ROSE-ROTH SEMINAR 247 SEM 04 E Original: English NAT O   Pa rl ia me n ta ry  As s e mb l y 57^th ROSE-ROTH SEMINAR SECURITY IN THE SOUTH CAUCASUS SECRETARIAT REPORT* Baku 25-27 NOVEMBER 2004 International Secretariat 1 December 2004 * This Secretariat Report is presented for information only and does not necessarily represent the official view of the Assembly. Assembly documents are available on its website, http://www.nato-pa.int

247 SEM 04 E 1 1. The  58^th  Rose-Roth  Seminar  was  held  in  Baku  25-27  November  2004.  A  year  after  the elections  which  brought  Ilham  Aliev  (son  of  the  former  president  Heydar  Aliev)  to  power,  the country is facing serious challenges in 2005. First of all the “second oil boom” is expected to bring a  significant  amount  of  oil  revenue  to  Azerbaijan  in  2005.  With  an  estimated  production  of 4.5 billion barrels, Azerbaijan is said to have about 1.3% of world oil reserves as well as important gas reserves. The enormous and positive consequences expected from this influx of money on the country’s  economical  and  social  development  will  certainly  influence  the  course  of  the  country’s development. With  Parliamentary  elections  scheduled  in  the  autumn,  next  year  will  be  important with regard to the country’s implementations of commitments in the field of democratic reforms and Human rights. These elections are seen as a real test for the democratic credentials of Azerbaijan. Finally,  it  is  hoped  that  internal  and  regional  evolution  might  prompt  the  negotiation  process  for settlement of the Nagorno Karabakh conflict, which is obviously an absolute centrality for the entire Azerbaijani population and a major driver of the country’s national and international politics.   2. Murtuz    Aleskerov,    Speaker    of    the    Milli    Mejlis    of    the    Republic    of    Azerbaijan (Parliament),  in  his  introduction  underlined  the  mutual  interests  in  the  NATO  PA-Azerbaijan co-operation  and  welcomed  the  organisation  of  a  Rose-Roth  seminar  in  his  country.  Azerbaijan has  already  declared  a  strong  interest  in  developing  closer  relations  with  the  NATO  institutions, several years ago. Azerbaijan has been involved in a PfP programme since 1994, and in spring 2004 initiated a new type of co-operation with NATO (IPAP project) which will soon be finalised. Azerbaijan  is  actively   contributing  to  various  peacekeeping  operations  in  Kosovo,  Iraq  and Afghanistan.  Recalling  that  Azerbaijan  has  been  an  associate  member  of  the  NATO  PA  since 1999, he stressed the importance for his country of actively participating in NATO PA activities and discussions  on  security  issues.  Azerbaijan,  which  is  suffering  from  a  long-lasting  conflict  and occupation of its territories, is very confident about the role of the NATO PA in promoting dialogue on  stability  in  the  region.  In  this  regard,  he  regretted  the  absence  of  concrete  achievements  in solving the Nagorno Karabakh conflict. He recalled his country’s hopes for a peaceful settlement of the  dispute  and  reiterated  the  strong  commitment  of  his  government  in  the  negotiation  process under the auspices of the OSCE Minsk Group. 3. Siyafet  Asgerov,  Head  of  the  Azerbaijani  Delegation  to  the  NATO  PA,  underlined  the security concerns that we all share after the 11/09 attacks on the Twin Towers. Azerbaijan, among the  international  coalition,  is  totally  committed  to  the  fight  against  terror.  He  also  stated  that  the fight  against  terror  and  extremism  will  be  a  central  element  in  the  new  package  of  co-operation projects with NATO. 4. Simon  Lunn,  the  Secretary  General  of  the  NATO  Parliamentary  Assembly,  provided  a brief history of the creation of the Rose-Roth seminars and clarified the aims and goals of these meetings. He also briefly informed the participants of the current and forthcoming activities of the Assembly in the Caucasus region and discussed the strategic role of this region for Euro-Atlantic stability.  He  stressed  how  crucial  and  essential  a  better  understanding of  one  another’s  security preoccupations and challenges is. He particularly thanked the Azerbaijani Parliament, his Speaker, Mr Aleskerov and the Head of Delegation to the NATO PA Mr Askerov, for the hospitality of the Azeris and for allowing the organisation of such a seminar in Baku. 5. Brenda  Shaffer,  Research  Director,  Caspian  Studies  Program  at  Harvard  University, described the recently acquired geopolitical importance of the Caucasus region. It became a major ”transportation hub to NATO operations” beyond the region in Afghanistan and the Middle East. As NATO is increasing its presence in the region, she underlined the need for NATO to elaborate, in co-operation with the three Caucasian republics, a real strategy, including concrete possibilities for the  evolution  of  this  co-operation.  She  underlined  the  need  to  clarify  the  plans,  aims,  and expectations of such co-operation. The mandate of the organisation has to be clearly explained. One of the spheres where NATO could enhance its own security through expanded co-operation

