The Swiss government has agreed to underwrite the export risks of firms taking part in a Turkish dam project, but only if international standards are fully met.
The proposed Ilisu dam in the southeastern province of Anatolia has provoked controversy because it will flood a large area and force 55,000 people, mostly Kurds, to leave their homes.
On Friday, the Swiss authorities gave the go-ahead to the Export Credit Agency (ECA) to guarantee the export risks of Alstom Switzerland, Maggia, Stucky and Colenco to provide goods and engineering services worth SFr225 million ($184.6 million).
The government said it had reached its decision after making sure that preparatory work would guarantee that international environmental standards were met.
"It was not an easy decision to take," admitted Economics Minister Doris Leuthard.
With the help of independent international environment experts, the German, Austrian and Swiss export credit agencies, the exporters themselves and the consortium building the dam worked out what measures still needed to be taken.
Conditions were fixed based on environmental and export credit conventions in place since 2001 within the framework of the Organisation for Economic Cooperation and Development (OECD) and according to World Bank standards.
The result was a list of over 100 possible criteria, concerning the population, cultural goods, ecology and neighbouring countries. Twenty of these criteria will have to be met for the authorities to give their final go-ahead, said Leuthard.
Education, fishing and agriculture will have to be guaranteed for the local population, and plans for power supply, housing and infrastructure will also have to be drawn up.
The Turkish authorities should also ensure there is enough arable land available for displaced farmers, and cultural goods must be moved to a safe location.
According to Leuthard, if these criteria are not fulfilled, the government might end up refusing the export-risk guarantee. She said, however, that the aim was not to put an end to the project, since it would go ahead regardless of the Swiss position.
"What we want is that these measures are taken," she added. But she warned if Swiss companies were forced to pull out, they would be replaced by others who might not respect international standards.
Leuthard said that by participating in the project, Swiss companies were preventing job losses in providing goods and services and earning money for the economy.
Non-governmental organisations (NGO) warned that the project would cause untold damage to the ecosystem and possibly lead to a dispute with neighbouring countries Iran and Syria over water supply.
On Tuesday, NGOs handed over a petition with 37,000 signatures to the economics minister demanding that she turn down the request for the guarantee.
They claim that compensation for the people who are displaced by the project will be insufficient, that damage to the River Tigris would not be covered and that traces of the ancient Mesopotamian civilisation would be destroyed.
The Berne Declaration said on Friday it deplored the government's decision. It added that Turkey had shown no sign that it wanted to meet the standards of the World Bank.
The NGO called on the authorities to include organisations such as itself among the experts it consults and to only give its approval when all the measures are carried out.
According to Peter Niggli, the director of Alliance Sud, a group of six leading Swiss development organisations, "nobody believes" that the standards will be met in the near future.
But, Alstom Switzerland, one of the exporters, said it was very pleased with the decision.
"It means that deliveries already made have been taken into account and the Swiss engineering work is valued," said its spokesman Simone Ramser.
swissinfo with agencies
The Ilisu dam is part of a larger hydro-power project drawn up by the Turkish authorities in 1991. 22 dams and 19 power plants are planned on the Tigris and Euphrates rivers.
The dam will be 135 metres high and 1,820 metres wide holding a reservoir of 10.4 billion cubic metres of water.
Swiss industrial giants Sulzer Hydro and ABB plus Switzerland's biggest bank UBS were part of an original consortium that was granted a SFr470 million export risk guarantee from the Swiss government in 1999.
However, that consortium fell apart in 2002 when several players, including UBS, pulled out following fierce criticism from environmental organisations and other pressure groups.
By this time Austrian company VA Tech had acquired Sulzer Hydro and ABB had sold its power generation business to French company Alstom.
A new consortium, including VA Tech, the Swiss branch of Alstom and other Swiss companies, then put together a new bid, asking the Swiss authorities to grant an export risk guarantee.