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After 9 years of activity in Indonesia: Saga's environmental status report is criticized

Saga Petroleum is withdrawing from Indonesia after nine years of gas exploration, and has conducted an environmental status report for the Jambi Merang project in Sumatra. But the report, which concludes that their land based exploration in the jungle has not led to environmental problems, is scriticized severely by a British expert on environmental impact analyses: It is very thin, it does not address important issues, it does not give any recommendations on alleviating measures, and can therefore only be regarded as a trip report. Saga, on the other hand, say that they have obeyed all the laws and rules of the country, and that they have taken more environmental considerations than other oil companies in the area. But the company also informs that they have now tightened up their international environmental policy, and that they would have carried out a more comprehensive environmental assessment of such a project if they were to do it again today. NorWatch recently visited Saga's concession block.
Artikkelen er mer enn to år gammel. Ting kan ha endret seg.
Saga Petroleum is withdrawing from Indonesia after nine years of gas exploration, and has conducted an environmental status report for the Jambi Merang project in Sumatra. But the report, which concludes that their land based exploration in the jungle has not led to environmental problems, is scriticized severely by a British expert on environmental impact analyses: It is very thin, it does not address important issues, it does not give any recommendations on alleviating measures, and can therefore only be regarded as a trip report. Saga, on the other hand, say that they have obeyed all the laws and rules of the country, and that they have taken more environmental considerations than other oil companies in the area. But the company also informs that they have now tightened up their international environmental policy, and that they would have carried out a more comprehensive environmental assessment of such a project if they were to do it again today. NorWatch recently visited Saga's concession block.


By Kim T. Loraas and Harald Eraker
Norwatch

- Saga's environmental report is ridiculous and pathetic. It is not a serious document which answers important questions on this kind of activity in a tropical area like Sumatra, says Ross Hughes, researcher at the International Institute for Environment and Development (IIED) in England.

- We admit that many things could have been done differently, both with regard to content, precision, and choice of words, in the work on the report. We will learn from our experience from Sumatra and make use of this in future international activity. However, it is also important to point out that Saga's environmental strategy is changing. At that time, our policy was to follow the laws and regulations of the country in question. Today, we would have made a much more thorough assessment with regard to health, environment and security from the beginning, says adviser Britt Stene in Saga's Health, Environment and Security Department.

The reason why Saga worked out an environmental status report, is that the company is withdrawing from Indonesia. Saga started to explore for gas in the Jambi province in Sumatra in 1990. At that time, the French oil company Elf and the national Indonesian oil company Pertamina were Saga's partners.

In 1992, Elf withdrew from the Jambi Merang block, which has a size of 973 km2, and since that time, Saga and Pertamina have owned 50% each of the block each. During the years, Saga and their partners have drilled six wells within the block. However, the promised gas was not found. In combination with a wish to concentrate their foreign activity in fewer places, this has made Saga look for potential buyers of the block since 1996.

Visual inspection
The environmental status report (Environmental Status of the Jambi Merang Block) was completed in July 1997. It is worked out by Sagas construction leader for Jambi Merang, Hans Petter Christophersen, and Anton G. Kjelås from Saga Petroleum, who at that time was responsible for the external environment in Saga's technology department.

The report was given to NorWatch during a meeting with Saga's resident representative Arild Unnerberg and field construction adviser Johs. Søfferud in Saga's International Activity Department in Jakarta in November last year.

The status report only counts six pages, in addition to 46 photos from the area. In the first sentence, the report concludes that Saga's activity has not had any serious, negative impacts on the environment. The conclusion is based on a visual inspection from flying with a helicopter over the area, visits to the area where the six wells have been drilled, and soil samples which were collected and analysed.

- This was primarily a visual inspection. We also collected soil samples in order to find out whether our activity has polluted the environment. The status report is intended for internal use in Saga. In addition, there are growing demands in the business to know the environmental status of a project when it is taken over by new investors. The new buyers say that their reputation is at stake, Christophersen and adviser Johs. Søfferud explain.

They inform that the American oil companies Maxus and Armada Hess will take over after Saga in Jambi.

"Saga's environmental report is ridiculous and pathetic. It is not a serious document which answers important questions on this kind of activity in a tropical area like Sumatra."
Ross Hughes, researcher at the International Institute for Environment and Development (IIED) in England.

Everything looks clean
According to the visual inspection, most things look OK in the Jambi Merang block. For example, the report concludes, from observations from the air and by the wells, that "everything looks clean", that "the area looks nice without waste", and that "the area seems to be intact".

