"Economic Development and the Environment"
on the Sakhalin Offshore Oil and Gas Fields II

Copyright (C) 1999 by Slavic Research Center, Hokkaido University.
All rights reserved

Conflict or Compromise?
Traditional natural resource use and oil exploitation
in northeastern Sakhalin/Noglikskii district

Emma Wilson

Like other regions of the Russian Federation, Sakhalin region is trying to make sense of the transition to a global market economy, with new approaches to natural resource use; new investment agreements and trade dynamics; new partnerships between Russian and foreign parties, the State, the public and industry. Exploitation of the off-shore oil and gas reserves will greatly influence Sakhalin's future economic development. But will this development be sustainable and how much benefit will it bring to local communities in the area of exploitation who will suffer most from ecological pollution and disturbance related to the projects?
Sakhalin is rich in natural resources of all kinds (forests, fish, mammals, thermal waters, mineral resources). There is a long history of conflict and interaction between the traditional forms of resource use of the indigenous populations (fishing, hunting, marine mammal hunting, reindeer herding) and those forms introduced and developed by the non-indigenous populations (including the Japanese) from the late 19th century (fishing artels, commercial hunting, collective farms, State farms, oil extraction, logging, mining).
State policies of collectivisation (from the 1930s) and resettlement (from the 1950s and 60s) destroyed the traditional way of life of the indigenous peoples and uprooted them from their native lands, yet created a dependency on the new forms of State-organised resource use and the accompanying social changes (boarding school education, enforced semi-urbanisation, provision of social infrastructure by the collective farm or dominant industry, State subsidies and privileges for indigenous populations). The socio-economic and psychological consequences of these policies are visible today.
In this paper I aim to look at the relationship between traditional natural resource use and oil and gas exploitation in the context of "sustainable" local development. I will focus on the effects of resource management planning on local populations and at local participation in decision-making processes.
Today indigenous and non-indigenous populations alike are suffering the effects of Russia's painful transition to a market economy and the globalisation of market relations. All people are hoping for a solution to their economic crisis, and everyone wants to live in a clean environment. However, development of the Sakhalin oil and gas projects raises issues relating specifically to the indigenous populations and their historical relationship to the land. In this paper I would like to focus on certain issues that concern all local populations, while drawing attention to those problems that particularly concern the local Native populations of Nivkhi, Uil'ta and Evenki.
Sustainable Development and Local Participation
"Sustainable development" (WCED, 1987) is a term interpreted in many different ways by different people for different needs, and generally at the level of theory and rhetoric. It can underpin creation of strictly protected areas (SPAs); it can justify compromise between industrial development and nature conservation. The Sakhalin II project (Sakhalin Energy Investment Corporation [SEIC]) is being financed by the European Bank of Reconstruction and Development (EBRD) whose founding agreement includes a pledge to "promote in the full range of its activities environmentally sound and sustainable development" (EBRD, 1996, p. 1). Oil and gas exploitation is not generally associated with sustainability, as it provides for a "boom and bust" type of development with a high ecological risk factor. Furthermore the Sakhalin off-shore oil developments could hasten the demise of indigenous cultures and subsistence livelihoods already on the brink of extinction.
I understand "sustainable development" to be a long-term integrated form of development that benefits the local population, preserving local livelihoods and socio-cultural systems, while providing a foundation for the socio-economic well-being of future generations. In Russian, "sustainable development" is translated directly as "ustoichivoe razvitie." Russian also has the term "ratsional'noe prirodopol'zovanie" or "rational use of natural resources." This is defined by Reymers and Iablokov as "[a] system of activity that is recognised as providing the most effective regime of renewal and economic exploitation of natural resources, with consideration for the future interests of economic development and protection of the health of the people" (Zimenko and Krupnik, 1987, p. 13).
In my view, a form of development that is close to "sustainable development" or "rational use of natural resources" requires a broad base of economic activity, and cannot rely heavily on one or two forms of natural resource use (such as oil and gas extraction, logging, mining), which is how many Sakhalin settlements and districts have developed. On Sakhalin, the local budget of Noglikskii district is heavily dependent on the oil industry, especially after the collapse of State enterprise and the withdrawal of State subsidies.
