SAKHALIN INDIGENOUS MINORITIES DEVELOPMENT PLAN 3

PLAN COMPLETION EVALUATION REPORT December 2020

Gregory Eliyu Guldin, Plan Completion Evaluation Team Chair; President of CCCS

Gulvaira Kudenovna Kutsenko, Independent Indigenous Peoples Expert; President of the Interregional Public Organization "Indigenous Information and Education Network "Llyoravellian"

Alexander Timofeyevich Konkov, Independent Social Scientist; Head, Sociology Department, Sakhalin State University

www.crossculturalconsult.com

SIMDP3 Plan Completion Evaluation Report December 2020

ACRONYMS ...... III 1 INTRODUCTION ...... 1 1.1 OVERVIEW ...... 1 1.2 PLAN COMPLETION EVALUATION REPORT OBJECTIVES, METHODOLOGY, AND AUTHORSHIP ...... 4 1.2.1 Objectives ...... 4 1.2.2 Team Composition ...... 5 1.2.3 Methodology ...... 5 2 EVALUATION OF THE 3RD SIMDP: WERE THE OBJECTIVES ACHIEVED? ...... 7 2.1 OBJECTIVE 1: CAPACITY-BUILDING ...... 7 2.2 OBJECTIVE 2: SOCIAL, CULTURAL, AND ECONOMIC IMPROVEMENT ...... 10 2.2.1 Social and Cultural Improvement (Social Development Fund) ...... 11 2.2.2 Economic Development (Traditional Economic Activities Support Programme) ..14 2.3 OBJECTIVE 3: INDEPENDENT FUND PREPARATION ...... 16 2.4 OBJECTIVE 4: PROJECT ENVIRONMENTAL EFFECTS DISCLOSURE ...... 17 3. EVALUATION OF THE 3RD SIMDP: CHALLENGES ...... 18 2.5 TRANSPARENCY ...... 18 2.6 GRANT ACCESSIBILITY OBSTACLES ...... 20 2.7 CONFLICTS OF INTEREST ...... 21 2.8 NEED FOR ENHANCED TRAINING & GUIDANCE ...... 22 2.9 PLAN AS LOCUS OF CONFLICT ...... 23 EVALUATION OF THE 3RD SIMDP: GOVERNANCE ...... 24 3.1 GOVERNANCE STRUCTURE RATIONALE ...... 24 3.2 DISTRICT COMMITTEES ...... 24 3.3 EXPERTS GROUPS ...... 26 3.4 SDF COMMITTEE ...... 26 3.5 TEASP COMMITTEE ...... 27 3.6 EXECUTIVE COMMITTEE & GOVERNING BOARD ...... 28 3.7 INTERNAL & EXTERNAL MONITORING ...... 29 3.7.1 Internal Monitoring ...... 29 3.7.2 External Monitoring ...... 30 3.8 TRIPARTITE COLLABORATION ...... 30 4 RECOMMENDATIONS FOR THE SIMDP4 ...... 31 4.1 VISION STATEMENT & STRATEGIC APPROACH ...... 31 4.2 SIMDP4 OBJECTIVES & PROGRAMMES ...... 31 4.3 CAPACITY-BUILDING PROGRAMME ...... 33 4.4 SOCIAL AND CULTURAL DEVELOPMENT PROGRAMME ...... 35 4.4.1 National Culture and Sport ...... 35 4.4.2 Education...... 35 4.4.3 Health ...... 35 4.4.4 Ecological Knowledge Preservation ...... 35 i

4.5 ECONOMIC DEVELOPMENT PROGRAMME ...... 36 4.6 GRANT ASSESSMENT PROCESS ...... 36 4.7 GRANT ACCESSIBILITY ...... 38 4.8 DISTRICT COMMITTEES ...... 39 4.9 EXPERTS GROUPS ...... 40 4.10 GOVERNING BOARD, EXECUTIVE COMMITTEE, AND GRIEVANCE PROCEDURE ...... 40 4.11 EXTERNAL MONITORING & INTERNAL MONITORING ...... 41 4.12 REGULATIONS ...... 42 4.13 ENHANCING STAKEHOLDER PARTICIPATION ...... 44 ANNEX 1: ADDITIONAL INDIGENOUS PEOPLES PROJECTS SUPPORTED BY SAKHALIN ENERGY 46 ANNEX 2: SAKHALIN’S INDIGENOUS MINORITIES ...... 49

ii

Acronyms

BP Business Plan CBP Capacity-Building Programme CCCS Cross-Cultural Consulting Services, PLLC CEO Chief Executive Officer DC District Committees EC Executive Committee EG Experts Group EM External Monitor FPIC Free, Prior, and Informed Consent GB Governing Board IMT Internal Monitoring Team IPO Indigenous Peoples Organization MET Midterm Evaluation Team MGF Mini-Grant Fund NGO Non-governmental organisations PC Programme Committee [e.g., either SDF or TEASP Committee] PCER Plan Completion Evaluation Report PCET Plan Completion Evaluation Team RCAR Regional Council of the Authorized Representatives of the Indigenous Minorities of the North of Sakhalin RAIPON Russian Association of Indigenous Peoples of the North, Siberia, and the Far East SDP Social Development Programme SDF Social Development Fund SIM Sakhalin Indigenous Minorities SIMDP Sakhalin Indigenous Minorities Development Plan 1, 2, 3, and/or 4 SOG Sakhalin Oblast Government TEASP Traditional Economic Activities Support Programme

iii

SIMDP3 Plan Completion Evaluation Report 1 Introduction

1.1 Overview Over the past 15 years, the Sakhalin Indigenous Minorities Development Plan (SIMDP) has garnered national and global attention as a trendsetting effort to raise the development potential of indigenous communities. With its innovative structure of collaborative governance, based on a tripartite partnership between Sakhalin’s Indigenous Minorities of the North of Sakhalin Region (SIM) 1 , the Sakhalin Energy Investment Company Ltd. (Sakhalin Energy, or the Company)2 and the local Sakhalin Oblast Government (SOG), this arrangement has emerged as a model of cooperation and empowerment, from Moscow and from the International Finance Corporation to the United Nations. Naturally, this development has not been without its rough spots, and there have been many lessons learned over its decade and a half of implementation.

The Sakhalin Indigenous Minorities Development Plan 3 (SIMDP3) succeeded the first and second SIMDPs that were implemented between May 2006 and December 2015. The SIMDP1 was introduced by Sakhalin Energy Investment Company Ltd (Sakhalin Energy; the Company) with the support of Sakhalin Island’s Indigenous Minorities (as represented by the Regional Council of Authorised Representatives of Sakhalin Oblast; RCAR), and the Sakhalin Oblast Government (SOG). This collaboration was formalized in a Tripartite Agreement signed by all three partners in May, 2006.

Sakhalin Energy, RCAR, and the Sakhalin Oblast Government had established a smooth working relationship to supervise and implement the SIMDP. Multiple rounds of consultations with Indigenous Minorities communities and other stakeholders were held and a new SIMDP developed by the fall of 2010. The draft SIMDP2 was distributed in the areas of traditional indigenous residence during the first week of November to be considered by the indigenous population, followed by a special conference in Yuzhno- Sakhalinsk on November 17 called by the RCAR to approve and/or amend the draft SIMDP2.

At that conference the indigenous delegates declared that they gave their free, prior and informed consent (FPIC) to the Plan and to their representatives’ signing of a new Tripartite Agreement to implement the Plan. This signing took place at a ceremony in

1 Throughout this Report, the Sakhalin Indigenous Minorities of the North of Sakhalin Region will be referred to as the Sakhalin Indigenous Minorities, or SIM. These groups would be considered “Indigenous Peoples” according to international nomenclature. 2 Sakhalin Energy has also supported numerous projects popularizing and supporting SIM culture over the years beyond the SIMDPs. See Annex 1 for a list of such projects during SIMDP3. 1

Moscow in mid-December with Sakhalin’s Governor, Sakhalin Energy’s CEO, and the RCAR’s Chair. All were personally representing their SIMDP partner organization in a public pledge of support to the renewal of the SIMDP.

Development of this third SIMDP followed a Similar process during 2015, once again achieving the international FPIC standard. A fourth Plan is currently under preparation which will also attempt to achieve FPIC successfully.

First SIMDP

The first SIMDP incorporated measures to mitigate negative effects on the lives and livelihoods of Sakhalin Indigenous Minorities (SIM) in the project area of the Sakhalin-2 oil and gas Project, as well as measures to share project benefits with Indigenous Minorities throughout the Island. The latter was delivered by way of Programmes of economic development (the Traditional Economic Activities Support Programme [TEASP]), health, education, culture, and training (the Social Development Programme [SDP]), along with a stand-alone, indigenous-directed Mini-Grant Fund (MGF). Yearly funding of the Plan was USD$300,000, which added up to a 5-year US$1.5 million commitment by the Company. In addition, administrative costs for the Plan (including staff salaries and costs for the operation of governance bodies) as well as other SIM- related projects were supported by Sakhalin Energy from non-SIMDP allocated funds.

SIMDP2

With the successful completion of SIMDP1, the SIMDP partners prepared the SIMDP2 to build upon the collective experience of the Plan and its implementers.

Key innovations of the SIMDP2 were:

• A near total focus on capacity-building and social benefits distribution in contrast to SIMDP1 when negative impacts mitigation was a key focus • The application of the positive experiences of the Mini-Grants Fund of SIMDP1 to extend indigenous-only Programme committee membership to the Social Development Fund (SDF) Council and Traditional Economic Activities Support Programme (TEASP) Committee of SIMDP2 • The application of the positive experiences of the Mini-Grants Fund (MGF) and the Social Development Programme (SDP; now SDF) of SIMDP1 with the use of an Experts Group (EG) to initiate a Similar assessment process for grant applications for the TEASP • Increased indigenous communities’ representatives on the Plan’s governing bodies • Internal monitoring of the Plan undertaken jointly by representatives of the three Plan partners • Special SIMDP grievance procedure with all three SIMDP partners having access to the grievance log and participating in joint investigation of every grievance 2

• An increase in annual funding from Sakhalin Energy from USD300,000 to USD312,000 for five years for SIMDP Programmes

SIMDP3

Key innovations of the SIMDP3 were:

• Introduction of District Committees (DCs) at the District Municipality level consisting of two representatives of the local Indigenous Peoples Council and a member of the District Administration to provide local-level review and recommendations on applications for Self-Sufficiency grants and student support grants. • An increase in annual funding from Sakhalin Energy from USD312,000 to USD320,000 for five years for SIMDP Programmes, split evenly between the Traditional Economic Activities Support Programme and Social Development Fund Committees. • Strengthening of the capacity-building aspect of the Plan by its introduction into the TEASP as well as the SDF.

The key objectives of this third Five Year Plan were:

• Capacity-building. Enhancing the capacity of Sakhalin’s Indigenous Minorities to actively participate in the self-management of their own affairs. Such capacity- building could range from leadership training, to technical skills enhancing (e.g., for accounting, report-writing, budget preparation, traditional economic and cultural activities, business planning), to heightened cultural and ethnic self- awareness. • Social, cultural, and economic development. Improving the lives and livelihoods of the Indigenous Minorities of Sakhalin Oblast through the implementation of social and economic development plans in a culturally appropriate manner. Cultural revival, economic viability of traditional economic enterprises, and improved social conditions will be targeted areas for support. Long-term strategic planning with the concept of sustainable development as an objective will also be emphasised. • Independent fund preparation. Assisting Sakhalin’s Indigenous Minorities to prepare for the eventual establishment of an independent Indigenous Minorities development fund. • Project environmental effects disclosure. Providing timely, objective and complete information to the Sakhalin Indigenous Minorities’ community of the actual and/or potential impacts of the Sakhalin-2 project on the environment, and the measures taken to prevent and/or minimize any potential negative impacts

The Plan incorporated measures to improve the lives and livelihoods of the Sakhalin Indigenous Minorities in the project area of the Sakhalin-2 oil and gas project, as well as measures to share project benefits with all SIM. Although the Sakhalin-2 project is 3

implemented only in several areas of traditional SIM residence, SIM representatives from all seven districts take part in the SIMDP implementation.3 As in previous Plans, benefits were delivered by way of Programmes for economic development (TEASP), and Programmes focused on health, education, culture, and sport, (SDF) while both Programmes included capacity-building components.

During this concluding year of SIMDP3 preparations for a fourth iteration of the Plan (SIMDP4) are also taking place. The concluding section of this Report contains recommendations for that SIMDP4, based on lessons learned from the implementation of the first three Plans.

The overwhelming majority of Sakhalin’s Indigenous Minorities (SIM) are concentrated in seven districts, mostly in the northern part of the island. According to recent SOG figures, Sakhalin’s 4,390 Indigenous Minorities are comprised of four major ethnic groups: the Nivkh (3,254), the Uilta (481), the Evenk (334), and the Nanai (215) with Nekrasovka in the Okhinsky District and Nogliki in the Nogliki district being the largest SIM population centers.4 See Annex 2 for more information.

1.2 Plan Completion Evaluation Report Objectives, Methodology, and Authorship

1.2.1 Objectives

Section 4.5.3 of the Sakhalin Indigenous Minorities Development Plan: Third Five-Year Plan (2016-2020) mandates a Plan Completion Evaluation be conducted during the concluding year of the Plan. It culminates a series of annual External Monitor Review Reports including the Midterm Evaluation Report of 2018. This review thus covers nearly the entire span of the Third Plan implementation, from January 2016 through August 2020 (with the Plan terminating in December 2020).

