Monday 22 May 2006

As a result WWF believes that the European Bank of Reconstruction and Development (EBRD) should uphold its environmental standards and decline funding of the project.

The independent assessors report sets out numerous breaches of environmental standards set by the EBRD. These breaches happened during the construction of the pipelines at river crossings. In some instances the report shows that there were up to ten breaches of environmental standards during a single river crossing.

Robert Napier, WWF Chief Executive, said: "Two years ago WWF proved to the EBRD that Shell was breaching its environmental standards on river crossings during construction. Unfortunately, even though Shell promised to tighten the process up, these documents prove yet again that Shell continues to break standards. It is time to call it a day. The EBRD should protect its own reputation and decline funding to the Sakhalin project."

Disturbingly the version of the same report published on the project's website differs, showing the work in a more favourable light. The report covers the period from December 2005 to April 2006. Co-incidentally this is the same period of time as the EBRD's public consultation on whether they should fund the project. Shell's sustainability report published last week claims that the company had reported "in full" on the river crossings and their potential impact on salmon - this is not the case.

"If EBRD have not seen this report they must question whether they can trust their potential client. James Leaton, WWF Oil and Gas expert, said: "EBRD has made it clear that improved river crossings are an essential benchmark to getting finance. Shell's ongoing problems have now been exposed and it is clear that they have not met the EBRD's benchmark".

Equator Principles signatories such as ABN Amro and the Royal Bank of Scotland are currently considering the project and should be equally concerned over the lack of progress on the project which is now 70 per cent completed. Banks that have signed up to the Equator Principles have signed up to only funding projects that are environmentally sound.

In addition to the impacts on salmon from river crossings there is real concern that the oil operation will be detrimental to the critically endangered western gray whales. Earlier this month the Director General of the IUCN wrote to Sakhalin Energy expressing concerns that the company was not heeding independent whale scientists' advice on this issue. He called on the company to rectify the inaccurate impression the company gave in saying that they had been given the green light by the whale panel to go ahead with off shore construction this summer.