Japanese Banks Blasted for Investment Plans in Environmentally Unsound Oil and Gas Project in Russia
For Immediate Release: June 11th, 2008
Contact:
Naomi Kanzaki / Eri Watanabe, Friends of the Earth Japan +81 3 6907 7217, watanabe@foejapan.org
Dmitry Lisitsyn, Sakhalin Environment Watch, +7 4242 74 75 18 sakhalinwatch@yandex.ru
Doug Norlen, Pacific Environment, +1 202 465 1650 dnorlen@pacificenvironment.org
Tokyo - Seventeen environmental organizations today sent a letter assailing the Japan Bank for International Cooperation (JBIC) and four private banks’ reported plan to provide approximately 5.3 billion dollars in financing for the problematic Sakhalin II oil and gas project in the Russian Far East.[1] The groups are asking JBIC to refuse all funding to the Sakhalin II project. Sakhalin II’s environmental damage violates the banks' funding requirements and should be deemed ineligible for loans, according to the letter.
“Sakhalin II has consistently committed severe violations of JBIC and private bank environmental and social policies. Financing of Sakhalin II will damage these bank’s environmental credibility and expose them to increased reputational and financial risks,” said Eri Watanabe, FoE Japan.
The environmental groups’ fourteen page letter cites a litany of examples of violations of bank policies, internationally accepted practice and Russian law that has been documented over several years by a diverse array of professional experts appointed by Sakhalin Energy, public and private banks, international and Russian scientific institutions, and Russian government authorities.
“The broad range of experts that have documented environmental damage and policy violations represent a growing consensus that Sakhalin II is an environmental and social failure,” said Dmitry Lisitsyn, Chairman of the Sakhalin Island-based Sakhalin Environment Watch.
The environmental groups’ letter also stresses that financing by JBIC and other banks for Sakhalin II will be in conflict with decisions against financing by the international banking community:
“Sakhalin II never achieved environmental clearances from the European Bank for Reconstruction and Development, UK Export Credit Guarantee Department and the US Export-Import Bank. The project’s fundamental environmental and social shortcomings contributed to the ultimate unwillingness of these public banks to finance the project.”(from the letter)
JBIC, which is the Japanese government’s official export credit agency, reportedly will lead a syndicate of banks to provide possible financing for Sakhalin II this month, including the Bank of Tokyo-Mitsubishi, Mizuho Corporate Bank, Sumitomo Mitsui Banking Corp., and French bank BNP Paribas.
“Financing under such conditions undercuts the international banking community’s efforts to maintain minimal environmental and social policies of public and private banks world-wide,” said Doug Norlen, Policy Director, Pacific Environment.
The letter also presents the results of environmental groups’ fact-finding mission on the pipeline route that concluded in early June.
“The extensive and ongoing environmental damage that we documented is the result of poor project design and implementation that has also led to over a year’s delay in completion of the project,” said Lisitsyn.
Notes:
[1] Sakhalin II is operated by Sakhalin Energy Investment Company, Ltd, which is comprised of Gazprom, Royal Dutch Shell, Mitsubishi and Mitsui.