STAKEHOLDER CONSULTATION          53

         SAKHALIN ENERGY INVESTMENT COMPANY:
         A PARTICIPATORY PROCESS FOR THE SAKHALIN
         INDIGENOUS MINORITIES DEVELOPMENT PLAN

Sakhalin II is an integrated oil and gas offshore and onshore devel-
opment project for the recovery, processing, and export of oil and
gas from offshore oil fields on and around Sakhalin Island, in the
Far East of the Russian Federation. There are approximately 3,500
indigenous people on the island, in four groups; the Nivkhi, Uilta,
Evenki, and Nanai. Some are directly affected, some indirectly
affected, and others not affected at all by the project. The compa-
ny, Sakhalin Energy Investment Company – SEIC, undertook the
development of a Sustainable Indigenous Minorities Development
Plan (SMDP), in order to comply with policy requirements of poten-
tial lenders, and to improve relationships with indigenous people
on the island following protests against all of the oil and gas oper-
ators on Sakhalin. The SIMDP had two broad objectives: to miti-
gate the impacts of the project on indigenous peoples and to
provide a framework for the delivery of socio-economic benefits to
the indigenous communities.

The Consultation Process
As relations between the indigenous peoples and all oil and gas
companies on Sakhalin Island had not been optimal, it was decid-
ed to be as participatory as possible in developing the plan, so as
to allow communities a greater degree of ownership. This entailed
ensuring that the process not only involved Sakhalin minority com-
munity leaders, but also ordinary community members who would
not otherwise have had an opportunity to interact with the compa-
ny and/or authorities.

The first round of consultations focused on ascertaining priorities
for benefits-sharing components, and were also used to gather
input for mitigation planning. The process, which engaged commu-
nity leaders and members of the indigenous communities who
were directly affected by the project, involved nearly 200 people,
or more than 5 percent of the entire indigenous population of the
island. Information about the process was disseminated through
formal channels, such as the company’s community liaison officers,
as well as informally through the network of clans. The indigenous
54   STAKEHOLDER ENGAGEMENT: PART ONE




                  SAKHALIN ENERGY INVESTMENT COMPANY
                  continued



     communities on the island were not homogenous. Different clans
     had differing views and interests due to their differences in loca-
     tions, occupations, and family ties. Consultations were also held
     with indigenous peoples and other stakeholders, including Oblast
     officials, other oil company operators, non-governmental organiza-
     tions, and social development and indigenous experts.

     A Working Group of company staff and consultants, Oblast repre-
     sentatives, and Sakhalin Indigenous Minorities Peoples Council
     members was formed to provide guidance and feedback to the
     company team preparing this plan. Working Group Committees
     composed of Oblast, indigenous, and civil society representatives
     as well as company staff/consultants were also set up to advise on
     appropriate mitigation measures, indigenous peoples’ develop-
     ment projects, and other forms of benefits sharing.

     A second round of consultations was held in the early autumn of
     2005 to report back to stakeholders with a tentative outline of the
     project components selected. This was followed up by a third
     round of consultations which lasted three months and had the
     objective of assessing the proposed mitigation measures and
     social program benefits that had been developed based on previ-
     ous rounds of consultations. The process was then expanded to
     include areas not directly affected by the project but included in
     the benefits-sharing as part of a strategy of inclusion of all Sakhalin
     indigenous peoples.

     Making Consultation Accessible
     As the majority of the consultations took place in the winter
     months, special attention needed to be made to ensure that more
     vulnerable community members, such as the “babushkas” (grand-
     mothers) could attend. Special transportation was arranged when
     necessary, or younger members of the community accompanied
     the more elderly. As central a location as possible was chosen and
     the meetings were timed to coincide with the end of the fishing
     day. Food and beverages were served as they comprise an essen-