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Russia: Whale Protection Plan Response, Aug. 2002

NGO response Letter to Sakhalin Energy (SEIC) regarding the Gray Whale Protection Plan

SAKHALIN ENVIRONMENT WATCH * FUND FOR WILD NATURE OF SAKHALIN * PACIFIC ENVIRONMENT * INTERNATIONAL FUND FOR ANIMAL WELFARE * WORLDWIDE FUND FOR NATURE * LEGAL CENTER "RODNIK" * GREEN KOREA UNITED * FRIENDS OF THE EARTH JAPAN * LIVING SEAS COALITION * GREENPEACE-RUSSIA * BIODIVERSITY CONSERVATION CENTER * KAIRA CLUB * KAMCHATKA LEAGUE OF INDEPENDENT EXPERTS * SIBERIAN ENVIRONMENTAL ALLIANCE * FUND FOR ALTAI - 21ST CENTURY * MAGADAN CENTER FOR THE ENVIRONMENT * ECO-PATROL * BAIKAL ENVIRONMENTAL WAVE * WOODS HOLE RESEARCH CENTER * BURYAT REGIONAL UNION FOR BAIKAL * AMUR SOCIO-ECOLOGICAL UNION * KHABAROVSK ASSOCIATION OF INDIGENOUS PEOPLES OF THE NORTH * ECODAL * CENTER FOR ENVIRONMENTAL EDUCATION "EYGE" * TAIGA RESEARCH AND PROTECTION ASSOCIATION

August 15, 2002

Julian Barnes
External Affairs Manager
Sakhalin Energy Investment Company Limited
35 Dzerzhinskogo Street
Yuzhno-Sakhalinsk 693000
Russia

VIA E-MAIL

Dear Julian:

This letter is in response to your request for comments from our organizations to the Sakhalin Energy Investment Company's "Western Gray Whale Protection Plan: A Framework for Monitoring and Mitigation Measures Related to Sakhalin Energy Oil and Gas Operations on the Northeast Coast of Sakhalin Island, Russia," dated March 2002.

We would like to first point out that our organizations were not provided with adequate forewarning about a public comment period supposedly established by your company that is currently supposed to end on August 16, 2002. When the plan was originally posted on the Sakhalin Energy website, the plan was depicted as having already been "approved" by the company and we were not informed of or given adequate advance warning of a specific public comment period. Now the Company has established a public comment period during a time of year when, as is traditionally well known, many specialists are in the field conducting summer research activities and thus are not available to comment on the plan.

Furthermore, despite your comment that advertisements were taken out in local newspapers of Sakhalin Island in order to alert interested citizens about the availability of the plan and the opportunity to provide comments, two leading NGOs on Sakhalin were unable to find advertisements about the whale plan in the major newspapers until the very end of July. We also note that while the plan has been available to the public on the internet since early June, no posting on the website has alerted interested citizens about a public review process or alerted them to the fact that August 16 would be the closing date for public comments. As such, we must question Sakhalin Energy's intentions in suddenly announcing a public comment period that ends on August 16. These practices continue to further erode public confidence in Sakhalin, in Russia, and internationally in Sakhalin Energy's ability to work with the public and take public concerns into consideration and in Sakhalin Energy's willingness to meet international standards in areas of public accountability.

Therefore, we provide these initial comments to you in order to ensure that you understand some of the critical weaknesses in the process and substance of the Western Gray Whale Protection Plan that we identified to date. Simultaneously, we will also further study the plan and provide you with additional comments based on further review. We hope that this correspondence will be the start of a constructive dialogue to improve Sakhalin Energy's whale protection activities and reduce Sakhalin Energy's impacts on this critically endangered population of Gray Whales.

Initial review of the Western Gray Whale Protection Plan has illuminated a number of serious deficiencies in both the process and the substance of the plan. As such, we believe that Sakhalin Energy Investment Company should take significant steps to revise and update this document to address these concerns before it can be considered an effective plan. These concerns include:

- Lack of public review of the Plan prior to its adoption by the Company, relevant Russian government agencies, and lenders.

Prior to approval by Sakhalin Energy, Russian government agencies, and lenders, the plan should have been vetted through a thorough public review and comment process, as would be required with similar Habitat Conservation Plans in other parts of the world. Sakhalin Energy has been in the process of developing this Plan for quite some time and had ample opportunity to provide drafts of the plan to the public for review. Unfortunately, the Company instead chose to limit public access to the Plan until it had already been approved, in spite of the Company's stated desire to improve its sharing of information. Furthermore, Sakhalin Energy should provide an administrative record for its plan that fully shows the comments provided to the plan and Sakhalin Energy's response to these comments, as would be required for similar Habitat Conservation Plans elsewhere. Sakhalin Energy has indicated its preference that comments to the plan be kept confidential. However, since the plan is a decision document approved by public agencies on a government- supported project that impacts an internationally recognized endangered species, the process be credible unless the draft plan, the comments to the plan, and the response to those comments are vetted in the light of day. We also note that the Company has not carried out any public hearings on the Gray Whale Plan, which we believe would be essential for the Company to develop a fully vetted and effective conservation plan.