According to the report, the regrowth after the trees which were felled in order to make room for the wells looks okay. The environmental status report uses words like "completely replaced" and "completely intact" about the areas in which Saga has had activity.

This is in stark contrast how it looked at the time of NorWatch's recent visit to parts of the area. NorWatch's observations were made by the well which has been drilled in Pulau Gading, and included the infrastructure around the plant. The only sign of regrowth was that some oil palms had been planted. Apart from this, only grass grew in the areas which had been cleared to give way to the activity.

- It is correct that we have not reconstructed the kind of forest that was there before we felled it. In this regard, we have destroyed the forest. But we have done what we can to minimize the environmental effects. For example, we have planted oil palms, as some of the pictures in the report show, says Christophersen.

Too high values
In spite of the positive conclusion of the report, it describes several problems which is strange that Saga has not made a closer investigation of. One of the reports from the flyover of one of the areas says explicitly that there are "visually big environmental effects".

When we confront Saga with this, they inform that this area actually does not have anything to do with the company's activity in the Jambi Merang block, and they admit that the environmental status report is not precise enough.

The results of the soil samples show the following:
•The mercury (Hg) content exceeded the permitted limit with 12% in one of the waste ponds.
•The amount of zinc (Zn) was almost three times the legal amount by the Merang-1 well.
•The cyanide (CN) content was 53.90 mg/kg by the Pulau Gading well. The permitted maximum limit is 50 mg/kg.
•The total amount of petroleum hydrocarbons was twice as high as permitted by the Pulau Gading well.

Sunscreen spills
Saga never followed up these test results, and the following explanations of the findings have been presented to NorWatch:

The reason for the high zinc content may be that the person who collected the soil samples had put on sunscreen which contains a lot of zinc. Because of his sweating in the tropical heat, the sunscreen may have dripped into the soil sample.

With regard to the mercury, it is suggested that a reason may be that people living near by the waste pond have a small treeplantation, and that a 12% above the limit of mercury is not very much. At the same time, it is admitted that the Saga people who gave this explanation to NorWatch are not mercury experts.

Saga's adviser Britt Stene points out that these explanations are not Saga's official view, and refers to an appendix to the environmental status report which has been worked out by the laboratory PT. Corelab Indonesia. According to Stene, the appendix shows that the values of mercury, zinc and cyanide are within the statistical margin of error, and that the values of these substances therefore are acceptable and undramatic.

Foolish
- If I had found too high values of for example mercury or cyanide, I would definetly have been concerned. They do not write exactly where and how many soil samples they have taken, either. This is unreliable, Ross Hughes from the International Institute for Environment and Development (IIED) comments.

Hughes further thinks that it is "silly" by the Saga report to state that the forest regenerates quickly and that the environmental effects are not problematic. He describes flying over the areas to inspect the activity's impact on the environment as a "quick and dirty" method.

The inspection from the helicopter was obviously not easy everywhere. On the observation of the Merang-1 well, the report says: "Because of heavy rain, we cannot see anything."

Once again, Saga defend themselves by stating that their environmental status report has not been precise enough. The helicopter inspection was actually not planned as a part of the procedure: The trip was made because the oil company Maxus was going on a helicopter trip for other reasons. Saga's people spontaneously joined them as passengers, and made observations from the air which they included in the status report.

"We admit that many things could have been done differently, both with regard to content, precision, and choice of words, in the work on the report. We will learn from our experiences from Sumatra and make use of this in future international activity. Saga has now tightened up its international environmental policy, and we would have carried out a more comprehensive environmental assessment of such a project if we were to do it again today."
Adviser Britt Stene in Saga's Health, Environment and Security Department

Says nothing
- Saga's environmental status report simply does not answer the questions. It says nothing about what should be done, and what this would cost. It does not follow any known guidelines on what an environmental impact assesment should contain, and it says nothing about social questions connected with the activity, says Hughes, who has worked on environmental issues in Sumatra, and done research on the use of environmental impact assesments internationally.

NorWatch visited the village closest to the Pulau Gading-1 well. It is situated at the Lalang river, and 15 families live there. Several family members have worked for Saga's and Pertamina's subcontractors earlier, and NorWatch did not observe any dissatisfaction or complaints against the exploration activity.

Saga's environmental status report neither says anything about the project's impact on wild life. A relevant question would be the project's impact on the Sumatra tiger, which has been observed in the area, and which is threatened by extinction.

