Spaces of Indigeneity within the

West Siberian Oil Industry:

The Case of Salym Petroleum Development

MSc dissertation in Nature, Society and Environmental Policy

Kärg Kama, candidate number 51562

University of Oxford

Centre for the Environment

September 2007

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CONTENTS

ABSTRACT.......................................................................................................2

ACKNOWLEDGMENTS .......................................................................................3

ACRONYMS......................................................................................................4

1. INTRODUCTION ..........................................................................................5

1.1 Oil Industry Relations with Local Communities ...........................................5

1.2 Space of Indigeneity...............................................................................7

2. RESEARCH METHODS ..................................................................................9

2.1 Research Aims .......................................................................................9

2.2 Case Study Approach............................................................................12

2.3 Field Work...........................................................................................13

3. SETTING THE SCENE .................................................................................16

3.1 West Siberian Oil Industry.....................................................................16

3.2 The Khanty of Salym ............................................................................16

3.3 Petroleum Development in the Salym Fields ............................................19

4. SALYM PETROLEUM DEVELOPMENT’S SOCIAL PERFORMANCE .........................23

4.1 Approach to Sustainable Development ....................................................23

4.2 Instruments of Social Performance .........................................................25

4.3 Social Investments ...............................................................................28

4.4 A Social Issue of Indigenous Peoples ......................................................33

5. SPACES OF INDIGENEITY WITHIN SALYM OIL INDUSTRY ...............................36

5.1 Territories of Tribal Lands......................................................................36

5.2 Territories of an Oil Concession ..............................................................39

5.3 Mobilization or Cooperation?..................................................................54

5.4 The ‘Rabbit Ears’ of Salym Petroleum Development ..................................57

6. CONCLUSIONS..........................................................................................63

BIBLIOGRAPHY ..............................................................................................66

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ABSTRACT

In West Siberia, multinational oil corporations are about to introduce new policies into

the industry’s relations with local indigenous minorities. In studying the case of Salym

petroleum development, this dissertation examines the ways in which the interaction

between the local population, a foreign company and state authorities is mutually

governed and territorially constituted through an oil concession on the Khanty tribal

lands. Whereas Michael Watts argues that this interaction may produce a ‘space of

indigeneity’, the Salym project presents multiple indigenous spaces. Generated by

different forms of rule, conduct and imagining, these spaces can be abstracted as (a)

the dominant regime of Russia’s authorities in granting specific ethnic groups

indigenous rights and territories, (b) the actions of cooperation or mobilisation among

the indigenous population in response to oil development, and, (c) the company’s

attempts to manage its indigenous stakeholders and to employ native culture for

corporate marketing purposes.

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ACKNOWLEDGMENTS

Visits to the Siberian oil-fields have rarely been made alone. I would like to thank Art

Leete, Kaur Mägi and Eva Toulouze from the University of Tartu for their advice and

support during my fieldwork preparations. I am grateful to my father Kaido Kama for

the inspiring stories of his West Siberian travels and for his guidance throughout my

studies. Special thanks to Emma Wilson, Florian Stammler and Laur Vallikivi from Scott

Polar Research Institute for their comments on the draft version of this work.

The people in Salym Petroleum Development were kindly willing to meet and

discuss my research interests, as well as enabled access to the oil company documents

and territories. The Estonian Kindred Peoples’ Programme helped to cover the

expenses of travelling to Siberia. The Forest Management Centre in Salym provided us

with free accommodation during our stay in the village and helped to solve the

complications with our immigration stamps. I am thankful for their time and efforts.

I would like to thank the indigenous people of Yugra – the Khanty in Salym village

for their hospitality and sympathy for my research, as well as Agrafena Pesikova and

Tatyana Gogoleva for their support in Surgut and Khanty-Mansiysk.

I am indebted to Jaanika Vider, an Oxford undergraduate student in Anthropology

and Archaeology. Her bilingual abilities, adventurous mind and minimal sleeping needs

made the most out of our travels in Russia. I hope the fieldwork was inspiring for her

future studies and, from here on, I will refer to both of us as researchers.

Finally, my greatest thanks go to my supervisor Andrew Barry for sparking my

interest in oil studies and for not losing faith in the success of my project throughout

the year in Oxford.

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ACRONYMS

CSR = Corporate Social Responsibility

ESHIA = Environment, Social and Health Impact Assessment

KMAO = Khanty-Mansi Autonomous Okrug – Yugra

HSE = Health, Safety and Environment

NDACIPN = Nefteyugansk District Administration’s Committee for the Issues of the

Peoples of the North

NGO = Non-Governmental Organisation

PSA = Production Sharing Agreement

SPD = Salym Petroleum Development N. V.

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1. INTRODUCTION

1.1 Oil Industry Relations with Local Communities

Within the studies of nature and society relations, the interaction between the

extractive industries and local communities is of growing academic interest. New

theoretical and empirical understandings of resource governance gain importance in

the context of an emerging hydrocarbon scarcity, when the multinational corporations

searching for new oil and gas reserves move to the remotest areas of the globe.

Unfamiliar to the developers, these places are often the remaining homelands of the

world’s indigenous tribes. However, while the devastating impacts of oil and gas

exploitation on indigenous livelihoods are widely recognized, the ways in which the

interaction between the native communities and industries is mutually understood and

governed, have gained much less scholarly attention.

The changes in the global geopolitics of resource accessibility reshape the

relations between the hydrocarbon developers and the local societies. On the one

hand, the new entrants often challenge the existing industry-community relationship

by introducing global policies and practices. On the other hand, they still need to adjust

their operations to local circumstances, becoming dependent on their residential

communities. Therefore, in order to integrate their exploration and production activities

from these recently opened diverse environments into coherent global production

networks, the multinational oil corporations need to acquire, develop and mobilize

various types of knowledge on local affairs, including skills to cope with the place-

specific socio-cultural issues (Bridge and Wood, 2005).

Increasingly, the impacts of the petroleum extraction on the natural environment

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and local communities are becoming matters of public scrutiny and moral judgement.

This new era of ‘ethical capitalism’ has presented various practices and procedures,

through which the ethical or unethical conduct of the oil developers is publicly

demonstrated (Barry, 2004). On the side of the global oil industry, these techniques

are often framed with a claim of corporate social responsibility (CSR) towards its

stakeholders. The latter include the neighbourhoods of the oil development, such as

the impacted population and local authorities.

Some multinationals like Royal Dutch Shell and BP have integrated CSR into their

main business practices. These efforts were driven by intensified public criticism of

their operations, most notably in the Brent Spar event in 1995, when a Greenpeace-

organised media campaign raised widespread opposition to Shell’s plan to dispose of its

redundant oil buoy in the depths of the North Sea. In terms of impacts on indigenous

communities, Shell’s operations in Nigeria have been widely interrogated by

international organisations and academia.