- Lack of independent scientific review of the data and scientific research results used in development of the Plan.

The consultants that developed Sakhalin Energy's whale conservation plan represent LGL, a company that is financially interested in contracts from oil companies for whale research offshore of Sakhalin and is currently under contract to Exxon Neftegas Limited. LGL's financial interest in additional contracts makes independent scientific review of its work, as well as of all the scientific research and data used in preparation of the plan, even more important. Without such independent scientific peer review, the plan and its data cannot be considered to have credibility. There is a clear need for independent scientific review of the plan in order to demonstrate that the results and conclusions are unbiased. Even organizations like the Marine Mammal Council, a scientific NGO that unites a number of marine mammal specialists in the countries of the former Soviet Union and an NGO that has focused scientific attention on the Western Pacific Gray whale, was not informed about the review.

- Lack of public access to the scientific research used in development of the Plan.

Similarly, public organizations have been unable to review the scientific research that was used to develop the Plan. In order for the Plan to have credibility, all whale research conducted by oil companies working off the northeastern Sakhalin shelf and by other researchers should be made available to the public. There must be full public access to the information used in development of the plan in order to demonstrate the validity of the plan's information.

- Inaccurate representation of scientific data as a result of financial pressure by the Company on scientists involved in whale research.

It has been reported that the Company has stifled scientific debate on Western Pacific Gray Whale research and conservation by filtering research results and excluding scientific data from the research. In an April 2001 expose in the New Times, a lead scientist was quoted saying he has become "increasingly suspicious that the oil companies are controlling research to prevent the scientists from developing solid conclusions that can be used to develop a mitigation plan to protect the whales" and that the companies are "working to sabotage the research project by censoring preliminary reports, cutting funding and severing crucial noise research from whale-behavior research." A conservation plan based on censored and filtered research - which does not include full data - cannot be considered adequate or reliable.

- Lack of information about mitigating adverse effects.

The Plan does not contain any elements of adaptive management. Indeed, nothing is said about how Sakhalin Energy will adapt its practices based on the results of whale monitoring in order to mitigate adverse effects to the Western Pacific Gray Whale population. As such, in its present form, the plan can hardly be called a "Whale Protection Plan."

- Lack of review of potential and likely impacts to Gray Whales from the expansion of the Sakhalin-II project to Phase II.

The Plan only discusses existing and potential impacts from the Sakhalin-II project during Phase I. The fact that Sakhalin Energy is only finalizing its whale protection plan - which was required under its initial financing agreements with public financial institutions including European Bank for Reconstruction and Development, Overseas Private Investment Corporation, and Japan Bank for International Cooperation - at the end of its Phase I operations calls the very usefulness of this plan into question and raises questions about reasons for such a delayed preparation of the plan. Sakhalin Energy is currently involved in significant work to develop plans for Phase II of its project, which is likely to greatly increase impacts to critically endangered Gray Whales as a result of additional noise and disruption of habitat from construction of an additional platform, construction of offshore-to-onshore pipelines, and potentially seabed disruption. As a result, the Plan is already outdated and needs to be significantly revised to address impacts from Phase II of Sakhalin Energy's operations before it can be considered adequate. In fact, by treating the two phases of one project separately, the necessary environmental impacts cannot be adequately determined and leads to a flawed assessment.

- Lack of review of cumulative impacts to Gray Whales from the development of multiple oil and gas development projects in the area, including but not limited to Sakhalin-I.

While the Plan acknowledges potential cumulative impacts from the development of multiple oil development projects on the northeastern Sakhalin shelf, it does not address these potential cumulative impacts in any detail. Yet activities by the Sakhalin-1 consortium, including seismic testing by Exxon Neftegas Limited in 2001, have already had impacts on gray whales and are likely to have significant impacts in the future. British Petroleum is currently conducting seismic testing to the north of gray whale habitat for the Sakhalin-V project, which may also have significant impacts on gray whale protection. Taken together, the cumulative impacts of simultaneous expansion of the Sakhalin-I and Sakhalin-II projects, as well as development of other projects, may lead to irreversible impacts to the whale population. A conservation plan can only be considered adequate if it addresses these significant cumulative impacts. Meanwhile, there has been inadequate analysis of potential cumulative impacts from oil development projects to the larger food chain and habitat that support the Western Pacific Gray Whale.