The Plan Completion Evaluation was carried out with the twin objectives of:

i. Evaluating the strengths and challenges of the SIMDP3 ii. Formulating recommendations to guide the preparation of the Fourth SIMDP (2021-2025)

3 This is an important point to note as most extractive industry projects would not include as community development plan beneficiaries residents who were not in the areas directly affected by a project. Sakhalin Energy deserves recognition for this generosity. 4Data as of 1 August, 2020. 4

1.2.2 Team Composition Three people comprised a Plan Completion Evaluation Team (PCET): the Plan’s previously appointed External Monitor (EM), Gregory Guldin,5 as well as two others chosen by the Plan partners RCAR, Sakhalin Energy, and the Sakhalin Oblast Government. Gulvaira Kudenovna Kutsenko, an experienced, knowledgeable, and respected indigenous leader from the Altai-Kumandin Region with rich experience in government and community affairs, was agreed on by the partners to serve as the indigenous representative on the Plan Completion Evaluation Team (PCET) and to provide a distinctly indigenous voice in the PCET’s analysis. Professor Alexander Timofeyevich Konkov, Chair of the Sociology Department at Sakhalin State University and an acknowledged expert on survey methodology and community social analysis, was selected to round out the team.

1.2.3 Methodology The Plan Completion Evaluation was carried out utilizing two distinct methodological approaches: the first was a qualitative field team series of interviews and observations and the second a desk review of key Plan documents.

The PCET conducted their field assessment between 17 August and 4 September, 2020. Thirteen communities were visited distributed in the seven municipalities that are formally recognised as districts of traditional residence of Sakhalin’s Indigenous Peoples. Due to the COVID-19 emergency, Professor Konkov and Dr. Guldin attended the interviews remotely while Ms. Kutsenko travelled with the Company team around the Island. The PCET thus in person and remotely visited Sakhalin Indigenous Minority communities and/or government authorities around the island, including those in Nogliki, Okha, Nekrasovka, Val, Chir-Unvd, Tymovsk, Viakhtu, Trambaus, Smyrnikh, Poronaisk, and Yuzhno-Sakhalinsk. Meetings were held with the members of the Plan coordinating bodies, representatives of cultural and educational institutions, as well as independent SIM representatives (both within and without obschini).

Prior to the visit—and during the field visits themselves--Sakhalin Energy’s staff assigned to work with the SIMDP and the Plan Coordinator shared key documents with the PCET including updates on the SDF and TEASP regulations and tenders, a partial grants application database, documentation on the management of grievances, and committee and other governance entity meeting minutes. They also arranged a series of meetings with representatives of key stakeholders, including:

• Sakhalin Energy employees (personnel running the Programme and others involved with support of the SIMDP)

5 Gregory Eliyu Guldin of the consultancy Cross-Cultural Consulting Services, PLLC (CCCS) has been serving as the External Monitor (EM) for SIMDP1, 2 and 3 since 2006. 5

• Representatives of Indigenous Minorities (including the RCAR, individual community members, and indigenous community organizations [e.g., rodovye hozyaistva (clan/family enterprises) and rodovye obschini (clan organisations)]) • Both successful (those who have received grants) and unsuccessful (those who did not) applicants to the Plan’s grant Programmes or competitions • Partner organisations assisting in Plan implementation (both for the SDF and for the TEASP grant competitions) • Authorities in the Sakhalin Oblast Government, including the Indigenous Peoples Department, the Public Chamber, and the Indigenous Peoples Representative to the Oblast Duma • Authorities in various District administrations, primarily their staff member responsible for Indigenous Minorities affairs and participating on the District Committees • SIMDP governance participants, including those on the SIMDP Governing Board (GB), the Executive Committee (EC), the TEASP Committee, the Internal Monitoring Team (IMT), the SDF Committee, the District Committees, and the two Experts Groups

In contrast to the previous SIMDP3 Plan Mid-Term Evaluation Report (2018), the present report does not contain the results of a sociological survey of Sakhalin Indigenous Minorities. Such a survey was not conducted due to the COVID-19 epidemiological restrictions in the Sakhalin Region. For this reason, field visits to conduct face-to-face interviews in the communities where Indigenous Peoples reside were not undertaken. Telephone interviews with SIM were not conducted since they could not provide any representative coverage of Sakhalin Indigenous Minorities due to the following: a) the lack of a Sakhalin Indigenous Minorities telephone database; development of such a database is impossible without written consent of the citizens, according to the RF legislation on personal data protection b) not all SIM, especially in the older age group, have mobile phones c) lack of or poor quality of mobile communication in a number of communities where SIM reside, which makes it impossible to construct area frame sample designs of SIM. Thus, unlike with previous MET and PCET reports, this PCER is only based on qualitative rather than a combination of quantitative and qualitative methodologies.

AUTHORSHIP Due to the pandemic-induced absence of two of the three PCET members from the field visit, the PCET was denied the opportunity to meet in person during our field visit to discuss our observations and what we had heard and to draw conclusions. We could only begin to develop a common frame of interpretation and to agree on some basic ideas as to our recommendations for the next Plan after return to our homes. We then assigned team members to provide first drafts of different sections of our Report outline. These

6

were circulated among us so we could agree on a final version. This was the pattern as well for the recommendations. 2 Evaluation of the 3rd SIMDP: Were the Objectives Achieved? SIMDP3 lists four objectives. This PCER reviews each one and comments on the degree to which each objective was met. 2.1 Objective 1: Capacity-building Did the SIMDP3 enhance the capacity of Sakhalin’s Indigenous Minorities to actively participate in the self-management of their own affairs through development of their leadership and technical skills and by raising their cultural and ethnic awareness?

To some degree, yes, although a more focused group effort on this topic would have helped build capacity more robustly. Certainly, many in the community had their personal skills developed, while public organizations and many obschini utilised the grants to expand their activities or to organise (as in the case of obschini spurred into existence by the Plan). Examples abound on both the organisational and personal level.

Some obschini both in the sociocultural and economic spheres relied on the Plan to expand their activities, although one can say that most SIM were not affected significantly. Many individuals did indeed become more active, however, and even many general community members were inspired to attend festivals and sports competitions even if they themselves did not have direct contact with the Plan. Sports activities served to introduce the youth to the skills needed for traditional economic activities and sports and festivals collectively were useful in popularizing SIM culture among the wider population of Russians and others. Some respondents felt that their participation in a SIMDP3 project contributed to their personal growth. According to one participant, “The Project has motivated me to practice traditional activities. I started making toys and clothes. I understand now that I can participate in projects by myself. If I start a project on applied and decorative arts, I will apply for an SIMDP grant.” To achieve the Plan’s capacity-building goals a specially designated component was included in TEASP. Its name kept changing, however. In the Competition Regulations issued annually it was first dubbed “Sakhalin Indigenous Minorities’ capacity-building” (2016, 2017), “Development of economic potential of Sakhalin IP to practice traditional activities” (2018, second round of competition), and finally “Development of economic potential” (2018, first round, 2019, 2020). The description of the projects approved by the TEASP Committee under the ‘Development of economic potential’ component suggests that some projects were focused on development of technical skills of beneficiaries. This includes different projects, such as Small Boat Handling Training, Snow Mobile Driving Training, and Automobile Driving Training. Projects aimed at support of traditional activities, such as 7

tailoring workshops, fish skins treatment workshops, fish and seal cutting workshops, etc. were also approved. Another group of projects approved for financing as part of the Capacity Building component is associated with participation of SIM ensembles in presentations of traditional culture and arts of the Sakhalin SIM at international, federal, and regional trade fairs and indigenous forums. The opinions of respondents towards the capacity-building efforts were divided. Some people believe that the potential of organizations and individuals which participated in the SIMDP implementation has indeed been raised. The respondents noted that capacity- building and the wish to participate in projects are directly connected with the SIMDP. According to one informant, “There appeared a lot of new rodovye hozaitsva (clan enterprises) in Nogliki District. We used to have just eight clan enterprises, but since then new clan enterprises were established to participate in the SIMDP. Now there are 23 clan enterprises.” Other informants noted that “People have become more active; they write grant applications and participate in events.”

One capacity-bulding activity, support for the Young Leaders School project, though not a major activity during this Third Plan, was cited by more than a few respondents as having had significant influence on their lives, with one School “graduate” averring that the experience changed her life so much so that she afterwards joined the SDF Committee and learned a lot of skills that she utilized in her personal life (she quit her job to study and became an accountant) and in general had her horizons broadened, setting up an obschina and becoming a partner-organization for others’ projects. Another person noted that “The Young Leader School allowed me to meet new people, and we started communicating and studying together. They made us work together in a team. We learned how to work in a team and make joint decisions. At that moment I understood that the world is not just about working and earning one’s living for myself and my child. The Young Leader School took me out of my routine life. I have become more confident.” Yet another was inspired by service on a District Committee to join a Programme Committee and to get involved in community affairs for the first time in her life. Broadening horizons is a critical aspect of community capacity-building for it enables SIM youth to see their connections across the Island with other SIM of their own or other SIM nationalities from different districts—or even across the country when sent with ensembles or groups to attend festivals in Moscow or elsewhere domestically. For many School graduates, their ethnic pride was raised and some went into cultural or public organizations which promote SIM culture and solidarity. Some respondents mentioned that their self-identification as SIM has indeed been strengthened as a result of the Plan. “The people have started to understand that their rights as SIM can be protected.”

Participation in the Plan itself—either by serving on governance bodies or through learning to make applications for grants—also has built up capacity. Many community members told us that such grants or committee service were their first exposure to such activities and although it was strange at first they can now use their newly found experiences and skills to transfer them to applying for other grants such as Presidential 8

or Governor’s Grants. Among those who served on the Programme Committees, their main complaint was that their 2.5 year terms were too short. Because of such short terms some respondents doubt the influence of work in the SIMDP3 governing bodies on capacity-building of these individuals. According to one respondent, “People that worked in the SIMDP Committees did not have enough time to develop their skills while working in the SIMDP. They got accustomed for the first 1-1.5 years, and then there was only one year to develop their potential, which is not enough.”

Though the Plan has had much difficulty with getting people to properly fill out grant application forms or complete implemented project reports, the requirements for such have also caused many people to learn to prepare such documents and they report this ability has transferred over to jobs and other venues. And once successful, some entrepreneurs have turned successful Self-Sufficiency grants into a run of successful Business Plans (BP) in both the cultural and livelihood fields. One 66-year old woman who received a Business Plan which required her to get a drivers licence to drive a boat, later on opened a shop selling fish products, expressed her gratitude to the Plan for enabling her to drive herself to go fishing in both summer and winter, remarking: “Now I don’t have to rely on my nephew anymore and can work whenever I need to. I’m a very developed babushka!”

Yet, despite these many positive examples, the Capacity-Building components of both SDF and TEASP were often under-utilized or under-budgeted, as when TEASP cut its Capacity-Building to only 10% of the TEASP allocation. A strategic approach is clearly needed to strengthen this forward-looking aspect of the Plan, and one of the critical components to a strategy of sustainable development. Furthermore, some respondents doubted the influence of the SIMDP3 on capacity-building of the SIM community as a whole.

Whereas development of technical skills, such as driving or boat handling, can be used to practice traditional activities and seem to fit well the definition of “capacity-building [development of potential]”--a term used in the text of the Third SIMDP--the connection of other projects with SIM capacity-building can be questioned. For example, is a workshop on making traditional clothes a capacity-building project if it’s only held once? Can a trip of a local SIM group to an international festival or trade fair be treated as a project promoting the SIM capacity-building? The PCET doubts that it is; such activities may be worthwhile in terms of business marketing or development but not as capacity- building. Thus, a member of one of the SIMDP3 coordinating bodies noted that “One of the capacity-building projects was a fish processing masterclass. This is not capacity-building. People just watched it and went back home.” Another respondent indicated that “Projects [on capacity-building] should be focused on the establishment of conditions for SIM development. However, when the grants are submitted, the grant applicants describe where they would like to go. There’s no capacity-building in this. Based on the project 9

outcomes a basis for continuation of the project, festival, etc., should be formed, i.e., after the project is finished there should be an opportunity for its further development without the Plan’s financing. If such festivals continue without external funding – this is capacity-building.” Other respondents noted that “Capacity-building is to explain to a young person information about opportunities and SIM rights, to inform him of the laws. Such knowledge will allow people to interact with government bodies and control authorities.” “There’s also a need for seminars with specialists on how to begin sales of products and how to make it legal. Legal training is needed. Legal literacy of people should be strengthened.” Lastly, meetings of the Plan Completion Evaluation Team with SIM led to an understanding that some people interpret capacity-building as the development of their own potential and their individual abilities and skills which could allow them to be more successful in their professional or public sphere. According to other people, however, improvement in the educational and cultural level of an individual does not necessarily increase the capacity of the indigenous community as a whole. They further believe that to build the capacity of the SIM community it is important to develop their skills in cooperative problem-solving of issues relevant to them as SIM, to establish new SIM non- commercial organisations, and to implement projects that involve a large number of SIM. The PCET believes that both aspects can be incorporated into a capacity-building programme with support for development of human cultural capacity on the individual level and for development of social capital at the community level.

2.2 Objective 2: Social, Cultural, and Economic Improvement Improving the lives and livelihoods of the Indigenous Minorities of Sakhalin Oblast through the implementation of social and economic development plans in a culturally appropriate manner.

The SIMDP3 (and its predecessors) is the only community development plan run by an oil and gas project which extends benefits to the general indigenous population on the island. The Social Development Fund largely benefits the entire population, with components emphasising student support, or celebration of indigenous holidays, festivals, and culture, while the Traditional Economic Activities Support Programme focuses its benefits on individuals and obschini. Overall, the Plan benefited many SIM—even those who have fiercely criticised it—with its distribution of goods, scholarships, and capacity- building opportunities even to remote villages as well as to district centres. Yet, such a Plan—with relatively limited funds—could not fundamentally change the socioeconomic status of SIM given the general limitations underpinning pursuit of key indigenous livelihoods such as fishing.

