Use of World Bank Groups Complaints Mechanisms and its Limits, or the Various Ways to Access Information

November 24, 2008

In campaigning, (environmental) information often proves extremely important to support one’s case. The following example of the Karachaganak Oil and Gas Field gives an example of the possible use of the World Bank Groups internal complaints mechanism and its limits. It shows as well how the Aarhus Convention on Access to Information may help to obtain information.

Compliance Advisor Ombudsman

Various campaigns have tried the internal complaints mechanisms of the World Bank Group. The experiences are mixed. In many cases the plaintiffs were disappointed by the weak outcomes or the lack of effect of CAO’s (Compliance Advisor Ombudsman) or Inspection Panel’s recommendation on the projects. However, in the case of the Karachaganak oil and gas field it helped to identify non-compliance of IFC with its own requirements and an important lack of monitoring of relevant data.

Karachaganak is an Oil and Gas Condensate Field in Western Kazakhstan, its oil and gas contain high amounts of hydrogen sulphide (H2S). On the periphery of the field lies Berezovka, a small village. The villagers suffer from serious environmental and health damage related to toxic exposure due to the oil field. A committed group of villagers, the Berezovka Initiative Group therefore is demanding compensation and relocation to a safe and environmentally clean location of their choosing. In 2002 they asked Crude Accountability, a US based environmental justice organisation with a focus on the Caspian basin region, for support. In the same year the International Finance Corporation (IFC) provided US$ 150 million to Russia’s Lukoil, which is a member of the international consortium, Karachaganak Petroleum Operating (KPO), that operates the field.

Kazakhstani law foresees a five-kilometer “Sanitary Protection Zone” for gas fields if hydrogen sulphide (H2S) concentrations in the gas are over 2% (with the Karachaganak H2S concentrations ranging from 4% to 4,3%), which would give the villagers the right to relocation. However, KPO has decreased the Sanitary Protection Zone to 3 kilometers. The Kazakh law allows this if a field emits less than 0,5 tons per day H2S and has a low content of volatile hydrocarbons.

In 2004, the village residents filed a complaint with the CAO regarding the impact of the Karachaganak project on their health and quality of life, particularly related to the effects of emissions to air and quality of drinking water. Two additional complaints were filed with the CAO in 2007 and 2008 seeking relocation and compensation for the villagers, who can no longer safely live in Berezovka due to environmental and health damages from the Karachaganak field.

The CAO when receiving a complaint first refers to the CAO Ombudsman who will try to reach a facilitated settlement between plaintiffs and IFC (or MIGA). If the Ombudsman concludes that the parties are not willing or able to reach a facilitated solution, he transfers the case to the compliance arm of CAO, CAO Compliance, which in turn has to appraise the concerns raised in the complaint for a compliance audit of IFC (or MIGA).

In the case of Karachaganak, CAO Compliance determined that the issue related to emissions to air fulfilled the criteria for further investigation in the form of an audit, while the other issues related to the complaint did not fulfil the criteria for further investigation in the form of an audit. The audit report was published in April 2008. It found the IFC to be out of compliance with its own regulations on toxic emissions and on environmental monitoring requirements: the monitoring program and data reported on stack emissions and on ambient air quality were insufficient. The CAO report states that the IFC failed to report hydrogen sulphide data for the stacks, as required in IFC guidelines from 2003-2006, despite Karachaganak’s extremely high levels of hydrogen sulphide.

In its report the CAO acknowledges that IFC has a step-by-step approach to implementing a robust stack-monitoring program, but that it considers the pace of implementation insufficient.

The report is especially important in the light that hydrogen sulphides played a role in diminishing the Sanitary Protection Zone, which in turn has an effect on the right of villagers to be relocated. However, by the end of October 2008, villagers from Berezovka report that neither the company nor the local authorities have made any concrete decisions in response to their complaints and the CAO website reports no progress in the case. Therefore the villagers together with their NGO partners continue to pressure IFC, KPO and the local authorities (source: Crude Accountability).

Aarhus Convention on Access to Information

In order to obtain relevant information on the quality of their environment, the villagers and their local partners used other ways, too. Green Salvation, a Kazakhstani NGO, works in partnership with Crude Accountability to provide the villagers of Berezovka with legal consultation and support. Green Salvation requested information about emissions levels at the Karachaganak field from 2000-2006 from the Statistics Department of Western Kazakhstan Oblast. The Department refused to provide the information, claiming corporate confidentiality. Green Salvation sued the Statistics Department in the Specialized Interregional Economic Court of Western Kazakhstan Oblast and lost. It then took the case to Kazakhstan’s Supreme Court, which ruled in favour of Green Salvation in April 2008 and demanded that the Statistics Department provide the organisation with all the requested information. The case is precedent setting since for the first time in its history, the Kazakhstan Supreme Court considered the terms of the "Aarhus Convention on Access to Information, Public Participation in Decision-making and Access to Justice in Environmental Matters" as mandatory in its ruling. Kazhakstan has signed the Convention and ratified it in 2001 (Source: Crude Accountability).