Sakhalin II (Phase 2) Compliance Review
Assessment Against ECGD Policies on Project Acceptability

The Anglo-Dutch petrochemical multinational Shell has applied to Britain's Export Credits Guarantees Department (ECGD) for financial support to develop two oil and gas fields (Piltun-Astokhskoye and Lunskoye) off Sakhalin Island in Russia's Far East.

The project, which has already been substantially constructed, threatens the critically endangered Pacific Gray Whale, salmon fisheries, internationally-important wetlands and migratory bird habitats. Local communities have been adversely affected without having been consulted or provided with adequate compensation.

The Corner House, in this submission to the ECGD undertaken with Friends of the Earth (England, Wales and Northern Ireland) and WWF-UK, assessed the Sakhalin II (Phase 2) oil and gas project against the ECGD's stated policies on project acceptability.

The submission concludes that the project breaches several international guidelines and that ECGD support would conflict with the UK's sustainable development commitments and with a range of international environmental obligations.

The ECGD has argued that its involvement would improve the project. The submission points out that this claim lacks credibility because of the extent to which the project has already been implemented. Any ECGD involvement would require ECGD to derogate on its key environmental policies, putting its reputation at considerable risk and with very little prospect of improving the project.

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