"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

Natural Resources
The off-shore oil and gas developments clearly pose a threat to the marine resources of the Sakhalin shelf, to the coastal waters, the bays, wetlands, reindeer pastures and salmon spawning grounds that make up the delicate human and natural ecosystem of the north-eastern coastal region. An oil slick will be catastrophic both for the natural environment and the humans that depend on it. The Native minorities are both hopeful and suspicious of the oil developments, hoping for new job opportunities, yet fearing the final destruction of their environment - the last fishing grounds and reindeer pastures - and the disappearance of their culture and livelihoods.
Molikpaq has taken on mythical significance in the eyes of local people. It has become the symbol of some indeterminate cataclysmic change that is gradually occurring in the natural environment. Reindeer herders herd their deer on the pastures close to Piltun'skii and Astokhskii bays. Molikpaq can be seen from the shore when the mists rise. Since seismic testing began in that region, reindeer herders claim that the local environmental conditions began noticeably to change. There are fewer seals in the sea. One herder claims to have seen three dead seals along one stretch of coastline where usually no dead seals are washed up. Another notes that some of the marine birds they hunt are starting to eat land-based insects instead of plankton from the sea (evidenced by the stomach contents).*7  Local (indigenous and non-indigenous) people who fish also report increasing numbers of poisoned fish being washed up on the shore. Fish sometimes smells of oil or phenols when it is caught, but it is still eaten out of necessity. Recently a huge number of dead herring were washed up on the shores of Piltun bay, reportedly poisoned by DDT.*8
While this is clearly not related solely to the appearance of Molikpaq, the platform remains a folk-symbol of accelerating environmental degradation. There are other factors, including the huge forest fires of 1989 and 1998; a reported phenol leak into the Amur river last year; leaks from waste dumps along the shoreline. The phenomena could also relate to global climate change. The problem is that no-one really knows the damage caused so far by the exploratory drilling, seismic testing, erection of Molikpaq and its subsequent work. There are no independent monitoring programmes, and control of environmental conditions relating to Sakhalin I and II is out of the hands of both local regulatory organs and the local populations. Local people cannot afford to attract specialists to carry out independent scientific assessments, which are urgently needed, especially if people are to continue eating contaminated fish.
The bureaucrats (chinovniki) who should be defending the interests of people locally are highly dependent on decisions made at the regional level. The Noglikskii district committee of ecology and fisheries inspectorate are not allowed onto Molikpaq, as control is entirely at the regional level (mostly in the hands of Sakhalin regional committee of ecology). When asked whether they object to the threats posed by the off-shore oil developments, the answer provided by local regulators is that they might be concerned, but their seniors in Yuzhno-Sakhalinsk are responsible for decision making. At the same time, one Yuzhno-Sakhalinsk official is famously quoted as saying: "We are the real enemies of nature. We are the ones who sign the papers."*9  Approvals and permissions are often signed against the better judgement of the official who signs them, but under pressure from "higher powers." The Moscow-based environmental law NGO "Ecojuris" advocates public legal control of regulatory organs that do not carry out their responsibility to the public for whatever reason, be this fear of losing their jobs, or pressure from superiors or powerful political and economic interests. With a strong "civil society" chinovniki would fear the public in the same way.
Two projects are currently being planned which could provide an opportunity for more active public participation and control. Sakhalin I and II are planning pipelines to cut across some of the last remaining summer reindeer pastures. The proposed Sakhalin I project pipeline and preliminary processing plant (Exxon), cuts across the spawning river Evai and important wetlands for migrating birds. It is an area for hunting, fishing and reindeer herding, and lies just south of the wildlife preserve "Olenii (Deer)." The proposed Sakhalin II pipeline (SEIC) cuts straight through this wildlife preserve further north, close to reindeer calving grounds. The land here is marshy and highly sensitive to anthropogenic disturbance. Where the land is dry, the soil is very sandy, and construction work tends to leave gaping scars in the earth that erode rather than healing. It is unlikely that any pipeline construction and use will take place in these areas without considerable environmental disturbance and pollution.
