Relationship of the “Yasavey” Association with oil companies

Vladislav Peskov, President of the Association of Nenets People “Yasavey”

Presentation at Round Table:
“Mastering natural resources in the Nenets Autonomous Okrug -
Indigenous peoples and oil extracting companies -
Perspectives for interaction”
Naryan-Mar, 17 May 2002

1. The situation in the Nenets Autonomous Okrug. Problems and difficulties during negotiations with enterprises and the position of the government authorities of the Nenets Autonomous Okrug. The syndrome known as “you are welcome , but…”

The Nenets Autonomous Okrug occupies the northern part of the Timan-Pechora oil and gas producing province. Reindeer husbandry is practiced in this Okrug and the beginning of the 70s witnessed intensive surveying activities and oil extraction. In the book “Roads to oil”, by Viktor Tolkachev, this period in history is rendered quite vividly. I shall not go into more detail on this matter since, in essence, the participants present at this meeting are not only well informed about this period in history of the Nenets Okrug but are also continuing to pursue these activities.

In my presentation I shall mainly emphasize the existing situation and relationship between the oil companies and the Nenets Okrug, particularly with regard to the population, governmental authorities and the indigenous peoples.

The early 90s witnessed a new phase in the development of the oil branch and the arrival of Lukoil, a large-scale enterprise in the Nenets Autonomous Okrug. This situation left its imprint on all the layers of society within the Okrug. The election campaign in 2002 was a vivid illustration of the contradictions and disagreements existing within society.

It is my belief that a division of opinions occurred among the inhabitants: those for Lukoil on the one hand, and on the other hand those for the Administration. Those abstaining formed the minority.

Those supporting the Administration’s position fear that the oil oligarchs will win the upper hand and feel indignation due to the low salaries given by the oil companies within the Okrug. The presence of small-scale or private oil companies is quite a welcome issue and hope is expressed that in case of a sufficiently large number of companies, the interest of local inhabitants will be taken into consideration.

There are others who agree with the presence of Lukoil and hold out hope that the Okrug will receive further development and life, on the whole, will become better. The arrival of a large-scale enterprise is interpreted as a further step in the development of infrastructure and the availability of many employment opportunities.

Numerous articles are published on these two topics and there are two opposing positions in the local press.

Even the governmental authorities in the Nenets Okrug are divided into two parts. A neutral position is mainly upheld by the Federal structures. The NAO Administration is against the ownership of the oil sources in the Nenets Okrug by the Lukoil company. The main argument is that small-scale enterprises means more taxes in the Okrug, the lack of cooperative prices for oil, etc. Yet no word is mentioned about environmental risks during the acquisition period. Neither is there any mention of the fact that small-scale companies could just disappear after having extracted a certain amount of oil, not to mention that the approach to the acquisition, in the interest of the population, should be comprehensive and systematic, according to the words of Lukoil itself.

Perhaps such a confrontation is inevitable, yet this situation has existed for three years. Objectively speaking, this situation does not permit the Okrug to develop.

Another scenario is already beginning to transpire: that each individual company is planning to build its own pipeline and to lead it up to Usinsk or to its own oil terminal on the coast of the Barents Sea. Should this continue, then the eastern part of the Okrug shall soon be covered with a network of oil pipelines owned by different companies. There are numerous examples of such a practice even in our Okrug… How can one come to an agreement with them, how can one monitor the oil extracting process and the observance of environmental requirements, not to mention the interests of the indigenous peoples and the inhabitants of the Okrug?

