Azerbaijan
Situated geographically between East Asia, South Asia, and the Middle East, on one hand, and Western and Eastern Europe, on the other hand, Azerbaijan inhabits a strategic midpoint of the energy transition.
In addition to concentrating some of the most important pipeline projects spanning nearly one half of the globe, the country is also a hydrocarbons and renewable energy producer. In other words,the energy transition and Azerbaijan are inextricably linked.If that were not enough, Azerbaijan — a State synonymous with corruption — is responsible for theethnic cleansing of the Armenian community,which reached a nadir in September 2023, as virtually the entire Armenian population in western Azerbaijan was killed or forcibly displaced into territorial Armenia, leading analysts to consider this an act of genocide.
In 1994, Azerbaijan and hydrocarbons majorBritish Petroleum(BP) signed a 30-year agreement to develop Caspian Sea oilfields. Since then, as the country’s largest foreign investor, BP and Azerbaijan have expanded their relationship. In the context of the Russian war against Ukraine and the European energy crisis, both parties agreed to build a huge solar power plant in Jabrayil, part of the Nagorno-Karabakh region where the Armenian population has been displaced.Their goal is to transform the conflict zone into a green energy-producing region.
The worrisome corporate capture element concerns the role of BP. Ostensibly, it is an ally of the Government of Azerbaijan insofar as energy production and the much more recent commitment to a net-zero future; however, at the same time, its presence and economic agreements effectively legitimize ethnic cleansing. Moreover, the much-touted solar project is a form ofgreenwashing,as it both distracts from the deep, long-term fossil fuel commits of oil and gas majors and the Government, as well as diverts attention from the regional conflict.
Specifically, the close partnership between the country’s president,Ilham Aliyev,his family, and BP has drawn scrutiny. For the corporate accountability movement, which has largely not paid attention to the conflict, two major concerns should be that the corporate capture of the State has become the default business model in Azerbaijan and that both BP and the Government have ignored basic business and human principles of protection, due diligence, and remedy.This case illustrates several aspects of capture: narrative capture, macro-crime and illicit financial flows, diversion of resources, and greenwashing.