Baikal Movement’s Appeal To The Heads Of States And International Banking And Business Communities

Dear Sirs!

Experts estimate that by 2025 populations of 48 countries, or 3 billion people, will face a deficit of fresh water. Today 2 billion people in 80 countries already do not have sufficient access to drinking
water. At the same time fresh water contained in glaciers and icebergs not only remains inaccessible, but may be lost in the near future due to the global rise in ocean temperatures.

Given these circumstances, it is impossible to overestimate the role of Lake Baikal, a UNESCO World Heritage Site, as a unique, natural water-producing factory that constantly replenishes a reservoir containing more than 20 percent of the world’s liquid fresh water and more than 80 percent of Russia’s fresh water.

In 2006 your principled stand on environmentally harmful investment projects saved Lake Baikal from the deadly threat of the Eastern Siberia-Pacific Ocean oil pipeline. Unfortunately, today Baikal’s unique ecosystem is yet again under threat of complete destruction by unethical and irresponsible business, specifically by an oligarch who wields unlimited influence over the Russian state’s thoroughly corrupt administrative structures.

Until it came to a stop in October 2008, the Baikalsk Pulp and Paper Mill (BPPM) was the only industrial polluter to discharge dangerous toxic wastes directly into Lake Baikal and surrounding atmosphere. On January 13, 2010 the Russian government issued Federal Resolution No. 1, which allows BPPM not only to resume its harmful operations, but to work without a closed wastewater cycle, previously required by law.

BPPM daily discharged up to 200 thousand tons of toxic liquid wastes containing poisonous phenols and organic sulphur compounds into Lake Baikal, and spewed thousands of tons of methyl mercaptan and carbon bisulfide into the air. In 2002 BPPM was acquired by Continental Management, a company that belongs to Basic Element, a financial holding owned by Russian oligarch Oleg Deripaska. Along with the SUAL aluminum factory, Selenginsky Pulp and Paper Mill, and other companies in the Baikal region owned by Basic Element, BPPM engaged in ecological terrorism against local people and Lake Baikal’s ecosystem.

Financial impropriety of Mr. Deripaska’s Continental Management has been confirmed, in essence, as far back as December 2004 by Kristalina Georgieva, the World Bank’s country director for Russia, “in connection with an on-going practice of establishing low selling prices for cellulose, as a result of which another division of Continental Management acts as a a profit-receiving center.” For example, buyers of BMMP production addressed their payments to «Kensington Securites and Investments Ltd», a company registered in the British Virgin Islands offshore zone. The very fact that an offshore company was involved in this process clearly points to tax evasion concerning a part of the profits.

But as Continental Management and Rusal squeeze everything possible from their factories, they invest next to nothing into repair, maintenance and upgrade of equipment that dates to 1960s, leading to serious accidents at their plants. Just in January and February of this year serious accidents took place at the BPPM and at the SUAL-PM aluminum smelter in the town of Shelehov. The latter involved a fire and human fatalities.

Ever-increasing toxic and poisonous emissions from Mr. Deripaska’s factories can at any point irreversibly change the quality of water in Lake Baikal, a lake that could provide almost the entire population of our planet with clean water in the future. In your countries this kind of unethical and irresponsible business, profiting at the expense of environment and human health, would have been stopped with fines and criminal prosecutions a long time ago. Understanding this too well, Mr. Deripaska has been trying to escape responsibility for his longstanding environmental crimes, through alleged sale or transfer of his BPPM shares to companies affiliated with Continental Management that belong to his junior partner, a de facto Deripaska employee.

Given this, Baikal Movement appeals to all responsible heads of state who respect international environmental legal norms, to demand consistent fulfillment of its international environmental obligations  from the Russian Government. We also urge you to demand that the Russian Government enforce its own laws, such as the Law on Protection of Lake Baikal, to halt harmful BPPM operations, which since the mill’s re-opening have already polluted Lake Baikal and the water treatment systems of Baikalsk with industrial effluent.

We call on all international banking and business communities that respect the Equator Principles, to follow the World Bank in renouncing all joint projects with any corporations and companies that belong to Oleg Deripaska, including Basic Element, Continental Management, and Rusal. In the case of BPPM these companies have demonstrated their willingness to blackmail the populace, deceive and provoke the public, and misinform the authorities. We ask you to consider that these companies will be paying back your credits or distributing common profits at the cost of destruction of Lake Baikal, ecocide of Siberian peoples, depriving millions of people on this planet of a chance to survive the water deficit that will result from global climate change, and making you unwilling accomplices in a crime of planetary proportions.

The Baikal Movement