How We Work

Project Monitoring

When we hear that a large extractive or industrial project has been proposed for a developing country, one of the first things we ask is, "Who's financing it?" Once we find out, we begin a dialogue with the bank involved to assure that the financing is being used to support the best environmental protection and human rights practices.

If the project is not up to best standards, we appeal to the bank's responsibility to the public interest, and ask for the necessary improvements. We also make sure that people in the affected community have a seat at the head of the decision-making table. And if the bank won't budge, we work with partners in both the local community and in the bank's home country to apply political pressure to stop or fundamentally change the project.

Policy Reform

Pacific Environment parlays its experiences with project impacts and victories to leverage policy reforms applied to finance institutions and industry sectors as a whole.

Pacific Environment is one of the founding members of the international "ECA-Watch" campaign, a global network of organizations and citizens' groups working to reform Export Credit Agencies (ECAs), like the U.S.- backed Overseas Private Investment Corporation (OPIC) and Export-Import Bank (Ex-Im Bank). ECAs provide approximately twice as much funding for harmful extractive
projects in the developing world than the better known World Bank Group.

ECA-Watch works to ensure that all the world's ECAs apply adequate environmental and human rights standards before being allowed to award their largesse to multinational corporations. By creating international standards, we hope to end the "race to the bottom," where a multinational corporation "shops around" for the ECA with the least environmental and human rights requirements.

In 2001, ECA-Watch successfully persuaded most of the world's ECAs[1] to adopt a framework of environmental and social policies that now apply to tens of billions of dollars in extractive, energy and infrastructure projects worldwide. These policies help eliminate a "race to the bottom," where proponents of harmful projects seek ECA financing due to these institution's lack of adequate environmental and social standards. While these ECAs' policies are now more on a par with those of the World Bank Group, implementation and enforcement still lags a problem that ECA-Watch seeks to fix. In 2009, ECA-Watch successfully persuaded ECAs to adopt policies that provide enhanced financing terms for renewable energy and energy efficiency (e.g., 18 year repayment periods versus 12 for fossil fuel projects), while effectively resisting enhanced terms for dubious technologies such as carbon capture and storage.

Meanwhile, Pacific Environment has over a decade of leadership in efforts to improve the policies of the U.S. ECA, Export-Import Bank, and the U.S. Overseas Private Investment Corporation (OPIC), including environmental and social reforms announced by President Clinton at the United Nations in 1997, and climate change reforms enacted in 2009 that are among the strongest of any mainstream public finance institution.

Pacific Environment is also a leader in international efforts to reform the growing use of financial intermediaries by public finance institutions. Increasingly, public finance institutions use financial intermediaries to channel funding to third party entities, often circumventing environmental and social safeguards. Pacific Environment was instrumental at gaining reforms at OPIC that close these loopholes, which now represent one of the best financial intermediary policies for any public finance institution.

Case Study: Shell's Sakhalin II Oil and Gas Project

Pacific Environment has campaigned for over a decade to hold the sponsors of one of the largest integrated oil and gas projects in the world, Sakhalin II, accountable for the environmental and social harm of the project. Sakhalin II is located onshore and offshore Sakhalin Island in the Russian Far East, north of Japan. Sakhalin II includes two offshore platforms,165 kilometers of offshore pipeline, 800 kilometers of onshore pipeline, and one of the largest liquefied natural gas projects in the world. Sakhalin II threatens one of the world's most critically endangered whales, the Western Gray Whale, with extinction. Onshore portions of the Sakhalin II project dissect over 1,000 wild salmon rivers and tributaries and threatens future damage from erosion from poorly designed crossing of manifold geohazards, including 22 active earthquake fault crossings and landslide-prone areas.

Pacific Environment campaigned with our local Russian partners and international allies to block over $5 billion in financing for Sakhalin II for over 5 years, which ultimately compelled Sakhalin II project sponsors, Gazprom, Shell, Mitsubishi and Mitsui to adopt the highest global environmental standards for the project. This includes re-routing the offshore pipeline around the feeding habitat of the Western Gray Whale; a requirement for the company to follow the recommendations of an independent international panel of experts on future activities near the Western Gray Whale, greatly improved erosion controls, and other gains which set precedents for future oil and gas projects in the Arctic and sub-Arctic zones.

Why We Are Effective

By linking local groups with international campaign networks, we reform environmental and social policies of public and private banks, and we watchdog harmful projects, calling on banks to halt or condition financing on environmental reforms.

[1] These ECAs are members of the Export Credit Croup of the Organization for Economic Cooperation and Development, representing 34 higher income countries.