Mitigation of Community Impacts

A project as large as Sakhalin-2 will inevitably have social impacts as a result of massive construction activities. Sakhalin Energy implements a range of mitigation measures to minimise negative impact and maximise positive effect which includes a Code of Conduct, Camp Management, Policy on No Hunting, Fishing and Gathering During Construction and a Resettlement Action Plan.

	A Social Impact Assessment (SIA) was conducted by Sakhalin Energy between September 2001 and October 2002 (and again in 2003-2005) to provide a social baseline and help the company predict and manage social impacts from the project. It was managed by a group of local, Russian and international experts and consultants. Around 5000 Sakhalin residents were consulted during the process. Link to SIA documentation can be found at Company web site.
	Based on the SIA a range of mitigation measures were developed which included a Code of Conduct, Camp Management, Policy on Hunting, Fishing and Gathering During Construction and a Resettlement Action Plan. To ensure social commitments are met Sakhalin Energy implements a social impact monitoring programme.
	Sakhalin Energy is committed to interacting and working with local communities to minimise Project impacts and contribute in a positive way to the development of the communities in which we work on the Island. A community liaison network was set up whose key role is to be Sakhalin Energy’s eyes and ears in communities and to provide a link between the Project and the general population.
	Negative impacts upon communities and individuals are avoided where possible and mitigated if they arise. A grievance procedure enables anyone on the island to address a complaint or concern to Sakhalin Energy. All grievances are recorded with a commitment to respond within a set time period. More information on grievance procedure is available here.
	The Company has provided benefits to the local community in terms of direct and indirect employment: local taxes and revenues, an infrastructure update programme and social investment programmes as well as stimulating local business, particularly in the goods and service sectors. For example in 2007 more then 11,000 Sakhaliners participated in construction work under the Project. Sakhalin Energy provided $59 million in infrastructure update programmes in 2007 and made social investments of $6.5 million.
	Sakhalin Energy implements a Resettlement Action Plan (RAP) , in line with World Bank policies, to award compensation to affected land users. The AEA Report acknowledges this by stating, “Sakhalin Energy’s approach to resettlement as outlined in the RAP (Issues Q4, 2005) is in line with WB OD 4.30”. Sakhalin Energy has resettled affected land users to new properties and/or compensated them due to Project land needs for the LNG site, pipeline right of way or other Project facilities. In addition a targeted compensation programme has been implemented for the dacha owners/users near the LNG site whose properties are not located close enough to require resettlement under Russian law. Compensation payments also cover impacts on fisheries, including the payment of $11 million to the authorities for potential estimated impacts on the fishing industry.