All news

Oil and benefits: How resources’ production changes life of Arctic indigenous peoples

Experts have told TASS about the benefits people in the North receive from oil production

TASS, February 1. Social scientists from Russia, the US and the Netherlands surveyed cooperation between the Sakhalin-1 and Sakhalin-2 oil consortiums and the sub-Arctic authorities and indigenous peoples. The research’s results would be used for further global analysis of cooperation between oil companies and residents of the Arctic and sub-Arctic regions.

Experts and the indigenous peoples’ representatives told TASS about the benefits people in the North receive from oil production and about that cooperation’s further studies.

Oil production and indigenous peoples

The survey’s author Doctor of Social Sciences Maria Tysyachnyuk jointly with foreign partners studies the cooperation instruments the oil companies, authorities and the local residents are using. Similar cooperation studies have been in the Komi, Khanty-Mansk, Nenets Regions, on Sakhalin and in Alaska’s north. The scientists interview the local people, authorities and companies, working in the regions.

"In every region, production companies have their rules for cooperation with the local residents, including with indigenous peoples. At the same time, there are common features, like for example in projects in Sakhalin and in Alaska’s Point Thomson, though the economies and political systems differ in the countries," the scientist told TASS. "We research instruments of social support, what they are giving to the locals, and in the end, probably we shall offer common recommendations on cooperation, which we shall present to the Arctic sustainable development group at the Arctic Council."

According to her, this analysis of cooperation instruments would be also useful for the transport sector, which is developing actively in the Arctic.

Two consortiums - one Sakhalin

The social scientists studied cooperation between consortiums Sakhalin-1, Sakhalin-2 and the island’s authorities and residents, including the Sub-Arctic Uilta, Nivkh and Evenk peoples. Sakhalin-1’s operator is a branch of the US ExxonMobil - Exxon Neftegas Limited; Sakhalin-2’s operator is the Sakhalin Energy company, where Gazprom owns 50% plus one share. The consortiums pay taxes to the federal and regional budgets, and additionally the companies have agreements with the Sakhalin regional government and the indigenous people’s authority.

The expert pointed to different methods the consortiums are using in the region. "Sakhalin Energy has many practices of corporate and social responsibility, united them and implemented on Sakhalin, trying to adapt them to the local conditions. The company offers grant programs for the island’s all indigenous people, even in the areas where oil is not extracted," she said. "Exxon Neftegaz Limited is also a socially responsible company, but, according to its corporate policy across the world, they support communities in the areas of their activities."

Exxon Neftegaz Limited’s Coordinator Alexandra Huryun told TASS Sakhalin-1’s operator is not working directly with individuals - every year the company transfers about ten million rubles ($178,000) to social organizations.

"As for Sakhalin Energy, the company offers support to individuals, national tribes - in scholarships, paying for surgeries," the coordinator said. "The companies’ cooperation with local residents develops in a stable positive manner."

Infrastructures instead of compensations

The scientist told TASS the example of cooperation between Sakhalin-1 and Sakhalin-2 with the indigenous peoples is a most successful example, as the people are offered the option of taking decisions. For example, Sakhalin Energy allows the people to distribute grants. Another example: in the Nenets Region the indigenous peoples receive not just compensations for damage to the nature, but money to develop infrastructures in the areas.

Head of the Reindeer Herders’ Union Vladislav Vyicheisky told TASS the Nenets now know how to calculate the damage or make agreements and regulate relations with the resources’ extracting companies. "It is not realistic to influence the companies’ presence, thus, they have to learn how to cooperate with them," he said. "This applies to assistance in construction of abattoirs and other facilities in reindeer breeding."

"In the past, people living in the Nenets Region, entered agreements on compensations, which not always reflected the damage, and the deal cost depended on negotiating skills of the community’s leaders," the social scientist said. "Now, there are clear methods for calculating compensations, and the Nenets were able to build the abattoirs. Only five years ago, the indigenous peoples would say - the oil companies come, pump out the oil and we remain with nothing; nowadays they would say - the oil companies leave, but we are receiving infrastructures, the nature restores. The discourse has changed."

'Souvenir' culture and returning to ancestry

The expert continued by saying the oil consortiums influence in various aspects life of the indigenous peoples. "The locals say, formerly they used to organize festivities for themselves, while now the culture is rather of "souvenir" looks. The indigenous peoples’ costumes never were bright, but the companies now support foreign tours and finance the trips of folk artists. Now, the locals are making bright beautiful costumes, so that they look picturesque on the stage," the scientist said.

Not all indigenous peoples were ready for the changes and support from the oil companies, but at the same time the people now have the option to return to ancestry. Many have quit the traditional living, the scientist said. "Though, there are cases, where some people who lived all the time in a city, when retired made use of the grants to move to the native lands, to organize a community there and develop the traditional crafts," she said.