WWF to sue: UK government funds environmentally destructive business ventures

The World Wildlife Fund, in partnership with the environmental and social justice organisation, the Corner House, is to sue a UK government department over financial support for a Russian gas project which threatens a rare species of whale. WWF claims the UK government is still financing Shell’s project in Sakhalin, despite the fact that the European Bank for Reconstruction and Development has pulled out of funding the $20bn Sakhalin-2 scheme off Russia’s Pacific coast over environmental concerns.

The EBRD has a rigorous system for vetting loans that takes into consideration any environmental issues. At the far eastern island of Sakhalin where the project is based, environmentalists have raised concerns about its impact on salmon-spawning rivers and the summer feeding grounds of rare gray whales.

The WWF accuses the Export Credit Guarantee Department of committing itself to underwriting $1 billion’s worth of contracts for Shell’s Sakhalin-2 scheme three years ago, but ministers insist no such decision has been taken.

James Leaton of WWF-UK commented that “ECGD’s support for the Sakhalin-2 project effectively gave the backing of the UK government to an environmental catastrophe. ECGD has paid lip-service to the environment, but shows no intention of taking concrete action to prevent damage caused by the projects it backs. Supporting this project shows no coherence across the UK government on protecting biodiversity or tackling climate change.”

The case centres around a letter, obtained by the WWF under the Freedom of Information Act, from the ECGD to Shell consortium, which says: “We are pleased to confirm … that ECGD is able to support the contracts detailed in the schedules of this letter.” However, the ECGD claims that this agreement was conditional on the agency being reassured on various potential “environmental and social impacts arising from the project”.

Despite the WWF legal action claiming the contrary, the ECGD insist the position remains the same, with no effective insurance given to help Shell. “We think the WWF case is pretty flimsy and have endlessly told them that no decision has yet been made. It does not seem to be getting through but there is no cover in place, no premium has been received and no British taxpayer’s money at risk.”

However, Nick Hildyard of the Corner House said: “ECGD has broken its own policies…ECGD must not be allowed to offer UK government money willy-nilly to environmentally damaging business ventures benefiting foreign countries.”

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