247 SEM 04 E 2 with   South   Caucasian   States   is   in   the   field   of   non-proliferation   of   material,   scientists   and technologies  relevant  to  weapons  of  mass  destruction  programmes.  If  one  wants  to  promote security and prosperity in the South Caucasus and the greater region, it is essential to address the regional  conflicts  and  in  particular  the  Nagorno  Karabakh  dispute.  These  conflicts  are  of  an unusual  nature;  they  are  not  ethnic  conflicts,  but  ethnicity  is  often  used  as  a  justification. Ms Shaffer  dismissed  the  concept  of  “frozen  conflicts”  as  it  is  essential  for  the  development  of these states to resolve these conflicts, and people are ready for peace. One should also note that during the years of transition –characterised by high instability in the region- no religious conflict arose, which is a sign of moderation. In her opinion, security is often a pre-condition not only to the promotion  of  co-operation  -especially  in  the  field  of  security-  but  also  to  the  stability  and  the democratisation  process  of  these  states.  Recalling  the  secular,  liberal  and  historical  roots  of Azerbaijan, which adopted a Constitution during its brief independence in 1918, she underlined the need to strongly encourage and support the democratic process in these states. 6. George Arveladze (GE) underlined that in fact most of the conflicts in Georgia are linked to financial  interests,  illegal  trafficking  and  organised  crime.  It  is  essential  to  eliminate  organised crime, which often supports illegal and separatist regimes. John Smith (UK) confirmed that these conflicts  had  very  little  religious  implication,  and  this  is  illustrated  by  the fact  that Iran  was  more inclined  to  develop  its  relations  with  Armenia  than  to  support  its  Muslim  brothers  in  Azerbaijan.   Siyavush Novruzov  (AZ)  agreed  that the  persistence  of the  Nagorno Karabakh  conflict  and  the long-lasting   cease-fire  between   Armenia   and   Azerbaijan   hampers   any   possible   attempts   to strengthen  collective  security  in  the  region.  Emin  Bilgiç  (TR)   stressed  that  unfortunately  the international  community  is  paying  greater  attention  to  nuclear  proliferation  in  Iran  than  to  the settlement  of the  Nagorno  Karabakh  conflict.  He  also  underlined  that  in  his  opinion  this  was  not only “a dispute” but also a real occupation of Azerbaijani land by Armenia, and it should be referred to   as   such.   Asim Mollazadeh,   president   of   the   NGO,   Euro-Atlantic   Center   of   Azerbaijan, suggested that NATO should consider being involved in the peacekeeping operations, which are currently led in the region by Russian forces. Moreover, it would be worthwhile considering the idea of  Russian-NATO  peacekeeping  operations,  which  would  secure  an  impartial  and  internationally recognised peacekeeping presence. Jérôme Rivière (FR),     referring to Ms Shaffer’s presentation, argued  that,  using  the  example  of  Europe  after  the  Second  World  War,  it  is  obvious  that co-operation  contributes  to  establishing  security  and  not  the  contrary.  Furthermore,  Europeans were –at the time- fully committed to a European integration; therefore to achieve regional stability it  is  essential  to  strengthen  the  dialogue  and  to  continue  negotiating  settlement  of  the  conflicts.   Agnes  Vadai  (HU)  regretted  that  it  is  often  the  politicians  who  are  not  ready  for  peace,  not  the local populations. In her opinion a major role for international organisations is to observe and assist the  democratisation  process  of  these  societies  and  in  particular  to  promote  freedom  of  speech, access to information and the independence of the media. 7. Mustafa  Aydin  from  the  University  of  Ankara  discussed  the  weaknesses  that  hamper  the settlement of conflicts in the region. In his view  there is a lack of a proper institutional forum for co-operation  and  regional  dialogue.  In  fact,  compared  to  the  Balkans,  the  Caucasus  has  a  very poor sense of being a region as such. This also undermines the confidence needed to establish peace  and  stability  in  the  region.    