Two environmental groups have accused the British Government of covertly sponsoring Royal Dutch Shell's Sakhalin-2 oil and gas project off east Russia, which they say is causing major environmental damage and threatening a rare species of whale. WWF and The Corner House say the Government is seeking judicial review of what they claim is crucial financial support for a project which does not meet official standards on conservation.

Their criticism is focused on a decision by the Export Credit Guarantee Department (ECGD) in March 2004, just months after the beginning of the Sakhalin-2 development, to offer $1bn (£500m) in guarantees to the project to cover the work of two British sub-contractors. The ECGD insists its offer of funding was subject to strict conditions, including an assessment of the environmental impact of any development. This was to be carried out by independent environmental consultants.

But WWF and The Corner House accuse the ECGD of in effect "giving the development a nod and a wink in signing a document that was legally binding", and failing to hold a proper consultation about the likely impact of Sakhalin-2. The project, which started in January 2004, is now 86 per cent complete. James Leaton, a policy adviser at WWF, said: "The ECGD separated the decision to make an offer from their environmental assessment. Why has it taken three years? In that time much of the development has already been done."

The World Conservation Union (IUCN) has heavily criticised the Sakhalin-2 project for its impact on the ecosystem off eastern Russia. The impact of noise on the western grey whale has been the subject of intense scrutiny. In July this year, an IUCN panel said it "finds Sakhalin Energy's apparent decision to reject the noise criteria proposed in April 2007... extremely disappointing". It expressed concern about the "cumulative effects of noise produced by ongoing industrial activities" on grey whales. Only about 120 whales are thought to remain.

An ECGD spokesman said the campaigning groups' claims "contained material inaccuracies and were misleading". He added: "There is no specific time-scale on our independent environmental assessment. We have yet to make a decision about funding, and will only commit money if we are satisfied that our strict criteria are met".

In a letter of 10 May 2004 obtained by The Independent, Elliot Morley MP, then environment minister, wrote to the Wildlife and Countryside Link, a consortium of conservation groups: "Let me reassure you the Government will only agree to support it [the development] if we are satisfied that, among other things, the best scientific advice is being followed and the risk to the whales is being minimised". Mr Leaton said: "The implication of that letter is that the Government was yet to give support to the development. The fact is, but for the ECGD's March 2004 decision, the project may not have happened so quickly."
(By Amol Rajan, The Independent, 17/08/2007)