to JBIC and EBRD: "Financing for Phase 2 construction of
Sakhalin II Oil and Gas Development Project"
December 15, 2003
Mr. Jean Lemierre, President
European Bank for Reconstruction and Development
Mr. Kyosuke Shinozawa, Governor
Japan Bank for International Cooperation
Re: Financing for Phase 2 construction of Sakhalin II Oil and Gas Development Project
We understand that your institutions are now conducting environmental
assessments for loans to the Sakhalin II oil and natural gas development
project (hereinafter Sakhalin II). We believe that environmental and
social considerations by the Sakhalin Energy Investment Company (SEIC),
the lead entity in the project, are seriously inadequate. In this
statement of opinion we summarize the present problems, including
the results of meetings in Tokyo and Sapporo between SEIC and Japanese
parties in late September, and describe some measures needed to remedy
the situation before any decision on financing is made (please see
Appendix 1for details).
Normally, environmental and social considerations and protection
measures should be given equal priority to the economic and financial
aspects of a project, and the project should be developed after discussions
with stakeholders under conditions of proper information disclosure,
right from the early stages of planning. SEIC has left these "on the
back burner" in the case of Sakhalin II, however. While the project
itself is moving forward rapidly, there has been no progress with
the necessary information disclosure, consultations with stakeholders,
and establishment of environmental measures.
Moreover, we are forced to question the very character of SEIC itself,
based on our dealings with it so far. The performance of SEIC has
served only to undermine any trust that may have existed. For example,
(1) it appears that SEIC documentation may contain data that has been
manipulated only to support its environmental assessment report and
justify the project; (2) SEIC has failed to provide supplementary
explanations about the incomplete environmental and social impact
assessments and delay in establishing measures for the whole ecosystem;
(3) despite promises made, SEIC has ignored requests by Japanese citizens
for information regarding the project and consultations; and (4) SEIC
has rejected requests to permit audio recording of meetings for the
sake of keeping an accurate record.
We believe that SEIC has not behaved in a manner suitable for an entity that is to receive financing from public funds. We are highly concerned about the potential that the project will cause serious and irreparable damage to natural and human environments, including destructive impacts on endangered wildlife and marine resources, leading to impacts on human livelihoods.
The responsibility for impacts of a project lie not only with the project entity, but also with the financing institutions that support the project. We urge you not to end your environmental assessments of the project and or make any decision in favor of financing the project under the current circumstances of SEIC's inadequate environmental and social consideration. Moreover, we request that you as financing institutions make efforts to ensure that the appropriate measures for environment and social consideration are established and implemented, based on proper processes.
A number of environmental issues have been raised since the first phase of the project. SEIC has not yet resolved most of them. The second phase of the project will likely add environmental risks to the unresolved issues. We urge you again not to make any decision regarding financing for the project as things stand. As organizations that have closely followed the Sakhalin oil and gas developments for years, and aiming to ensure that all development is socially and environmentally sound and sustainable, we appreciate your consideration of our concerns. We would be happy to provide you more information or cooperate in any way necessary to achieve those aims.
Friends of the Earth Japan
3-17-24-201 Mejiro, Toshima-ku,
＞APPENDIX 1, OUR CONCERNS AND SEIC'S RESPONSES
＞APPENDIX 2, LIST OF ENDORSEMENT