|Business relationships in Russia|
|Lead NCP||United Kingdom|
|Supporting NCP(s)||None Selected|
|Description||Specific instance notified by the Russian NGO Sakhalin Environment Watch regarding the activities of a Dutch multinational enterprise operating in Russia and its relationship with three UK banks.|
|Date||31 Jul 2012|
|Host country(ies)||Russian Federation|
|Industry sector||Financial and insurance activities|
Read the initial assessment issued by the UK NCP concluding the specific instance - 21 December 2012
On 31 July 2012, the UK and Netherlands NCPs received a request for review by the Russian NGO Sakhalin Environment Watch alleging that a Dutch-based multinational enterprise and three UK banks had breached the general policies provisions of the Guidelines in Russia. The NGO raised concerns about the impact of an oil and gas production complex (the Sakhalin II Project) on local property owners. The UK and Dutch NCPs agreed to treat the complaints against each company separately.
The NGO alleged that the UK banks had business relationships with the Russian company operating the oil and gas complex (Company R), and that the banks had failed to comply with the responsibilities placed on them by the Guidelines to address impacts to which they were linked by a business relationship. The impacts resulted from actions of Company R that were allegedly inconsistent with many of the Guidelines' standards. More specifically, the NGO alleged that one of the banks (Bank B) had a business relationship with Company R through its acquisition in autumn 2007 of a Netherlands-based bank. This bank, prior to being purchased by Bank B, had arranged loans that the NGO alleged allowed a Russian multinational to acquire a controlling interest in Company R. The NGO alleged that this gave Bank B a financial interest in Company R and direct influence over it.
The UK NCP undertook an initial assessment of the specific instance which included asking the NGO to clarify their complaint and receiving a response to the allegations from Bank B. At the end of the initial assessment, the NCP concluded that the request did not merit further consideration on the grounds that the link with Bank B's responsibilities under the Guidelines was not substantiated. The NCP's assessments of the specific instances concerning Banks A and C resulted in the same conclusion.