CRUDE ACCOUNTABILITY LETTER TO MR. JAMES WOLFENSOHN
Mr. James Wolfensohn, President
and
Board of Directors
The World Bank
1818 H Street, NW
Washington, DC 20433
January 31, 2005
Dear Mr. Wolfensohn and Members of the Board of Directors:
I am writing to you in regard to a project financed by the International Finance Corporation (IFC) in western Kazakhstan, which is resulting in serious environmental health problems in the village of Berezovka and other communities close to the Karachaganak oil and gas condensate field. As you are aware, in 2002 the IFC provided $150 million in loans to LUKoil, which has a fifteen percent share in Karachaganak Petroleum Operating, BV (KPO), the operator at Karachaganak. (Other members of KPO include ChevronTexaco, British Gas and ENI/Agip.) We respectfully urge that you investigate the situation at Karachaganak and consider the villagers’ requests for compensation, relocation and cleaner production at the field.
Crude Accountability is an international environmental nonprofit organization working on environmental justice issues at the grassroots level in the Caspian region. We have been working with the community in Berezovka since 2002.
The Karachaganak project provides an important case study as IFC conducts a review and revision of its safeguard policies. Among other things, the project points to the need for IFC to acquire more independent monitoring of its projects and not simply rely on monitoring data provided by its clients. Karachaganak also demonstrates the need for the IFC to increase transparency and citizen participation in project monitoring.
The village of Berezovka, which is located approximately five kilometers from the field, has been suffering increasingly serious environmental health problems (described below) since Karachaganak became operational under KPO’s leadership. Despite assurances by KPO and the IFC that airborne pollution in Berezovka and other villages surrounding the field is at safe levels, independent air monitoring since September of 2004 indicates elevated levels of toxics in the air.
Based on the evidence outlined below, we believe that KPO fails to utilize practices at the Karachaganak field adequate to prevent toxic exposure in Berezovka as well as in two villages on the Russian side of the border: Ilyek and Zatonnoye.
Crude Accountability wrote to Mr. Rashad Kaldany, Director of the IFC’s Oil, Gas, Mining and Chemicals Department regarding these concerns on September 24, 2004 (attached in hard copy); Mr Kaldany responded on December 28, 2004 (attached in hard copy). Our response and excerpts of Mr. Kaldany’s letter are provided below.
1. Air Monitoring Mr. Kaldany stated in his letter of December 28, 2004:
“The air monitoring results for the surrounding villages do not indicate the presence of a harmful level of ambient pollutants. The nearest Russian village is Zatonnoye which is 12.5 km away from the field border.”
Mr. Kaldany’s response does not indicate what constitutes a “harmful level of ambient pollutants.” However, independent monitoring data collected by the villagers in Berezovka on September 11, December 1 and December 2, 2004 indicate that there are elevated levels of hydrogen sulfide, carbon disulfide, methylene chloride, toluene and acrylonitrile in the air in Berezovka that are above amounts recognized as the level of concern in United States.(1) Hydrogen sulfide registered 5 times above the level of concern, carbon disulfide registered 4.33 times over the level of concern, methylene chloride 4 times over the level of concern, toluene 1.77 times over level of concern, and acrylonitrile 714.3 times over the level of concern.(2) Acrylonitrile, toluene, and methylene chloride are recognized by the EPA as “probable human carcinogens.” These data were collected by the Berezovka villagers using the EPA recognized methodology, Bucket Brigade, which has been used in petroleum-impacted communities around the United States and throughout the world to monitor airborne toxins.(3)
In addition, Crude Accountability has obtained official data from the Orenburg Oblast (regional) Environmental Department, which conducts ongoing air monitoring in Zatonnoye and Ilyek and other Russian villages close to Karachaganak. According to their official data from October 2004, hydrogen sulfide was 2.6 times above the accepted norm in Zatonnoye and 1.28 times above the accepted norm in Ilyek.(4) This information was transmitted to the Oblast Ecology Department in Uralsk, Kazakhstan. Crude Accountability finds it surprising that the IFC was unaware of this fact.
In addition, residents of both Russian villages complain of ongoing environmental health problems, which they attribute to Karachaganak.
We would like to know if the testing done in the vicinity of Karachaganak includes monitoring for toluene, benzene, carbon disulfide, methylene chloride, acrylonitrile, and xylenes. We would like to know if IFC independently verifies data provided by the client. We would also like to see a copy of the transboundary environmental impact assessment conducted by the IFC when the project was under consideration for financing.