10

2.2.1 Social and Cultural Improvement (Social Development Fund) The SDF aimed at improving the quality of life of the representatives of the SIM, taking into account their cultural characteristics. The Fund's programmes included five components: education, health, capacity development, national culture development, and the development of national sport.

2.2.1.1 Education and Healthcare More than 200 people received support under the Healthcare and Education components of the SDF.

o Education The Indigenous Peoples of the Russian Federation live in 28 regions and lead a traditional way of life. One of the reasons for their difficult economic situation is the frequent lack of access to the quality progressive system of education that the nation is renowned for. One of the greatest strengths—and one of the most appreciated—benefits of the SIMDP is the educational support component since SIM believe that access higher education can greatly increase a family's chances of improving their quality of life. Almost all respondents noted that SIMDP educational support for young people encouraged them to become more active both within and outside the community. Student beneficiaries also said that the SDF scholarships greatly eased the financial burden of their parents, which in turn gave them a sense of respect for the SIMDP and a responsibility to members of their SIM community. Students studying at universities and vocational education institutions on a fee-paying basis spoke frankly about the fact that without the help of the SIMDP they would not be able to access paid education services because of the high cost of paid educational. Along with the positive feedback, some youth representatives drew the attention of the PCET to what they felt was the poor information circulation regarding the scholarship programs. Some of them learned about the program in a completely random way, while others, according to their own words, had to make significant efforts to finally obtain information about the component, who to contact with this issue at the District level and what steps to take to get support. That this was so despite the availability of this support being in the public domain, means that the Plan needs to do a better job in publicizing these opportunities. We recommend local representatives of the Plan at the District level (members of the District Committees and the SDF Committee) do a more vigorous job in publicizing these opportunities. Merely placing information in the public domain or on the website is evidently not enough; targeted e-mailing, provision of information to the SIMDP District Committees, to District Administrations, and social media can be usefully employed to better spread the word.

o Health SIM predominantly live in the northern part of the island, often in relatively inaccessible areas. As a result, they have limited access to quality health services. This is often due

11

to a lack of proper infrastructure, medical staff, equipment, medicine, consumables, etc. However, it's not just the geographical separation from the regional capital that prevents them from getting the necessary medical care as high prices for medical goods and services presents an equally high obstacle. Thanks to SIMDP3, the physical and economic availability of the health services for SIM has been greatly improved allowing them to materially improve their health. At the same time, the interviewees related that their need for medical services is much greater and broader than offered by the Plan and not limited to eye surgery. They suggested the Plan resume including dental care (false teeth) as well as to create a reserve fund that could provide medical assistance in emergency situations (i.e., situations where there is a threat to life itself). 2.2.1.2 National Culture The preservation of their own cultural and spiritual heritage is an inalienable right of Indigenous Peoples throughout the world. During the implementation of the SIMDP3, various projects aimed at preserving, developing, and reviving the languages, songs, dances, legends, holidays, rituals, costumes, household items and many other aspects of indigenous life. This component has had rich success. Municipality Central district libraries usually initiated well-prepared proposals, and the libraries in Nogliki--and to a lesser extent Poronaisk and Alexandrovsk-Sakhalinsk--have been particularly successful in their implementation year after year. Both libraries pay a lot of attention to indigenous language and literature/folklore preservation, as well as improving access to and the appeal of cultural heritage for the younger generation and for a wider audience, including people on the mainland. Other cultural institutions such as museums and “Dom Kulturi” have also been quite active with their own SIMDP-financed projects and these have benefitted institutions based in small hamlets such as Malodozhna in Tymvosk District and Viakhtu in Alexandrovsk-Sakhalinsk as well as the Oblast capital of Yuzhno-Sakhalinsk where the Ethnic Creative Arts Centre has proved a critical point in the ongoing maintenance of SIM culture and heritage. Two important projects were implemented in Nogliki in 2017: one on publication of a children’s book in Orok (Uilta), Russian and English languages, which continues the tradition of Uilta people transferring their knowledge of the environment through pictures of local birds and their sounds. The second project was aimed at a search for and purchase of the literary works of the famed Nivkh writer Vladimir Mikhailovich Sangi. Libraries and museums normally receive the largest amount of SDF grants.

The Anton Chekhov Museum in Yuzhno-Sakhalinsk has implemented a number of projects. “We Need to Hurry” (2016) was focused on preparation and publication of an audio primer for the Uilta language. The Museum acquired communications equipment to record the voice of Elena Alexeevna Bibikova, a native Uilta speaker. A second project “Everything is Transformed by Knowledge and Mind” focused on making costumes for a children’s ensemble, teaching traditional singing, dancing, and arts and crafts. Although 12

the project was completed in 2018, that was merely the beginning as the work is developing independently now with grants from other sources. This is another good example of capacity-building outside the designated Capacity-Building components. A third project called “Native and Great” was aimed at translation of one chapter of Anton Chekhov’s book Sakhalin Island into the Uilta language. The book describes Indigenous People of Sakhalin and it has been translated into a dozen languages, but not into the languages of the SIM that the book describes. The grant applicants asked Elena Bibikova to translate the chapter and announced a children's painting competition to illustrate this chapter.

Such projects have a collective impression on society. One of the respondents commented that although many in the non-indigenous community believe that Indigenous People just want money, when they see the richness of SIM culture, they see the other side of the story and appreciate SIM efforts to preserve and promote their culture in order to preserve and develop their nationality.

Nonetheless, the PCET needs to draw attention to a few cases wherein the same organization received 2-3 grants year after year through the SDF, while the projects of other applicants were left without due attention and support. According to the SDF Regulations for 2016-2020, state budget institutions of education, health, culture and sports were allowed to participate in the contests, alongside of SIM ad hoc groups and non-profit organizations. This was very likely an unequal competition as the quality of projects prepared by budget organizations, which have at their disposal personnel, technical, and financial resources far in excess of their indigenous community competitors, will no doubt be far better than projects prepared by organizations of small SIM groups. This makes it harder for SIM to compete with such well-equipped and resourced entities.

In a situation where competition for the Plan’s funds is being conducted as part of a programme aimed at improving the quality of life of indigenous small peoples, the PCET was interested in the extent to which the FPIC principles were being implemented at the level of specific projects and programmes. It is necessary to note that this principle, well implemented at the inception of the 3rd Plan, is less well implemented at the level of individual SDF programs. SDF national cultural project grant-receiving government budget agencies were not able to confirm that they had received consent from SIM communities for the use of their cultural heritage, such as by producing a letter of support. The PCET recognises that this was not a specific requirement of the SIMDP3. Nevertheless, the PCET recommends that in the future such project sponsors should be able to demonstrate that the SIM are actively involved in the decision-making process on all issues that may directly relate to them, including cultural development.

13

2.2.1.3 National Sport National sports and traditional indigenous games have long been a part of indigenous life. Thanks to sports and games there was a transfer of traditions from generation to generation wherein children and young people gained the vital skills of endurance, strength, and agility. In addition, traditional sports formed an ethnic spirit, instilling such qualities as honesty, justice, and dignity. In the past, national sports were in decline; they were not developed nor supported and remembered only on holidays or during various ceremonial events. The SIMDP sports component has contributed significantly to SIM culture during the Third Plan. Within this component, projects of SIM organizations and communities were supported, aimed at acquiring national sportswear, equipment, construction of sports grounds, training camps, workshops, development of dog riding, as well as archery competitions. In 2017 a project on construction of a sports ground was implemented in Viakhtu. Sports events are usually carried out within the framework of large festivals.

2.2.2 Economic Development (Traditional Economic Activities Support Programme) Summarised data on the number of beneficiaries of different components of two SIMDP3 Programmes - TEASP and SDF - provide insight into the influence of the Plan on lives and well-being of the Sakhalin Indigenous Minorities community. During the SIMDP3 implementation (2016-2020) 115 grants for Self-Sufficiency were awarded to 111 recipients. Under the Business Plan component 53 grants were allocated to 37 SIM obschini over 5 years. Taking into consideration the average number of people in a SIM obschina is relatively limited, it can be assumed that a few hundred people improved to some degree their economic opportunities under the Business Plan component. As a result, the SIM enterprises could support and further develop their economic activities, and some even managed to become more economically stable and to make a transition from exploitation of natural resources to processing and selling their final product.

While estimating the influence of the SIMDP3 on lives and well-being of Sakhalin SIM community, respondents provided different opinions – from totally positive to extremely negative. In the majority of cases the respondents noted that the SIMDP3 contributed to improving the well-being of Indigenous People and representatives of SIM enterprises who received TEASP grants. According to one respondent (member of the SIMDP3 Governing Board), “Many people take part in the Self-Sufficiency projects. The number of participants has increased.” Another respondent, the head of a SIM enterprise, noted that “the SIMDP3 helps through the SDF. A lot of projects are implemented through the ‘Nivkhinka’ club. They also conduct master-classes and other events.”

Another informant, a beneficiary of the Self-Sufficiency component of the TEASP, notes: “I have received a grant. My brother has bought a boat engine. I used to fish only onshore, but now I successfully fish in the sea as well. In Poronaysk we are allowed to fish 5 km away from the town. Those without transport have difficulties getting there.

14

Thanks to the Plan we received our means of transport.” A more or less similar opinion was shared by many respondents, who noted that any material support to SIM has a positive impact because “the life of the people participating in the SIMDP3 projects is improving.”

Along with the positive assessments there were critical remarks concerning the impact the SIMDP3 has on the economic well-being of Sakhalin SIM. A head of a SIM NGO observed that “the 3d SIMDP is the worst compared to the 1st and the 2nd Plans. The goals of the 1st and the 2nd SIMPDs – to teach people to be beneficiaries--were achieved. Now the goal is to teach SIM how to grow and establish their own business. If the Batani Fund6 had continued working, we would have had the development of SIM business.”7 According to another respondent, a member of one of the Plan’s governing bodies, “the 3d Plan, especially its last year, is a great disappointment. The ambitious objectives of the SIMDP were not accomplished. The SIMPD 3 has not improved the lives of the Sakhalin SIM.“

Respondents having doubts with regards to the influence of the SIMDP3 on improving the economic situation of the Sakhalin SIM, note that the financing of the SIMDP3 is limited, which makes it impossible for the Plan to support a large number of applicants, both individuals and members of SIM obschini. This criticism has a firm basis, since only several hundred beneficiaries and their families received financial support during the five years of the Plan implementation, accounting for only a small percentage out of the total 4362 SIM population. Seen from a broader perspective, however, the PCET found that the SIMDP3 did indeed have a modest net positive impact on the socioeconomic status of the SIM, a reasonable accomplishment for a private sector social development program.

Among the many factors limiting the influence of the Plan on development of the economic potential of the Sakhalin SIM community a limited budget is only one. Due to a general economic weakness SIM obschini lack opportunities to receive industrial fishery quotas, although fishing is the most precious natural resource for SIM. Individual fishery quotas are supposed to satisfy only personal needs and do not allow people to process and sell fish in any substantial amounts. Besides, the status of SIM obschini as NGOs makes it difficult for them to turn to commercial activities and sell fish and other natural resources they obtain. The way out could be a registration of small SIM enterprises based on either existing obschini or through establishing new legal bodies in a collective form of individual entrepreneurs or small enterprises. However, this may lead to economic risks

6 The Batani Fund was engaged by Sakhalin Energy during SIMDP2 with the approval of the Plan’s governing bodies to manage a microcredit program which was abandoned due to financial problems. 7 Critics of the Fund pointed to its overly large administration budget and suspected that the monies were misused. 15

and will also require more significant financial support, such as concessional loans supplied by financial institutions not connected with the Plan. This will also require business skills, which are not fully developed even by some heads of SIM obschini.

Support to the SIM obschni under the Business Plan component is assessed by the population in different ways. Some people believe that it promotes economic well-being of obschini, although on a small scale. Ohers note that the number of SIM obschini that received support is limited and moreover that the grants are being received by the same obschini.

Another TEASP component – Self-Sufficiency – is viewed by the population as an important means to improve the economic well-being of families. Taking into consideration the social significance of the Self-Sufficiency component it should be admitted that its budget looks quite modest. The share of the TEASP Programme reserved for the Self-sufficiency component has decreased; in 2020 its proportion was only 30%, whereas the proportion of the Business-planning component was 60% of the total TEASP budget. While discussing the reasons for such allocation of funds with the TEASP Committee member the SIMDP3 Plan Completion Evaluation Team did not receive a clear answer for such a skewed allocation. The decision to allocate the funds in such a manner was probably influenced by the fact that the current TEASP Committee has a majority composed of the heads of SIM obschini (5 out of 7 members) who understand the needs of SIM obschini and believe that the Business Plan component should receive the priority. Given the broad popularity of the Self-Sufficiency component and combined with an objective of spreading SIMDP benefits amongst a wider range of SIM, the PCET recommends that the two components—Self-Sufficiency and Business Plans—receive allocations closer to parity.

A last point to consider is to note that many successful TEASP applicants have gone on from Self-Sufficiency grants to Business Plans (and sometimes back to Self-Sufficiency grants which makes one question whether there is any real difference in the nature of those grants aside from the amount of money available).

2.3 Objective 3: Independent Fund Preparation Did the SIMDP3 assist Sakhalin’s Indigenous Minorities to prepare for the eventual establishment of an independent Indigenous Minorities development fund.