This question must definitely be put to the governmental authorities on all levels concerning the elaboration or confirmation of the Federal program on the acquisition of the Timan-Pechorsk province. It is no secret that drafts for such a program have already been made but a solution does not yet exist…

In other regions, for example those of our neighbors – the Yamal-Nenets and Khanty-Mansi autonomous okrugs, conflicts of this type do not exist. I am well acquainted with and have visited Yamal on numerous occasions during these three years and can tell you that there is indisputably something to be learned from them. This refers to not only the inter-relationships with large-scale enterprises (Gasprom, one of the largest giants in the gas industry, is located in Yamal) but also to the attitude towards the inhabitants. Without a doubt there are many problems and conflictful situations. The difference is that they find a solution or at least make an attempt to do so. It is a well-known fact that the arrival of the oil or gas workers into the region does not only lead to problems, but at the same time also to an amelioration of the social and economic situation. At this point I should like to quote the words spoken by Sergey N. Kharyuchi (a representative of the government Duma YANAO) when he said that in Yamal the governmental authorities and the oil workers make every attempt possible not to be drawn into conflicts between themselves and the inhabitants of the Okrug… If this could happen to us…

Why should we – the Yasavey Association – raise this question? The answer is an easy one – this is our land, we have lived here, we still live here and we shall continue to live here. Consequently, since the Yasavey Association represents and protects the interests of the indigenous peoples in the NAO, we would like to know and have the right to know how the government intends to solve the problems related to the acquisition of oil on the territory of the Okrug. The acquisition of oil touches upon the interests of not only the indigenous peoples but also the Komi who are involved with reindeer husbandry in the Okrug. The first impact is felt by reindeer husbandry. Alienation of grazing lands, pollution of the environment, a conflict of interests and many more issues. The inhabitants of the settlements are least touched but consequences can not be avoided… Even though the Committee on NAO Land Resources has disclosed data and the figure of less than 1% is used to illustrate the amount of grazing land for reindeer which has been taken away for the construction of oil elaboration, don’t forget that this is only the beginning… Furthermore, how can one say that when a pipeline for oil is being built the actual amount of land taken away for this purpose would in fact not be large? This oil pipeline can effectively cut off a part of the territory, hindering access by the reindeer herds …

We are in favor of the government approach since the Russian government and the President guarantee our rights and steps must be taken to ensure that our rights are not violated. A solution must be found for the situation in the Okrug. The time for hostilities and conflicts is over. It is time to sit down around a negotiating table and start a dialogue. Our Round Table is an example of this. General questions shall not be touched upon even though they are tightly intertwined. For the time being we shall limit ourselves to discussing the relationships between indigenous peoples and oil enterprises.

2. Main guidelines and principles towards building up relations between the Yasavey Association and the oil enterprises working within the Nenets Okrug.

As of March 2001, the Yasavey Association declared its intention of having a transparent relationship with the oil extracting enterprises working within the Nenets Autonomous Okrug. The Association continues to uphold the strategy and policy selected. During these Round Table discussions which are being held for the second time, we are convinced that the community of the Okrug has taken a greater amount of interest, but what is more important, the oil companies are ready to hold a dialogue with us. Frankly speaking, the interested companies are mainly those belonging to the Lukoil group. The remaining companies, the so-called small-scale companies, are observing the situation or taking a neutral stand.

It is not our task to bring these companies over to our side, but the problems are numerous and for this reason we have decided to create this public forum where it is possible to discuss questions which crop up.

The Round Table being held this year is especially interesting because a number of rather acute problems have arisen and they shall be presented for discussion at this Round Table meeting.

At this point I should like to enumerate those principles according to which the Yasavey Association operates and shall continue operating along these lines in the foreseeable future with regard to interaction with oil companies:

• Transparency of dialogues. This is of utmost importance. We are not for negotiations based on gossip overheard in corridors or behind the scene. We are ready and willing to carry out discussions with open cards.
  
• Utilizing experience from Russia and abroad to solve these problems. The Yasavey Association is a regional subunit of the Russian Association of Indigenous Peoples of the North (RAIPON). The policy of this Association is our main point of orientation.
  
• Consultations with international financial institutes such as the EBRR, and the World Bank. On the one hand such consultations are necessary in order to study the experience of the communities participating in controlling the projects financed by them. On the other hand, in order to ensure direct participation of the Yasavey Association in the procedure of discussing possible projects within the Nenets Okrug.
  