As the on-land oil industry is in decline, the focus should now be on expansion of the base of economic activity in the district (focusing on renewable resource use, including revival of traditional forms of resource use), to ensure the socio-economic well-being of future generations while preserving the natural environment and its capacity to support the human population. While many hopes for a stable economic future on Sakhalin lie in development of the off-shore oil and gas fields, people fear that these are not being exploited in the interests of the local populations but in the interests of international investors, developers and consumers; decision-makers in Moscow and Yuzhno-Sakhalinsk; and the upper levels of the domestic oil giant Rosneft-Sakhalinmorneftegas.
Sakhalin oblast, as other regions of Russia, has still not recovered from the withdrawal of State subsidies that accompanied the collapse of the Soviet Union, while mechanisms have not yet been set in place to fill the vacuum. In a "Free Market" economy (which no-one can recognise in the present-day Russian economy), the State should not be expected to subsidise whole regions as under the centralised Command system. However, a rational, integrated system of State subsidies is important, at least to support sectors of the economy such as agriculture and animal husbandry (as is done in any western country), despite the recommendations of the IMF to the contrary.
Essentially, there should also be mechanisms whereby the high-profit, high disturbance sectors of industry support social infrastructure and traditional resource use, especially if the latter are threatened or disturbed by the industry in question. This can be achieved through a sensible taxation system, which has not yet been established in Russia, or through creation of special Funds (such as the Alaska Development Fund). Other potential forms of support for local populations include federal socio-economic and cultural programmes, foreign grants and small credit programmes. However, federal programmes are not generally financed today, while foreign grants are available only to a minority of the population who are able to write grant proposals and overcome their aversion to what is perceived as "begging."
On Sakhalin there seems to be a problem with allocated federal and foreign monies not reaching their destination. While at the "kitchen table" level, this is one topic of conversation that is rarely exhausted, at the official (seminar, conference) level, it is rarely raised. Development of various financing mechanisms should be accompanied by strict monitoring programmes and policies of transparency and public accountability. In Russia, this goes against traditional attitudes and approaches. If people are not officially informed of how monies are being spent, they have little idea of how to demand access to information from the grassroots level if there are concerns about allocated monies not reaching their destination.
"Sustainable development" requires integrated natural resource use planning involving all stakeholders in the planning processes at all stages. This means the broad participation of local populations, who are all too often excluded from or poorly represented in decision-making processes. Public participation may include public consultations to accompany environmental impact assessments (EIAs) and State ecological expert reviews (EERs); independent public EERs; referendums; village meetings; two or three-sided "agreements"; representative commissions; public monitoring; litigation. Participation of the public is assisted by access to information; public accountability and transparency on the part of the developers. It is also assisted by creation of non-governmental organisations (NGOs) to represent the interests of the local population.
"Sustainable development" demands equity of access to resources, which means clarity of rights and adequate enforcement and control. Given the collapse of established forms of State-controlled natural resource use, it is particularly important today that citizens become more closely acquainted with the law. Citizens of the Russian Federation, and indigenous people in particular, have a growing base of legislation with which to determine their rights of access to resources, land, a clean environment and equitable distribution of profits from resource use. However, the legislative base is incomplete and there is a lack of experience especially at the grass-roots level in actually using the laws. Often laws are only framework laws and there are no established official mechanisms for implementation. As a rule, there is no money in the federal, regional or local budget to implement them. Generally the federal laws demand further legislation at the regional and local level and in many cases this has not been developed.
Local people are now passing through the transition from a paternalistic relationship with the State to independent participation in development processes. This can be conceptualised in terms of building a "civil society (grazhdanskoe obshchestvo)" (Anderson, 1990; Hann and Dunn, 1996; Bridger and Pine, 1998) or developing the "third sector (tretii sektor)" (CAF, 1998) and leads to talk of "partnerships (partnerstvo)" and "dialogue (dialog)" between people and the State or industry (CAF, 1998; Arakchaa and Zaidfudim, 1999). However, these terms bear little relation to the realities of Sakhalin, where, despite recent development of the environmental and indigenous people's movements, public activism is extremely low, and established forms of "top-down" decision-making continue to predominate.
In northern Sakhalin, the local people themselves (and especially the Native populations) have a huge psychological barrier to overcome in making the transition "from Paternalism to Partnership." In order to understand the nature of this psychological "leap of faith," it is important to consider first of all the historical development of local populations.