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Following Shell’s announcement that its Sakhalin II project would cost $20 billion – twice the original estimate – BankTrack on July 19, 2005 sent letters to 25 banks, calling on them not to finance the project. This is the third letter that BankTrack has sent to financial institutions raising environmental and social concerns about Sakhalin II.
Shell’s announcement comes at a time when the company is seeking a financing package for Sakhalin II. In April 2005, BankTrack sent dozens of letters to financial institutions, inquiring about their involvement in the project. Although many banks did not reply, several, including HVB and Rabobank, stated or implied that they were not involved.
BankTrack also prepared a bank briefing outlining the environmental, social and operational risks associated with the project. outlining the environmental, social and operational risks associated with the project, and documenting how Sakhalin II violates the Equator Principles (EPs) on numerous counts.
For example, Sakhalin II violates the Equator Principles’ Critical Natural Habitats policy, which prohibits the significant degradation of critical natural habitats; and it also violates the Indigenous Peoples policy, which requires projects to achieve the informed participation of indigenous peoples and to create of a Indigenous Peoples plan to avoid negative social impacts.