• Informing the community, in a compulsory manner, as well as creating our own data bank concerning projects for the acquisition of oil sources. We already have an archive of all documents agreed upon and signed by the Yasavey Association.
  
• A neutral position towards all companies. We shall not favor oil companies just because they are “ours” or “foreign”. You have come to our Okrug in order to work, to develop your own business activities and to earn money. Our attitude will depend on how you will adhere to the rules and regulations applied in the contemporary world. We are not opposed to the idea of acquisition; it is the policy of the government and we are its citizens. We advocate acquisition of oil and gas within our Okrug which is competent, safe and insured from all risks.
  
• Monitoring and controlling the realization of the projects. Our aim is to have our comments and proposals either accepted or rejected justifiably in writing which can then be used in court. We have made many comments on a great number of projects and there exist already at this stage examples of our comments are not being followed up on by the projects. It is not without reason that we request the companies to familiarize us with their work. We want to see the companies in practice and attempt to determine of whether to trust these companies or not. With this in mind we have already familiarized ourselves with the experience obtained by the company “Polyarnoe Siyanie (Polar Lights)” and now we shall look into the work of “Varandeyneftegas”.
  
• Negotiating processes and training of representatives of indigenous peoples by means of negotiations. The planned seminar on this unfortunately did not take place. Therefore we are presenting you the material and still have not abandoned hope that this seminar will be held in the Okrug. We are ready to participate in negotiating processes between companies and reindeer herders as well as seek out and invite specialists. We have not yet been invited to participate in this process by a company involved in reindeer husbandry. This occurs in spite of the fact that one or the other company turns to us at a later date with complaints against another company.
  
• Working with companies in order to realize joint projects and programs for the inhabitants of the NAO. We are ready not only to receive financial support from the company but also to prepare for them, jointly with the companies, reasonable proposals, projects and programs for the social and economic development of indigenous peoples and inhabitants within the Okrug. However, at this stage the orientation is more towards experimental tasks and minor questions.
  
• In order for our claims and programs to be well-founded, we intend to organize an impartial evaluation of oil projects with respect to their ethnological impacts. Our belief is that social programs encompass not only the inhabitants of the particular area of the developments earmarked.
  
• Working out and preparing proposals and legal drafts for a legislative basis of the Nenets Okrug and utilizing the resources of the created Working Group concerning the creation of rules and mechanisms leasing natural resources. Even though at present the possibilities for the region to achieve this are dwindling continuously. The Federal Center is attempting to take over everything for itself or at least the largest part. This would also offer a possibility for a general discussion on the subject of creating a fund for future generations and using the experience obtained by indigenous peoples in Alaska, Canada, and the Khanty-Mansi Autonomous Okrug.
  
• Inviting the organs of the governmental authorities of the Nenets Autonomous Okrug of the Federal structures to participate in these processes. It should be noted that as far as the Federal structures and the meeting of deputies of the Nenets Okrug are concerned, there exists a certain amount of participation. However, the NAO Administration does not participate in spite of constantly sending out invitations for cooperation and interaction.

The initiative to hold transparent discussions in the form of Round Table discussions and joint meetings is timely and necessary. Many problems can thus be solved in advance and at the negotiating stage all rules, regulations and details can be discussed as well as the procedure to be applied when introducing amendments.

Making these discussions public, the need to inform the public at large concerning the actual state of affairs is an extremely important factor. It is our sincere desire that the inhabitants of the Okrug are informed as to the actual situation, the actual income and also what they receive from this income.

More than often the public at large is not aware of the actual situation. We the Yasavey Association shall make every attempt to solve this problem.

3. What has been achieved during the past year in this direction. Work together with the NO “Union of Geologists and Oil Workers of the North”.

As you already know, a decision was made during the last Round Table discussions to establish a Working Group. At this point I should also like to elaborate on the actual work of the Working Group.