Mr. Kaldany also states: “The quality of air in the surrounding villages is monitored daily by various parties. An independent contractor monitors the quality of ambient air in the villages by taking samples four times a day. Furthermore, KPO sends its own state-of-the-art mobile monitoring units to the same eight villages closest to the field, in addition to several layers of air monitoring within the field. Monitoring results for the villages, published locally and distributed free of charge to the villagers in the field area, do not indicate the presence of harmful concentrations of pollutants in the air.”
Crude Accountability would like to know who the independent contractor is, who hired the contractor and what the contractor’s monitoring conclusions are, complete with data. We have never seen independent contractors monitoring “four times a day” in Berezovka. Additionally, the monitoring information published in the newspapers is not raw data, but rather analyzed information. The villagers have repeatedly requested that they be provided the raw data from environmental monitoring in Berezovka and in the vicinity of Karachaganak field.
2. Crude Accountability asked about ongoing gas flaring from the field, which appears to be in violation of the World Bank’s efforts to reduce flaring, particularly through its Global Gas Flaring Reduction Partnership. In his response, Mr. Kaldany stated:
“Although unplanned and in excess of the planned levels of emissions from the field, there have been no exceedances recorded at the SPZ [Sanitary Protection Zone] boundary or in the 10 villages adjacent to the field with the exception of two villages, one in each. There was an insignificant NO2 exceedance of 1.1 MPC recorded in Berezovka village on January 2, 2004. The second instance of NO2 exceedance of 2.4 MPC was recorded in Karachaganak village on February 25, 2004…”
Flaring at the Karachaganak field continues; when Crude Accountability staff were in the village December 8-14, 2004 we witnessed significant flaring, which was accompanied by the smell of rotten eggs–widely understood to indicate the presence of hydrogen sulfide. Regardless of whether emissions are planned or unplanned, the impact on the surrounding villages remains the same.
Meanwhile, additional flaring and burning at the Karachaganak field was witnessed in mid-November as well as on December 13-14. We would appreciate information about both of these instances. As it had been in July 2004 when villagers recorded flaring from the field, the flaring was accompanied by loud booming sounds, toxic smells and no information from the local authorities or KPO. This, along with the flaring from July, was captured on video by the villagers. Crude Accountability would like to receive the raw data from KPO and IFC environmental monitoring of these activities, along with clarification of both incidents.
Mr. Kaldany stated:
“Commissioning and operation of the methanol regenerator at Unit 3 will significantly reduce the flaring of the water methanol mixture at the horizontal flare. The methanol will be recycled and the treated water will be injected into a disposal well. The associated condensate will be recovered and recycled.”
With regard to the methanol regenerator, we would appreciate more information about its operations, specifically when it will come on line, how much it is expected to reduce the “flaring of the water methanol mixture at the horizontal flare,” and the percentage of associated condensate that will be recovered and recycled. We also request information about how the problem is being dealt with until the methanol regenerator is on line.
The problem of air pollution is not only connected to the horizontal flare, but also to the emissions coming from the stacks on site at the field.
Although Mr. Kaldany stated in his letter that the flaring observed in July was “due to the performance of an ‘acid job or workover and intervention job’ on well 626” he did not address the issue of excess emissions related to that instance. The Uralsk Oblast Ecology Department told Crude Accountability in August 2004 that KPO exceeded allowable emissions levels in July, and stated in a letter in October 2004 that KPO had released 25 thousand tons of emissions in the third quarter of 2004. Crude Accountability requests the environmental data from the third quarter of 2004, which contain information about these emissions.
3. Drinking Water: Berezovka has experienced a dramatic decline in the quality of its drinking water over the course of the past two years. The villagers are concerned this is connected with the activity at the field.
In response to our letter, Mr. Kaldany wrote:
“(a) The project performs well testing for groundwater and surface water within the field from 25 wells on a regular basis;
(b) In addition, 12 wells within the villages are tested and analyzed for groundwater and surface water quality and the reports indicated no contamination resulting from the field. However, most, if not all villages (including Berezovka), suffer from the deterioration of the Soviet-era water distribution infrastructure that is leaking, rusted and in need of repair; and
(c) the project is self-contained for liquid waste–industrial liquid waste is contained either in lined polygons or lined ponds so that it cannot leach in to the ground and is never discharged to surface waters.
While we understand that the results discussed above are not published in the local newspapers, we nonetheless cannot link the deterioration in the [sic] Berezovka’s drinking water to KPO’s activities. We would welcome the publishing of this information.”
If the World Bank, IFC and KPO would encourage the local authorities to publish the results of drinking water monitoring, this would be a tremendous help to the local communities and go along way toward rebuilding trust. Perhaps some of the KPO annual $10 million social fund could go toward improving water quality in the villages.