Within the framework of CSR, the petroleum companies have now begun to

develop specific instruments to manage their community relations in order to secure

access to oil-reserves, to manage risks from local opposition and to make their ethical

conduct visible to the international public. An example of such instruments is the

system of social performance management. With this approach, the industry often

supports the communities not only by making charity donations but by meeting their

investment demands and actively participating in the local development. However,

even the most CSR-oriented companies like Shell have been continuously criticized

because their social investments are driven by corporate interests and fail to address

the long-term development needs of the locals (Frynas, 2005).

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1.2 Space of Indigeneity

At the same time, as the global overview of case studies by Al Gedicks (2004)

demonstrates, the conflicts between extractive industries and indigenous communities

over the last decades have empowered native rights movements towards self-

determination. The industry-community relations are therefore not necessarily

unidirectional, where the natives appear as mere victims of resource extraction and the

corporations attempt to legitimise their operations by making use of various CSR

instruments, but in fact much more complicated.

The studies of Michael Watts on Nigerian oil-producing communities indicate the

effects of petroleum development on ethnic mobilisation. Drawing on Foucauldian

theories of governmentality, Watts (2004a, 2004b, 2005) suggests that the community

movements, which have emerged in response to contemporary oil capitalism, have

created sorts of ‘governable spaces’1 in oil-dependent societies. He has abstracted

three such ‘spaces’ from the Nigerian affairs of community and petroleum industry

relations - ‘the space of chieftainship’, ‘the space of indigeneity’ and ‘the space of

nationalism’ – among which the second is of particular interest to this research.

For Watts, these governable spaces are produced and operated by the interaction

between community, state and oil company, “that is territorially constituted through oil

concessions” (2005: 199). Within this interaction, each governable space has

generated different “forms of rule, conduct and imagining” (2004a: 61; 2004b: 280;

2005: 205). According to his position, very little scholarly attention has so far been

paid to the presence and activities of the multinational oil companies in producing such

1 Watts has taken this term from N. Rose (1999).

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‘spaces’ as they may challenge the existing community relations and thereby

encourage mobilisation within local societies (2004a: 53–54; 2005: 199).

A ‘space of indigeneity’ emerges within oil-producing societies when its ethnic

subjects begin to make claims in terms of indigenous identities, rights, and territories

in response to petroleum development. As Watts explains, particular minority groups

among larger communities are then constructed as indigenous people, attracting

support from international advocacy organisations and launching an ethnic

mobilization. Oil, with its characteristics of being both territorial and material,

constitutes the necessary ground upon which ethnic identities and rights are

constructed and indigenous claims are made. Indigenous space is therefore achieved

“through an imbrication of […] oil and ethnicity” (2004a: 72) because the very

existence and exploitation of petroleum reserves enables to generate and amplify

indigenous movements.

On the other hand, as Watts’ study on the Ogoni people’s mobilisation against

Shell exemplifies, this indigenous space may simultaneously be problematic,

contentious and unstable, because the involved ethnic subjects do not necessarily

share same imaginations, neither do they articulate consistent claims on their own

identity and rights. Additionally, the oil-grounded indigenous claims can also

exacerbate the historical conflicts between different ethnic groups within these

communities (2005: 209).

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2. RESEARCH METHODS

2.1 Research Aims

This dissertation explores how the introduction of corporate social responsibility policies

into West Siberian oil industry may reshape the relations between the developers and

indigenous minorities. Namely, the post-Soviet North has recently become a popular

destination for the Western multinationals in their quest for new, easily accessible and

relatively risk-free oil reserves. At the same time, the international public is

increasingly concerned with the industry’s impacts on Northern indigenous livelihoods,

which tightens the scrutiny of the multinationals working in Siberia. For example,

Survival, a major indigenous rights organisation has published a web-portal in five

international languages to support the Khanty people in their confrontations with the

oil exploitation (Survival, 2007). As this portal is regularly updated and provides a

technological basis for presenting petitions, it may jeopardize the stability and

profitability of Siberian-based operations, if native protests are taken up and amplified

by the international activists. After a long break in their Russian-based oil

developments, the Western oil companies are once again expected to face the pre-

Soviet dilemma whether they should “start buying [and drilling] cheaper Russian oil, or

[…] continue to stand back on both moral and business grounds?” (Yergin, 1993: 240).

One possible theoretical starting point to interrogate the ethicalities and impacts

of multinationals’ entrance on local indigenous politics would be to employ Watts’

theory on industry-community interactions and test its applicability in another oil

province. However, there are some crucial differences between the Nigerian

communities studied by Watts and West Siberia, which complicate this approach. Most

importantly, whilst Watts’ work can be largely divided into studies on ‘economies of

violence’ and ‘governable spaces’, in his understanding these topics are largely

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entangled because his oil-grounded ‘spaces’ are “characterised by violence and

instability” (2004b: 278). Instead, this dissertation is concerned with the second notion

for the obvious reason that so far no large-scale violent conflicts have occurred in

response to the oil operations in the Russian North (but see Balzer, 1999: 152;

Golovnev and Osherenko, 1999: 106, 112).

Although being inspired by Watts’ work, this dissertation narrows down his

theoretical standpoint and focuses only on the notion of ‘space of indigeneity’ as

understood to be a ‘governable space’ emerging in multiethnic oil-producing

communities. In learning from the encounters between indigenous minorities, state

authorities and multinational oil corporations in yet another society, this work strives to

gain new understandings of the ways in which their relations can be mutually governed

and particular ‘spaces’ be produced. By doing so, it still develops from Watts’ central

claim that petroleum development can provide new opportunities for certain minority

groups to articulate their claims in terms of indigenous identities, rights and territories.

However, it focuses primarily on the questions of rights and territories, paying less

attention to the changing identities of Siberian indigenous peoples in post-Soviet

Russia (see Balzer, 1999; Anderson, 2000).

Thereby, this dissertation is concerned with the following theoretical questions:

° Can claims in terms of indigenous rights and territories be based on the

characteristics of territoriality and materiality of oil?

° In which ways can the interaction between indigenous communities, state

authorities and oil developers be mutually governed? How are these governance

actions territorialized through the licensed oil concessions?

° What different forms of rule, conduct and imagining can be generated within

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this interaction? What sorts of ‘spaces’ do they reveal?

° Are the produced ‘governable spaces’ stable or contested? Does instability

necessarily generate indigenous mobilisation or even violence?

° Does this interaction present a homogenous ‘space of indigeneity’ or can

different actors produce multiple indigenous spaces?

Given this theoretical ground, the dissertation aims to answer the following

empirical questions in the context of the West Siberian oil industry:

° To what extent do the newly entered multinationals follow international industry

practice in managing their community relations? On the other hand, to what

extent do they employ Russian knowledge and practice?

° How do the foreign companies address and manage the issues of local

indigenous minorities? Are these issues integrated into their policy instruments

of corporate social responsibility for local communities?

° What claims have been articulated in response to the oil development on the

ancestral lands of local indigenous groups? Who has made these claims? How

do state authorities and petroleum industry address them?

° How is the interaction between local the indigenous population, Western

companies and Russian authorities mutually governed and territorially

constituted through the licensed oil concessions located on tribal lands?

° What sorts of ‘governable spaces’ have been produced in this interaction?

