SOCAR Faces Challenges: Labor Issues in Turkey and Sanction Concerns in Georgia

SOCAR, the major Azerbaijani state oil company, now deals with problems both at home and abroad. It faces anger at its facilities in Turkey, plus the possibility of international sanctions affecting its operations in Georgia. These situations show how corporate profits, social responsibility, and world politics all meet in the energy business.

In Turkey, workers at SOCAR’s PETKİM plants are upset because they must leave their longtime company housing by September. For over 40 years, these dorms have been more than just places to live. They've been important social places where families and kids feel safe and have a community. Workers say that while SOCAR is celebrating big investments and profits, it's taking away the support systems that helped the company get where it is today.

Company leaders state that the evictions are happening because of earthquake safety and old buildings. But, many don't believe them. Employees think the company is just trying to make more money. They claim the company doesn't want to pay for building fixes and instead wants to use the land—which is in a good spot near the port—for warehouses that will make a lot of money. The timing is bad because it's happening during union talks, which makes workers worry that it's a way to weaken their group. Besides losing their homes, the whole community in Aliağa is in trouble because there aren't many places to live already, and rents are going up, which means hundreds of families won't be able to find new homes.

At the same time, SOCAR is having image issues in Georgia. The Georgian Prime Minister, Irakli Kobakhidze, said he hopes the European Union won't put the SOCAR-owned Kulevi Oil Terminal on its upcoming list of sanctions. The EU might target the terminal because it suspects it's helping Russia export oil. This would be the first time the EU has sanctioned ports in other countries as part of its effort to stop shadow routes.

The problem gets worse with reports that Russia’s Russneft has sent oil to the terminal. Also, investigations into the terminal's expansion have found some tricky financial involved. The project includes Black Sea Petroleum, a company that may be connected to Russian intelligence officials and is getting money from banks connected to Bidzina Ivanishvili, a rich and influential person in Georgia.

The Georgian government insists it has given complete and trustworthy information to show the terminal follows international law, but people are still watching it closely. These claims, along with reports that some Azerbaijani tankers and the STAR refinery in Turkey are also being watched for possible sanctions violations, put SOCAR in a tough place globally.

As SOCAR moves ahead, how it handles these two separate problems—one about worker rights and the other about following international rules—will probably decide the company’s future as a major energy player in the region.