It was a case of save the whales but lose the CEO on the island of Sakhalin off the far-east coast of Russia last month.
Sakhalin Energy, a multi-billion dollar oil and gas project whose majority shareholder is Shell, is rethinking plans to build an offshore pipeline in the Piltun-Astokhskoye field ?to ensure minimal disturbance to the western grey whale?.
Environmental NGOs are concerned that the Sakhalin projects, both those of Sakhalin Energy and of a consortium led by Exxon-Mobil, will disturb the endangered species: scientists believe there are fewer than 100 individuals extant.
Following the announcement of the pipeline rescheduling, Sakhalin Energy then said that its CEO, Steve McVeigh, would be returning to Shell, to be replaced by Ian Craig.
A Sakhalin Energy source says McVeigh?s departure is not related to ?the whale issue?, but that it is Shell?s policy to rotate senior management every few years.
The Sakhalin Energy project is reported to be about $2 billion over budget, because of the weak dollar and rising raw materials costs from Chinese industrial suppliers. It is seeking around $4 billion in additional funding, of which a large proportion will be from multilateral organizations.
It is this that has perhaps made the company particularly sensitive to the plight of the whale. It is waiting to hear from the European Bank for Reconstruction and Development on whether the bank will approve a $100 million loan. Other private investors are likely to follow its lead.
The EBRD, which is known for its cooperative stance towards NGOs because of its unique mandate to promote pluralism and democracy, has been lobbied hard by environmental groups.
At its annual meeting in April, NGOs staged a mock whale funeral for the benefit of assembled journalists. Campaigners also posed as waiters at the EBRD?s drinks party in the Museum of London, and handed out napkins printed with the words ?No Public Money for Dirty Oil?.
Despite the delay in the offshore pipeline construction, NGOs say they can?t declare victory yet. Roger Higman, climate campaigner with Friends of the Earth, says: ?When big projects like this get a lot of stick in public, they will try and jiggle it around to give the impression they have changed something.?
Higman says NGOs would ideally like to see multilaterals cease lending to mining or fossil fuel sectors altogether. He says: ?We?d like to see the EBRD and the World Bank follow the recommendations of the World Bank Extractive Industries Review, and cease funding this sector, because of the environmental damage it causes.?
In 2001, World Bank president James Wolfensohn commissioned former Indonesian environment minister Emil Salim to look at the environmental impact of the Bank?s lending to mining and fossil fuels projects. Salim?s report, released earlier this year, recommends ceasing all funding to the sector.
The Bank is due to respond to the report in July but is unlikely to cease energy funding. Both it and the EBRD make the argument that without their presence the projects would have significantly worse corporate governance.