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2.2 Case Study Approach

Having set these research questions, this dissertation focuses on a particular case of a

multinational’s entrance into the post-Soviet situation of indigenous politics and

resource governance in the Khanty-Mansi Autonomous Okrug, the oil province of the

Russian North.

There are currently only two multinational oil companies working in this region,

Shell and BP, both positioning themselves as outstanding examples of corporate

commitments to social responsibility. The decision was made in favour of Shell for

various reasons. Firstly, the development of Salym oil-fields in Nefteyugansk district is

a relatively new project, Shell’s only exploration and production site in West Siberia

and its second in Russia next to Sakhalin-2, as compared to BP’s involvement in

various projects with different histories. Secondly, Salym joint venture’s operations are

mostly defined by Shell thereby representing a case of a fully international oil project,

whereas BP cooperates with TNK and Rosneft, both experienced Russian oil companies.

Thirdly, Salym Petroleum Development (SPD) has been making strong public

statements of taking care of the natural environment and supporting local community

by meeting its investment needs. Fourthly, by the time of the fieldwork, Salym

community affairs had not yet attracted any attention of the international public, as

compared to the wide-spread public activism and growing body of academic analyses

addressing Shell’s community relations with regard to its Sakhhalin-2 project (e.g.

Wilson, 2000; Stammler and Wilson, 2006).

By combining geographical research questions with ethnography-inspired

methods, this research seeks to find a middle ground between the currently dominant

paradigm of macro-economical analyses on the geopolitics of Russian oil industry (e.g.

Bradshaw, 2006; Sagers, 2006), and the single anthropologists’ descriptions of the

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devastating impacts of petroleum extraction on Khanty livelihoods (e.g. Wiget 1997;

Balzer 2005). It hopes to describe industry-indigenes interaction from a more localised

and balanced point of view, by coupling the analysis of corporate management tools

with interpretation of the natives’ understandings and representations of the oil

development. The focus on a single case of Salym oil development thereby responds to

Florian Stammler’s and Emma Wilson’s recent call for more “locally grounded

ethnographic research” on the engagement of Western multinationals in community

development in the Russian North (Stammler and Wilson, 2006: 31).

For some particular historical reasons, which will be discussed in sections 3.2, 3.3

and 5.3, the Salym petroleum development cannot be presented as the most typical

case characterising all potential future relationships between the global oil giants and

Siberian indigenous minorities. However, as it will be demonstrated, for the same

reasons Salym is the most remarkable case, which can be currently studied. The focus

on this specific project has the advantage to give further insights into the various ways

in which in which the indigenous affairs are governed and particular spaces are

produced in oil-dependent societies.

2.3 Field Work

In addition to work with available literature and web-sources, the research undertaken to

write this dissertation involved 17 days of fieldwork in the Russian Federation, from 9 to

25 July. The trip to Russia was accompanied by an Oxford undergraduate student in

Anthropology and Archaeology, who acted as an independent translator between Russian

and Estonian languages. The field-trip began and ended with meetings in SPD office in

Moscow. For ten days in between, the researchers lived in Salym village. The rest of the

fieldwork involved interviews in Nefteyugansk, Surgut and Khanty-Mansiysk cities.

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During the fieldwork, the researchers familiarized themselves with the local

situation, collected additional literature in Russian and carried out a series of interviews

with various informants, including the representatives of Shell and SPD oil companies,

the indigenous peoples’ committee in Nefteyugansk District Administration, the native

residents of Salym village and high-level indigenous activists from regional cities.

Altogether, 12 semi-structured interviews were conducted, three of them in English

and the rest in Russian with partial translations to Estonian. Seven of those interviews

were recorded using a Sony minidisc player and five were documented by regular note-

taking, according to the consent of the interviewees. In addition, the students spent

significant time accompanying and talking to both the SPD local staff and indigenous

villagers in Salym, when notes were also taken. Useful information was also gained

during a number of informal chats and observations.

In addition to the interviews, further insights into the interaction between oil

developers and the local indigenous population were gained during two visits to the

Salym oil-fields. The first visit was organised by SPD staff to their base camp and well-

pad no. 23. Another was initiated by the researchers together with the native land-

users to visit one of the tribal land allotments at the oil-fields. The impressions and

emotions gained by passing through the same entrance gate twice with different

companions and by observing the perceptions and representations of the same

geographical territory of the oil concession as presented by its competing user groups

provided an invaluable input to the research and will be discussed in chapter 5.

Based on the work with literature and the ethnography done at the field, the

dissertation at first situates the Salym project historically and geographically in the

West Siberian oil industry (chapter 3), and then proceeds to examine the relations

between the indigenous population and oil developers in their residential community

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(chapters 4, 5). This interaction is discussed by analysing SPD managerial documents

and public statements, and by interpreting the impressions and representations

encountered during the fieldwork. In abstracting from the collected data, the research

materials are also produced with the help of author’s descriptions of personal

experiences, photographs and short quotes from the interviewees.

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3. SETTING THE SCENE

3.1 West Siberian Oil Industry

In the late 1950s, first flares were lit among the vast wetlands of the West Siberian

Plain, launching the industrial exploration of its hydrocarbon reserves. In the 1960s, an

oil boom began. Large oil-fields were set into production and people from all over the

former Soviet Union were invited to work for the promising industry. Since then, West

Siberia has performed as the most intense oil-producing area in Northern Eurasia. The

region currently supplies about 70% of Russia’s crude oil. Over 80% of it originates

from the Khanty-Mansi Autonomous Okrug - Yugra (KMAO). Although KMAO’s larger

reserves are gradually depleted, the petroleum industry is expected to sustain its

production flow for several decades to come by expanding the existing oil-fields and

making use of undeveloped smaller fields (Sagers, 2006).

Not only are Russian oil companies expanding their operations to new fields, but

the former Soviet North has also become a popular destination for global oil

corporations. However, the Russian crude is definitely not ‘easy oil’ (Bridge, 2007) for

the Western multinationals, in the sense that very few of them have succeeded in

meeting the geo-technical challenges of extracting oil in the sub-arctic environment. In

addition, the re-emerging ‘state-capitalism’ resource politics of the Russian Federation

(Sagers, 2006: 509) is further complicating the possibilities of gaining access to the

Siberian reserves, engaging in PSAs with the Russian government, and establishing

profitable and sustainable international business operations in the North.

3.2 The Khanty of Salym

Historically, various non-Slavic indigenous tribes have inhabited the Russian North. As

the name suggests, the region currently called Khanty-Mansi Autonomous Okrug -

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Yugra was established in 1931 on the homelands of Finno-Ugric speaking Khanty and

Mansi people, and Forest Nenets, a southern sub-group of Samoyedic-speaking

Nenets. Since the oil exploitation was started in the 1960s, KMAO’s population has

increased about 12 times, while a million Russian-speaking oil and gas workers have

moved into the region (KMAO, 2007). The three local ethnic groups are now

acknowledged as Yugra’s indigenous minorities according to the regional legislation,

and exercise all rights granted to indigenous peoples in Russia.