The Sakhalin II pipeline route received preliminary approval without direct consultation with local herders. However, on the basis of a survey of local land use and populations SEIC is now considering bringing their pipeline on to the land further down the shoreline away from the reindeer pastures. The Sakhalin I proposal has not yet received preliminary approval and Exxon has now asked the Sakhalin Association of Northern Native Minorities (ANNM) to research the opinions of local indigenous populations to their proposed construction project. This move on the part of Exxon is related to the agreement recently signed between the governor and the AMMN at a seminar (28-29 May 1999), which includes an assurance that the local indigenous populations will be consulted on all industrial projects taking place on their lands.
Once the pipelines have received preliminary approval they pass on to the stage of environmental expert review, which includes compulsory public hearings. However, the reindeer herders claim they are too busy tending their deer and resolving their own problems to attend hearings and seminars, even if they are held in the closest village (Val), which is over an hour away by heavy Jeep if the roads are dry. This could in reality be more of an excuse not to take part in such meetings, where they feel uncomfortable, or it could be due to a lack of belief in the effectiveness of standing up at such a meeting to defend one's own interests. The consultation process for the Sakhalin I pipeline proposal could provide an opportunity for developing a model of consultation that reaches the broadest possible range of local residents.
The Okhotsk sea itself provides half of the total supply of fish and other marine resources to the Russian Federation and is vital to the Sakhalin regional economy. While fishing does not bring a significant amount into the Noglikskii district budget in the form of taxes, some local people are regularly employed in the fishing industry, local entrepreneurs are increasingly seeking to develop private fishing ventures, while more and more local residents are now turning to fishing simply for subsistence and survival. This refers to both indigenous and non-indigenous residents.
Many of the rivers of Noglikskii district are spawning rivers, and are still relatively rich in salmon, including the Red Book taimen' although logging in the upper reaches and intensive poaching is likely to destroy stocks in future years. Fishing takes place on the rivers, in the river estuaries, along the coastline, and further out to sea. The "Vostok" collective fishing enterprise (rybolovetskii kolkhoz) fishes in Pil'tunskii, Chaivinskii, Nabil'skii and Nyiskii bays. Other areas of water are allocated to various fishing enterprises including indigenous "clan enterprises" or rodovye khoziaistva (see below). Fishing boats registered elsewhere on the island and international vessels are allowed to fish further from the shore, or are involved in poaching.
The multinational oil companies are unsure how to compensate the fishing industry (such payments are made in advance in Russia). Compensation for damage to the fisheries from development of the Sakhalin II project was estimated in the initial project plans (TEO) as being $1,680,000 US. An initial scientific study completed by the Vladivostok-based Pacific Institute of Fisheries and Oceanography (TINRO) estimated this sum at $3 million US, but this sum was challenged by SEIC and reduced to $200,000 US. According to recent reports, this has once more been reduced, now to $120,000. This money will be put towards development of a fish farm in Tymovsk district, central Sakhalin.
Local people are allowed to fish for most kinds of fish, using rods, at any time during the year without permissions, but they need permissions and limits in order to fish with nets. They get priority when limits are allocated for personal use. Limits are allocated by the local administration. Indigenous people are also allowed free limits of 100kg of salmon per person for personal use (not for sale), but this is clearly inadequate to satisfy daily needs for the whole year. However, the limits are still the source of some controversy at the local level - especially when claims are made by people of mixed parentage (metisy) - as many long-term non-Natives feel that they have an equal right to limits. Local (unofficial) policies of assimilation are aimed at reducing claims for privileges.
In summer many Nivkh families travel out to the bays, especially Nyiva Bay, where they traditionally used to live. They spend the summer living and fishing on the shores of the bay and along the spit between the bay and the Okhotsk sea. This activity is becoming more and more popular, providing the present day Native community with a new form of summer occupation and the chance to practice and re-learn traditional forms of natural resource use (cutting and drying fish, hunting marine mammals, collecting berries, etc.).