Independent analysis of the drinking water in Berezovka conducted by the State Sanitary Epidemiological Department in Orenburg, Russia in December 2004 indicates elevated levels of chlorides. The conclusion of the experts conducting the analysis is that this water cannot be considered drinking water quality.
4. Health Study: Mr. Kaldany wrote:
“…because we remain concerned about Berezovka villagers’ health and their perception of the field’s risk to it, we would appreciate if you could help us understand exactly what kind of scientific methodology Ms. Anosova used when conducting the mentioned study and deriving the link between the health of the residents and the field activities.”
Crude Accountability’s and the villagers’ investigations into the health of Berezovka residents are ongoing. Crude Accountability is working with independent doctors in Russia and health experts in the United States who have worked with toxic communities since the 1970s. Because of the lack of transparency around prior studies by local authorities (including the lack of full disclosure of the results of the most recent government blood testing of villagers, which was done in May 2004), it has been difficult for the villagers to obtain baseline information. However, the villagers have used methods employed by toxic communities around oil and gas facilities in the United States for the past twenty years. In addition, blood analysis is currently being conducted, which will provide information about the levels of toxins in the body. We will be happy to share results with the IFC when the latest data become available.
According to the villagers’ own data,(5) 45 percent of Berezovka’s population is chronically ill. Studies done in the spring of 2003 show that among an adult population of approximately 890 people, 688 complain of significant memory loss, 600 of muscular-skeletal problems, 423 of teeth and hair loss, 413 of significant vision loss, 308 of respiratory illness and 260 of skin ailments. Among children, 83 percent of high school students suffer from frequent severe headaches, 77 percent suffer memory loss, 77 percent suffer from frequent fainting spells, 67 percent have skin ailments, and 34 percent have regular nosebleeds.(6)
According to data compiled by the USEPA, American Toxic Substance and Disease Registry (ATSDR), and Occupational Safety and Health Administration (OSHA), people who have experienced chronic exposure to hydrogen sulfide exhibit the following symptoms: low blood pressure, headaches, nausea, eye membrane inflammation, and chronic cough, in addition to neurological symptoms. Chronic exposure may be more serious for children. Symptoms of chronic exposure to acrylonitrile include headaches, fatigue, nausea, and weakness. Symptoms of chronic exposure to toluene include significant decrease in lung function, asthma-like reactions, and bronchial constriction. Chronic exposure to carbon disulfide results in muscle pain, headaches and general fatigue, and to methylene chloride, headaches, dizziness, nausea, and memory loss.(7) Acute exposure to each of these chemicals causes serious medical problems, including nervous system damage, severe irritation of the eyes, skin and mucous membranes, and in severe cases, unconsciousness and/or death.
5. Emergency Evacuation:
Crude Accountability and the Berezovka Village Initiative Group are concerned that in the event of an accident at the Karachaganak field, inadequate measures are in place to ensure safe evacuation of the village. Despite KPO’s assurances that the responsibility for the evacuation plan rests with the village administration (akim), villagers are unaware of the plan and expect that KPO will arrive in the village with buses to evacuate them.
Mr. Kaldany wrote:
“Although the civil defense plan is in the government’s domain of responsibility, KPO has provided Berezovka as well as other villages in the area with emergency response training, and explained the lines of responsibility and evacuation routes. KPO has documented such training sessions as well as the drills conducted in the area.”
KPO informed Crude Accountability staff in August 2004 that an emergency evacuation drill is done in one out of nine villages every year. This would mean that once every nine years Berezovka would undergo an evacuation drill. This hardly seems adequate to ensure maximum safety for a community located so close to the Karachaganak operations.
The emergency monitoring systems in place near the field are entirely inadequate to protect Berezovka residents from exposure in the event of an accident. When Crude Accountability was in Berezovka in August 2004, the KPO mobile monitoring unit was located approximately 1 kilometer from the northern edge of the village. In the event of an accident, in the time that it would take the employee on duty at the unit to phone the field manager at the field and receive instructions, any toxic emissions would have already reached the field, exposing the villagers.
Mr. Kaldany wrote:
“When IFC visited the village of Uspenovka, some 14 km away from the field in October 2004, IFC staff queried the gathered residents about the emergency evacuation plans and routes. They seemed to have a very clear understanding of the plans, the transportation modes and responsibility for different tasks… It is therefore unclear to IFC how it is that the 15 or so interviewed Uspenovka villagers have a correct understanding of the evacuation plan, the lines of responsibility and the associated transportation while Berezovka villagers apparently lack such understanding?”