Following the Round Table discussions, the Yasavey Association together with the Union prepared a proposal concerning the establishing of a Working Group and sent this proposal to the companies. After lengthy discussions and negotiations, the Working Group was founded. The companies were requested to invest their financial share. As of today, there are 8 companies which have carried this out and transferred their shares. The overall sum of transferred shares comprises 491,128.15 roubles. A statement is attached to your file of documents.

All funds were spent according to the confirmed budget of the Working Group and we made an attempt to reflect this as well in the financial statement.

As of October 2001 a secretarial aide was employed. Her statement is also attached and many companies have already become acquainted with her. She prepared all the details necessary to hold these Round Table discussions and during the discussions her task was to gather information and disseminate it to the companies.

Planning the first phase and achievements attained by the Working Group:

1. Establishment of a working place for the Secretary and defining her duties

2. Partially using the resources of the Working Group including our own resources we began to attain, for example, business trips to the populated points of the Okrug. The main destinations during this phase were the Kanin, Timan and Malozemlya Okrugs. Within the framework of the WG the following business trips were made:

• Nelmin-Nos (several trips)
  
• Krasnoe (several trips)
  
• Indiga and Vyucheiyskiy
  
• Arkhangelsk – Mezen – Nes – Oma
  
• Murmansk (several trips)
  

A report for almost every destination has been presented; a few reports are currently being compiled. The reports which have been completed were dispatched to the companies. During the next phase , our plans include the eastern part of the Okrug.

3. The Yasavey Association has prepared several proposals concerning the projects and several of them are being compiled at this stage, mainly

• The Kolguev Island project (1st stage complete, preparation of 2nd stage)
  
• “Kaninskiy Krasnyy Chum” project
  
• Project related to rendering assistance to reindeer herders leaving the Vyucheyskiy (Nelmin-Nos) SPK membership.
  

New reports are also being prepared.

All financial operations within the framework of the Working Group are carried out together with the Union since the Union has presented its financial statement and monitors outgoing funds.

This Round Table was prepared using the funds of the Working Group and we were not obliged to request additional financing. We also prepared a CD for you which includes electronic versions of the material related to the subject of indigenous peoples and oil companies. Material about the Okrug is also available, e.g. a video of the Lukoil company flight to the Yerv reindeer farm in order to discuss the construction of the future oil pipeline. The film has not been edited and thus you can follow the process of the discussions taking place and the entire flight route. We hope that this material will serve you in your work.

That was only one side of the work performed by the Yasavey Association. In order to solve our problems we use not only the resources from the Working Group but also those of the Danish project which has been going on since January 1, 2002. At present we are occupied with accumulating and analyzing applications from the sites themselves in order to elaborate these projects and prepare them for the financing stage. In order to solve problems related to the inhabitants, especially in populated places, it is not always necessary to have millions of dollars. An amount of 10000 to 20000 roubles is often sufficient to carry out a project along with a person to whom it is obvious that help can be received. The main thing is to have the knowledge necessary to establish your own business and to start working on your own. As an example we are constantly referring to a workshop “Yenabz” (Viktoria Vylko) in the Krasnoe settlement. We were not the ones who commenced this process but we supported it and today they are self-sufficient. We intend to develop this experience in our inhabited points.

Perhaps it will be possible within the framework of the Working Group, to establish a fund for so-called small grants in order to finance projects geared towards sustainable development.

More detailed information concerning the activities of the Working Group will be available in the near future. However, the time has come to express my gratitude to the Union for the support and assistance it has rendered and in particular I should like to thank Evgeniy Tikhonovich Bobrov who coordinated this work on behalf of the Union.

There exists a great need for the companies to participate more actively. You have invested financial means but at times we are not aware of your problems and for this reason we need your active participation. Let us jointly elaborate proposals. Unfortunately, it must be noted that most of the work in this area was made and defined by the Yasavey Association. We are ready for mutual collaboration of the works planned and also to carry them out.