He  added  that  this  region  was  not  only  going  through  a "transition period" but also a real state-building process was taking place. In 2004, it is clear that most of the problems and challenges faced by the governments of the region are not of a transitory nature, but rather are endemic and could remain. We can only recognise that the South Caucasus states  are  weak  states  with  incomplete  control  of  their  territories  and/or  populations,  suffering ramping   corruption,   tremendous   economical   problems   and   an   overall   pauperisation   of   the population. In addition, they have poor political systems and the leadership often faces problems of legitimacy. The state sovereignty is undermined by the existence of uncontrolled armed groups or separatist movements. To be fair, one should recognise that the international community is far from having played all  its cards in this region. Very poor co-ordination of all activities undermines co- operation   efforts   and   promotes   “clientelism  reflexes”.      Mr   Aydin   is   convinced   that   a   more

247 SEM 04 E 3 constructive  and  co-ordinated  approach  together  with  the  creation  of  an  appropriate  and  unique structure  for  regional  co-operation  and  integration  would  prompt  the  necessary  reforms,  help  in forming a regional identity and play a major role in assisting the conflict resolution processes. SESSION I: INTERNAL STABILITY Moderator: John SMITH (United Kingdom), Rapporteur of the NATO PA Defence and Security Sub-Committee on Future Security and Defence Capabilities 8. Ramil  Usubov,  Minister  of  the  Interior  of  Azerbaijan,  addressed  the  participants  on  the “ Potential Factors relating to Internal Destabilisation”. Underlining that stability is a crucial factor in the  development  of  a  nation;  the  Minister  discussed  internal  affairs  and  the  country’s  current security  strategy.  In  line  with  his  predecessor,  President  Aliev  is  working  toward  establishing long-term stability based on respect for the country’s sovereignty and territorial integrity. All reforms of the law enforcement bodies are conducted in agreement with the international standards related to the matter. At the Ministry of Interior special attention is given to fighting illegal trafficking and organised crime; prevention of the development of armed gangs and proliferation of weapons has been  made  a  priority,  as  well  as  close  monitoring  of  those  religious  organisations  which  are intending  to  promote  religious  extremism.  In  2004,  more  than  30  people  were  detained  in connection  with  terrorist  networks,  out  of  whom  20  were  sentenced  for  terrorist  activities.  Six charity organisations devoted to religious proselytism were closed in Baku and 14 aid workers of religious  humanitarian  missions  suspected  of  illegal  activities  were  extradited  to  the  Russian Federation. Because of its geography, Azerbaijan is naturally at risk from terrorists and extremist activities. Azerbaijan unconditionally joined the anti-terror coalition after 11/09 and this remains a major  field  for  further  co-operation  with  NATO.  The  Minister  added  that  one  other  area  for co-operation with NATO institutions could be the training of the Interior Ministry’s special troops, support in modernisation of these troops and training for peacekeeping operations. 9. David Gamkrelidze (GE) inquired about the Georgian/Azerbaijani bilateral co-operation and in  particular  in  the  field  of  information  exchange.  Minister  Usubov  informed  the  participants  that there is solid co-operation with counterparts in Georgia based on a formal agreement. Not only are they able to exchange information on a regular basis, but they can also conduct joint operations, in particular to fight illegal trafficking and organised crime. 10. Alexei   Volkov   (RU)   asked   the   Minister   to   elaborate   on   the   fight   against   corruption. Minister Usubov provided a brief overview of his Ministry’s activities in this field and underlined that Azerbaijan   has   recently   adopted   a   law   against   corruption   as   well   as   a   decree   for   the implementation  of  this  law.  Furthermore,  the  President  has  set  up  a  special  committee  under presidential administration to monitor activities in this field. SESSION II: NATO-AZERBAIJAN, PERCEPTIONS AND FUTURE PERSPECTIVES 11. Mr  Mollazadeh  recalled  that,  historically,  and  despite  its  Muslim  religion  and  tradition, Azerbaijan  was  a  pioneer  in  creating  a  secular and  democratic  republic  in  1918,  and  is  strongly committed to democratic and western values. He stressed the tradition of tolerance in his country, which allows a large number of different nationalities to live together in peace. The commitment of Azerbaijan  to  a  closer  co-operation  with  NATO  structures  is  a  natural  evolution  for  the  country. Euro-Atlantic  integration  is  strongly  supported  by  the  people.  The  majority  of  the  population  in Azerbaijan supports the strengthening of relations with NATO, whereas only 10% would prefer to join  the  CIS  collective  security  system.  The  Azerbaijani  leadership  is  also  showing  a  strong commitment  to  reforming  the  country’s  institutions,  in  particular  in  the  field  of  defence.  Serious problems  remain,  in  particular  in  the  sphere  of  media  and  in  the  development  of  a  genuine  civil