While there are approximately 21 000 Khanty and 8200 Mansi living in West

Siberia altogether (Csonka and Schweitzer, 2004: 53), the indigenous groups currently

account for only 1.5% of KMAO’s total population (2002 census, KMAO 2007). Due to

the massive influx of outsiders, the Nefteyugansk district is represented by even

smaller proportion of the ‘numerically small peoples’, as the indigenes are now called,

compared to KMAO’s northern territories. Recent calculations indicate only 410 natives

living in the district, most of them Khanty. Only 64 of them continue their traditional

semi-nomadic lifestyle in the taiga, whereas the majority is now assembled in urban-

style settlements, including 50 indigenes living in Salym village. (NDACIPN, 2007)

The historical clans, which resided along the Salym tributary of Ob River, are

classified as Salym Khanty, one of the eastern language groups of Khanty people.

Since the 16th century, they have stood on the main path of Russian conquest to West

Siberia from the southern steppes. Today, this historical route is marked by the

Tyumen-Nefteyugansk highway, which passes through Salym village (Forsyth, 1992:

390–391). Being therefore prone to assimilation long before the oil development was

started, the Salym Khanty language and culture are now considered to have largely

disappeared (Jordan and Filtchenko, 2005: 73). Despite this understanding, they have

so far remained entirely out of the discussion in the Western scholarship over Khanty

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(see Balzer, 1999; Jordan, 2003).

However, the recent studies by Russian archaeologists (Vizgalov, 2000;

Glavatskaya et al, 2005) suggest, that despite the relatively active trade and marriage

relations they had with the immigrating Russians, the Salym Khanty retained their

traditional lifestyle until quite recently. They lived in permanent settlements of 3-10

families (yurts) and built additional wooden dwellings for seasonal hunting and

gathering activities in the forest. A Khanty settlement called Kintus yurts was located

at the site of the current Salym village.

This lifestyle endured for centuries until it was disrupted by the collectivisation

and dislocation campaigns of the Soviet Union. In the 1950s, the Khanty people living

along the Salym river basin were resettled for collective work into Lempino village,

about 200km north of Salym. However, one family from Kintus yurts refused to leave

their home. While yet another family later returned from Lempino, the ancestral lands

of Salym Khanty were gradually overtaken by neighbouring Yugan Khanty, who had

begun to move into the area since the 1930s in search of new hunting grounds and

relief from collectivisation in their own river basin.

Just a decade after resettlement, the remains of Kintus yurts were overrun by the

construction of the Surgut sub-section of Trans-Siberian railway (see figure 1). The log

houses built during 1968–1970 to accommodate the railway constructors established

Salym village and remained homes for its first non-Khanty settlers (Yusupov and

Shevtsova, 1999). Later the village was expanded by Transneft and SurgutGazprom

companies that built new blocks of houses for their employees working on the oil and

gas pipelines, which now parallel the Tyumen-Nefteyugansk highway transporting West

Siberian hydrocarbons to southern regions.

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Figure 1. A view over Salym village from the railway station.

By 1999, when the Salym settlers celebrated the 30th birthday of their village, its

population had grown to more than 5500 people. Taking pride in the fact that Salym

originates from the Khanty word ‘solhem’, which means ‘created’ or ‘constructed’, the

villagers raised a massive anniversary monument in front of the local administration

building, next to the historical site of the Kintus yurts. The native villagers made then

up less than 1% of this multiethnic population. Many of them were still born in the

yurts, “before the construction and progress”, as one of them noted.

3.3 Petroleum Development in the Salym Fields

Salym oil-fields extend from the Salym village to the KMAO’s southern borderline,

covering 2141.4km2. The currently licensed concession consists of a group of three oil-

20

fields – West Salym, Vadelyp and Upper Salym (see figure 2). Situated next to the

central route of oil and gas export facilities, highway and railway transport systems

passing through Salym village, the geographical location of the concession favours

profitable oil production. However, although the Upper Salym oil-bearing sands were

discovered already in 1966 and the two other fields in the 1980s, they were not

developed because of complicated geo-technical circumstances.

Figure 2. Location of Salym oil-fields in West Siberia2

Only in July 1992, several regional industrial units3 were given the federal

approval to establish a new, share-based oil company Evikhon for conducting

geological studies and preparatory works to plan oil production at the West and Upper

Salym fields with a perspective of further foreign investment. Curiously enough, in the

2 Downloaded from www.spdnv.ru on 13 February 2007, no longer available.

3 Yuganskneftegaz, Tyumenneftegaz, Yugraneft, Yurang and Ivakon

21

context of the Soviet Union collapse, Evikhon was called into existence as a “company

of regional development […] in the interest of the numerically small Khanty and Mansi

peoples living at the territories of these oil-fields” (translated from Kryazhkov, 1994:

210). Later, the shares of Evikhon were taken over by Sibir Energy plc, which is

declared to be an independent Anglo-Russian energy company.

Soon, an international tender was organised by the Russian authorities to find

foreign developers for Salym oil-reserves. In 1996, a joint venture was set up between

Evikhon and Shell Salym Development B.V, a member of Royal Dutch Shell Group.

Established on 50/50 basis, Salym Petroleum Development N.V. oil company is

therefore governed mostly by non-Russian shareholders and claimed to be the largest

on-shore foreign investment project in Russia (Sibir Energy, 2007).

During the years following the successful joint venture agreement, the rights to

develop Salym oil-fields were re-negotiated and the licences transferred to SPD.

However, the production was delayed because the shareholders did not succeed to

engage in PSA with the Russian government due to the changes in the federal

legislation and protracted negotiations. Only in 2003, under a threat of loosing the

licences altogether, the joint venture proceeded to develop the project under Russian

domestic tax/royalty regime. Followed by rapid construction works, oil production was

commenced from the West Salym wells in December 2004. (Sagers, 2006: 520; SPD,

2004c, 2007b) By the time of the current research, all three Salym oil-fields were put

into production and connected to a 88km pipeline transporting petroleum to the

Transneft’s oil export system. In Vadelyp field, SPD had utilised Shell’s most advanced

‘smart wells’, introducing this technology for the first time in Russia.

Located just 30km west of Salym, the oil industry non-arguably has an important

role in the local life, most notably because of the number of people working in the

22

village’s vicinity for the next 30 years, which is the estimated lifetime of the reserves.

During the preparatory phase, the project employed over 4000 temporary

constructors. Today, there are over 1500 oil-workers daily present at the oil-fields,

most of them coming from outside of Salym area and many having international

backgrounds with Shell’s operations in other states.

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4. SALYM PETROLEUM DEVELOPMENT’S SOCIAL PERFORMANCE

4.1 Approach to Sustainable Development

Shell has responded to the pressing needs to manage its relations with impacted

societies and to legitimise its operations in regard to growing public concerns by

introducing CSR policies and programmes of community development support in many

oil-producing regions, firstly in Nigeria (see Shell, 2006: 28, 30). Following Shell’s

international practice, SPD despite being a relatively new entrant to the West Siberian

oil industry, has chosen environmentally-safe operations and social responsibility to be

its top priorities for publicity since the beginning of its operations (see SPD, 2004c).

