for land for this type of mega-project in the context of worsening tension and conflict.

BHRRC approached bp on 19 September 2023 to request their heightened human rights due diligence plans. This has also been done for other conflict zones, such as Russia and Myanmar, to encourage cross-corporate learning on best practice. bp chose to respond with a short letter to say they “support a peaceful settlement to any conflict and hope that a resolution will soon be found.”

They continued: “bp’s principal operations in Azerbaijan are over 400km from the conflict-affected area… we are planning the development of a solar plant in the Jabrayil district, around 100km from the area. This district has not had a civilian population since the early 1990s. It is bp’s policy to conduct environmental and social impact assessments (including human rights aspects) for such projects.”

bp has an urgent responsibility to demonstrate its commitment to human rights, in line with international standards on responsible business conduct, before the ethnic cleansing is consolidated and this conflict undermines bp’s credibility.

Augmented legal risks may also be a concern. State actors are no longer the only ones being held accountable for war crimes. Most recently, in Sweden, Lundin executives are facing charges of complicity in Sudan’s violent seizure of an oil field.

bp should urgently endorse the appeal from responsible business leaders for the Government of Azerbaijan “to meet its obligations as set out in international law, so that all people in Nagorno-Karabakh can live in peace and security, free from discrimination and the threat of inhuman and degrading treatment, and are able to move freely, including leaving and re-entering the area. Their safety, dignity and liberty must be upheld.”

By Nora Mardirossian, senior legal researcher at Columbia Center on Sustainable Investment (writing in a personal capacity); Phil Bloomer, Executive Director, Business and Human Rights Resource Centre