247 SEM 04 E 4 society. He stressed that many new laws have been adopted but noted that the implementation of these laws is problematic in the country. 12. Rasim Musabayov, Sociologist, Political expert, started his presentation by noting 2 major elements for an increasing presence of NATO in the Caucasus. First of all, NATO provides the only credible security system that survived the end of the cold war. The second element is that NATO is also playing a strong role in promoting reforms and democratisation in post-soviet societies. This region  is  suffering  rampant  problems  of  corruption,  autocratic  trends  and  local  and  regional conflicts,  which  obviously  undermine  regional  and  national  security.  Two  out  of  three  Caucasian governments  have  yet  to  engage  in  close  co-operation  with  NATO,  namely  Azerbaijan  and Georgia, the latter being the most advanced in this process. Armenia has also declared its interest and is now engaging cautiously in the same type of co-operation with the NATO-IPAP programme. In  2001,  Mr  Musabayov  conducted  a  sociological  study  on  the  perception  of  NATO  and  on  the major security challenges for the region. Out of 1000 people who were interviewed in each country, NATO integration was supported by 25% in Azerbaijan; 28% in Georgia; and 6.5% in Armenia. It should be borne in mind that Turkey is a member of NATO, which contributes to the popularity of this  concept  in  Azerbaijan.  In  the  collective  minds,  NATO  is  also  offering  Azerbaijan  a  way  to ultimately   escape   from   traditional   “influences”   from  ither   Iran   or   Russia.   NATO   is   almost unanimously seen as a motor for the promotion of stability, prosperity and peace. Among political parties  support  is  similarly  unconditional,  from  both  opposition  and  pro-government  parties. Communist,  Islamic  and  Social  Democratic  parties  voiced  the  only  criticisms.  Most  of  those interviewed had a very limited knowledge of NATO’s mandate and its potential role in the region. To a question from Zahid Orujov (AZ), Mr Musabayov suggested that the GUUAM could be given a  special  status  within  the  NATO  structure.  He  underlined  the  role  of  NATO  in  the  history  of Kosovo,   and   suggested   that   if   NATO   has   not   yet   considered   intervening   to   resolve   the Nagorno Karabakh conflict, it was probably politically not ready to do so. SESSION III: DEMOCRATIC REFORMS ON THE EVE OF MUNICIPAL ELECTIONS 13. Samad  Seyidov  (AZ),  MP,  Head  of  the  Azerbaijani  Delegation  to  the  Parliamentary Assembly of the Council of Europe, presented the reform process which has taken place since independence.  Recalling  that  Azerbaijan  abolished  the  death  penalty  in  1998,  he  described  in detail   the   difficult   and   painful   path   to   transform   the   country’s   institutions.   A   decade   after independence,   the   overall   legal   framework   was   brought   in   line   to   conform   to   international standards. Mr Seyidov recognised that in several areas, such as protection of human rights and the freedom of speech progress was still necessary. 14. Ambassador Maurizio Pavesi, Head of the OSCE Mission in Baku, shared his concerns regarding  the  conduct  of  elections  in  Azerbaijan.  Recent  re-runs  in  3  constituencies  have  once more  shown  significant  problems.  Both  municipal  elections,  and  –  in  particular  -  Parliamentary elections  scheduled  in  2005  will  be  carefully  observed  by  the  international  community,  and  the OSCE in particular. He regretted that some of the opposition parties have already announced they will  not  take  part  in  these  elections.  It  is  essential  that  a  political  dialogue  is  restored.  The Ambassador also reiterated that 2005 will be a crucial year for Azerbaijan and said that the rule of law must prevail and there is no choice but to conduct these elections in an open and fair manner.   He is also expecting a large amount of progress in promoting an independent and free press and in the strengthening of the independence of the judiciary in the country. 15. Ilham Safarov, Managing Director, Internews-Azerbaijan, confirmed the serious difficulties faced by the media in his country. Although it is a commitment before the Council of Europe, public TV  has  not  been  created  yet  and  there  is  only  a  small  chance  that  it  will  de  done  by  the  next parliamentary  elections.    He  added  that  despite  some  very  encouraging  steps  (liquidation  of censorship, organisation of a Press Council…) the majority of the media in thi   s country is suffering

