19 September 2008
The European Bank for Reconstruction and Development (EBRD) has approved a US$50 million loan for expansion of oil and gas extraction operations in the Timan-Pechora basin of the northern Komi Republic in Russia. Various civil society groups have raised concerns of the major project's implications for the environment and the indigenous Komi-Izhemts people's rights.
On September 9, 2008, the Board of Directors of the European Bank for Reconstruction and Development (EBRD) approved a project for further exploitation of the Luzskoye oil field in the Timan-Pechora basin, in the Komi Republic, the Russian Federation. The Luzskoye (Luzsk) Field is located between the towns of Izhma and Pechora, just west of the Ural Mountains.
This sub-arctic region is the site of substantial hydrocarbon and mining development, with oil fields a dominant feature in the Timan-Pechora basin. The Komi region however is also home to the Virgin Komi Forests, a UNESCO World Heritage site since 1995, and the largest of its kind in Europe. In addition to environmental concerns, civil society groups are also worried about the various extractive industry impacts on the indigenous peoples of the region.
The recent EBRD approval of a loan of up to US$50 million for the project will include major exploration activities, supposedly utilizing existing roads. The latest in a long string of international finance institutions (IFI)-funded mining and other extractive projects in the region, the Pechora Energy project comes at the heel of other high-profile commitments such as the 2004 joint International Finance Corporation (IFC) and EBRD expansion of the Middle Timan Bauxite Mine, with a US$150 million approval in funding in 2007.
EBRD’s Environmental and Social Policy, adopted in May of 2008, calls for financing only “socially and environmentally sustainable projects” and “respecting the rights of affected workers and communities.” Specifically in regard to indigenous peoples, EBRD’s policy states the need for such measure as free, prior consent from the local population and carrying out “corrective actions” to ensure compliance with EBRD policy. EBRD’s adherence to these standards is essential in order to preserve the Komi-Izhemts’ culture and land rights and to ensure environmentally-responsible actions that are so essential to these people’s traditional livelihoods of reindeer herding and fishing.
Civil society groups have raised major concerns about the joint IFC/EBRD project at Middle Timan, specifically regarding potential adverse impacts on the indigenous population of the Komi Republic, as well as the environment. Since the Middle Timan project was approved before IFC and EBRD adopted requirements for extractive industry clients to disclose their payments to the government, these payments will like remain undisclosed.
Local NGO’s working for environmental protection and indigenous peoples’ rights, such as the Save Pechora Committee and the Russian Association of Indigenous Peoples of the North (RAIPON) have been active in seeking transparency and supporting the rights of the local Komi Izhemts people. The Komi-Izhemts are centered around the town of Izhma, in the middle of the various Timan-Pechora extractive projects. They are in the process of requesting their recognition as a separate, indigenous minority of the region. Even though the governor of Komi Republic Vladimir Torlopov has supported the Komi-Izhemts call for recognition; the ultimate decision however rests with the Russian federal government. Attaining a status of a separate minority group will help the Komi-Izhemts to better articulate their concerns over extractive industry development in their region, and to become a stronger force in confronting private companies as well as the government with their grievances.
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