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environmental-finance.com: RBS pressured over ABN’s Sakhalin loan

London, 17 January: The Royal Bank of Scotland (RBS) has been urged to withdraw a loan that was used to finance Gazprom’s purchase of a majority share in the controversial Sakhalin II oil and gas project.

Nineteen environmental campaign groups and NGOs have written to Fred Goodwin, chief executive of the bank, asking him to rescind the loan, which was made by ABN Amro before it was acquired by a consortium of banks led by RBS (see ABN Amro slammed for $1 billion Sakhalin deal).

They argue that the project – on the Russian island of Sakhalin – endangers the survival of the rare Western Grey Whale, while work inland damages wild salmon runs. They say the project breaches the Equator Principles, which set sustainability criteria for project finance deals by private banks.

According to the letter, on 20 December last year the Russian environment agency Rosprirodnadzor also calculated damage to forestry resources on the island at 390 million roubles ($15.9 million).

Dmitry Lisitsyn, chairman of local pressure group Sakhalin Environment Watch, said: “When RBS bought ABN Amro, it acquired the bank’s assets and liabilities, including financial and reputational, and thus the responsibility to address the wrongful financing of Sakhalin.”

Before RBS bought ABN Amro, the Dutch bank was already under pressure from environmental groups over its decision to provide the loan to Gazprom.

“At the 2005 ABN Amro annual meeting, [then] chief executive officer Rijkman Groenink committed not to finance Sakhalin II until it was brought into compliance with the Equator Principles. So it came as a complete shock when the bank circumvented the principles by financing Sakhalin through one of the project sponsors. RBS must now take responsibility to correct this damage,” said Netherlands-based Paul de Clerck of Friends of the Earth International.

Doug Norlen, policy director of Pacific Environment, added: “The buck now stops at RBS.”

Other NGOs that signed the letter were: BankTrack, the Berne Declaration, Campagna per la Riforma della Banda Mondiale, CCE Bankwatch Network, Friends of the Earth Europe, Japan and France, International Fund for Animal Welfare, The Corner House, Platform, Proyecto Gato, Rainforest Action Network, Urgewald, WWF UK, WWF Germany and Both ENDS.

The letter calls for a meeting with Goodwin to discuss the issue. RBS did not respond to requests for comment before press time.
 
Updated 17 January 2008
 
http://www.environmental-finance.com/onlinews/1701rbs.html

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