247 SEM 04 E 5 from direct or indirect control and interference by pro-governmental structures, and that currently a significant part of the population has no access to free press or media. SESSION IV: REGIONAL STABILITY IN THE SOUTH CAUCASUS   Moderator:  Jérôme  RIVIÈRE (France),  Chairman  of  the  NATO  PA  Science  and  Technology Sub-Committee on the Proliferation of Military Technology 16. Dennis  Sammut,  Executive  Director  of  LINKS,  briefly  introduced  the  British  NGO  “LINKS” and its role in assisting the creation of the South Caucasus Parliamentary Initiative. In response to the need to promote regional co-operation at the parliamentary level, an initial dialogue was started in   2001.   Overcoming   a   large   amount   of   scepticism   and   hesitations,   a   Memorandum   of Understanding was finally signed in Tbilissi, in May 2003, institutionalising the Initiative. The group has a rotating chairmanship and a secretariat. The rotating presidency is being held by Armenia until  December  2004,  and  Azerbaijan  will  take  over  in  January  2005.    It  has  held  two  plenary sessions,  in  Scotland  in  2003  and  in  Bulgaria  in  2004.  Each  chairmanship  prepares  a  working programme for the duration of the presidency. The Final Communiqué issued at the occasion of the   2^nd   Plenary   Assembly   in   Sofia   stressed   the   importance   of   the   process   of   democratic state-building  in  the  region  and  underlined  the  need  for  regional  co-operation  and  peaceful settlement  of  the  conflict  as  essential  factors  for  further  integration  of  the  South  Caucasus  in European  and  international  institutions.  Mr  Sammut,  acting  as  adviser  and  facilitator  of  the process, noted that this initiative has not yet reached sustainability, mainly due to the difficulty of this type of regional dialogue and to a false sense of competition among actors. Nevertheless the initiative  is  now  accepted,  and  it  has  become  a  significant  item  on  the  agenda  of  all  three parliaments. He also praised the courage of the political leaders who supported and made possible this initiative despite national and popular mistrust of regional co-operation. 17. In  response  to  a  question  by  Mr  Rivière  (FR),   Mr  Sammut  pointed  out  that  a  mechanism aimed at disseminating the Initiative’s report within the national parliaments is in place and is an important  element  of  the  process.  Mr  Gamkrelidze  (GE)  suggested  that  relations  with  other parliamentary assemblies should be established in the future. Mr Volkov (RU) added that it would be an interesting idea to bring together this initiative  with the Russian  initiative called “3+1-three Caucasian and the Russian parliaments” and called for vigilance in order to avoid duplication in the activities  of  these  initiatives.  Mr  Sammut  noted  that  in  fact  several  initiatives  are  trying  to  foster regional  dialogue.  He  added  that  there  is  no  sense  of  competition  since  these  initiatives  are complementary  and  that  the  main  objective  is  to  organise  intensive  consultations  and  develop confidence-building measures among the three Caucasian partners. 18. In  his  remarks,  James  Mackey  from  NATO’s  Political  Affairs  and  Security  Policy  Division discussed  the  interdependence  between  regional  and  internal  stability.  Based  on  this  approach, NATO realised that the NATO shared values are more than military interoperability and reforms; democratic, political and legal reforms also generate stability. Each of the three South Caucasian States  has  undertaken  reforming  processes  such  as  these  and  established  individual  goals  and strategies. In this context, the new set of NATO proposed activities does not force the partner state to accept a given programme, but rather elaborates a specific co-operation programme based on the partner’s wishes and priorities. At this stage, Georgia is the most advanced in the definition of this  new  partnership  with  NATO,  as  recently  its  IPAP  (Individual  Partnership  Programme)  was approved.  Azerbaijan’s  IPAP  should  soon  be  approved  and  Armenia  has  undertaken  intensive consultation  to  develop  one  in  the future.  In  addition,  other  opportunities for further  co-operation are available. PAPT (Partnership Action Plan against Terrorism) and PAPDIB (Partnership Action Plan  for  Defence  Institution  Building)  will  provide  a  framework  for  bilateral  and  multilateral co-operation  in  these  spheres.  Mr  Mackey  also  noted  that  the  appointment  of  Mr  R.  Simmons, Deputy Assistant Secretary General for Security Co-operation and Partnership, as NATO Special