Basically, no. Although this was a popular idea—or a dream actually that has been extant for decades—the Plan itself did little to advance the SIM community towards its realization other than in a peripheral or general way by raising the social and human capacity of individuals and organizations—which while genuine, does not translate into the infrastructure for a Fund. No specific planning took place, no strategic discussions of the nuts and bolts of how it would take place, how it would be financed and what specific skills and types of people would be needed. And, critically, no analysis of the how the 16

strengths and weaknesses of the implementation of the many SIMDPs could shed light on what would be needed for successful launch of an independent SIM Fund.8

Many people though are in favour of such a Fund, but it remains a vague concept and is often raised by people in the context of criticism of aspects of the current SIMDP which they don’t like. People decry “bias” in grant-allocation decisions or “Plan capture” by a few organizations or individual or clans and say “we need a Plan to stop this abuse” but then cannot describe how an “Independent Plan” would avoid these very same problems. Most people—even strong advocates of such a Plan—acknowledge that the SIM community is not ready to establish such a Fund in the near future. Some people even pointed to the grant application structure of other companies wherein the grant- application process includes Company and government representatives as a superior model to the SIMDP reliance on only SIM to award grants. To follow such a model would be a step further away from the Independent Fund ideal. Still others believe that only with firm support from the SOG can such a fund be established—and if that were the case, would it be “independent”? The PCET believes that the principle of self- determination embodied in the awarding of grants by SIM representatives only should be retained in the SIMDP or in a putative independent Fund but that counter-balancing mechanisms (discussed below) need to be robust to prevent potential abuses.

2.4 Objective 4: Project Environmental Effects Disclosure Was timely, objective and complete information provided to the Sakhalin Indigenous Minorities’ community of the actual and/or potential impacts of the Sakhalin-2 project on the environment, and the measures taken to prevent and/or minimize any potential negative impacts?

Yes, this objective was definitely accomplished as reflected in the lack of any mention of environmental issues during our entire field visit to the SIM communities participating in the Plan (although a few did lament the general ecological deterioration they felt the oil and gas industry had brought to northern Sakhalin). This was accomplished both through measures undertaken under the Plan and some outside.

Section 3.3 of the Plan calls for a Mitigation Matrix containing information about ecological and other issues affected by the Sakhalin-2 project to be regularly shared by the Company with both the Governing Board of the Plan and the Regional Council of Authorised Representatives (the island-wide non-governmental SIM coordinating body). This happened as per schedule twice yearly at meetings of the Governing Board when Sakhalin Energy specialists made presentations and answered questions from SIM representatives regarding the Company’s extractive activities and mitigation and risk issues. The

8 At least this was the status of Independent Fund planning or lack thereof in the SIMDP3. Outside the Plan, efforts were made to move the idea forward but these were unsuccessful. 17

Company expanded on this effort in 2019 when it invited SIM members of the GB to visit the Project’s on-shore facilities. RCAR and GB members express satisfaction with the amount of disclosure of environmental information by the Company including news about expansion plans.

In addition, the Company also conducts regular community meetings in the areas of SIM residence to dialog about environmental impacts of the Sakhalin-2 project as part of its preparation of its annual Sustainable Development Report and in the course of its other public consultations. These gatherings inform the indigenous community about the implementation of the Sakhalin-2 project, including possible expansion projects, employment opportunities, the existing and/or potential environmental impacts of the project, and measures taken to prevent and/or minimise any possible negative impact, environmental programmes, social investments, etc., and to discuss these topics.

Such regular and public meetings are quite necessary for local communities which are often not well informed when spills or other negative environmental accidents do occur. The usual tendency is to blame all the industry operators even when not all are responsible. This was the case during the PCET’s tour of the island when we heard about purported Company spills which turned out to be the responsibility of another operator.

3. Evaluation of the 3rd SIMDP: Challenges 2.5 Transparency Transparency and the validity of the procedures relating to the review and final approval of grant applications are key components of trust among the SIM population in the SIMDP3. These aspects of Plan implementation have raised a large number of questions and criticism by the SIM population.

It can be stated that currently we must face the fact that the grant review procedures are not transparent and comprehensible enough for grant applicants, and information on the motivations behind decisions is not always available to grant applicants and is not always exhaustive. Thus, many grant applicants indicated that they were denied grants based on “budget limitations” without any further clarification as to why their proposals were denied or why other proposals were better. Following this line, one member of the SIMDP3 Governing Board told the PCET that “We have to deny good projects sometimes. People need to understand that they are denied simply because there is a lack of funds.”

Another respondent, who is a member of a District Committee, was surprised to learn that a Self-Sufficiency grant application which he helped to write for a grant applicant was denied without any detailed explanations or reasons for denial. According to this respondent, the grant applicant did not receive any explanations on the reasons for denial, there was just a reference to the lack of budget. “It would be most appropriate to

18

send an explanatory note to our District Committee, so that we could further explain to the applicant the reasons for denial of their proposal.”

One means for ensuring greater transparency in the activity of the Programme Committees could be regular reports on the decisions made by the members of the Programme Committees at SIM gatherings. According to the data received by the SIMDP3 PCET, such reports have not become a practice. During interviews with the SIM population the Team did not obtain any evidence that such meetings are held by the members of the Programme Committees. During the SIMDP3 implementation some applications approved by the Programme Committees were later rejected by the Executive Committee. However, some applicants and members of the Programme Committees noted that did not receive any adequate explanation of the criteria on which the Executive Committee made their decisions nor on the reasons why these particular projects were selected among others for a more robust evaluation after they had been reviewed and approved by the Programme Committee. Thus, according to a member of one of the SIMDP3 governing bodies, the Executive Committee "kills projects based on personal preferences, without understanding the essence of the project”. It may be assumed that if there were a procedure developed to regulate the manner in which the Executive Committee reviews applications in question, as well as clear criteria as to when the EC may reconsider the decision of the PC, that could contribute to greater transparency in the review of controversial applications. In addition, the decision of the Executive Committee to reverse the Programme Committees’ decision would have been more convincing if it had included detailed reasons for the cancellation of the PCs’ decisions using clear criteria and if that information had been promptly brought to the attention of the Committee concerned. On the other hand, the PCET recognizes that the Plan does make an effort to keep the public informed in a timely manner about the SIMDP3 beneficiaries; one can find on the SIMDP website a listing of each grant beneficiary, the project name, and the amount granted (http://simdp.com/?id=51). Nevertheless, according to some respondents, they are aware of situations where the same rodovye hozaitsva or individuals have repeatedly received financial assistance under the Plan, in violation of the periodicity established by the regulations of the Programme Committees. Some respondents stressed that the information on all beneficiaries for all components of the Programmes during the implementation of each plan, as well as lists of all applicants whose applications are under consideration, should not only be accessible to the public and regularly updated but need to be consolidated so as to enable the PCs and others to promptly identify or even eliminate possible violations in the periodicity with which the same individuals and obschini receive grants. Also, some respondents noted that there were cases where people whose names were listed as applicants for Self-Sufficiency grants were not aware of this and did not receive the equipment or money requested in the grant proposals. Oddly enough, this occurred 19

even though the SIMDP site lists all successful applicants. These examples point to a larger issue: the lack of a general database detailing which organisations and individuals received grants and which had applied unsuccessfully. Without such a comprehensive accounting, it makes it difficult for interested parties to track the movement of funds in the Plan over the years. This hinders not only the work of the PCs—they can’t easily be aware of who are repeating beneficiaries—but also keeps the general SIM public in the dark as to who the Plan is helping and in what ways. 2.6 Grant Accessibility Obstacles Frequently, during meetings with the PCET, the respondents mentioned their perception of a reduction in the availability of grants for the various components of the SIMDP3. The number of grant applications has indeed tended to increase while the budget of the Plan –fixed at its inception for its full five year term--has not increased in proportion to the increase in the number of applicants (although there was never a promise that that would happen). As a result, there has been an increase in the number of rejections of grant applications due to «limited budget», without reference to the content or quality of the submitted applications. In the present circumstances, the availability of grants is determined by a number of factors, such as the level of funding for the SIMDP3, the increasing competition for the share of the budget between the SDF and TEASP components of the Plan, and unequal access to the Self-Sufficiency Programme of residents in different districts of Sakhalin due to the different number of obschini in different districts. Another factor that reduces the availability of grants is the Committee practice of repeatedly awarding grants to the same obschini (under the Business Plan component) and to individuals (under the Self- Sufficiency component) during the SIMDP3 implementation period. During SIMDP3 implementation, the 53 grants under the Business Plan component were issued to only 37 obschini. Some obschini have even received a grant to implement a Business Plan 3 or 4 times during the SIMDP3 period. The PCET maintains that the concentration of such grants in a small number of obschini only serves to limit the spread of the economic benefits of the Plan and contributes to negative perceptions. There have also been cases where the same individual has received a Self-Sufficiency grant twice during the SIMDP3 period. These circumstances limit the availability of grants to a wider range of applicants and give rise to the oft-heard claims that «the grants are received by the same clan enterprises and individuals». Another aspect of this problem is the disparity in the number of obschini in different districts where SIM reside. Starting in 2020 government regulations changed so that to legally receive a grant under the Self-Sufficiency component the applicant must be a member of an obschina. This was a problematic change, as in some districts the limited number of obschini there enabled them to in effect discriminate against certain would-be applicants by denying them potential membership and thus access to the Plan. The PCE Team repeatedly heard the view that the leaders of the existing obschini often refuse to accept new members and do not welcome the establishment of new obschini, seeing

20

them as potential competitors in the SIMDP3 grant tenders. This is one of the challenges that needs to be addressed in the development of the regulatory documentation for the next plan. 2.7 Conflicts of Interest There is no doubt that one of the most sensitive aspects of SIMDP implementation remains the equitable distribution of grants. In this regard, conflicts of interest--real or perceived--plays a central role. During the evaluation, the Plan Completion Evaluation Team once again encountered a lack of a common approach to interpreting the term “conflict of interest”. Some considered a conflict of interest the fact that the members of the Committees voted on applications submitted by their relatives, even remote ones (cousins, uncles/aunts) or their family members (a common-law wife/husband). Others saw a conflict of interest in the fact that one member of one of the Experts Groups evaluating the applications was also an applicant, having a good knowledge of the other members of the Experts Group, and potentially having an opportunity to discuss with them his or her application or applications of close relatives, thereby laying the groundwork for a biased approach.

The SIMDP documentation contains provisions on conflict of interest which recommend Committee members to be absent from the discussion and voting on applications which were submitted by themselves or their close relatives. In practice, this provision is generally implemented. Nevertheless, the situation with regard to the review of applications on an objective and impartial basis is far from ideal. Thus, until 2020, the members of the TEASP and SDF Committees had the opportunity to spend time together informally, exchange views, discuss applications and gain support for a project prior to the formal meeting. When agreements had been reached, the presence or absence of a member of the Committee during the discussion and voting for a project submitted by him or a closely-related person had been rendered practically irrelevant. The PCET was informed of situations where the personal interests of the members of the Committee were claimed to have affected the proper and objective performance of the members’ duties. However, the personal interest of the Committee members is not always expressed directly. During interviews, the PCE Team received information from respondents that some applications for funding were submitted by distant relatives of the members of the Committees but that these members of the Committees were the actual beneficiaries of these projects. There have also been cases when newly elected members of the Committee have received strong advice, or even directed guidance, from more experienced Committee colleagues regarding voting on applications, thereby causing a situation wherein the novice members of the Committee were not able to objectively and independently assess grant applications. Russian legislation does not contain an exhaustive and specific list of persons who may be considered subjects of a conflict of interest. Nevertheless, a broad discussion on this

21

issue is needed among the SIM community in order to eliminate any ambiguity in the interpretation of the terms «conflict of interest», «personal interest», and «corporate interest» with respect to the SIMDP. It is also necessary to work out a practical scheme excluding lobbying for their own applications among the members of the Committee. It is unlikely that this issue can be successfully tackled by prohibitive measures. A voluntary refusal by a Committee member to apply for funding from himself/his obschina/organization while serving on a Committee is already an option but it should be strengthened after discussion among the governing bodies. On the one hand, the issue of declaration of conflict of interest is an ethical and voluntary one. On the other hand, it should be borne in mind that the damage to the reputation of the SIMDP as a result of the failure to resolve a conflict of interest can be substantial. On this basis, the question of establishing a method to identify and analyze conflicts of interest and to take measures to prevent/remedy the situation is not so trivial. 2.8 Need for Enhanced Training & Guidance The Plan carried out many trainings over the course of the five years of SIMDP3. Trainings were held for all committee members, sometimes bringing them all together in Yuzhno- Sakhalinsk for a day or training, usually in combination with annual or semi-annual meetings of the SDF and TEASP committees. These were both necessary and useful, although some report that attendance was spotty for some of the meetings, aside from mealtimes. The Plan also held trainings in the Districts for community members interested in making grant applications for either SDF or TEASP components.

Aside from these Plan governance and application-related trainings, the Plan Programmes also funded projects which provided training for such practical activities as boat or vehicle driving courses where the goal was a licence, as well as for master classes in SIM arts and crafts, language, and culture. Training was also provided which allowed participants to go to the Mainland to receive hands-on training from master craftspersons and to participate in exhibitions both on Sakhalin and elsewhere in the country. Some participants in these workshops have received certificates and gone on to become crafts entrepreneurs opening their own businesses.

Despite all these efforts by the Plan and by the Company (some trainings were separately funded by Sakhalin Energy outside the SIMDP budget), however, many people opined that still more training was necessary, pointing to the often low quality of grant applications (“some applications merely say, ‘Give us money and we will make costumes’ without any further explanation”). Furthermore, many people have also emphasised that the quality of reporting on project results was often extremely poor, occasionally leading to individuals and partner-organisations being declared “delinquent” due to such non- performance.