Most visibly to the international public, it has presented those concerns among the

main headlines on its daily updated web-page www.salympetroleum.ru.

According to the joint venture agreement, Salym operations are based on Shell

Group’s main business standards, including its General Statement of Business

Principles establishing responsibilities to the society and the community (in SPD,

2007c) and an overall contribution to sustainable development, as understood to be

comprised in “efficient operations, protection of the environment and attention to social

issues” (SPD 2007a). Among other measures, SPD’s commitment to sustainable

development has entailed the conducting of Environmental, Social and Health Impact

Assessment (ESHIA) and applied systems of HSE Management and Social Performance

Management – the latter being of primary interest for this study.

SPD’s public commitment to CSR has yet to be managed in the context of Russian

legislative requirements and the overall practice of West Siberian oil business. In

principle, this context may condition SPD’s ability to implement the requested

mechanisms to manage its community relations in practice, and in turn, make it

24

dependent on specific local circumstances, which characterize the interaction between

the oil industry and local population in KMAO in general and in the vicinity of the Salym

fields in particular.

Aiming to accommodate the relevant global practice and guidance into the

Siberian context SPD has developed a separate Sustainable Development Strategy

(SPD, 2004a). Based on consultations with ERM, an international environmental

consultancy company, and preceded by ESHIA, this document formulates SPD’s

approach to contributing to sustainable development and integrating these principles

into its daily business procedures and decision-making. In addition to introducing

mainstream HSE procedures, the sustainable development strategy together with

annually updated plans focuses on social investments as a major instrument of social

performance alongside the regular impact assessment and management tools. This

approach commits SPD to support regional socio-economic development through

additional expenditure. In the Russian context, such social spending can be regarded

as a sort of informal tax paid to the Russian authorities in addition to the regular

revenues collected under the tax/royalty scheme (Gaddy and Ickes, 2005: 11–12).

However, SPD itself sees this approach to sustainable development as “an important

differentiator to help it to gain its licence to operate and grow” (SPD, 2004: 4).

Shell therefore attempts to position itself in the West Siberian oil industry by

priding itself on promoting sustainable development and by making use of advanced

Western CSR practices. At least initially, such an approach has proved to be successful.

SPD’s social performance was credited already in 2005, a year after it started with oil

production. The joint venture won awards in two categories at the Black Gold of Yugra,

an annual contest held between all KMAO’s oil corporations. One of those awards was

given for SPD’s social and economic partnership within the region.

25

4.2 Instruments of Social Performance

Although the promises of community support are articulated in various management

documents, SPD performs its interaction with the local society through its actual

residence in the vicinity of Salym village. Locally, the relations with Salym population

are governed by permanent staff in sustainable development matters, the sustainable

development advisor and community liaison officer. Working in close cooperation, the

latter is mainly responsible for negotiating the developmental needs with the village

administration and other potential beneficiaries, including coordinating the work of the

Community Advisory Committee, whereas the former is also involved in managing

company’s encounters with affected individuals such as the indigenous villagers who

hold land use rights over the territory of SPD’s oil concession. Their work is coordinated

by the Department for External Relations and the Division for Sustainable Development

in SPD’s Moscow office.

The employees currently filling these positions are both long-time residents of

Salym settlement. Prior to their recruitment by SPD some years ago they had high-

level jobs in the village administration. Being experienced in everyday village affairs

and its administrational matters, the Russian-speaking coordinators seemed to identify

themselves more with regard to the village community than with the oil-workers 30km

away. This impression of a relative estrangement from the daily operations of oil

extraction was not improved by the fact that their office rooms were located in Salym

Culture and Sports Centre in the middle of the village with only a telephone connection

and no Internet access. Although they were provided with Internet in SPD base camp,

these rooms were located in a rusty barrack, which stood behind the fence separating

the camp from the surrounding taiga (see figure 3). As they joked among themselves

over the barrack, they were indeed the ‘external relations’ of the oil development.

26

Figure 3. The ‘external relations’ of sustainable development in SPD base camp

External to the oil production, the sustainable development staff nevertheless

perform as important mediators between the neighbouring communities of Salym

village and oil-workers in a double sense – they are expected to coordinate the

relations between these two societies, but at the same time they themselves represent

the minority of locally employed oil-workers (about 50 altogether), who occupy an

ambiguous position between the development project and its residential community.

Interestingly, these two communities seem to be simultaneously distanced and

amalgamated by the SPD governance activities. Most of the directly employed oil-

workers are accommodated at the territory of the oil concession, in SPD base camp,

Central Processing Facility camp or in temporarily raised camps at the fields.

Considering that Salym village has one of the highest rates of HIV in KMAO, SPD’s

27

annually updated Social Performance Plan (2007c: 22) indicates the need to limit the

contacts between its employees and the near-by settlement on the highway. On the

other hand, SPD has expressed an interest in employing more staff locally when its

regular production operations will have settled down. To this end, it has developed an

apprenticeship programme for local youths. This programme has already educated

some young oil-workers now employed by SPD on a long-term basis. Such an approach

to increased local employment, which was regarded as the most outstanding

commitment to social performance by the interviewed field manager, may be expected

to build closer relations between the company and Salym population in the future.

In addition to the locally employed staff, SPD’s another instrument of managing

its social performance is the Community Affairs Committee. For some years, this

committee has been making recommendations on investment needs, overseeing the

progress of social projects and giving evaluative opinion on funding requests made by

local organisations. Bringing together the high-level representatives of local authorities

and organisations, such as the village mayor and the head of Forest Management

Centre, this committee provides a potential forum to negotiate the investment

decisions of the oil industry with the village administration and local population.

Thus, while SPD appears to have utilized advanced Shell and Russian industry

knowledge in its internal exploration and production operations, in managing its

‘external relations’ it has decided to employ mostly local knowledge and networks. This

approach has resulted in delegating the management of daily community relations to

former village administrators, who are not familiar with the specificities of the oil

extraction, whereas central policies are developed in Moscow. These measures have

enabled SPD to establish instantly good relations with the local authorities. At the same

time, they have raised concerns and envy among those villagers who do not benefit

28

from the oil project. They complained about lacking direct access to SPD leaders and

were unhappy with the mediating role of the local sustainable development staff.

4.3 Social Investments

SPD’s contribution to local community development was launched in 2003, when the

company decided to donate 2.5 million dollars to support the social infrastructure in

Nefteyugansk district. In fact, this sum was paid out in 2005, when first social projects

were established. Initially, these projects addressed the most critical needs of

investments into healthcare, schooling and telecommunications facilities in Salym

village. Additionally, SPD presented itself in terms of charity and sponsorship by

participating in supporting some major cultural events and sports contests in KMAO.

In 2006, a three-year memorandum signed between SPD and KMAO government

framed a new commitment to additional expenditure on community development.

According to this mutual agreement, the joint venture complied with further

investments into several regional community projects during 2006–2008 totalling 7

million dollars. This support involves contribution to local infrastructure investments,

such as supplying equipment for Salym’s existing hospital and schools and supporting

the construction of a new hospital. In parallel, SPD has established another programme

to fund ‘softer’ projects initiated by local organisations. Operating on a competitive

basis, this programme allocates small grants according to the results of annual calls for

project applications.