247 SEM 04 E 6 Representative  for  the  Caucasus  and  Central  Asia,  as  well  as  the  establishment  of  two  liaison officers  in  these  regions,  will  tremendously  facilitate  communication  and  help  strengthen  the co-operation with the authorities of the South Caucasus States. 19. Mr Gamkrelidze (GE) and Ms Vadai (HU) underlined how important it is in their view to offer the  possibility  of  having  individualised  projects  and  independent  itineraries  towards  enhanced co-operation with NATO. It is essential that the Russian military bases be withdrawn from Georgia as agreed. In response to a question about possible membership of Caucasian States in NATO, Mr Mackey  recalled  the  NATO  Secretary  General’s  words  regarding  the  open  door  policy  in  the Caucasus, and emphasised that the NATO approach is to focus above all on results rather than on the timeline.   20. Araz  Azimov,  Deputy Minister of Foreign Affairs of Azerbaijan, mentioned how pleased he  was  to  see  concrete  developments  in  the  relations  between  the  NATO  institutions  and Azerbaijan, and welcomed the participants to the seminar. In his presentation on the perspective for  settlement  of  the  Nagorno  Karabakh  conflict,  Mr  Azimov  noted  that  despite  all  efforts  the dispute was not yet resolved. Some are tempted to believe that two principles of international law are  in  contradiction  in  this  situation,  the  principle  of  territorial  integrity  and  the  principle  of self-determination.  But  this  is  wrong,  as  the  principle  of  self-determination  cannot  undermine territorial integrity. Azerbaijan also has the right to self-determination! Mr Azimov is convinced that there  are  ways  to  find  a  solution  and  refuses  to  accept  the  “fait  accompli”.  He  added  that  the Azerbaijani view on a possible agreement implies a global agreement including major elements of the  negotiations,  i.e.  the  return  of  refugees;  the  issue  of  occupied  territory;  and  the  status  of Nagorno Karabakh.  More than 20% of the territory is under occupation and almost 1 million people are   displaced.   The   persistence   of   this   conflict   undermines   any   possible   serious   regional co-operation; there are no established borders between Azerbaijan and Armenia and all roads and railways have been destroyed. As a result, there is a nearly total absence of co-operation between the  two  states,  as  well  as  very  difficult  communications.  Both  sides  in  the  conflict  are  living  on illusions:  Armenia  believes  in  the  illusion  of  a  military  victory;  and  Azerbaijan  on  the  other  hand believes  that  everything  can  be  resolved  by  war.  Objective  conditions  for  concrete  negotiations need  to  be  created.  And  there  are  many  common  interests for  ending  this  situation  of  complete stalemate. Mr Azimov strongly believes that co-operation is an element for the settlement of the dispute and these two elements should be linked.  He also stated that international organisations would have to play an important role in providing the two sides in the conflict with the political and security guarantees essential for the implementation of a potential peace agreement. 21. In  response  to  a  question  by  Mr  Rivière  (FR),   Mr  Azimov  added  that  negotiations  were somehow “monopolised” by the Co -Chairs of the Minsk Group. Germany, Turkey and other states are  de  facto  excluded  from  this  process.  One  should  consider  how  they  could  contribute  in  the future in the peace talks. Regarding the role of NATO in the region, he suggested that whatever NATO   considers   (facilitating   peace   talks;   deepening   co-operation;   help   implementing   the Resolutions of the UN Security Council related to this conflict; or providing security guarantees), would  be  welcomed.  He  added  that  the  principle  of  confidentiality  of  the  negotiations  under  the auspices  of  OSCE  unfortunately  doesn’t  allow  for  the  proper  preparation  of  public  opinion  for  a peace  agreement.  Mr  Azimov  concluded  that  there  is  a  sense  of  urgency  about finding  a  peace agreement as the conflict has continued for the last 10 years.