22

While some people were probably just derelict in filling in the required paperwork for applications or reports due to a lack of motivation, many others reported being intimidated by the paperwork, the need for formal documents, and the language of the forms themselves. As more than one person reminded us, many of the applicants—or those discouraged from applying—were often not used to preparing “applications.” This situation often led to partner-organisations taking on a heavy burden of preparing the applications for those they sponsored as well as following up when reports were needed to be filed. An added dimension to this problem is the fact that many being asked to make grant applications are not familiar with the terms used in the forms whether for Business Plans (e.g., “assets”, “liabilities”) or for governance body service (“conflict of interest”; “self-sufficiency”; “sustainability”).

Similar difficulties sometimes faced new members of the PCs. Even when they started learning the new jargon, the requirement to rotate PC members out midway through the Plan meant that lessons learned would need to be relearned by a new group of likely novices in just 2.5 years’ time. Rather than training a whole new group of people mid- way through the Plan it probably would work better to repeat the training after the members had been on the job for a while.

Another lack noted both by interviewees and the PCET was the absence of any guidelines or regulations (“polozhenya”) for the District Committees and the Experts Groups. Lacking guidance as to what their roles were (other than a few lines in the Plan itself), these bodies varied in their interpretations of their rights and obligations and operating procedures. Likewise, the other governance bodies had very little guidance in how to make use of the deliberations of the DCs and EGs. Not surprisingly many people felt that the DCs and EGs were not needed or duplicative or could be eliminated. 2.9 Plan as Locus of Conflict Conflicts invoking charges of conflicts of interest or unfair allocation of Plan funds have occurred throughout the life of the Plan from its beginning in 2006. However, during this past Plan the conflicts have seemed to increase with many pointing to the Plan itself as the source of these conflicts. Asked about whether or not the Plan causes conflict, most serving on the Plan’s governance bodies acknowledge that there is a fair amount of conflict or tension present and point to unclear grant process regulations, an insufficient Plan budget, disgruntled unsuccessful applicants, conflict being “natural,” or merely that such charges are baseless.

Some interviewees declared that it’s simply the case that the opportunity to distribute Plan funds causes the clashes between district representatives fighting for funds for their friends, family, and allies, and that they are focused on this as opposed to any greater vision of project quality or objective evaluation of strangers’ applications. Instances of alleged corruption or abuse of Plan funds and the relatively lax enforcement of Plan rules and regulations adds to the problem.

23

3 Evaluation of the 3rd SIMDP: GovernanceGovernance Structure Rationale With SIMDP2, a radical innovation was introduced in having both key grant decision- making bodies—the SDF and the TEASP committees—include only SIM. In pursuit of the principles of capacity-building and inclusion, the move was seen as innovative since nearly all community development programmes globally involve members of the sponsoring company or government organization having sole or shared decision-making power when allocating grant funds. At that time and thereafter, it was recognized that aside from one sole indigenous representative from each district, other sources of information about grant applications should be solicited both to avoid over-concentration of decision-making authority and to render more objective assessments of grant applications.

Thus, separate Experts Groups for SDF and TEASP which were to be composed of specialists who would not know the applicants and who could render unbiased assessments based on their specialist expertise were established. As for the District Committees, the idea was to infuse the decision-making process with others from the district familiar with the applicants aside from the sole Committee representative (including on the District Committee a District Administration representative who could bring broader knowledge of the applicants’ socioeconomic status and access to other support sources).

At the top level of Plan Governance, the Governing Board—made up of representatives of the three Plan partners and indigenous representatives—is the highest decision-making body in the Plan with a predominance of SIM voices and votes. Recognizing that the Governing Board could not decide rapidly on a host of Plan issues, an Executive Committee—made up equally of representatives of the three Partners was established to handle matters in between Governing Board meetings but each of the EC’s decisions were subject to final review by the Governing Board.

This structure was thus aimed at inclusion of multiple voices into grant allocation decision- making, expanding the number of indigenous representatives participating in Plan governance at all levels and increasing transparency. However, during the Third Plan, the PCET has noted that the model has not worked completely as envisioned, with an overconcentration of decision-making authority lodging in both the Executive Committee as regards the Governing Board (and Programme Committees on the one hand) and in the Programme Committees as regards both the Experts Groups and the District Committees). These issues will be discussed in further detail below. 3.2 District Committees The District Committees were only partially effective. Many respondents declared them useless, their members incompetent, and/or their efforts an unnecessary duplication of the work of the TEASP Committee and called for their abolition in the next Plan. Particularly in the last few years of the Plan, some DCs didn’t even meet and in 2020 only 24

four of the total of seven DCs even submitted reports (meeting minutes) of their deliberations. Yet some DCs did work well year after year, going through each of the student support applications and the Self-Sufficiency applications, checking the applications against the Programme Committee Regulations in effect for that year and removing those that were inappropriate or advising the applicant to revise the application.

The District Committees, an innovation under Plan 3, suffered from a general lack of written guidance as to how to perform their tasks. Early on during Plan 3, the External Monitor urged the Programme Committees and the Executive Committee to provide them with Regulations which would spell out their tasks, recommended procedures and the communication channels with other Plan bodies such as the Programme Committees. None of this, however, was provided, leaving each District’s DC to stumble their own way towards implementation—or failure to implement—their assigned task of local level review of applications for Self-Sufficiency grants or student support awards. Some DCs accomplished the general goals for them set out in the Plan but most did not or only partially.

Problems with communication abounded as not all members of the DCs heard back officially from the Plan which of their recommended grants were approved and which denied—and why. This was sometimes due to non-functioning DCs or to the local administration representative not forwarding information duly received from the Plan. What the DC members did hear they often didn’t like: that the PCs—especially the TEASP Committee which was their main recipient of their investment of time and energy reviewing the Self-Sufficiency grants—paid little to no attention to their recommendations and usually were not even aware of them. This led to a situation where after a few years of this perceived neglect, some DCs failed to carry out their functions, leaving the Plan Coordinator to cajole DC members to issue a “report” or meeting minutes even if they had not actually met.

Circumstances thus led to the Plan missing out on the full potential of the DCs. The DCs were designed to provide an entry point for more people to be involved in Plan governance (some DC members from the first half of SIMDP3 did move on to other Plan bodies and were emboldened to seek out other community leadership roles) and to provide a counter-balance of three additional voices from others in the District aside from the lone District Committee representative for the TEASP and SDF Committees as they decided on Self-Sufficiency and student applications. The role of the District Administration representative on the DC also served a positive role when it worked: bringing information to the other members of the DC as to whether the applicant had received similar awards from government or other sources. This helped the SIM members of the DC better judge who should be recommended for the Self-Sufficiency grants. These members were often members of the District SIM Council and this also served to spread awareness of both the student and Self-Sufficiency grants to more people. One disturbing trend noticed in the last few years of Plan 3, however, was the appearance of the close

25

relatives of members of the Plan’s other governing bodies on a few of the DCs, thus compromising the independence of the DCs and raising conflict of interest questions.

Members of DCs that were active felt that their work was important but that their powerlessness made their work ineffective. Their recommended solution was not the abolition of the DCs but their strengthening. Regulations to guide the DCs, particularly the procedure for assessing applications, are desperately needed. 3.3 Experts Groups With regards to the role of the Experts Groups for both TEASP and SDF, the respondents, including former and serving members of the Experts Groups, expressed the belief that the recommendations of the Experts Group should be of great importance in the decision- making of the Programme Committees. Only a small proportion of respondents felt that Experts Groups failed or were not needed. One challenge, however, was the fact that the TEASP Experts Group did not work in full in the last two years of the Third SIMDP implementation period – just two out of three members of the Experts Group actually worked; a representative of the Ministry of Economy of the Sakhalin Oblast Government did not attend its meetings. More significantly, the PCET believes that the composition of the TEASP Experts Group is insufficient for a comprehensive evaluation of applications, considering the characteristics of the activities envisaged by the projects of the applicants. In some cases, the evaluation of a project required specific expertise in traditional crafts, forestry, fisheries legislation, nature resource use, taxation and other areas. According to some respondents, in order to improve the quality of decision-making the TEASP Experts Group needs to include representatives of relevant agencies as well as people with experience in certain areas of economic activity. It is also necessary to highlight that there is a lack of feedback between the Programme Committees and the Experts Group. Former and serving members of the TEASP Experts Group noted that they did not receive adequate explanations of why the Programme Committee members disagreed with the opinion of the Experts Group on specific applications. Many respondents, including members of the Experts Groups, also noted the need to use a formal bid scoring system to unify the work of experts and reduce subjectivity in the assessment of applications.

3.4 SDF Committee

During the PCE, the team members conducted relatively in-depth interviews with members of the SDF Committee to understand the nature of the conflicts that have torn apart the body over the last few years. As many members of the Committee have pointed out, in the initial phase of their duties they faced great difficulties that were not known before their election. The lack of information about the Committee itself, its regulations, 26

and how decisions actually took place were cited as reasons. The PCET also believes another reason was the lack of mentoring on the part of more experienced SDF colleagues who were in no hurry to share their knowledge and experience, and sometimes even tried to put pressure on newcomers to vote for certain applications. 3.5 TEASP Committee The last two years of the Third SIMDP implementation were characterized by the fact that the TEASP Committee decided on applications which did not result in complaints to the SIMDP governing bodies. This should be considered a positive development in its work as the TEASP Committee has been the more problematic of the two PCs since the First Plan. However, in interviews with the Final Evaluation Team respondents did criticize some TEASP Committee activities. One of the problems in the work of the TEASP Committee in 2020—due to COVID-19 restrictions--was a remote discussion of applications and voting on them in WhatsApp. Respondents, including representatives of the TEASP Committee, noted that this format of the discussion resulted in applicants not having the opportunity to present their projects in person and representatives of Sakhalin Energy and the SIMDP top management bodies (the Governing Board and Executive Committee) not being present during the discussion as they usually are and which ensures that discussions operate with some transparency. According to the respondents such a discussion format violated the principle of openness and created conditions for informal agreements among the Committee members on which applications they would support. Another aspect to be considered is that the TEASP Committee currently consists mainly of the heads of SIM obschini (5 out of 7 members of the Committee have been the chairmen of obschini in the last 2.5 years of the SIMDP3 implementation period). According to some respondents, this contributed to shifting the Committee’s interest towards supporting projects aimed at obschini. In particular, some people connected this fact with the distribution of the TEASP budget in 2020, where the Business-Plan component was allocated 60% of the total funds whereas the Self-Sufficiency and Capacity-Building components were allocated 30% and 10% respectively. The PCET recommends a more equitable balance between grants favouring individuals/families (Self-Sufficiency grants) and those favouring obschini (Business Plans). An important aspect of the TEASP Committee work should be seeking effective feedback with the Experts Group and the applicants, as well as informing the public about the TEASP Committee activities and grant application opportunities. The Experts Group currently does not receive a detailed explanation of the reasons for the Committee’s approving applications, particularly in cases where such decisions are contrary to the recommendations of the Experts Group; similarly, the applicants who were denied grants are not fully informed of the reasons. In addition, the members of the TEASP Committee do not hold regular meetings with the population of the Districts to report the results of the assessment of the applications. These circumstances highlight the need for greater transparency in the work of the TEASP Committee.

27

3.6 Executive Committee & Governing Board Members of the Executive Committee played a crucial role in the governance of the SIMDP3. Composed of two members each from the three Partners, their workload increased over the last few years of the Plan as they took on the development of regulations for the Internal Monitoring Team (as Internal Monitoring is one of their key duties), and they dealt with official Grievances filed with the Plan, while also arranging the logistics for the Plan’s multiple consultations trips. Their contribution and hard work on the Plan’s behalf cannot be faulted.

Increasingly, though, they have felt the need to add to their own workload. Assessing the review function of other Plan bodies as inadequate (that of the Programme Committees, the Experts Groups, and the DCs) they have taken on increasingly the tasks the Plan assigns to other bodies with one EC member claiming that they now review every grant application made to the Plan. While the PCET can appreciate the EC’s sense of responsibility, their overextension of their authority represents a serious malfunctioning of the Plan’s governance and an over-concentration of authority and power in the EC, beyond what was envisioned in the Plan’s division of labour and decision-making authority between the different governance bodies.

The key area of complaint with the EC these past few years has been that it has usurped the authority of the two Programme Committees by overturning their grant allocations. EC members claim these steps were necessary given that the grants in question were approved in violation of the PCs’ own regulations or did not make the changes recommended by the EGs. Yet, EC critics counter-claim that as practically all applications—particularly those not from state budget organisations—often have minor rules infractions, this EC vigilance merely serves for EC members to kill projects they personally don’t like and substitute those that they do. That the EC after overturning a project’s financing then determines on its own to reallocate the funds to projects that the EC likes (rather than returning the funds to the PC to reallocate) renders accusations that the EC’s decisions are biased somewhat credible.

Another area where the original cross-check function seems to have weakened is that while the EC reports their decisions, including their decisions to overturn PC allocations, to the Governing Board, this might not happen till weeks after the decisions in question. With the Governing Board perhaps not meeting until months past the overturning decisions, the GB is effectively sidelined as the ultimate decision-maker as the EC decisions have already been implemented and perhaps irrevocable. It should be noted that, in accordance with SIMDP regulations, the PCET recognises that the EC has the right to overturn PC decisions; the assessment here is that this power has occasionally been abused and that the GB has perhaps not performed as an effective supreme authority to review, confirm or reject the EC’s decisions.