4. Work performed by specialists and specifying the guidelines of these works

Specialists were invited to participate in the Working Group. Unfortunately not all of those invited could participate at the Round Table discussions. Nevertheless, the Yasavey Association is maintaining contact and working with some of them. A large part of the material on the CD is presented by Alexandr Pilyasov and the Association for indigenous peoples in the North, Siberia and the Far East.

Up until now we have not been able to hold a meeting of experts and I hope that after this Round Table meeting a series of substantial questions will arise which the experts can assist us in solving.

Composition of experts of the Working group:
1. Pavel Sulyandziga (RAIPON)
2. Aleksandr Pilyasov (SOPS Russian Academy of Sciences)
3. Tamara Lesoto (Ministry of Natural Resources, Russian Federation)
4. Viktoria Bobrova (lawyer, Nenets AO prosecution office)
5. Georgiy Yastrebov (Nenets AO Committee on Land Resources)
6. Leonid Sablin (Nenets AO Meeting of deputies)

5. The situation with reindeer husbandry. The position of the Yasavey Association

The previous Round Table meeting was held in a rather calm atmosphere but at present some acute circumstances have arisen concerning the interaction between oil companies and reindeer herders.

1. The “Ya’ Yerv” establishment and ZAO “Varandeyneftegas” and ZAO “Lukoil-Sever”
A Commission was founded and on May 13th a flight left for the construction site. At present the commission is in the process of making a decision. In my opinion the sides are not ready to hold a constructive dialogue. There is a series of questions and problems and these must be solved. This is particularly the case since there are insufficient reports from both sides in addition to emotions running high…. We must sit down and start the process of coming to an agreement…

2. The establishment “Druzhba Narodov” and the company “Bovel”
At present a problem exists related to obtaining land handed over. The establishment “Druzhba narodov” insists on concluding an agreement which includes additional financial liabilities.

3. The establishment “Harp” and OAO “Severgasprom”
SPK “Harp” addressed itself requesting assistance in solving the situation with OAO “Severgasprom”. The Yasavey Association started looking into this problem but has come no further since there has been no development on behalf of SPK “Harp” or else the Yasavey Association has no information relating to this issue.

Our general position is the following:
Already during the designing stage and the handing over of land, any existing problems must be agreed upon. This applies in particular to the building of overpasses for reindeer. These also fall into the category of construction objects and must be supplied with specific documentation, wherein the following instances are reflected:

• Basis for selecting the sites of the overpasses and agreement of it with the reindeer herders;
  
• These overpasses must be reflected in the project documentation in accordance with all regulations governing technical documentation;
  
• The overpasses must be prepared first during the construction phase to avoid the disruption of reindeer herders economic activities;
  
• Technical parameters must conform with realistic parameters, thus avoiding unnecessary questions related to width, height and type of construction;
  
• Government bodies shall elaborate the basic requirements for reindeer overpasses and also monitor their realization;
  
• When deciding questions with establishments dealing with the conclusion of compensatory agreements, it is mandatory that such discussions are open and made available to the public at large. The Yasavey Association is willing to participate in such discussions and work out general recommendations within the framework of the Working Group.

6. Conclusions and recommendations for future perspectives

We propose continuation of this work according to the principles and guidelines outlined previously.

The most important ones are:

• An open atmosphere and transparency when concluding agreements and contracts between the main stake-holders, reindeer herder establishments and oil extracting companies as well as in making decisions on conflicts erupting between them.
  
• Advancing initiatives concerning the need of a comprehensive and systematic approach when acquiring oil resources in the Okrug, taking into account the interests of the indigenous peoples and inhabitants.
  
• Carrying out impartial ethnological impact evaluations of all oil projects as a basis for a scientifically sound program for social and economic development of indigenous peoples in the Okrug and its inhabitants.
  

Practical recommendations:
During the construction phase of oil pipelines, the economic activities of the initial consumers shall not be violated and in particular, the reindeer crossings of the oil pipelines shall be built first. The above must be the rule in the Nenets Autonomous Okrug.