247 SEM 04 E 7 SESSION VI: DEFENSE REFORMS IN THE COMMONWEALTH OF INDEPENDENT STATES Moderator:  Franco  ANGIONI  (Italy),  Vice-Chairman  of  the  NATO  PA  Defence  and  Security Committee 22. General Safar ABIYEV, Minister of Defence of Azerbaijan, presented a detailed overview of the co-operation between Azerbaijan and NATO since first contacts in 1994, and discussed the current progress in the reform and modernisation of the armed forces. As of today the Azerbaijani armed forces consist of about 76 000 soldiers and military personnel. He pointed out the positive progress  taking  place  in  identifying  elements  of  co-operation  within  the  IPAP  framework.  He mentioned that Azerbaijan was planning to create a peacekeeping brigade and has already sent officers and military personnel to join international operations in Iraq, Kosovo and Afghanistan. 23. Alexei Guzanov (RU) enquired about the Azerbaijani system for protection and defence of the  Caspian  Sea,  and  noted  that  even  if  Azerbaijan  was  not  a  member  of  the  CIS  collective security  agreement  it  had  strong  bilateral  relations  with  the  member  states  of  this  alliance. Mr Volkov  (RU)  also  asked  about  the  current  US-Azerbaijani  co-operation  in  the  Caspian  Sea. Mr Bilgiç (TR)  asked about the status of negotiations for the delimitation of the Caspian waters.   The   Minister   responded   that   his   country   has   signed   a   bilateral   military   and   technological agreement with Russia, but that so far there is no plan for a joint force in the Caspian Sea. There is in  fact  technical  co-operation  with  the  US  to  develop  and  train  the  Azerbaijani  patrols  in  the Caspian.  Regarding  the  water  delimitation,  a  first  agreement  was  reached  between  Russia, Kazakhstan  and  Azerbaijan.  Turkmenistan  and  Iran  have  not  yet  joined  this  agreement.    In response  to  a  comment  by  Mario Palombo  (IT)  on  the  democratic  control  of  armed  forces,  the Minister stated that not only do the presidential administration and the Prime Minister exert a real control  over  the  activities  of  the  Ministry  of  Defence,  but  there  is  also  a  Committee  within  the parliament in charge of this type of control. In response to a question from Mr  Lunn, the Minister explained that for the time being there were only 4,000 civilians employed by his ministry but that the current reform intends to further promote the role of civilians. In reference to Mr Unsal (TR)'s comment   the   Minister   mentioned   that   NATO   should   be   engaged   in   supporting   Armenian withdrawal from Azerbaijani occupied lands. 24. General  Sir  Garry  Johnson  informed  the  participants  that  the  Azerbaijani  government  is currently drafting a National Security Concept. Later this exercise should lead to the drafting of a Military Doctrine. A special interagency working group was settled to produce the draft, which shall be further agreed by the parliament. He stressed the role and responsibility of parliaments. Even in wartime,  parliamentary  control  over  armed  forces  is  necessary,  since  war  is  a  political  act performed  by  the  military.  Military  operations  and  activities  need  a  legal  basis  as  well  as  a regulatory framework  adopted  by  the  legislative  authority.  Also,  parliaments  have  a  great role  to play  in  controlling  the  military  budget.  It  is  agreed  that  this  control  shall  not  interfere  with operational  decisions  unless  it  is  necessary  or  unless  the  operational  decision  undermines  the operability capacity, which is the reason why a clear distinction, set in the legislation, is needed. 25. David Law, DECAF Centre in Geneva, noted that co-operation in the field of security has until recently been mainly oriented towards development of interoperability. He further stressed the importance of good governance projects in recent NATO initiatives and the role of parliamentary control over the armed forces. SESSION VII: ENERGY RESOURCES AND GOVERNANCE IN THE CASPIAN REGION Moderator:   M.J.   ROBERTS,   Senior   Partner,   Methinks   Ltd   and   Energy   Security   Specialist, PLATTS