In order to analyse SPD’s role in local community development, it is important to

remember that Salym village was founded by extractive industries. These enterprises,

although now privatised and acting under commercial principles, still have considerable

status of an employer and investor as they operate the system of oil and gas transport

29

pipelines in Salym’s vicinity. Similar contribution is expected from a new entrant. As

explained by Michael Bradshaw, “in Soviet times, it was expected that large region-

forming enterprises would support the local community by paying for schools,

hospitals, and housing”. In his understanding though, the Russian companies are today

“attempting to reduce the scale of this activity, developing Western-style social

programs promoting corporate responsibility” (Bradshaw, 2006: 737). However, in

Salym, there exist still differences between the conduct of the local industries and a

multinational joint venture. Locals considered the Russian companies to be mostly

concerned with improving their own operational environment not the general living

conditions in the village. For example, SurgutGazprom is currently building a new

group of modern blockhouses in the village, but reserves the apartments for its own

employees, whereas the majority of Salym population is still living in the old log

houses (see figure 4).

On the contrary, SPD has declared that its investments will benefit the whole

village. By making social investments, SPD hopes to ensure that these are “aligned

with SPD’s and the community broader objectives, based on consultation and not

regarded as an alternative to managing social issues and impacts or as a means of

buying SPD out of an issue” (SPD 2004a: 8). Namely, Shell claims to implement its

social performance policy based on the results of community dialogue, involving the

work of the community liaison officers, locally held forums and focus groups, and not

to start with spending according to the wish lists of local authorities (Macklin in

Gouldson et al, 2005: 4). In Salym, however, the villagers have not been actively

attending SPD’s annual open forums and the community dialogue has taken the form

of a discussion between the former and current village leaders.

30

Figure 4. The old and new Salym houses

The largest social investment made prior to the 2006 memorandum of new

projects was the construction of the kindergarten ‘Ulybka’ (‘smile’) for 210 children in

Salym village (see figure 5). SPD not only financed the project, but also organised the

construction works, thereby actively participating in implementing its social projects. A

spectacular ceremony to open the new building was held on 1 September last year.

Called ‘the SPD face’ by one of the villagers, the red-coloured kindergarten building has

performed as the main tool of publicizing SPD’s contribution to community

development since its inauguration. Demonstrably, SPD had really met the region’s

expectations, as KMAO’s governor Alexander Filipenko assured in public cutting

through the symbolic red ribbon (in SPD, 2006: 6).

31

The kindergarten example reveals yet another interesting aspect of SPD social

investments. They have deliberately targeted youths and children, some of them

possibly future oil-workers. With 15% of kindergarten places booked for the child care

needs of SPD employees the improved local social facilities could also attract more

qualified oil-workers from KMAO to move into the village in the future.

Figure 5. SPD-constructed kindergarten in Salym village

Although SPD is concerned with tackling the excessive community expectations

and worried ending up in the role of the government (2007c: 19), overall it acts

according to the mainstream Siberian industry practice. It invests most of its social

support into local infrastructure projects both in terms of the budget spent and the

number of projects financed. As explained by the SPD’s sustainable development

32

division in Moscow, the company would ideally prefer to channel its investments

through ‘softer’, community-initiated projects but yet it has to meet the expectations of

the local and district’s authorities. A public declaration to apply its own, Shell-inspired

funding criteria pertains also to the programme of small-scale community projects.

Specifically, SPD refuses to give grants or to make one-off payments to any

individuals, religious organisations and organisations established for political purposes.

In addition, it claims to not make any “social investments that benefit only one, or a

few, ethnic groups in an ethnically divided community”. (SPD, 2007a) In this regard,

SPD clearly positions itself as addressing the society as a whole not its individual

members. As the interviewees in Moscow explained, the above-listed criteria are

generally followed, although sometimes misunderstandings appear on the side of the

community because of the specific situation in Salym. For example, the village has a

potential of social initiative under the congregations of three churches but according to

Shell criteria these are regarded ineligible for investments.

Under the new framework agreement with regional government the infrastructure

projects continuously prevail over the projects initiated by the community members.

While some ‘softer’ projects such as ‘Raduga’ summer camps for children from under-

privileged families were established years ago, when the sustainable development

coordinators were working for the village administration, and only recently taken over

for SPD funding, new community projects are only beginning to be initiated.

However, trying to accommodate Shell’s understanding of sustainable

development to the local conditions, SPD has focused on children and youths as the

most neutral target group. Meeting the needs of ‘future generations’ enables the joint

venture to respond best to the criteria of their shareholders, the expectations of

Russian society and the ethical concerns of the international community.

33

4.4 A Social Issue of Indigenous Peoples

Contrary to SPD’s statements some years ago, its Social Performance Plan for 2007

indicates the impacts on indigenous people among its main concerns of external

relations. Defined as “an emerging or unresolved matter that has the potential to have

an impact, either negative or positive, on local community at whole and/or related

company activity”, indigenous affairs are now understood to be a key social issue for

SPD, which needs further identification and management (SPD, 2007c: 16).

Making its social contributions visible to wider public, the information at SPD’s

web-page informs about supporting “indigenous culture protection projects” (SPD,

2007a). Remarkably, this is the only reference to the existence of indigenous villagers

on the web-page. It gives an impression that the social issue of indigenous people has

been managed under the same framework of social investments as other

responsibilities towards the local community. However, the researchers learnt that to

date there has been no social spending targeted directly to indigenous people. Indeed,

community projects benefiting a certain ethic group in the village would contradict the

funding criteria listed above. Exceptions hold for SPD’s small donations given to the

indigenous peoples committee in the Nefteyugansk District Administration.

Instead, there are other instruments designed to identify, manage and perform

SPD’s relations with local native minorities and their advocate organisations. As the

latest Social Performance Plan states, the company is first and foremost concerned

with those indigenous persons holding land use rights over the territory of the oil-

fields. Prevailingly, relations with these natives are regulated by contracts signed

between the two parties. There are two types of these contracts. First, the ‘call-off

34

agreements’ (framework contracts)4 frame the general provisions regarding oil

development at the so-called family communal lands (rodovye ugodia) and establish

SPD’s obligations to pay compensation to affected families. This means annual

payments and additional finances allocated for fuel purchase. Secondly, the additional

‘socio-economic agreements’ define further payments according to consequent

construction works and production operations undertaken at the indigenes’ lands.

Whereas the framework contracts were signed once with an effect over the whole

period of SPD licences, socio-economical agreements are signed in the case of every

new construction.