It is good to know that the IFC conducted an independent assessment of emergency evacuation procedures in Uspenovka. We would suggest that IFC staff speak directly with Berezovka villagers about their evacuation plan instead of subjugating this concern to the realm of uncertainty. Evacuation from the village in the event of an accident is a life or death matter for those living there, and requires a serious response in each village surrounding the field.
6. Sanitary Protection Zone
Crude Accountability has requested for over a year that the IFC reconsider the reduction of the Sanitary Protection Zone around the Karachaganak field in its assessment of environmental protections to communities impacted by the field.
Mr. Kaldany’s response:
“IFC’s team has discussed this topic with you and your colleagues previously…IFC will not launch an audit of a government’s decision.”
Crude Accountability, nevertheless, requests the IFC reexamine the question of the sanitary protection zone and relocation for communities close to the field pursuant to its own safeguard policies including involuntary resettlement policy. The reduction of the sanitary protection zone from 5 kilometers to 3 kilometers, which was done in part because of the IFC’s point source environmental monitoring system, has resulted in Berezovka’s ineligibility for relocation, despite the fact that it obtained a letter from the Ministry of Environment in 2002 stating that the village was eligible for relocation.
7. Access to Environmental Information
Crude Accountability and the Berezovka Village Initiative Group have requested that the environmental portion of the PSA between KPO and the Kazakhstani government be made public, along with the quarterly environmental reports prepared by KPO for the local (oblast) ecology department. When the villagers and Crude Accountability have requested copies of the reports, the Oblast Ecology Department has referred us to KPO. KPO refuses to provide the reports to the villagers or to Crude Accountability. When villagers and Crude Accountability staff met with the Oblast Ecology Department in Uralsk on December 15, 2004, the monitoring staff again refused to provide the reports to us. When we asked why, a staff member who asked to remain anonymous responded, “We are afraid of what KPO will do to us if we provide the report to you.” This indicates an appalling level of interference and intimidation by KPO in local government affairs. The government, according to both environmental law and the Aarhus Convention, which Kazakhstan ratified, is required to provide environmental information to the public upon request. Is this type of behavior acceptable to the World Bank and IFC in its support of corporate activity?
Additionally, when Crude Accountability was in Berezovka in December 2004, staff witnessed–and experienced–intimidation by the local authorities first hand. On December 11, women and children who had come to an independent medical clinic in Aksai to give blood for testing were grabbed and threatened by local police, who tried to forcibly take them to the police station for questioning. Crude Accountability staff were detained by the police and questioned about their involvement in the activities, and ordered not to participate in an educational seminar, which was held the next day on environmental rights in Kazakhstan. The seminar was held, as planned, and interrupted by local police who requested that the trainers and attendees show their documents.(8) According to Kazakhstani law, citizens have the right to assemble, and educational workshops and seminars may be held without seeking the approval and/or permission of the local authorities.
Thank you for your attention to these matters, and for your responses to the questions posed in this letter. Please do not hesitate to contact me if you have questions, and I look forward to hearing from you.
Sincerely,
Kate Watters
Executive Director
Cc: Meg Taylor, CAO Ombudsman
- Levels of concern are according to EPA Region 6 long term exposure standard for hydrogen sulfide, the Texas long-term screening standard for carbon disulfide, EPA Region 6 screening level for methylene chloride, ATSDR chronic minimal risk level for toluene, and EPA Region 6 standards for acrylonitrile.
- Acrylonitrile level is also over the level of concern for Texas long-term screening standard, North Carolina Annual Standard, and Louisiana twenty-four hour standard. Hydrogen sulfide level is also over the Texas short-term screening level.
- Bucket Brigade air samples were taken in Berezovka using tedlar bags, and shipped to the Columbia Analytical Laboratory in Simi Valley, California. The levels of each element were identified in the Columbia Analytical Laboratory. Results were analyzed using Bucket Brigade methodology, developed by Global Community Monitor and recognized by the United States Environmental Protection Agency.
- The State Inspection for Environmental Protection of Orenburg Oblast, Russian Federation conducted the monitoring in Ilyek and Zatonnoye and issued a report (Number 05/02-866) with these results on November 3, 2004.
- These data were compiled in a door-to-door survey conducted in the spring of 2003 by Svetlana Anosova and other members of the Berezovka initiative group.
- Additional information is available on Crude Accountability’s website at https://crudeaccountability.org.
- See the EPA, ATSDR and OSHA websites for more information about each of these chemicals and their effect of human health.
- For more information about the intimidation of local residents in Berezovka, read articles published in the Uralsk Weekly and Respublika, translated into English and posted on Crude Accountability’s website.