247 SEM 04 E 8 26. Natig  Aliyev,  President  of  the  SOCAR  –  National  Oil  Company-,  examined  the  security consequences  of  the  economic  transformation  of  his  country  since  independence  and  since  the recent  discovery  of  significant  oil  reserves.  Exploitation  of  oil  reserves  is  still  hampered  by  the absence  of  an  agreement  with  Turkmenistan  and  Iran  on  the  limitation  of  waters.  Another significant concern  is the  security  of  oil  transportation.  Major  plans for  exportation  of  Azerbaijani gas  and  oil  have  been  defined  with  the  assistance  of  international  organisations  and  private companies.  It  is  to  be  hoped  that  these  infrastructures  can  be  further  utilised  for  the  export  of Kazakh oil and /or Turkmen gas. 27. Martin   J.   MILES,   Sustainable   Development   Director   BP   Exploration,   recalled   that Caspian   nations   have   proven   oil   reserves   similar   to   those   of   the   North   Sea.   Of   this   the Baku-Tbilissi-Ceyhan  oil  field  is  to  supply  1  million  barrels/day  or  1.3%  of  world  oil  supplies  by 2010. BP has made a significant commitment of about 21 billion dollars for the exploitation of oil and gas in the region. The UK Government’s Extractive Industries Transparency Initiative (EITI), supported by the Azerbaijani National Commission on EITI, conducts extensive consultations with oil  companies  and  local and  International  NGOs to  improve  transparency,  revenue management and human rights, which are key elements for sustainable development. On 24 November 2004 a MoU was signed between the GoA, the NGO Coalitions and foreign and local companies, which clearly  sets  out  the  process  for  implementation  of  this  initiative  in  Azerbaijan.  The  initiative encourages   oil   companies   to   produce   and   publish   data   and   information   similar  to  the   BP Azerbaijan Sustainable Report covering health, safety and environment and the economic impact of their activities. It also encourages and assists the GoA and civil society to increase transparency in the area of oil revenue management, to fight the development of corruption and conflicts and to promote human rights, a sense of equity and ethics.   28. Sabit Bagirov,  President of the Centre for Economic and Political Research, presented a prospective study on expected oil revenue and its impact on the local economy and development of   the    country.   In   the    coming    decades   the    country    will    see    the    exploitation    of   the “Azeri -Chirag-Guneshli”  oil   field   and   a   tremendous   profit.  This   profit   is   estimated   at   up   to 450 Million USD   for   the   National   Oil   Company   SOCAR   in   2009   with   a   barrel   at   45$   and 150 Million USD  with  a  barrel  at  18$.  Most  countries  with  abundant  oil  resources  have  failed  to translate oil-benefits into better lives for their citizens. Azerbaijan has to be extremely realistic and pragmatic for several reasons. Unless further discovery of oil reserves occurs, the production of oil in Azerbaijan will progressively reduce, reaching 2003 production levels in 2025-2027. This means that the Azerbaijani government has to seriously reflect on how to invest its financial resources in order to secure long-term benefits and investments. The GoA has to avoid the “Dutch disease” and has  to  maintain  and  secure  the  financial  and  economic  balance  of  the  country.      Secondly,  the fluctuations of the price of a barrel, which is currently in favour of the producing countries, could reverse  the  current  tendency.  He  raised  certain  concerns  as  to  how  prepared  and  capable  his country is in facing these numerous challenges. The government still lacks experience in managing major  revenue  and  the  legal  level  of  transparency  in  the  work  of  the  government.  National  and other oil companies might favour the development of corruption. The lack of democratic traditions in the country, the poor potential of civil society to monitor revenue and expenses, as well as the weakness of the mass media do not provide yet for a genuine overview.