Therefore, the local indigenous affairs, although being integrated into SPD’s

recent social performance policies, are not targeted by its social investments. By

compensating the native land-users the damage caused to the indigenous livelihoods,

SPD complies with KMAO regulations and Russian oil industry practice. However, there

are some differences between the practices of the joint venture and the Russian

companies. Namely, SPD refuses to provide the natives with goods such as

snowmobiles, which has been the mainstream approach in West Siberia, and channels

its compensations only through financial payments. Importantly, SPD does not apply

the funding criteria cited above in this case and makes one-off payments benefiting a

specific ethnic group – the Khanty people. Although the annual compensations paid to

the indigenous families are ridiculously small, the very fact that someone is privileged

to benefit directly from the oil industry without working for it may cause concerns

among the rest of the village’s multiethnic community. As one person in the village

administration noted, “the Khanty are smarter than us”. However, as the following

4 ramochnyi dogovor’ in Russian should be translated as ‘framework contract’ and this notion was also used

by SPD staff, whereas a term ‘call-off agreement’ was formulated in the English parts of the contracts.

35

analysis in chapter 5 will reveal, this is not the only outcome of the mutual interaction

between the oil developers and the local natives. In addition to the place-specific

challenges discussed above, the social issue of ‘numerically small’ members of Salym

population further challenges SPD’s abilities to manage the expectations of the local

community, to ensure its continuous presence in the West Siberian oil industry and to

demonstrate its ethicalities to its shareholders and the international public.

36

5. SPACES OF INDIGENEITY WITHIN SALYM OIL INDUSTRY

5.1 Territories of Tribal Lands

The questions of rights and territories of the Northern indigenous minorities were first

publicly addressed in the time of the collapsing Soviet Union, when the devastating

environmental and social impacts of the rapid industrialisation in the Russian North

became facts, which could no longer be ignored. In 1992, President Yeltsin signed an

edict on ‘Urgent measures to protect the inhabited areas and livelihoods of the

numerically small peoples of the North’, calling for reserving them territories to

continue with indigenous ways of land use. This attempt to save the ‘endangered

species’ of Northern tribes (Slezkine, 1994) caused a wave of indigenes’ claims over

their ancestral territories all across the post-Soviet North, and on the opposite, raised

developmental concerns among local authorities and industries.

In Khanty-Mansi Autonomous Okrug, Yeltsin’s edict inspired further developments

into the regional legislation, which already in late 1980s had introduced a notion of

‘territories of priority natural resource management’ with a purpose to allocate certain

allotments for traditional land use practices. In addition, KMAO’s legal acts granted

indigenous minorities rights to participate in the decision-making over industrial

development on these territories (Alferova, 2006: 153). KMAO authorities now started

to register fixed allotments of so-called family communal lands (rodovye ugodia),

hereinafter also referred to as tribal lands. Additional legal acts were soon developed to

manage competitive claims made by the privatised oil and gas companies over the use

of these lands. The extractive industries were obliged to compensate for damage and

constraints to the traditional ways of using renewable natural resources on these

territories and to support the socio-economic development of the indigenous minorities

37

living at the licensed areas (Alferova 2006: 154).

Although the legislative requirements for allocating lands to traditional resource

management were the same all over KMAO, the district administrations implemented

them in different ways. In Nefteyugansk district, the access to land-use rights seems to

have been relatively unrestricted for native (and allegedly, also non-native) families.

Consequently, 33 territories of tribal lands have been registered in this district.

Moreover, the indigenous family leaders of Nefteyugansk district were also provided

with certificates granting them use rights over their ancestral lands – contrary to some

other districts, where these documents were kept by the local authorities and the

natives had no access to them (Pesikova, 2007). However, these indigenous territories

have been simultaneously governed by a specific governmental committee (NDACIPN)

dealing with all the issues of the 410 indigenes living in Nefteyugansk district.

Over the last decade, these legislative measures have introduced complicated

administrative geographies into the region’s land-use practices. These geographies are

best illustrated in a Russian book ‘Territories of traditional nature use in Khanty-Mansi

Autonomous Okrug – Yugra during 1992–2004’ (Bulatov and Timoshkov, 2005). This

book summarises the most relevant regional statistics and examines the pre-conditions

to continue with indigenous land uses. But most importantly, page-by-page, it presents

maps of KMAO districts, where the areas of tribal lands are indicated in green and the

licence areas for resource extraction in grey tones. Numerous black numbers on these

maps reveal the names of the male leaders of indigenous families and single red

numbers refer to the developers, all of them published in the legend. Some of the

district maps in this analysis remain overwhelmingly green with smaller spots of grey.

Others are dominated by expanding grey. However, on the maps of Surgut,

Nizhnevartovsk and Nefteyugansk districts, the two colours are melting into one.

38

Thus, when Evikhon initially began to explore Salym oil-reserves, the project was

paralleled by Salym Khanty applications to gain official land-use rights over their

ancestral hunting grounds in the same territory. Representing one of those overlapping

geographies on the maps described above, the SPD project today affects directly 5

indigenous families, whose tribal lands cover majority of the licensed territory of the

three Salym oil-fields. In addition, the pipeline transporting crude from SPD’s Central

Processing Facility into Transneft’s oil export system is located in the communal lands

of another 4 families. Being mostly the descendants of Kintus yurts residents, the

Khanty holding land use titles over the SPD-operated territory reside permanently in

Salym and Lempino villages, depending on the fates of their families. Nevertheless,

they have continuously used these lands ‘out in the forest’ for their own subsistence.

For that, they have constructed temporary wooden hunting huts in the forest (see

figure 12), as had been done by their ancestors for centuries. As the natives

themselves explained, when their tribal lands were registered in 1993, they just

showed the authorities the territories their families had always kept in use.

A basis for the interaction between Salym petroleum industry and the indigenous

land-users was thereby established by KMAO’s legal acts, in particular, by the conditions

made in Evikhon’s licence agreements, which were later re-issued to SPD. Among other

conditions, the agreements incurred an obligation to compensate for the negative

impacts of oil extraction on indigenous livelihoods. Moreover, as mentioned earlier, the

federal decree ‘On the oil companies’ work for regional development in the Khanty-Mansi

Autonomous Okrug’ from 21st July 1992 called Evikhon into existence with a purpose to

meet the needs of the indigenous minorities active at the territories of Salym oil-fields

(in Krjazhkov, 1994: 209–210). For an interviewed indigenous member of KMAO Duma,

this peculiar commitment was regarded to be binding on SPD as Evikhon’s successor.

39

It was into this evolving network of complicated regulations, practices and

competitive geographies of tribal lands and extraction licences that Shell entered in

1996. This entrance had implications in a double sense. On the one hand, as the SPD

field manager stated referring to his previous experience in Nigeria, Shell was pleased

to meet a system of 'well established indigenous rights”. It just had to implement the

existing legislative requirements and local industry’s practices to cope with its

indigenous affairs. On the other hand, as will be argued in the next sections, these

rights were not yet fully established. First, they needed to be exercised through the

actual encounters between the native land-users and the joint venture, and secondly,

the changing post-Soviet resource politics introduced its own complicacies into the

interaction between native minorities and extractive companies in KMAO, where the

Western-style corporate conduct now had its specific role to play.

5.2 Territories of an Oil Concession

So far it was discussed that the rights of the Siberian indigenous minorities in relation

to industrial development are tied to traditional activities of using renewable natural

resources on their ancestral lands. But, if the rights (and accordingly, territories) of the

indigenes are allegedly well established, what about the territory of an oil concession?

