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Environmental Finance: Russia mounts legal challenge to Sakhalin II

London, 10 August: The Russian government has said it will take legal action to halt the construction of oil and gas infrastructure on the island of Sakhalin, citing environmental concerns.

Sakhalin II is the second major oil and gas project to be built on the Pacific island by Sakhalin Energy, a consortium headed by Shell. Environmental groups object to it on the grounds that it threatens the survival of the Western Gray Whale and the local wild salmon population, which spawn in its network of rivers.

The Ministry of Natural Resources has decided to sue Sakhalin Energy over poor engineering, which it claims has led to landslides, according to local NGOs. Although this will not have an immediate effect, the courts could order a complete shutdown.

Dmitry Lisitsyn, chair of Sakhalin Environment Watch, said: “For several years we have independently documented the same kinds of pipeline design flaws and construction failures which will cause dangerous landslides and erosion damage to Sakhalin’s wild salmon spawning rivers. This is no small matter since the pipeline cuts across 800 kilometres of land and over 1,100 watercourses that support the island’s fishing economy.”

Igor Chestin, from WWF Russia, said that there is a good chance that the government will succeed in its legal challenge because of flaws in the Environmental Impact Assessment that was carried out before work on the project was allowed to begin.

WWF Russia claims that Sakhalin Energy failed to take all risks into account in its assessment. In particular, the document did not fully address river bank protection, because it did not take into account how the rivers migrate during the year – sometimes as much as 500 metres – scuppering efforts to control erosion.

“The Russian government can easily play this card any time and it means [the project is] very vulnerable,” Chestin argued.

Some NGOs speculate that the Russian government is not acting out of concern for the environment, but hopes to use this “weak point” to lever Russian gas giant Gazprom into the consortium, or to take over the entire operation.

Chestin said: “I think that it’s very possible that is the driving reason, but the tools which were used were environmental.”

Lisitsyn argues that environmental groups can use this to prevent the construction of some of the most dangerous stretches of pipeline through forested areas. “We are very happy as a local people that this power game has happened now because definitely it will help us to prevent a disaster.”

But the status of this legal challenge is mired in confusion. Shell says that the decision seems to be at odds with the position of other agencies within the Ministry, and says it has not seen any official documentation.

A Shell spokesman said: “Project construction is continuing and good progress is being made. Recommendations made by the Ministry in 2003 have been taken on board and progress has been regularly reported to the Ministry.”

Calls to the Russian Ministry of Natural Resources for comment were not returned as of press time.

 

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