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Russia: Letter
to OPIC: December 2001
Letter from NGOs to OPIC regarding
OPIC's consideration to support Sakhalin 2
Sakhalin Environment Watch * Center for Russian Ecological
Policy * Initiative for Social Action and Renewal - Living Seas Campaign
* Bureau for Regional Outreach Campaigns * Legal Center "Rodnik"
* Kamchatka League of Independent Experts * Kaira Club * Center for Defense
of Wild Nature "Zov Taigi" * Magadan Center for the Environment
* Forest Bulletin * Northern Pacific Fund * Independent Defense * Pacific
Environment * Environmental Defense * Friends of the Earth International
* Baikal Watch * Earth Island Institute * Friends of the Earth Japan
December 10, 2001
Peter S. Watson
President and Chief Executive Officer
Overseas Private Investment Corporation
1100 New York Avenue NW
Washington, DC 20527
Dear Mr. Watson:
We write to express our serious concern about your institution's potential
consideration of support for the second phase of the Sakhalin II oil project,
located off-shore of Sakhalin Island, in the Russian Far East. The Sea
of Okhotsk is one of the world's most biologically productive seas. The
people of the Russian Far East depend on the harvest of the rich fisheries
stocks of crab, shrimp, pollock and other seafood products in the Sea
of Okhotsk. Indeed, as much as 70% of the seafood products caught in Russia
are harvested in the Sea of Okhotsk and the economy of the Russian Far
East has long been dependent on healthy fisheries. The coastlines of the
Sea of Okhotsk still provide spawning grounds for healthy, wild Pacific
salmon runs that are in decline in other parts of the North Pacific. The
waters near northeastern Sakhalin provide habitat for the endangered Okhotsk
Gray Whale. Yet new offshore oil developments along the northeastern shore
of Sakhalin Island have greatly increased risks to the Sea of Okhotsk
and its shorelines.
Many of our organizations were involved in good faith in earlier phases
of Sakhalin II, and continue to monitor the project closely. We believe
that many environmental, social and economic commitments that were made
by Sakhalin II, and the Multilateral Development Banks and Export Credit
Agencies that supported its first phase, have not been achieved. Environmental,
social, and economic problems associated with the Sakhalin II project
include:
· Decreases in fisheries populations, including a sharp decline
in saffron cod and herring stocks that are a key food source for the native
Nivkh peoples, and a failed commitment to provide related environmental
monitoring information to government agencies and the public;
· Inadequate access to public-interest environmental information
and lack of transparent monitoring despite commitments to ongoing public
consultation;
· Unacceptable risk from discharge of drilling wastes and a failed
commitment to meet the highest level of environmental protection, incorporate
best available technology, or use most appropriate techniques to prevent
or minimize environmental harm;
· Extremely inadequate revisions have apparently been made to the
Oil Spill Response Plan, as well as inadequate efforts to prevent oil
spills from occurring in the first place, despite the fact that oil spills
have subsequently occurred, that international expert review and recommendations
have been provided free to the company, and that there was a commitment
for this Plan to be a living document and upgraded over time;
· Inadequate regional and national economic benefits despite the
commitments that the federal government, the region and its people will
receive their due proportion of the benefits of the developments, and
that those benefits are sustainable and long lasting.
· The Production Sharing Agreement does not conform with Russian
environmental laws;
· Abrogation of responsibilities under Russian domestic law and
international treaties to protect the endangered Korean-Okhotsk Gray Whale,
and for OPIC, abrogation of its responsibilities to comply with the U.S.
Endangered Species Act;
· Sakhalin Energy Investment Company no longer includes Marathon
Oil, hence bringing into question OPIC's liability on Phase One of Sakhalin-II,
and prohibiting its support for Phase Two.
.We are attaching for your review a memo
that elaborates on these issues. It provides evidence that Sakhalin Energy
Investment Company, the project sponsor, has developed a poor track record
in corporate environmental and social responsibility. In light of this
record, we do not believe your institution should support the next phase
in any manner until these problems are resolved.
We ask that your institution refrain from supporting any expansion of
the Sakhalin-II project until:
· Sakhalin Energy Investment Company can guarantee the continued
health and viability of fisheries populations, including restoration of
previous populations of herring and saffron cod and the provision of adequate
and timely monitoring data to government agencies and to the public;
· Sakhalin Energy Investment Company proactively shares all relevant
information about the Sakhalin-II project - including the Production Sharing
Agreement, the Declaration of Industrial Safety, annual environmental
audits, and all monitoring reports for fisheries, environmental monitoring,
and gray whales, with the public;
· Sakhalin Energy Investment Company commits to 100% re-injection
of drilling muds and cuttings, implementing environmentally best "zero
discharge" practices that are now used in many places in the world.;
· Sakhalin Energy Investment Company ensures that oil spill prevention
and response standards in Sakhalin are equivalent or better than those
currently practiced in Alaska and the North Sea;
· The Production Sharing Agreement is rewritten in a manner that
guarantees the authority of environmental laws over the PSA, provides
for transparent accounting systems that are open for public review, and
ensures that sufficient profits are provided for the Russian Federation
and the people of Sakhalin Island;
· Sakhalin Energy Investment Company can guarantee the survival
and viability of the internationally recognized, critically endangered
Okhotsk-Korean gray whale population.
We look forward to your response.
Sincerely,
Dmitry V. Lisitsyn, Chair and Nataliya Barannikova, Marine Program Coordinator
Sakhalin Environment Watch, Yuzhno-Sakhalinsk
watch@dsc.ru
Alexey V. Yablokov, President
Center for Russian Ecological Policy, Moscow
Anton Semenov, Coordinator, Living Seas Campaign
Initiative for Social Action and Renewal-Russian Far East, Vladivostok
Anatoly Lebedev, Director
Bureau for Regional Outreach Campaigns, Vladivostok
Olga Yakovleva, Director
Legal Center "Rodnik," Moscow
Olga Chernyagina, Executive Director
Kamchatka League of Independent Experts, Kamchatka
Gennady Smirnov, Chair
Kaira Club, Chukotka
Vasily Solkin, Chair
Center for Defense of Wild Nature "Zov Taigi," Vladivostok
Elvira A. Grischenko, Executive Director
Magadan Center for the Environment, Magadan
Vladimir P. Zakharov, Editor
Forest Bulletin, Moscow
Alexey S. Vakhrin, Vice Director
Northern Pacific Fund, Kamchatka
Valery P. Kochetov, Executive Director
Independent Defense, Kamchatka
David Gordon, Associate Director
Pacific Environment, Oakland, California, USA
Bruce Rich
Director, International Program
Environmental Defense, USA
Jon Sohn
ECA Campaign Coordinator
Friends of the Earth International
Gary Cook, Director
Baikal Watch, Earth Island Institute, USA
Tokiharu Okazaki, Director of Programs
Friends of the Earth Japan, Tokyo
--Background Memo--
Broken Commitments: Sakhalin II and Ongoing
Environmental, Social and Economic Problems
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