December 28, 2004

Mr. Jean Lemierre, President
European Bank for Reconstruction and Development

Kyosuke Shinozawa, Governor
Japan Bank for International Cooperation

Philip Merrill, President and Chairman
Export-Import Bank of the U.S.

Richard Webster, Chief Executive Officer
Export Credit Guarantee Department, UK

Dear Sirs,

The Fifth Congress of the Indigenous Peoples of the North of Sakhalin Region took place in Yuzhno-Sakhalinsk - in 29 of October, 2004. Delegates of the Congress discussed and analyzed complicated issues related to the influence of the oil and gas fields on the native environment and traditional land-use and life style of the Sakhalin indigenous peoples. The delegates determined that in the process of oil and gas development ecological and socio-economic problems arise between indigenous peoples and the oil companies, including "Sakhalin Energy Investment Company Ltd", which is seeking hundreds of millions USD of public money from your banks for Sakhalin-II Phase-2 oil and gas project.

Delegates of the Congress declared that Sakhalin-II project has started to cause many problems to indigenous peoples (including damage to fish resources) since 1998 when Molikpaq platform has been installed. In spite of this, "Sakhalin Energy" and it's shareholders (Royal Dutch/Shell Group, Mitsui and Mitsubishi) did not pay an appropriate compensation directly to Indigenous Peoples' communities. Charitable financial help from "Sakhalin Energy" was provided by not enough volume (around $330,000 for 10 years) during all 10-years Sakhalin-II project history. Sakhalin-II project is developing very fast now. We are afraid that construction activities under the project will be a reason of fish stocks reducing through pipeline trench crossing of the salmon spawning rivers, will cut down reindeer pastures and the number of forest animals through building of onshore pipelines, and will pollute our environment.

We take note that the harm done to the animal and plant world in traditional land-use areas takes a direct toll on the vital activities of indigenous peoples. Nevertheless the damage inflicted on the traditional land-use of indigenous peoples, living a life style such as the indigenous, are not taken into account and aren't apparent to the management of the "Sakhalin Energy".

In connection with this, we, the delegates of the Fifth Congress, representing the Indigenous Minority Peoples of the North of Sakhalin Region, have declared that establishment of oil projects on Sakhalin, including Sakhalin-II project, has not yielded a modern and civilized approach towards the protection of traditional indigenous natural resources, and even aggravates further the indigenous peoples' difficult living conditions.

In the developing situation, the Fifth Congress of the Indigenous Peoples of the North of Sakhalin Region has decided to start a protest against Sakhalin-II project by blockage of key project roads and pipeline construction routs. Special steering committee of representatives of Sakhalin Indigenous Peoples for leadership in the protest has been created. The protest steering committee has decide to start the blockage since 20th of January, 2005.

The Sakhalin Indigenous Peoples have only demand to conduct an Independent Ethnological Expert Review in order to estimate the past, current and future impact of the Sakhalin-II project on the environment and traditional use of natural resources of the Sakhalin Indigenous Peoples.

We do not trust the Environment, Social and Health Impact Assessment which has been done by "Sakhalin Energy" with regard to Indigenous Peoples' issues. The Independent Ethnological Expert Review must be done completely independently. For that we propose following approach - the right to choose the independent experts or expert organization should belong to Indigenous Peoples' communities or to their representatives. "Sakhalin Energy" should pay for the ethnological expert review. Just this approach can give an appropriate method to determine all needed prevention and compensation measures, including changes of the project design.

We have tried to make a dialogue with oil companies to find a decision of all problems. We have proposed them to sign an agreement regarding conducting of the Independent Ethnological Expert Review. For this, we have organized a big meeting on 15 of December with participation of all oil companies operating on the Sakhalin Island. Just Russian state own company "Rosneft" was represented by CEO Ramil Valitov. "Sakhalin Energy", as other foreign oil companies, have sent just PR-staff to this meeting, who do not have any authority to solve the problem. This shows a disrespect for Indigenous Peoples of Sakhalin from "Sakhalin Energy' and it's shareholders like Shell, Mitsui and Mitsubishi.

We don't have any other possibility to defend our environment, natural resources and traditional life style except the long term blockage of project construction activity.

We, representatives of Sakhalin Indigenous Peoples' organizations, is asking you, presidents of main credit banks and potential lenders for Sakhalin-II project, to help us to solve this conflict! For that, we are asking all of you to dispatch representatives of your banks to Sakhalin at the time of the protest - since January 20, 2005. Your representatives could be mediators between "Sakhalin Energy" and Sakhalin Indigenous Peoples. We are sure that this mediation can play a key role in reaching a settlement on the conflict.

Also please be aware that the presence of your representatives on Sakhalin during the protest can prevent potential illegal pressure on the Indigenous Peoples from oil companies and government authorities.

Please, give us your answer regarding our request.


Alexey Limanzo,
President of the Association of Indigenous Peoples of North Sakhalin Region

Vladimir Sangi,
Chair of the Council of Elders, Noglik Society of the Nivkh People Ketnivgun, tribal chief and member of the UN Economic and Social Forum organization International League for Human Rights

Kim Limanzo,
Chairman of the Association of Indigenous Peoples of Nogliki District (Sakhalin Region)

Vladimir Machekhin,
Chairman of the Regional National Cultural Autonomy "Evenki of Sakhalin Region"