Fishing is one of the tradition occupations of the Nivkhi and is therefore a focus for those seeking to provide meaningful employment for the local indigenous populations. Clan enterprises (rodovye khoziaistva) began to be set up in the early 1990s to provide indigenous families with a form of subsistence activity, and in an effort to preserve traditional culture and livelihoods.*10
However, the legislative base for this form of economic activity is still inadequate and unstable. Rodovye khoziaistva were initially registered according to existing legislation as peasant farms (krest'ianskie or fermerskie khoziaistva), but this form of ownership is not appropriate to reindeer herding and fishing. The "Temporary regulations on clan communes, clan and family enterprises of the Northern Native minorities of Sakhalin region" (09.01.96) do not provide an adequate legal basis for establishing clan enterprises, as until recently the concept of clan enterprise did not exist in federal legislation. The Citizens' Code (Grazhdanskii Kodeks) does not recognise clan enterprises, and demands all enterprises re-register by the 1st July 1999 as a form of ownership that is acknowledged in the Citizens' Code, for example as a limited company (obshchestvo ogranichennoi otvetstvennosti or OOO). The new law "On the Guarantees of the Rights of Indigenous Peoples of the Russian Federation" (30.04.99) does, however, recognise the right of indigenous peoples to traditional enterprises (Article 8), and at the end of the law is written that efforts should be made to bring other legislation in line with this law (Article 16). Work has now started to bring existing legislation in line with the new indigenous rights law.
Aside from the instability of the legislative base, many of the clan enterprises created in the early 1990s are simply unprofitable and cannot resolve the urgent issue of employment for Native minorities (Roon, 1996). This is partly due to the Russian tax system that makes development of any small scale enterprise virtually impossible. Nowadays the only successful small businesses tend to be trading (buying and re-selling), which indigenous people are not usually involved in. The clan enterprise is a form of enterprise more suited to the indigenous lifestyle and skills. Re-registration means that unproductive clan enterprises will be closed, which on the one hand simplifies the situation from the point of view of legislation and taxation, but on the other hand undermines the initial concept of clan enterprises (traditional subsistence activity).
There are various different levels of clan enterprise with very different needs that should be addressed separately: (i) those who are trying to develop a sustainable economic enterprise (with or without the help of a non-indigenous "manager" or partner); (ii) those who are simply living a subsistence lifestyle on their traditional lands, perhaps close to the place where their ancestors are buried; (iii) those who are not producing anything but clinging on to the territory (perhaps in the hope of receiving compensation from the oil industry); (iv) those where Native people are managed by "outsiders" who are taking advantage of Native fish limits and other privileges.
Many of the local indigenous people in Noglikskii district resent the amount of financing that has been allocated to clan enterprises through federal programmes and government privileges. This money was directed through the regional and local administrations or through the agricultural trading firm "Aborigen Sakhalina" based in Yuzhno-Sakhalinsk. However by 1995 the financing had virtually come to a standstill, money from the regional to the district budgets is used to cancel local debts to the regional budget, and so on. "Aborigen Sakhalina" is now struggling to survive itself.
Locals feel that if the clan enterprises are receiving so much priority financial support, then they should ultimately be able to support the larger mass of indigenous people in the community (by catching fish quotas for those who are unable to catch their own; giving free fish to poor families; supporting local organisations or children's groups, etc.) This kind of model has been known to work in the past (though not in Noglikskii district): in the early 1990s, several payments of equal sums of money were directed through the federal programme of support to indigenous peoples to all the districts of Sakhalin where Native minorities live. In Noglikskii district, this money was used to build houses for the indigenous population of the district capital. A block of flats was left half-built, and most of the Native families that moved in ended up exchanging their flat for worse accommodation, or even for children's clothes or vodka. The money sent to Poronaiskii district, on the other hand, was fed into clan enterprises, in a focused attempt to raise production. Now these enterprises are still working, and they are able to support the local Association of Native minorities and certain aspects of social infrastructure.
According to the indigenous representative in the Sakhalin regional parliament, A. Nachetkina, the main problem for the indigenous people of northern Sakhalin is a lack of fishing limits. In Poronaiskii district they have sufficient limits for the local traditional enterprises to survive relatively well. According to Ms. Nachetkina, a fish farm needs to be established in the north to increase salmon stocks and work should be undertaken with scientists to increase fish limits.
In Noglikskii district, hunters hunt sable, wild reindeer, bear. Mostly these are non-indigenous hunters. In 1992 hunting territories were set aside for the northern Native minorities through "Aborigen Sakhalina." However, only one Native hunter has been actively using the territory and there is talk of removing the status. According to the law "On the animal kingdom" indigenous hunters have priority when giving out licenses, but they have to pay the same price as other hunters for their licence. Many cannot afford this.
