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Russia’s Lawsuit Against Shell is Consistent With Environmental Groups’ Claims

Environmental groups today welcomed the decision by the Russian Ministry of Natural Resources to sue to halt construction of the Royal Dutch Shell’s Sakhalin-II pipeline. The Russian Ministry of Natural Resources announced on August 3, 2006 that it will sue Shell’s Sakhalin II oil and gas project due to poor engineering that has resulted in land slides that are environmentally harmful and a safety hazard. Several independent environmental organizations have confirmed these findings.

‘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 II wild salmon spawning rivers,’ said Dmitry Lisitsyn, Chairman of the Sakhalin Island-based Sakhalin Environment Watch. ‘This is no small matter since the pipeline cuts across 800 kilometers of land and over 1,100 watercourses that support the island’s fishing economy.’

Photo documentation of design and construction failures include pipeline corridors slicing across landslide-prone slopes; failure to design pipeline crossing of rivers to account for the natural migration of river channels to other locations in floodplains; failed erosion control leading to deep gullies and muddy runoff flowing into previously crystal clear wild salmon spawning rivers. Two recent fact-finding trip photo reports are available at:

http://www.sakhalin.environment.ru/en/detail.php’slice=8b4cb37fba47da1c76cf3e44aa940cd2&sitemid=1913527
http://www.pacificenvironment.org/gallery.php’gal=12

‘Russian environmentalists consider this lawsuit as more proof of Shell’s import of outdated and unsafe technologies into our country. This is unlikely to be a lesson for Shell's management, which lost its credibility in Russia years ago. However, it should be instructive for the banks that concerns raised by environmental groups are becoming reality. This is especially true for the European Bank for Reconstruction and Development, which fortunately for its reputation delayed its financing decision,’ said Igor Chestin, Director, WWF-Russia.

Some observers have speculated that the MNR’s lawsuit is linked to the desire of Gazprom (the government controlled gas company) to strengthen its negotiating position to acquire a share of Sakhalin II. Yet, the fact that independent Russian and international ecologists have documented the same kinds of concerns long before Gazprom’s decision to seek a share of Sakhalin II lends credibility to the Ministry’s claims.

‘Independent ecologists can confirm that our findings are consistent with those of the Russian Ministry of Natural Resources. We have been warning Shell about the dangers of its pipeline construction for years. If anything, the Ministry could expand its lawsuit to include more examples of violations that independent groups have found.’ said Doug Norlen of Pacific Environment.