28

One area of successful Executive Committee operation was the work of its sub-committee to handle grievances related to Plan implementation. During this Third Plan, such work had increased significantly, with 21 of the 43 grievances filed since the First Plan began operation in 2006 being filed under this latest Plan. Throughout the five years of the Plan’s operation grievances were filed, investigated by a group made up equally of the three partners’ representatives, reports prepared and submitted to the Governing Board and complainants. In nearly all cases the Grievances were closed and with the satisfaction of the grievance filers. 3.7 Internal & External Monitoring

3.7.1 Internal Monitoring Internal monitoring has been carried out in a fairly orderly manner and without expressed dissatisfaction among the overwhelming majority of the respondents. However, some representatives of Sakhalin Energy and representatives of the SIM community that had been members of the Internal Monitoring Team (IMT) in the past raised concerns about some aspects of internal monitoring. In 2018, the Midterm Evaluation Team (MET) observed that the IMT promotes principles of openness and transparency. However, a major impediment to carrying out its mission, was that some grant awardees scheduled to meet with the IMT fail to show up for their sessions. As a result, the IMT cannot always assess the implementation of a grant project or identify misuse of the financial and material resources allocated. This problem is systematic and requires development of additional measures aimed at preventing such cases. Non-attendance of a grant recipient at a meeting with the IMT is sometimes caused by their unavailability for good reasons during the presence of the IMT in the settlement. However, in certain cases such non-attendance is likely purposeful and results from an inability or unwillingness of a grant recipient to present required reports, documents or other evidence demonstrating implementation of their project goals. One very positive aspect of the IMT work is their development during the Second Plan and its refinement during this Third Plan of a set of evaluation criteria for projects and a related scoring system for evaluating compliance of the project with the stated goals, targets and expected results. This can serve as an inspiration for other Plan bodies to devise the same approach for the 4th Plan. The MET revealed the lack of official documents guiding the IMT as to selecting which projects to field monitor and this situation has not been solved. As explained by the respondents who have served on the IMT, the main trigger for monitoring was failure to provide interim reports by a grant recipient while another ground for selecting projects was the feeling of an IMT member that a particular project was more likely to be problematic in its implementation. Nevertheless, project selection criteria are not formalised and are not reflected in any documents. It therefore seems necessary to discuss the appropriateness of establishing criteria for defining the types of projects 29

subject to field monitoring. It is also possible to establish quantitative parameters, e.g., percentage of the total number of projects subject to monitoring under each SIMDP Programme and under each component of this Programme. It is important to note that the number of projects subject to field monitoring will be different for each Programme component. For instance, the number of projects under the Business Plan component can be higher than the number of projects under the Self-Sufficiency or Education components, given the number of applications approved each year. In addition, it is possible to set a quantitative level (amount of money allocated for a project), which will serve as the basis for mandatory field monitoring of all projects that were allocated grants exceeding this amount. Post-grant ownership and utilisation of equipment allocated to grant recipients under the SIMDP Programmes remains an important issue. Respondents have repeatedly mentioned to the External Monitors that grant recipients resell the equipment obtained under the Self-Sufficiency and Business Plan Programmes. Such cases serve as the ground for accusing some recipients or partner-organisations of “unjust enrichment.” Possible cases of resale will undermine the objectives of the TEASP Programme. Accordingly, it is advisable to return to the idea of random inspection of the use of equipment obtained by grant recipients in previous years. A paragraph on responsibility of a grant recipient to possess the equipment within a certain period after receiving it will probably need to be added to the regulations on Programme Committees.

3.7.2 External Monitoring Despite repeated calls from the Governing Board Chair and other Board members for the different governance bodies to discuss and review the annual reports of the External Monitor and the Midterm Evaluation Team (2018), most respondents could not recall any such group discussions and only a handful recalled anything specific from those many reports. Some members of those bodies reported that there were some online discussions but no committee held an in-person discussion of the report and its recommendations. This lack of a full response to the recommendations undermines a useful tool for Plan revision and improvement. 3.8 Tripartite Collaboration Cooperation between the three partners in Plan implementation was satisfactory. This was true despite repeated turnover at the top of the SOG Indigenous Peoples Department. The RCAR, however, felt that at times the SOG and Company could have been more supportive of its initiatives but that by and large this did not affect cooperation in implementing SIMDP3. Furthermore, the Partners usually reached consensus on the Governing Board, and carried out their responsibilities in serving on the Executive Committee, the Internal Monitoring Team, the Grievances Review Working Group, and holding consultations and public meetings in the seven areas of SIM traditional residence.

30

4 Recommendations for the SIMDP4

The PCET, based on our interviews, reviews of key SIMDP3 documents, and our general experience with social development Programmes offers the below recommendations to both the Working Group preparing a draft of the SIMDP4 and to the SIM community. 4.1 Vision Statement & Strategic Approach Previous SIMDPs have lacked an overall strategy or vision as to what role the SIMDP(s) in general can serve in the development of the SIM. We recommend that the Working Group consider including such a statement and strategic approach in the Fourth SIMDP. Such a statement could include:

• FPIC Strategy: An explicit commitment to prepare the SIMDP4 as an “FPIC- Standard Indigenous Peoples Plan,” an idea which is gaining global acknowledgement. This would mean that the FPIC principles of “free,” “prior”, and “informed” decision-making would be the ruling principles in all regulations and procedures devised by the Plan. While some might argue that this has implicitly been the case, making such a commitment explicit would place Sakhalin and its SIMDP4 at the forefront of the global Indigenous Peoples development discussion. This would involve, at the minimum, a greater commitment to transparency on many dimensions. The Working Group could add more aspects of FPIC (e.g., a more robust process for informing local communities about each step of the grant application process; or the Social and Cultural Development Programme requiring project sponsors whose proposals make use of the intellectual property of SIM (e.g., arts, folktales, pharmacology) obtain the agreement/consent of at least one indigenous organisation to make their proposal).

• Vision Statement: What role(s) should the SIMDP(s) fulfil in the development of SIM? A testing ground for self-management of development plans? A vehicle to enhance human and social capital of the Island’s indigenous population? Preparation for establishing an Independent SIM Fund? Such a statement could guide – in complementary fashion with the SOG’s Sustainable Development plans for SIM—the preparation of SIMDP4 and future Plans. 4.2 SIMDP4 Objectives & Programmes Some interviewees this year and in previous years have suggested eliminating TEASP and transferring its moneys to SDF, while others have advocated for eliminating capacity- building efforts. The PCET believes that while those Plan elements might have had problems or challenges, their place in a well-rounded and forward-looking Indigenous Peoples Development Plan is critical. Others—tired of the “complexity” of the Plan have advocated simply reducing all Programmes to one with one guiding committee. This the PCET recommends against as it would narrow decision-making and involvement in the

31

Plan to only a few individuals and would likely only exacerbate problems of over- concentration of decision-making authority in a few hands as well as conflicts of interest.

The PCET, however, does recognise that changes in governance and Plan structure are necessary. The PCET thus recommends that the SIMDP4 Programmes be adjusted somewhat to reflect current 2020s conditions on Sakhalin. Furthermore, to carry out a Vision Statement or Strategic Approach as advocated in Section 5.1 above, each Plan Objective should be matched with a Programme tasked to actualise such objectives. We also suggest the following reconceptualization of the Objectives and Programmes as follows:

o Objective 1 & Programme 1: Capacity-Building. SIMDP3 Objectives 1 (“Capacity-Building”) and 3 (“Independent Fund Preparation”) should be combined. The innovation would be to establish a free-standing Capacity-Building Programme for the entire Plan with its own Capacity-Building Committee to encourage and assess capacity-building projects. A key part of its initial year tasks would be to define “capacity-building” in the context of today’s Sakhalin Indigenous Minorities development goals. Along with the other Plan Programmes, it would be accorded its own annual budget by the Governing Board. Concrete moves to establish an Independent Fund could be considered as a component of this Programme.

o Objective 2 & Programme 2: Social and Cultural Development. Current SIMDP3 Objective 2 (“Social, cultural, and economic development”) should be divided into two objectives with social and cultural development having its own objectives and Programme along with its own Social and Cultural Development Committee.

o Objective 3 & Programme 3: Economic Development. Aside from an emphasis on “traditional” economic activities, this objective and Programme should be expanded to include other forms of economic activity. The reasoning for this suggestion will be explained below (Section 5.4).

o Objective 4 & Programme 4: Project Environmental (or Ecological) Effects Disclosure and Environmental Awareness. For this item, the focus should be shifted to include SIM feedback on ecological changes and risks related to the Sakhalin-2 projects. This would include not only the robust information- sharing provided by the Company to the SIM but would also involve SIM in activities such as participatory environmental monitoring and environmental awareness educational activities. This Programme would be afforded a perhaps modest budget and would likely not need a full committee to run it or perhaps its work could be placed with another committee such as the one to be in charge of Capacity-Building.

32

4.3 Capacity-Building Programme

First task for the Capacity-Building Programme (CBP) Committee members will be to define “capacity-building” so that it makes sense in a SIM context. This could probably best be done with advice from the Experts Groups members and with the Social and Cultural Development Programme and Economic Development Programme Committees. The PCET recommends that such a new Committee consider what creates conditions for- further SIM development and make that part of their capacity-building definition.

In this context, it should be noted that the concept of “indigenous capacity-building” has not yet been clearly understood by the Indigenous People of Sakhalin. The term remains largely “umbrella” and is subject to different interpretations depending on the context of the discussion. It appears that the term needs to be clarified in the text of the SIMDP4, as the definition in the current Plan does not provide a clear answer to the question of which aspects are included in the capacity-building at the individual level and which at the wider level of the Indigenous Peoples community on Sakhalin. The definition of “SIM Capacity-Building” should thus include two aspects: A. Development of human and cultural capital of the Indigenous Peoples on Sakhalin In the first case, this is the development of the knowledge and skills necessary for the SIM to participate fully in economic and social activities, not only within the framework of traditional economy, culture and sports, but also within a wider range of activities. Representatives of the SIM community consider the following to be among the most needed knowledge and skills for development:

• Legal knowledge, in particular knowledge of legislation on Indigenous Peoples rights, fishing regulations, the use of natural resources, traditional economic activities, the licensing and certification of production, and the sales of products. • Knowledge of tax reporting and accounting procedures (particularly important for members of obschini as well as for those who intend to establish new enterprises or register as individual entrepreneurs). • Technical skills required for various types of economic activities: skills in operating of small boats, snowmobiles, automobiles. • Skills in production of various types of products (e.g., skills in leather processing, fur-making, tailoring, souvenir-making). • Skills in writing grant applications (including explaining the technical terms that are used in the applications and explaining the tender regulations), documenting and reporting on grants--not only under the SIMDP Programmes, but also under other SIM support Programmes at the regional and federal levels. • Expanded training in governance for all committee members (supplementing the training already offered but specific to the regulations 33

for each governance body—and to include the DCs and EGs with their own regulations if developed; see below). • Development of leadership qualities and social skills required for implementation of independent projects and joint activities of SIM. B. Development of social capital and the SIM community as a whole The second aspect of SIM capacity-building involves development of social contacts and collective action skills within the SIM community. They are necessary to enhance the ability of the SIM community to independently organize and implement joint projects, including programmes and major activities aimed at local community level development, as well as at district and regional levels. Possible areas for capacity development under this component are: • Training of interested SIM representatives (such as community leaders, regional NGOs, cultural and artistic organizations) in project management, strategic planning, event management and other skills necessary for the implementation of mass projects. • Arranging for an exchange of experience between successful Indigenous Peoples Organizations (IPOs) in Russia and IPOs on Sakhalin through training sessions, seminars and workshops focused on implementation of large-scale projects in the area of social self-organization of Indigenous Peoples, as well as the protection of collective interests and cultural development of Indigenous Peoples in other areas. • Development of communication among SIM residing in various Districts and settlements of the Sakhalin Region (including the areas not included in the official list of areas where SIM traditionally reside) using information technology communication systems. One element of such support could be inclusion in the list of authorized expenses for SIM organizations carrying out regional and inter-District IP activities, additional expenditure items for connection of the organizations' offices to the Internet, buying computers and office equipment needed to ensure sustained communication between Indigenous People organizations throughout Sakhalin.

The CBP Committee members could also act strategically, putting out tenders for grant applications in specific areas they think are important. These could all be considered as part of a designated tender. Alternatively, the CBP Committee could seek to organise such training themselves inviting the proper specialists to a workshop.

Lastly, the PCET recognises that Sakhalin Energy has already provided during SIMDP3 trainings somewhat similar to those mentioned above and that these have been quite useful. Nevertheless, these other types of training could be considered as integral parts of Plan Four.

34

4.4 Social and Cultural Development Programme

4.4.1 National Culture and Sport In the spirit of the FPIC strategy referred to in Section 5.1, the Social and Cultural Development Programme should include in its regulations that any grant application involving the cultural heritage of SIM whether tangible or intangible be accompanied by a document attesting to the fact that one local SIM group (either community, obschina, or organisation) has requested the proposed grant or grants or has given their consent to the application.

4.4.2 Education There is a need to increase awareness of this component, including through traditional media (TV, radio, newspapers) and secondary educational institutions themselves as well as through the offices of the District Administrations.

4.4.3 Health Given the current economic difficulties which particularly effect SIM, the developers of Plan 4 need to consider whether or not the Plan should buttress social health services as well as foster sustainable development. If the answer is yes, then we recommend the following: • Expand the range of medical care to SIM by including dental treatment services • Provide for the establishment of a reserve fund within SDF to provide emergency medical care to those in need (e.g., Support to Individuals in Need of Emergency Life Support) • Minimise the list of supporting documents for medical services given the difficulties of supplying detailed documents from official and often distant government offices

4.4.4 Ecological Knowledge Preservation For all its diversity, the Social Development Programme does not contain another very important component - the preservation of traditional environmental management approaches. It is proposed to expand the Social and Cultural Development Programme to introduce a component - the collection and systematization of the ecological knowledge of the SIM. Traditional environmental knowledge is directly related to traditional environmental management. Activities in this area may include: • the study of ethnoecological calendars (description of the main events of the natural and economic cycles: the time of intensive "movement" of commercial fish, calving and slaughter of domestic deer, the establishment of snow cover, time, etc., as well as related to the cycle holidays, rites, ceremonies)

35

• creation of an ethnoecological map (a map of natural objects important for the natural use and culture of the SIM: traditional hunting and fishing sites, ancient cemeteries, sacred sites (except for those that should be kept secret), places of certain historical events, etc. • description of certain processes and skills (animal skins, fish skins, manufacture of equipment, clothing, shoes, cooking traditional food, etc.) 4.5 Economic Development Programme At present, the economic programme of the SIMDP3 is aimed at only supporting “traditional” economic activities of SIM (TEASP). However, in today’s world traditional activities often do not generate substantial income or are high-cost; many SIM are not limited to traditional occupations, they have diversified their activities or chosen to engage in economic activities that go beyond traditional occupations and provide more stable income.

