Sakhalin Energyrefuses to provide compensation to farmer who has land on the construction site of LNG plant.

(a report from Sakhalin Environment Watch

June 14, 2004)

According to Sakhalin Environment Watch, onJune 03, 2004, farmer Atagishi Emeev blocked all truck movementon a road that Shell/Sakhalin Energy uses for constructionof the proposed LNG plant site, in Prigorodnoe, on the Southof Sakhalin. Emeev contends that the road is crossing his land.

Mr. Emeev and his family(wife and two children)were farmers for 13 years. They have 30 ha ofland and garden,and theyhad around37 head of cattle.Emeev was negotiatingwith Shell/Sakhalin Energy over the last two years regarding resettlement and compensation for loosing his farm. Emeev and Shell/Sakhalin Energy made several agreements regarding conditions of resettlementand obligations of both sides of the negotiation. The calculation of farmer's propertywas made bythe Independent Evaluation company ("Evalluation's society"). Under the main agreement,Shell/Sakhalin Energyshould pay compensation to Emeev (about $690 000)before 1st June, 2004. And Emeevshould relinquish the land after it.

Believing the promises of Shell/Sakhalin Energy, Emeev allowed the companyto build a bypass road on a piece ofhis land in the beginning of 2004. Sakhalin Energy and contractors started to use the road several months ago, hauling gravel, etc.

On 27 December,2003, a house fire destroyed the farmer's house, one day after the last burning of wood in the house furnace. There is no logical explanation of this fire. According to Emeev says a lot of house fires have started since March 2003 - when LNG construction works began. Before that, on the farm and on the nearest dacha village there werenot any fires. Not one in last 12 years. But since March 2003, 9 house fires occurred on the farm and on the dacha village. Some houses started to burn in middle of a day. Several dacha houses also were burned.

Sakhalin Energy representatives insisted that Mr. Emeev kill all his cattle because - as they explained - he must get out from his land in the end of May. Emeev did so, but he also left 6 cows, which allows his family to survive in this situation. Also Sakhalin Energy insisted that he not plant any vegetables this spring.

On May 28, Sakhalin Energy had a meeting with farmer and his lawyer, and the company stated that it will re-consider its policy regarding resettlement of the farmer, which means that the company cannot to say when the problem will be resolved and when farmer's family will receive their compensation money.

In response, the farmer has blocked the bypass road with his two cars. You can see first day of blokage on the pictures. As of June 14 the situation was still notresolved and the roadblock still continues.

Meanwhile, the dacha's community land is also in the Sanitary Protected Zone (as a biggest part of farmer's land). This means that under Russian legislation Sakhalin Energy should resettle all these land owners on a new place, and should provide them adequate land and dachas and compensate all expenses incurred by the people. However, after a house is burned, its value and compensation for it is reduced.