Intro Press Release: December 14, 2005 by Sakhalin Environment Watch / CEE Bankwatch Network Sakhalin II: Fit for purpose decision slammed by Sakhalin islanders, EBRD’s reputation on the brink Sakhalin, Russia -- Sakhalin islanders and environmentalists from around the world reacted with anger to today’s attempt by the management of the European Bank for Reconstruction and Development (EBRD) to convince the bank’s directors that the controversy-plagued Sakhalin II oil and gas development meets minimal environmental and social standards. The decision could make Shell’s Sakhalin II project eligible for multi-million dollar public financing. In a meeting today, EBRD management appears to have persuaded the bank’s directors that the Sakhalin II Environmental Impact Assessment (EIA) is "fit for purpose". The next step in the EBRD’s process is a 120 day public comment period and then a board vote. Such a vote could occur in spite of a laundry list of areas where Sakhalin II continues to violate Russian law and the EBRD’s own policies, as well as considerable internal opposition to the project within the EBRD’s board and staff. Dmitry Lisitysn, Chairman of the leading local group Sakhalin Environment Watch, said: “Today the EBRD has risked putting its reputation beyond repair by pronouncing that Sakhalin II is fit for purpose even though key aspects of the project are beyond repair. The science is out there, the breaches in the EBRD's policies are explicit, 120 days of consultations will make little difference to the huge fundamental violations that Shell has committed already.“ Environmental groups around the world have been advocating that Shell’s so-called flagship project should not be funded by the EBRD or any other public finance institution since the project irreversibly violates the company’s own standards on EIA as well as those of the EBRD. Shell is seeking up to USD five billion in public financing from the EBRD, and the export credit agencies of the US, UK and Japan. Yesterday WWF released the results of a survey carried out from July to September this year showing that Sakhalin II’s PA-B oil platform is disrupting the feeding patterns of the last remaining 100 critically endangered Western Pacific grey whales which feed and breed off the coast of Sakhalin. Ongoing monitoring of the Sakhalin II onshore pipelines’ impacts on Sakhalin’s salmon spawning rivers is being carried out by Sakhalin Environment Watch. Serious damage to a significant number of these economically vital rivers continues to be discovered in stark contrast to Shell’s view that only “in a few cases the performance and standards are not as we would wish or expect.” [1] The EBRD is concealing a consultants’ report – the so-called “Birmingham Report” – that it commissioned earlier this year to assess the adequacy of Shell’s river crossing strategy and execution plan on Sakhalin. Petr Hlobil, of CEE Bankwatch Network, commented: “Today’s decision indicates that the EBRD is more committed to shoring up what remains of Shell's reputation than to defending the interests of Sakhalin islanders. The EBRD’s environmental and social standards are now in serious danger of becoming museum pieces, consigned to cold storage in the frozen Sakhalin sea.” For more information, contact: Dmitry Lisitsyn (Sakhalin) Tel: +7 4242 747519, +7 914 757 0076, Email: sakhalinwatch@yandex.ru Petr Hlobil (Czech Republic) Tel: +420 603 154 349 Email: petrh@bankwatch.org Doug Norlen (US) Tel: +1 (202) 465-1650 Email: dnorlen@pacificenvironment.org [1] An interactive photo guide illustrating the extent of the Sakhalin II pipelines’ impacts on Sakhalin’s salmon spawning rivers can be viewed at: Sakhalin Energy's muddy waters Background information Shell's Sakhalin-2 gas project hit by eight-month delay and $10bn cost rise EBRD freezes Shell Sakhalin loan Stop Shell Ruining Sakhalin Island - Folder Sakhalin Environmental Watch (pdf-en) Race to the Bottom, Take II - An Assessment of Sustainable Development Achievements of ECASupported Projects Two Years After - OECD Common Approaches Rev 6 - ECA-Watch September 2003 pp 53-57 (pdf-en) Stop Shell Ruining Sakhalin Island (pdf-en) Seismic risks for Shell’s oil-and-gas facilities on Sakhalin (pdf-en) Shell Oil Company is posing a threat to the rare Western Grey Whale on Sakhalin Island (pdf-en) Shell’s oil and gas project creates the threats for fishery on Sakhalin (pdf-en) The Production Sharing Agreement (PSA) for the Sakhalin 2 Project (pdf-en) Delay in undersea pipeline construction is only a first step say environmentalists. Shell must heed scientific findings; whale survival and Sakhalin Project in balance The real story behind Shell's response to the supporters of the Sakhalin indigenous protesters follows Shell moves Sakhalin pipeline but faces new destruction row Shell's bottom line for Sakhalin Latest news EBRD disengages from talks on Sakhalin II Project By mutual agreement with OAO Gazprom and the other shareholders of the Sakhalin Energy Investment Company, it has been decided that the EBRD will not resume negotiations on financing the Sakhalin II project. The EBRD withdrew from active consideration of the project in January because there was a significant change of shareholding of SEIC and the new shareholders were reviewing financing plans. In informal discussions with the EBRD since then, it became clear that in light of the timetable envisaged by the shareholders, the financing from the EBRD was not feasible. Gazprom, the majority shareholder, and the other shareholders of the SEIC have reached an advanced stage in the negotiations for the financing of Sakhalin II and now expect to reach financial closure in the next few months. Gazprom and the EBRD now consider that it is preferable to focus on cooperation in other projects - such as promoting sustainable energy - where the experience and expertise of the EBRD can add significant value to Gazprom and Russia. go to the press release Essential reading • Dr. Ian Rutledge, The Sakhalin II PSA – a Production ‘Non-Sharing’ Agreement, Analysis of Revenue Distribution (pdf-en 37 pp). • Dredging vessel causes oil spill (September 2004) Essential links • • • Milieukontakt Oost-Europa: Shell on a collision course with the World Wildlife Fund • Pacific Environment: Ecologists Fear Disaster as Oil Rush Takes Grip in Quake Zone • Project web-site of Sakhalin Energy • RAIPON - Russian Association of Indigenous Peoples of the North, Siberia and Far East • Sakhalin Energy\'s muddy waters : a • Sakhalin Environment Watch (SEW) • Shell officially warned about Sakhalin II\'s impacts on endangered whales Essential contacts Regional Public Organization “Sakhalin Environment Watch” Dmitry Vasilievich Lisitsyn, Chair of the Board Yuzhno-Sakhalinsk, Kommunisticheskii Prospekt 27A, rm. 301 - Russia 693007 Tel/Fax +7-4242-747518, E-mail: watch@dsc.ru |