In this regard, the next SIMDP should expand the range of economic activities supported by its grants9. In view of the need to diversify the economic activities of the Sakhalin indigenous population, the following activities could be included in the list of supported activities: agriculture, retail sales (subject to obtaining the required licenses and certificates), tourism and some other services, as well as the construction of necessary temporary facilities. Likewise, given the broad popularity of the Self-Sufficiency component and combined with an objective of spreading SIMDP benefits amongst a wider range of SIM, the PCET recommends that the two components—Self-Sufficiency and Business Plans—receive allocations closer to parity.

The next SIMDP’s economic development Programme cannot be aimed solely at maintaining the level of economic activity previously achieved; it must encourage further development of successful obschini and other SIM organisations involved in economic activities. In this regard, consideration should be given to the possibility of inclusion in the SIMDP of a special component providing financial support to those SIM organisations that are in a stable financial position to apply to credit institutions for small business development credit. 4.6 Grant Assessment Process It is advisable to develop and implement independent scoring systems for applications assessed by the Economic Development Programme and Social and Cultural Development Programme Experts Groups on the one hand and the PCs on the other. As for the Economic Development Programme Experts Group, basic criteria for the evaluation of Self-Sufficiency and Business Plan applications need to be developed. For the first type of applications (for Self-Sufficiency grants), the most important criteria would be the

9 Thus changing the name of its economic programme from “Traditional Economic Activities Support Programme” to “Economic Development Programme.” 36

applicant’s financial situation, presence of other sources of support unrelated to the SIMDP, the applicant’s involvement in those forms of activity for which the requested equipment is intended, and a license to operate the equipment (where a license is a legal requirement), as necessary. Each criterion should be assessed on a scale of points (for example, 1 to 5). In reviewing applications, the Experts Group will add points for each criterion and assign a total score for each application. Thereafter, depending on the number of points received by the application, the Experts Group makes one of the three decisions: • The application is recommended for funding on a priority basis (applications receiving the highest number of points) • The application is recommended for funding • The application is not recommended for funding (due to lack of sufficient documentation of below a point minimum threshold; applications falling into this category should not be considered by the TEASP committee) Note that the above three tiers of recommendations are developed by the Expert Groups for final decision by the PCs. The Economic Development Programme Committee is encouraged to develop a similar system of criteria for the evaluation of business plans in accordance with the relevant Programme regulations. On the basis of the results of the assessment of the applications, the Committee assigns a total number of points to each application and ranks them by the number of points received. It is recommended that applications that do not meet the minimum requirements and that are not recommended by the Experts Group should not be reviewed by the Economic Development Programme Committee to enable the Committee to focus on applications that do not contain gross violations and that comply with the basic requirements of the Programme regulations. On the basis of the sum of the total points for each application, it is necessary to establish a common register of the applications considered by the Committee, indicating the score for each of them in the form of a rating. Based on the rating of applications (which is organised as a list of applications with points in descending order), the Committee should approve funding for those with the highest number of points. However, the number of approved applications recommended for funding would be limited to the budget of the relevant Programme component. The register of the applications reviewed by the Committee, with indication of the score for each of them, should be posted on the SIMDP website for the benefit of stakeholders. This will increase information transparency of the Committee. In principle, the Social and Cultural Development Programme Experts Group and PC should follow the same procedures. The rating of applications resulting from their review by the Economic Development and Social and Cultural Development Committees should be considered by the Executive Committee. If the Executive Committee had to reverse the decision of the Committee

37

(for example, in case of a serious breach of the Committee’s application review procedure), the funding thus released should be assigned by the application which is the next in the register based on the number of points scored. In addition, a number of measures should be envisaged to enhance transparency in the process of discussing the applications and final decision-making. Key to this effort should be the creation of a Plan Database which will be cumulatively added to over the lifetime of SIMDP4. This could be used both by the PCs to consider as they make decisions and also to enhance public transparency. Thus it would be highly advisable to post on the SIMDP website information about all incoming applications under the Economic Development and Social and Cultural Development components which are pending review, with indication of the following details: a list of names of applicants (and partner- organisations) under the Self-Sufficiency component, funding requested, equipment and its planned use; a list of obschini which applied under the Business Plan component, the description of the projects, the funding requested and its purpose. Once the applications have been reviewed, the lists should be supplemented by information on the review results, with a detailed explanation of the reasons for rejection for those applications denied. It is also necessary to inform the public of any changes in the regulations of the SIMDP Programmes; such information should be promptly made available to the public - information should be promptly posted on the SIMDP site and conveyed to the District Committees. The SIMDP site should include information on all SIMDP beneficiaries for the last 5 years. It is recommended that two lists be kept current:

1) List of individual beneficiaries 2) List of obschini, organizations and other legal entity beneficiaries

Each of the lists must include the name of a beneficiary (or the name of an obschina or other legal entity), the year of receipt of the grant, the component of the SIMDP, the amount, its purpose, and a summary of the results of the project. 4.7 Grant Accessibility It is advisable to set a limit on the frequency (periodicity) of receiving grants: • One Self-Sufficiency grant per person per 5-year plan • One Business Plan grant per obschina|rodovoye hozyaistvo per 5-year plan. • The Social and Cultural Development Programme Committee should institute a similar limit on the number of grants a particular institution can receive during the span of the 5-year Plan The PCET recommends these limits even though we recognize that the PCs award grants upon a competitive tender basis. We do so because the Plan needs to avoid the perception—and occasional reality—of Plan capture by a few individuals or obschini. And

38

to further the principle of equitable and broad distribution of Development Plan spurs to economic and sociocultural growth. 4.8 District Committees Despite a number of calls for the elimination of District Committees in SIMDP4, the PCET believes that they should be retained and indeed empowered to play a more significant role in the Plan. They serve two key functions: a) they act as a valuable additional source of information on Self-Sufficiency grant applicants and students applicants, and b) they increase the number of people involved with the Plan, thus building capacity for other Plan governance roles and for community involvement in other activities as well.

Most important is that Regulations (“Prolozhenya”) need to be created for the District Committees which lays out their role, their Self-Sufficiency grant assessment process, and the criteria that such grants should be judged by. PCET recommendations regarding such regulations include: • Committee Composition: The DCs should retain having a member of the District Administration as this provides the DC with access to a fuller picture of support that applicants have received and provides a potentially more “objective” reviewer of the applications; the Administration member’s service on the Committee also provides the only official link the Plan has with these important local government groups and could bolster information distribution within each of the seven Districts. Formally adding participation of the Administration representative in the DC to the representative’s job description would be useful and this could be discussed at the appropriate government level. As for the other members of the DC, recruitment from the local Indigenous Peoples Council makes for yet another Plan connection with the local community. • Empowering the DC: The DCs should be entrusted with two key roles: 1) reviewing Self-Sufficiency grant and student support applications to ensure that they meet the basic criteria set out by the Programme Committees for these components, 2) assessing all applications from their District and ranking them into three categories: a) “Not Eligible” for consideration due to not meeting minimal criteria or lacking critical documents (these applications could not then be passed on to the Programme Committees, b) “Eligible for Consideration” by the PCs, and c) “Highly Recommended.” If the PCs develop a point grading system, the “Highly Recommended” category could carry some point weights to figure into committee calculations. • Integrating the DCs into the Plan information flow: The PCs should communicate their decisions about grant applications forwarded by the DCs with explanations of how the PCs voted on the Recommended and Highly Recommended applications.

39

4.9 Experts Groups Both Experts Groups need Regulations to guide their activities, including their membership, their grant review processes, and their modes of information-sharing with other Plan bodies. It would also be advisable to expand the membership of the Economic Development Experts Group to include experts in the field of Indigenous Peoples legislation, environmental management, forestry, fishing, taxation, traditional economic activities and other fields. As for the Social and Cultural Development Experts Group, the predominance of SOG representatives needs to be addressed so as to give appropriately qualified SIM expert representatives who have the experience and knowledge necessary to evaluate projects in the sphere of culture, national languages, handcrafts and national sports a greater voice. . Experts Groups should have an opportunity not to recommend funding applications with gross violations (for example, those with incomplete packages of documents, the ones without the necessary financial settlements or those in conflict with legal requirements). Such applications will not be considered by the Committees, which will have the opportunity to focus on a more thorough review of the applications that were ‘filtered’ by the Experts Groups. The results of the review of applications by the PCs should be promptly (within 3 days) communicated to the applicants. In a case of a negative decision, the applicant and the relevant Experts Group, as well as the District Committee (in the case of applications under the Self-Sufficiency and Education components), should be provided with detailed written comments on the reasons for the rejection, indicating specific errors, inconsistencies and possible ways to address them. In addition, in order to enhance transparency in the review of applications, the following representatives should attend all meetings of the PCs:

a) the SIMDP Coordinator b) an independent observer (remotely or in person) 4.10 Governing Board, Executive Committee, and Grievance Procedure SIMDP3 has the Executive Committee acting on the Governing Board’s behalf in-between GB meetings. Given the recent controversies and complaints from PC members and from grant applicants that overturning PC grant decisions was excessive, the PCET recommends these changes for SIMDP4:

• In order to enhance transparency in decision-making, it is advisable to establish a procedure governing the review by the Executive Committee of questionable applications, as well as establish clear criteria by which the Executive Committee may reconsider the decision of a Programme Committee. The general rule should be that the reversal of a PC decision should be a rare exception, which applies only 40

in the event of a serious breach by the Committee of the application review and decision-making procedure. • One possibility to accomplish this objective is to restrict the EC to only review PC grant decisions if a grievance is filed by an applicant or is requested to do so by a member of the PC. This suggestion is contingent on a robust check on basic regulations adherence is implemented through the joint efforts of the Coordinator, the DCs, and the EGs. • EC decisions overturning PC grant allocation decisions be confirmed, revised, or rejected by the GB within a reasonable period of time (i.e., in time to be able to implement such a decision) if a request to have the GB review the decision is filed by the PC with the Coordinator. • In all cases where an allocation by a PC has been overturned by the EC and confirmed by the GB, the funds so released by a decision should be returned to the PC for reallocation. If a point application assessment scheme is implemented, this would presumably mean the project with the next highest point total would receive the released funds.

As for the Governing Board, the PCET recommends: • In between semi-annual physical meetings of the GB, virtual meetings of the GB should be held midpoint between those physical meetings, or on an emergency or ad hoc basis. This might happen, for example, to consider the situation when the EC overturns PC grant applications. • The GB should place on its regular meeting agendas timely discussion and consideration of Internal Monitoring Reports and External Monitoring Reports. Monitoring is only effective to the point that issues raised by their reports are considered carefully by supervisory bodies. • The GB needs to approve PC Regulations before they can take effect.

As for the Grievance Procedure: • Upon the close of a grievance procedure by the EC, the GB should be informed promptly and entitled to confirm, revise, or reject the EC’s Grievance Resolution Working Group’s report. • Regulations for the Grievance Procedure should allow the Plan Coordinator to refer disputes or complaints between partner-organisations and grant awardees the Coordinator is aware of but for which a formal grievance has not been filed to appeal to the EC for guidance.

Furthermore—as alluded to above--the Governing Board and the Executive Committee need to develop regulations for the Experts Groups and the District Committees which should describe their modus operandi. 4.11 External Monitoring & Internal Monitoring The Governing Board should consider developing guidelines for the Internal Monitoring Team, including the following: 41

• Determining criteria for priority inclusion of a project into the annual monitoring plan, including mandatory monitoring for all projects exceeding a certain amount of funding (exact threshold amount of funds to be determined) • Minimum quota (percentage values) to determine the number of projects subject to mandatory annual monitoring under each component of the SIMDP • Expanding the parties who can be involved in internal monitoring under each component of the SIMDP. Thus, for instance, the head (or the representative) of the SDF partner organisation can be involved in the monitoring. • Determine the period within which a grant recipient should possess the equipment received under the SIMDP Programmes, along with exceptions to that rule (e.g., inheritance of property will be treated as continued possession by the original grant recipient).