Traditionally the Nivkh also hunt for seals, and one or two seals are generally hunted each year. Seal oil and seal fat are used for health and medicinal purposes, while the meat, oil and fat are used in traditional food preparations. As reported by the reindeer herders and by Nivkhi there are fewer seals now than there used to be.
There are 5 families (about 17 herders) involved in reindeer herding in Noglikskii district; in the absence of official counts, estimates of the total number of domestic deer in the district range from 120 - 200 deer. The local reindeer herding enterprise, "MGP Val" was formed when the former State farm "Olenevod" ("Reindeer Herder" split into two enterprises in the early 1990s (the other half is now based in Aleksandrovskii district in the west). "MGP Val" and the infrastructure that it supported (including an electrical generator, a saw mill, technical equipment, a shop) are now in an extreme state of disrepair, and as usual in such cases the territory has been robbed by local scavengers. Now the enterprise exists only on paper as a branch of "Aborigen Sakhalina," while the herders themselves are now herding independently and living a subsistence lifestyle (fishing; hunting birds, bear, wild deer; collecting berries).
In winter the reindeer herders live in the forest with their deer and hunt wild deer for meat, both for their own consumption and to sell or exchange privately (this is not legal, but there are no other ways for the herders to survive). They do not generally kill their own herds, which are extremely small. Some herders are now trying to increase the size of their herds by taming wild reindeer, although sometimes the wild reindeer lure females away from the domestic herds instead. In summer the herders move to the coast and use those coastal reindeer pastures that have remained untouched by fires or the oil industry.
The reindeer herders are very concerned about the proposed pipelines, but do not have the time to take an active role in decision-making processes or activism. Their main concern is the survival of their herd. "If my reindeer die, then I die, too." *11  Local people feel that the reindeer herders should be allowed to get on with their lifestyles and be left alone as much as possible. To the herders, the most important thing is the freedom their lifestyle brings ("No-one puts pressure on us") and the health aspects of living close to nature: one herder gave up his education in Khabarovsk because his health deteriorated through being away from his own environment. The herders are also visited by their children, nephews and nieces. The children thrive in this environment much more so than in the village.
Ironically, while the herder's "freedom" is an important factor in their sticking to a lifestyle that may already seem invalid to some, this is only a perceived freedom, as outsiders make decisions regarding use of their lands without their participation. Regarding the pipeline, the most important fact is that the lands that they use for herding are not allocated to them personally, but to a commercial structure ("MGP Val") whose director has very little contact with them today, but continues to make decisions on their behalf. The herders themselves have no personal voice in negotiations as they are not official land users, nor do they have rights to compensations, which is of particular concern for some.
Several young entrepreneurs (both indigenous and non-indigenous) are now trying to set up projects to revive reindeer herding in northern Sakhalin by developing another more profitable type of resource use such as tourism or fishing and feeding the profits into herding, while employing primarily herders and other indigenous workers in the support enterprise. Integrated resource use plans such as these are possible models of sustainable development, and tentative solutions to the Native employment problem.
A popular idea at the more official level is that of creating a centralised "trading station (faktoriia)" to collect production from various forms of individual or collective enterprise (fishing, reindeer herding, hunting, collection of NTFPs, souvenir making) and organise its marketing and distribution, including abroad. This idea relates back to the former State enterprises (Gospromkhoz, Rybkoop, etc.) that used to provide this type of organisational infrastructure. In former years fern, for example, was successfully marketed in Japan. However, local people are always wary of creating or upholding mediating structures that are likely to eat up resources while not particularly helping the smaller enterprises they serve. Local preference is towards setting up strong enterprises at the local level that could make their own independent contacts.
There are other possible ways to employ Native workers, for example in local monitoring programmes related to the oil developments. Job creation should be aimed towards using the existing local skills as far as possible and supporting local production. Apparently no-one from the village of Val is employed in the oil industry as they do not have the appropriate skills.
It is unlikely that Noglikskii district will gain significantly from the Sakhalin oil developments through tax payments, job creation, increased consumer spending or development of service industries. Nor are they likely to gain a significant share of payments from the bonuses and the Sakhalin Development Fund unless they manage to gain influence in the regional assembly and regional administration. Local populations therefore have to use different mechanisms to gain a voice in decision-making; to attract investment in local production and social welfare; and ultimately to increase local control of resource management in order to preserve local cultures and livelihoods.