Not an environmental impact assesment
- The Jambi Merang block is a large area, larger than Vestfold county in Norway. I agree that the environmental status report may be too thin, but we have followed the regulations and the international environmental standards of the oil business, says Christophersen, who emphasizes that the report is intended for internal use in Saga.

- It is important to stress that this is not an environmental impact assesment (EIA). An EIA from Saga would look very different, says Britt Stene, who admits that to question why such an EIA was not carried out, is legitimate.

Saga's most important environmental contribution has, according to the company, been the method they have used to construct roads.

- When we arrived in Sumatra, we were horrified by the way other oil companies constructed roads. Because of the swamps in the area, the common method is to use timber from the forest as foundation of the gravel surface in order to stabilize the roads. Instead of this, we used a special cover and a cell system called Geoweb below the gravel surface. Thus, we avoided extensive felling of trees, says Christophersen. He adds that 50 metres of forest was felled on each side of the roads for security reasons.

Saga has, according to themselves, been credited by the Indonesian authorities for their use of the Geoweb concept. However, road construction in tropical forests - irrespective of method - is regarded as an important contribution to deforestation. Formerly inaccessible areas are opened up to settlers, timber companies and other activity which increases the pressure on the forests in countries like Indonesia.

- Yes, we realize that road construction in the jungle means that others follow, Christophersen admits.

"If I had found too high values of for example mercury or cyanide, I dertainly would have been concerned. They do not write exactly where and how many soil samples they have taken, either. This is unreliable."
Ross Hughes, researcher at the International Institute for Environmental and Development (IIED) in England.

Measure each tree
Saga's representatives inform that it is their partner, Pertamina, who has taken care of the paper work and formal documents with regard to the Jambi Merang block, while Saga has provided technology and financing.

- Pertamina handled the environmental analysis process and got the necessary permission for the activity. An environmental impact assesment for the test drilling of the Pulau Gading-1 well was carried out in advance. Before we started, we had to measure each tree we were to cut down, and pay compensation to the local population. 13 ministries were involved in the decision-making, says Christophersen.

When asked if the recommendations from the environmental impact assesment of Pulau Gading-1 were followed up, for example with regard to control samples from the soil and the waste ponds, Christophersen and Søfferud answer that this was done as a matter of routine in compliance with national regulations.

They also referre to the observations made by the project's Operation Manager from Pertamina, who brought buckets of soil samples from the Jambi Merang block, which were to be analyzed in Jakarta.

- But clearly, with the roles Saga and Pertamina have had, we have not had a complete grasp and control of the environmental aspects of the project. This is something we will have to look closer into in the future, says Stene.

The fox and the geese
The question is to what degree one can trust Saga's evaluation of their own activity in Jambi Merang. The environmental impact assesment which was carried out before the Pulau Gading well was drilled, and the environmental status report which was written afterwards, have been written by the company's own people. This is also the case for the soil samples which were taken.

When Saga decided to end their test drilling at Pulau Gading-1 in 1996, Søfferud said to the company's internal newsletter Saga Nytt (Saga News) that "Environmental considerations are important, and therefore we are happy to observe that the area has been abandoned in a tidy manner".

Saga Nytt concludes that it will not "take a long time before the jungle has wiped out most traces from Saga's drilling location - Pulau Gading".

There has been no independent environmental impact assesment of the Saga project. The fox has been set to keep the geese. This violates for example NORAD's environmental guidelines.

In any case, Saga's environmental status report is one of the thinnest reports NorWatch has come across during the many years of investigating Norwegian companies in the South.

The question is whether the only thing one can trust, is the following evaluation in the report:

"We arrived at Jambi at 1400 hours. We checked in at the new hotel (Novotel), which has a remarkably good standard."

Saga in Sumatra
In 1990, Saga Petroleum bought 20% of the shares of the 973 km2 large Jambi Merang block in the Jambi province of Sumatra. The French oil company Elf owned 30%, and the national Indonesian oil company Pertamina owned 50%. In 1992, Elf withdrew from the block, and since that time, Saga and Pertamina have owned 50% each.

Six exploration wells have been drilled by Saga and their partners in the concession block since 1990: Pulau Gading-1, Merang-1, Kukulambar-1, Muara Sabak-1, Gelam-4 and Sukayaja-1.

The American oil companies Maxus and Amarada Hess are about to take over Saga's share of the block.

Norwatch Newsletter 7/99

- Annonse -