- Lack of review of creation of a whale reserve (zakaznik) in the area.

Several leading scientists and environmental organizations have recommended the creation of a whale reserve to protect the feeding habitat of Western Pacific Gray Whale from anthropogenic influences. Although creation of a whale sanctuary was recommended in the initial government environmental impact review that permitted the operations of the Sakhalin-II Project, Sakhalin Energy Investment Company has taken no steps to review or encourage creation of such a reserve. Indeed, recent public statements by Company representatives suggest that Sakhalin Energy is opposed to creation of such a reserve despite the fact that such a reserve would likely increase chances for survival of the population. The Plan does not address the whale reserve or the arguments for or against creation of a reserve, which seems to be a significant omission, especially insofar as it was originally recommended through the Sakhalin-II state environmental impact review.

- Need for coordinated scientific research on Western Pacific Gray Whales.

We are concerned about your recent message indicating that due to the fact that Drs. Weller and Burdin did bid on Sakhalin Energy research contracts, you may choose to duplicate his team's research despite the fact that Drs. Weller and Burdin are continuing this research. We agree with Dr. Brownell's e-mail to you and copied to some of us that it is important to have coordinated research programs that do not duplicate each other in order to minimize impacts to the whales while we also see a clear need for expanded scientific research on the Western Pacific Gray Whale population and potential anthropogenic impacts to them. We also note that research by Drs. Weller and Burdin has been a coordinated U.S.-Russia effort since 1995. If certain researchers are not willing to work with Sakhalin Energy, this fact may reflect on the unreasonable research confidentiality and data distribution conditions that Sakhalin Energy imposes on its research.

Once again, we would like to indicate that these are not complete comments to Sakhalin Energy's Western Gray Whale Protection Plan and we do not believe that an August 16 deadline for public comments or realistic or possible given that many specialists are currently in the field. We will continue to study the plan and provide you with further comments.

However, based on the comments in this letter, we believe that Sakhalin Energy's Western Gray Whale Protection Plan is currently unacceptable in its current form and requires significant revision and improvement before it can truly meet its mandate to reduce the possibility that Sakhalin Energy's activities cause harm to the Western Pacific Gray Whale population. In its current form, the plan is not at all analogous to a Habitat Conservation Plan as was originally planned.

We hope that these comments will serve as the basis for a constructive dialogue to improve the Sakhalin Energy Western Gray Whale Protection Plan and to ensure that Sakhalin Energy's activities do not harm or prevent the recovery of this critically endangered whale population.

Sincerely,

Dmitry V. Lisitsyn
Chairman, Sakhalin Environment Watch

Sergey S. Makeev
Chairman, Fund for Wild Nature of Sakhalin

David K. Gordon
Associate Director, Pacific Environment

Dr. Maria Vorontsova, Ph.D.
Country Director, International Fund for Animal Welfare - Russia

Dr. Vassily A. Spiridonov
Marine Programme coordinator, WWF Russia

Ekaterina Grechushkina
Associate Director, Legal Center "Rodnik"

Lee Yu-Jin
International Programs Coordinator, Green Korea United

Naomi Kanzaki
Friends of the Earth-Japan

Anton V. Semenov
Coordinator, Living Seas Coalition

Aleksei Yaroschenko
Greenpeace-Russia

Mikhail Karpachevsky
Biodiversity Conservation Center

Varvara V. Litovka
Kaira Club

Olga A. Chernyagina
Kamchatka League of Independent Experts

Boris Nekrasov
Siberian Environmental Alliance

Irina Mikhailidi
Fund for Altai - 21st Century

Elvira Grischenko
Magadan Center for the Environment

Galina Stetskaya
Eco-Patrol

Viktor Kuznetsov
Baikal Environmental Wave

Elena Antonova
Woods Hole Research Center

Sergey G. Shapkhaev
Buryat Regional Union for Baikal

Svetlana I. Titova
Amur Socio-Ecological Union

Yuri Darman
Far Eastern Office of WWF-Russia

Galina M. Volkova
Khabarovsk Association of Indigenous Peoples of the North

Irina B. Bogdan
Ecodal

Aitalina P. Efimova
Center for Environmental Education "Eyge"

Tatiana O. Yanitskaya
Biodiversity Conservation Center

Aleksandr N. Arbachakov
Taiga Research and Protection Association


Cc: European Bank for Reconstruction and Development
Overseas Private Investment Corporation
Japan Bank for International Cooperation
Distribution


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