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Ilisu is a small village on the Tigris river in the mainly Kurdish-populated south-eastern part of Turkey, close to the borders of Syria and Iraq. It would have remained unknown to the outside world had it not been for a massive hydropower project that the Turkish government intends to develop where the village of Ilisu lies. The Ilisu dam project has been in Turkish and international headlines many times in recent years, as it is currently one of the most contested dam projects in the world. The project’s impact on the population and environment in the region will be immense, according to local communities affected by the project. For instance, the ancient city of Hasankeyf, once a trading centre on the silk route and continuously inhabited for the last 10,000 years, will be flooded.

In a project of this dimension, many different stakeholders with different interests are involved, some of whom have a stronger voice than others. In order to ensure that those with less influence are heard, and that the impact upon those most directly affected is minimised, the WCD developed a set of recommendations to address the impacts and outcomes of large dams. As a consequence, in the followup after the WCD, it was debated within the Dams and Development Forum1 which roles were appropriate for the different stakeholders, and specifically governments and 'external stakeholders', such as international institutions, financial investors and NGOs. A question central to the discussion was how these actors could be encouraged to implement the WCD recommendations and other international standards on resettlement and environmental protection, such as World Bank standards, to improve compliance and accountability aligned with best practices.

The construction of a large hydropower project is not only a technical endeavour, but also entails a complicated governance process and a complex financial structure. When, in 2005 (after an attempt failed some years earlier due to international pressure from NGOs), Turkey invited European companies to join the building consortium, the project was no longer a national affair but became a transnational and international political and financial decision (Warner, 2008). The European companies applied for export insurance cover with their national Export Credit Agencies (ECAs) and for export loans with European banks.2 Having learned from earlier attempts to establish international building and finance consortia for the same project (1997-2002), the ECAs decided to request a set of project conditions. The ECAs would only agree to support deliveries3 to the project if Turkey committed to international standards of dam building and met their safeguards (based on World Bank standards) to protect the environment, affected people, riparian states and cultural heritage.

For the second time, European ECAs tried to implement specific social and environmental project conditions, this time including an agreement with Turkey and a tight monitoring process. Although it became evident, after a three-year engagement, that these conditions would not be met by Turkey, this was still a major step forward in attempting to apply international standards to such projects. Hence, there are significant lessons to be learned from this process.

In this article we will analyse the actions of the German, Swiss and Austrian ECAs, who sought to adhere to World Bank standards for the Ilisu dam project. We will also examine the role of transnational NGO networks within this process, in which the authors were directly involved, to promote best practices and to prevent the anticipated detrimental outcomes of the dam project.

We begin by giving a general overview of the Ilisu dam project including general issues on dam building in Turkey and the geographical, socioeconomic and political settings of the South-eastern Anatolian Project (GAP), of which Ilisu is a part. In this context, we also examine the projected impact of the Ilisu dam, Turkey’s plans for mitigating the consequences of construction and an overview of the project history up to the withdrawal of the ECAs. We will then analyse the roles and interests of both primary and secondary stakeholders, particularly those of ECAs and NGOs as secondary stakeholders in the Ilisu dam project. In the next two sections, we examine the measures taken by the ECAs to achieve World Bank standards and by NGOs to ensure that best practice was applied, or – if standards and best practices to prevent the occurrence of major negative impacts could not be met – that financial support for the project would be rejected. In the final section we highlight how the ECAs failed in their efforts to implement World Bank standards and to encourage Turkey to abide by their obligations. We then conclude with the lessons to be learned by all sides from this resource-intensive process that stretched over a period of several years.

Ilisu is a small village on the Tigris river in the mainly Kurdish-populated south-eastern part of Turkey, close to the borders of Syria and Iraq. It would have remained unknown to the outside world had it not been for a massive hydropower project that the Turkish government intends to develop where the village of Ilisu lies. The Ilisu dam project has been in Turkish and international headlines many times in recent years, as it is currently one of the most contested dam projects in the world. The project’s impact on the population and environment in the region will be immense, according to local communities affected by the project. For instance, the ancient city of Hasankeyf, once a trading centre on the silk route and continuously inhabited for the last 10,000 years, will be flooded. In a project of this dimension, many different stakeholders with different interests are involved, some of whom have a stronger voice than others. In order to ensure that those with less influence are heard, and that the impact upon those most directly affected is minimised, the WCD developed a set of recommendations to address the impacts and outcomes of large dams. As a consequence, in the followup after the WCD, it was debated within the Dams and Development Forum1 which roles were appropriate for the different stakeholders, and specifically governments and 'external stakeholders', such as international institutions, financial investors and NGOs. A question central to the discussion was how these actors could be encouraged to implement the WCD recommendations and other international standards on resettlement and environmental protection, such as World Bank standards, to improve compliance and accountability aligned with best practices. The construction of a large hydropower project is not only a technical endeavour, but also entails a complicated governance process and a complex financial structure. When, in 2005 (after an attempt failed some years earlier due to international pressure from NGOs), Turkey invited European companies to join the building consortium, the project was no longer a national affair but became a transnational and international political and financial decision (Warner, 2008). The European companies applied for export insurance cover with their national Export Credit Agencies (ECAs) and for export loans with European banks.2 Having learned from earlier attempts to establish international building and finance consortia for the same project (1997-2002), the ECAs decided to request a set of project conditions. The ECAs would only agree to support deliveries3 to the project if Turkey committed to international standards of dam building and met their safeguards (based on World Bank standards) to protect the environment, affected people, riparian states and cultural heritage. For the second time, European ECAs tried to implement specific social and environmental project conditions, this time including an agreement with Turkey and a tight monitoring process. Although it became evident, after a three-year engagement, that these conditions would not be met by Turkey, this was still a major step forward in attempting to apply international standards to such projects. Hence, there are significant lessons to be learned from this process. In this article we will analyse the actions of the German, Swiss and Austrian ECAs, who sought to adhere to World Bank standards for the Ilisu dam project. We will also examine the role of transnational NGO networks within this process, in which the authors were directly involved, to promote best practices and to prevent the anticipated detrimental outcomes of the dam project. We begin by giving a general overview of the Ilisu dam project including general issues on dam building in Turkey and the geographical, socioeconomic and political settings of the South-eastern Anatolian Project (GAP), of which Ilisu is a part. In this context, we also examine the projected impact of the Ilisu dam, Turkey’s plans for mitigating the consequences of construction and an overview of the project history up to the withdrawal of the ECAs. We will then analyse the roles and interests of both primary and secondary stakeholders, particularly those of ECAs and NGOs as secondary stakeholders in the Ilisu dam project. In the next two sections, we examine the measures taken by the ECAs to achieve World Bank standards and by NGOs to ensure that best practice was applied, or – if standards and best practices to prevent the occurrence of major negative impacts could not be met – that financial support for the project would be rejected. In the final section we highlight how the ECAs failed in their efforts to implement World Bank standards and to encourage Turkey to abide by their obligations. We then conclude with the lessons to be learned by all sides from this resource-intensive process that stretched over a period of several years.