Furthermore, the regulations for all governance bodies should mandate that the bodies set aside time to discuss the content and consider the recommendations of reports issued by the Internal and External Monitoring Teams and the External Monitor. 4.12 Regulations It is advisable to include in the text of the Fourth Plan definitions of basic terms, a uniform understanding of which is essential in order to avoid uncertainty and ambiguity, which should ultimately enhance the coherence of the governing bodies of the SIMDP. • The concept of «conflict of interest» needs to be more clearly defined. During meetings with the indigenous population, the PCET had to deal with very different interpretations of the term. o The SIMDP guidance documents do not provide an exhaustive list of the empirical indicators of conflict of interest with regard to the SIMDP participants. In order to eliminate this shortcoming, the definitions of conflict of interest contained in the federal legislation of the Russian Federation (FL No. 273 «On anti-corruption», FL No. 79 «On the State Civil Service of the Russian Federation») could be used as a basis. In doing so, it is important to consider the qualifying elements of conflict of interest relevant to the content of the SIMDP and to exclude those that are not applicable to it. In addition, it is advisable to specify the concept of «family members» of a participant in the coordinating bodies of the SIMDP and to decide whether it is advisable or not to extend the list of family members to include persons of a more distant relationship. o Provision should also be made for the liability of persons who fail to declare a conflict of interest. Currently, the guidance documents oblige members of coordinating bodies to declare a conflict of interest, however responsibility for violating this requirement has not been defined. Moreover, a uniform procedure for so declaring such conflicts which specifies under what

42

circumstances and in what form needs to be developed and included in SIMDP4’s guiding regulations. • Sanctions for Not Declaring a Conflict of Interest At present the SIMDP and its regulating documents do not envisage sanctions for individuals violating the requirement to declare a conflict of interest. It is advisable to discuss the possibility of imposing such sanctions. o A possible sanction for not declaring a conflict of interest can be disqualification of a member from serving on any SMDP coordinating body (i.e., early termination of their term) or withdrawal of the right to receive SIMDP financing for a certain period of time. o It is also important to develop a form for declaring a conflict of interest and determine the circumstances for submission of the form (i.e., at the beginning of a decision-making meeting of the governance body). • It is also necessary to formulate an exhaustive definition of the concept of “Indigenous Peoples capacity-building” taking into account the opinion of the SIM community itself on which objectives should be pursued for capacity development. It is therefore advisable to include in the text of the SIMDP a description of capacity-building objectives at the individual level and at the level of the Sakhalin Indigenous Peoples community as a whole. This can best be the responsibility of the members of the new Plan’s Capacity-Building Programme. • The relationship of the SIMDP to an independent Indigenous People’s development fund needs to be clarified. Should the establishment of an independent Indigenous People’s development fund be considered one of the SIMDP objectives? This is the question raised by many Indigenous People representatives who believe that the SIMDP should pursue such a goal. If, however, the objective of the SIMDP is different, i.e. “assistance in preparing the Indigenous Peoples of the Sakhalin Region for the possible establishment of an independent fund for the development of Indigenous People,” it is necessary to determine what such preparation should be. • According to the list of objectives of the Third SIMDP, the preparation of Indigenous People for the establishment of an independent fund is considered to be a separate objective and not the same as the capacity building of SIM. However, the SIMDP3 does not contain any specific component or Programme to achieve this objective and thus this PCE Report recommends that an explicit capacity- building program be established under the SIMDP4. If, however, this separation of objectives is maintained, the Fourth SIMDP should define in detail the content of the preparatory activities for the establishment of an independent Sakhalin Indigenous People’s development fund and determine which component (or components) of the Plan will be designed to achieve it. See Section 5.2 “Objective 1” above.

43

• Regulations guiding both the Experts Groups and the District Committees need to be prepared under the direction of the Governing Board to guide their work in a uniform manner and in line with the Fourth Plan’s Objectives. • Responsibility of a Grant Applicant: It is recommended to include in the provisions of the SIMDP Programme Committees a paragraph on responsibility of grant applicants for the provision of trustworthy information. It is also appropriate to envisage negative (non-legal) sanctions placed on private individuals and partner organisations who contribute to the provision of false information by applicants applying for the SIMDP grants. Responsibility for such actions may consist in depriving such individual or partner organization of the right to receive funding under the Plan for a certain period of time. • Limitations on Members of the Coordinating Bodies Participating in the SIMDP Programmes: The SIMDP4 Working Group is encouraged to consider the possibility of imposing a restriction on members of the SIMDP coordinating bodies from receiving financing under the SIMDP Programmes for the duration of their term. Potential individuals subject to the restriction are: o Members of the SIMDP Governing Board and their close relatives o Members of the SIMDP Executive Committee and their close relatives o Members of the SIMDP Programme Committees and their close relatives o Members of the SIMDP Experts Groups of the Programme Committees and their close relatives o Members of the SIMDP District Committees and their close relatives 4.13 Enhancing Stakeholder Participation In order to increase the involvement of the three parties to SIMDP development, discussion, implementation and management, it would be desirable to consider the possibility of involving additional representatives of the parties representing different views, experiences and interests of the Sakhalin indigenous community, the government of the Sakhalin Region, and Sakhalin Energy. • It is proposed that the Indigenous Peoples Council of the Sakhalin Region under the Governor of the Sakhalin Region be involved in the process of discussion and subsequent management of the SIMDP. The specific format of the Council’s involvement in the Plan could be determined in the process of signing a new Tripartite Agreement. Given the fact that one of the key objectives of the Plan is and has long been the development of an Independent SIM Fund, involving the Governor’s Council would be a strategic move to broaden interest and involvement in the preparation for such an endeavour. • It is recommended that the composition of the TEASP Experts Group is expanded to include representatives of the relevant ministries and departments of the Sakhalin Regional government whose professional experience will facilitate the quality and comprehensive review of applications for the development of the economic activities of SIM (fishery and forestry specialists, business planning 44

specialists, tax and finance specialists, etc.). At the same time, indigenous specialists in cultural development should be added to the SDF Experts Group to better balance partner representation on that body. • Representatives of the Sakhalin Indigenous Minorities residing outside the areas designated as the traditional areas of living for Sakhalin IP should be involved in the discussion of the SIMDP.

45

Annex 1: ADDITIONAL INDIGENOUS PEOPLES PROJECTS SUPPORTED BY SAKHALIN ENERGY

Since 2006, the Sakhalin Indigenous Minorities Development Plan has been the company’s main Programme in the field of Sakhalin Indigenous Minorities (SIM) engagement.

In 2016-2020, during the implementation of the Third Development Plan, the Company, in addition to the many projects carried out under that Plan, continued realization, support and/or financing projects and events predominantly aimed at preservation, development and promotion of the national culture and languages as well as SIM capacity-building.

These are the projects implemented with the Company’s support outside the SIMDP scope in 2016-2020: 2016 XII regional SIM holiday (Nogliki) “The World of Nivkh” exhibition in the State Russian Museum (St. Petersburg) ParticSIMation of SIM delegation and exposition “Sakhalin Treasury: Traditions and Innovations” at International Exhibition & Fair “Treasures of the North. Craftsmen and Artists 2016.” (Moscow) Publication, presentation and distribution among SIM representatives and other stakeholders of corporate calendar dedicated to SIM culture: “12 Months on the Sunrise Island”. Publication, presentation and distribution among SIM representatives and other stakeholders of double audio album of Vladimir Sangi’s tales in Russian and Nivkh languages. Participation of SIM representatives in Forum of Indigenous Peoples of the North, Siberia and the Far East of Russia “Russian North” (Moscow) Participation of SIM representatives in SIM Council under the Governor of Sakhalin Oblast (Yuzhno-Sakhalinsk) Preparation, publication and distribution of “The World of Nivkh” 2017 calendar with reproductions of thematic pictures from the collections of Sakhalin Regional Art Museum and Okha Museum of Local Lore 2017 VII SIM Congress (Nogliki) Series of events “The Silhouette Magic by Semyon Nadein” (exhibitions and presentations, manufacture of souvenirs and their distribution among SIM representatives and other stakeholders) Participation of SIM delegation and “Sakhalin the Green Island” exposition at International Exhibition & Fair “Treasures of the North. Craftsmen and Artists of Russia 2017.” (Moscow) Participation of SIM representatives in “The Reality of Ethnicity” XVIII International Scientific and Practical Conference and the I Congress of Teachers of the Languages 46

and Literature of Indigenous Peoples of the North, Siberia, and the Far East of the Russian Federation (St. Petersburg) VII Congress as part of the Forum of Indigenous Peoples of the North, Siberia, and Russian Far East (Salekhard) 2018 Participation of SIM delegation and “How the Earth was Born” exposition at International Exhibition & Fair “Treasures of the North. Craftsmen and Artists of Russia 2018” (Moscow) Sakhalin Oblast Traditional Sports Competition Among SIM Children (Poronaisk) First “Mother Tongue” Children and Youth Conference in the Languages of the Sakhalin Indigenous Minorities (Yuzhno-Sakhalinsk) Continued series of events “The Silhouette Magic by Semyon Nadein” (exhibitions and presentations, manufacture of souvenirs and their distribution among SIM representatives and other stakeholders) in districts of Sakhalin Oblast IV Forum of Indigenous Youth of the North, Siberia and the Far East of Russia “Russian North” (St. Petersburg) Preparation, publication and distribution of 2019 corporate calendar (Nivkh Year from A to Z) 2019 Events to mark the 40th anniversary of the modern Nivkh alphabet by Vladimir Sangi (regional literature and art competition dedicated to Nivkh alphabet, solemn events in Yuzhno-Sakhalinsk and Nogliki) II International Symposium in the Languages of the Indigenous Minorities of the Far East (Yuzhno-Sakhalinsk) Website dedicated to the International Year of Languages (www.iyil2019.ru) Open lessons dedicated to the culture of Sakhalin Indigenous Minorities held in the Romashka kindergarten in Korsakov Participation of SIM delegation and exposition “Sakhalin the Ark-Island” at International Exhibition & Fair “Treasures of the North. Craftsmen and Artists of Russia 2019.” (Moscow) Sakhalin Oblast Traditional Sports Competition Among SIM Children (Tymovskoye, Chir Unvd) III International Scientific Conference “The Folklore of the Paleo-Asian Peoples” (Yuzhno-Sakhalinsk, Poronaisk) Conference “Preservation and Promotion of the Linguistic Heritage of the Indigenous Minorities of the North” as part of UN Permanent Forum on Indigenous Issues (New York) Exhibition of Sakhalin artist Veronica Osipova “I Draw Legends...” as part of UN Permanent Forum on Indigenous Issues (New York) Exhibition of Sakhalin artist Veronica Osipova “I Draw Legends...” as part of 8th UN Forum on Business and Human Rights (Geneva)

47

All-Russia scientific-practical conference “Languages and Culture of the Indigenous Minorities of the North, Siberia and the Far East of the Russian Federation: Preservation and Development Strategy” (Moscow) Second “Mother Tongue” children and youth conference in SIM’s languages (Yuzhno-Sakhalinsk) “Wild Plants in the Diet and Culture of Indigenous Peoples” conference (Moscow) Publication and presentation (Yuzhno-Sakhalinsk and Vogliki) of collection of SIM folklore “Sakhalin Fairy Tales” (2019-2020) Preparation and distribution among SIM representatives and other stakeholders of 2020 corporate calendar “Sakhalin Fairy Tales” 2020 (as of 25 September) XII Regional SIM Holiday (Nogliki) - in addition to financing under the Plan of Development Events dedicated to 85-th anniversary of Vladimir Sangi (Yuzhno-Sakhalinsk, Nogliki, Moscow) Newspaper in Nivkh language “Nivkh Dif” Publication, presentation and distribution among SIM representatives and other stakeholders of the book “Uilta Legends” “Reindeer Herder’s Drawings” exhibition (Sakhalin districts) Participation of SIM delegation and exposition “Sakhalin - the Island of Traditions” at International Exhibition & Fair “Treasures of the North. Craftsmen and Artists of Russia 2020.” (Moscow)

In addition to the above projects and events Sakhalin Energy provided organizational, logistical and financial support for arranging and holding: • annual SIMDP independent external monitoring of the SIMDP • annual SIMDP internal monitoring • annual public consultations with representatives of SIM community in all districts of traditional SIM residence • training workshops, trainings for members of SIMDP coordinating bodies and the general public • publication of information materials on the Plan Programmes’ implementation • website of the Plan • meetings of the Plan’s coordinating bodies

48

Annex 2: Sakhalin’s Indigenous Minorities10 he SIMDP3 covered all 4,390 members of the four main officially recognized ethnic groups of the Sakhalin Indigenous Minorities: Nivkhs, Nanais, Uiltas and Evenks, including several dozen members of other indigenous minority groups living in the Sakhalin Oblast. • Nivkhs. Nivkhs are the largest recognized group of indigenous minorities in the North of the Sakhalin region (currently numbering 3,254 people and making up three quarters of the total number of the island's Indigenous Peoples). Along with the Ainu people, who are no longer living on Sakhalin, these are the original inhabitants of the island. Currently, almost two thirds of the Nivkhs are concentrated in two settlements: in the village of Nekrasovka (Okha District) and in Nogliki, the administrative centre of the Nogliki District. The main traditional occupations of the Nivkhs were fishing and hunting, but by the 1980s, most of the Nivkh population was already living in small urban-type settlements. At present, only a small part of this group is engaged in hunting, while a large number of Nivkhs are engaged in fishing - for subsistence purposes, as well as in small fishing enterprises. • Uilta. In pre-revolutionary times, the Uilta (also known as Oroks or Orochens) had a diversified subsistence economy based on hunting, fishing and reindeer husbandry. At the beginning of the twentieth century, the situation changed, as the authorities decided to promote reindeer herding as the main activity. Currently, the Uilta is one of the smallest Indigenous Peoples of the Russian Federation, numbering 481 people, who are concentrated in the village of Val, the town of Nogliki and the city of Poronaysk. • Evenks. Evenks living on Sakhalin represent a small branch (334 people) of the Evenk people (aka the Tungus) living in Siberia, Mongolia and China. The Evenks came to Sakhalin at the end of the 19th century. They were closely associated with the Uilta, many of them were also engaged in reindeer herding. Most of the Evenks currently live in the city of Aleksandrovsk-Sakhalinsk, Nogliki and Okha districts of Sakhalin. • Nanai. The Sakhalin Nanai, like the Evenks, are a small branch of the mainland Nanais. Several Nanai families moved from the mainland to Sakhalin after World War II. The majority of Sakhalin Nanais, of which there are 215 people altogether, live in the Poronaysky District.

10 Information on the numerical composition of the indigenous small-numbered peoples of the North living in the Sakhalin region as of August 1, 2020 was provided by the Indigenous Peoples Department of the Sakhalin region in a private communication signed by the head of the department R.V. Fedulova.

49