Business relationships in Russia
Lead NCPUnited Kingdom
Supporting NCP(s)None Selected
DescriptionSpecific 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.
Theme(s)General policies
Date31 Jul 2012
Host country(ies)Russian Federation
Industry sectorFinancial and insurance activities
StatusNot accepted

Read the initial assessment issued by the UK NCP concluding the specific instance - 21 December 2012

In 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 one of the UK banks (Bank A) had a business relationship with Company R through loans made in 2007 and 2010. The 2007 loan was made by UK Bank A and other lenders to Company R’s controlling shareholder, and supported that company’s acquisition of its controlling interest.

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 A. Bank A pointed out that the report cited by the NGO as evidence of the loan was based on inaccurate information and this report was subsequently corrected. 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 the Bank A’s responsibilities under the Guidelines was not substantiated. The NCP's assessments of the specific instances concerning Banks B and C resulted in the same conclusion.

Read the Netherlands NCP's assessment regarding the Dutch multinational enterprise