How is the particular concession of Salym petroleum development allocated and

constituted in relation to the tribal lands where it is located and to the native persons

who are entitled to use this territory in alternative ways? Or more specifically, how is

this relatively new territorial unit mutually understood and represented by its

competitive user groups?

In this mutual interaction, there are particular spaces produced in Lefebvreian

sense – be it a physical space of a given oil concession or more abstract ‘spaces’ of the

social relations surrounding it. For Henri Lefebvre, there is no rigid separation between

40

the material production of objects and the mental projection of ideas. Rather, the

perceived realities of concrete spaces and the concepts of abstract spaces are

generated through a socially lived space. Space in this sense is socially produced

through the encounters with the world, being materially and mentally constructed at

the same time. It is a ‘space as real-and-imagined’. (Elden, 2004: 44, 181–192)

In what follows, it will be argued that the interaction between Salym oil

developers and its indigenous stakeholders has indeed produced particular spaces –

first of all, the alternative ‘territories’ of the oil concession, which are constituted

through the lived experiences and imaginations of its users and visitors, including the

researchers. Furthermore, following Watts’ theory, these real-and-imagined territories

of the oil concession and tribal lands are argued to reveal a genesis of a broader ‘space

of indigeneity’ in the interaction between the actors involved in the Salym oil industry.

The majority of the licensed area of Salym oil development is still covered with

taiga forest, bogs and wetlands, if ignoring the expanding well-pads, roads and

pipelines. There is no physical boundary such as a fence surrounding the three oil-

fields. Rather, the licensed concession area is first established on various maps, like

the one described above (see Bulatov and Timoshkov, 2005: 67) and secondly, with

the help of physical landmarks. The latter are, for example, a column with the SPD

logo standing next to the Tyumen-Nefteyugansk highway announcing the closeness of

the oil-fields (see figure 6) and a gate with a checkpoint, which is raised a bit further

away (see figure 7).

41

Figure 6. A column marking the entrance to the Salym oil-fields

The procedures of passing through this gate should in principle exclude any

potential attempts by outsiders to access the oil-fields with their vehicles, if they

cannot present or will not be issued the permits to do so. If requested, permits have to

be presented to SPD security guards or HSE representatives for examination at all

times when at the fields (SPD, 2004b). SPD hereby constitutes its licensed oil

concession through a process of territorialization, by “marking out a territory of

thought and inscribing it in the real, topographizing it, investing it with powers,

bounding it by exclusions, defining who or what can rightfully enter” (Rose, 1999: 34).

42

Figure 7. Checkpoint at the entrance gate

When outsiders, for example, students from Oxford University or local children

from ‘Raduga’ summer camp are invited to visit joint venture’s operations, they might

be shown its base camp, and if lucky, also the well-pad no. 23 situated just next to the

entrance gate. Although being escorted by SPD staff, the visitors experience entrance

into concession territory through specific enrolment procedures and instructions. These

supply the company with all necessary identification data and legally binding

documents admitting visitors’ own responsibility for forthcoming events. SPD safety

and security regimes are also vividly demonstrated. In students’ case, for example,

they were shown a video with driving instructions at the oil-fields – SPD’s primary

safety concern. ‘Salym Field Rules’, a document distributed at the gate, was

particularly instructive in this regard. However, an additional sheet with ‘The rules of

43

conduct on the territory on the tribal land’ enclosed in this document puts the visitor

under a personal obligation to take additional environmental precautions when at the

fields because of the responsibilities to indigenous ‘landowners’ (SPD, 2004b).

Here, the oil company distinguishes between its own rules and other codes of

conduct. It admits the existence of alternative territories within its concession. In fact,

SPD employees and contractors are obliged to comply with a similar code of conduct on

tribal lands, which has been agreed under the framework agreements signed between

the natives and the company, but importantly, the latter does not ensure compliance

to these rules by third parties.

Figure 8. The accommodation barracks in SPD base camps

44

Contrary to the oil-fields, the base camp is encircled with a high physical fence

separating it from the surrounding taiga (and also from the bears that were rumoured

to consume the leftovers of SPD’s dining hall). At first, one might be surprised by the

austerity of the camp’s rapidly constructed facilities. For example, most of the staff is

accommodated in the barracks staying in straight lines and tagged with SPD logos in

both Russian and English (see figure 8). Despite these relatively poor living conditions,

which give an image of oil workers working in the harsh conditions of Siberian taiga,

the camp is strictly organised and structured. In this well-governed organisation, one

cannot spot any signs of oil production, except on the photos displayed on the walls

inside the ‘Northern Lights’ main building (see figure 9).

Figure 9. The well-organised space of SPD base camp – ‘Northern Lights’ house

45

Similarly, the real operations of oil extraction as can be witnessed at the well-pad

no. 23 with its tiny green-coloured oil wells on the background of green-leaved taiga

(see figure 10) are made almost invisible compared to the visible signs of smoking

bans, protective equipment and other safety and security requirements (see figure 11).

Figure 10. Oil wells at well-pad no.23

Are these the advertised ‘smart wells’? No, the workers explain that these are

“the stupid ones” inherited from Evikhon’s first experiments. Despite that, the oil

production is here represented as something ‘sublime’ – fitting to and caring about the

safety of the surrounding environment (Sawyers, 2004). Indeed, it is “made visibly

invisible”, leading one to contrast the flaring images of the Soviet-style derricks around

Surgut with well-managed Western operations, where all “social and environmental

46

consequences would be monitored, minimized and mitigated” (Barry, 2006: 248).

Figure 11. Safety regulations at the well-pad no.23

Apparently, SPD intends to give an impression of a well-governed, secure and

relatively safe territory of an oil concession with its own regime of rules, standards,

obligations and responsibilities. At the same time, it distances itself from the messy,

uncontrollable and insecure activities of the so-called third parties at the tribal lands,

and claims one’s own responsibility for encountering or performing such activities.

These activities characterise the other ‘territory’ of the oil concession for SPD and can

be performed by both human and non-human actors, for example, by the bears or

encephalitis-bearing ticks. A crucial example concerns the activities of illegal hunters.

As explained, SPD does not take any responsibility for the activities of the third parties

47

at the tribal lands although it controls all vehicles entering its gate. Discussing this

policy, the native land-users were convinced that SPD issues entrance permits to far

too many people, some of them having no connections with the oil development but

only interests in hunting, as proved by the numerous cars tagged with SPD passes

driving between the village and the oil-fields.

As this example shows, the SPD gate procedures do not exclude from the oil-

fields other people using different transport routes and means. The illegal hunters

might easily drive over the frozen bogs with their snowmobiles in winter. In fact, the

Salym Khanty themselves continue to use these territories extensively for hunting,

fishing and berry-picking and spend significant periods of time there living in their

wooden huts (see figure 12). But, as the SPD staff remarked, the indigenous land-

users need to be managed. Managing the fields involves not only imposing duties on its

employees and visitors regarding their conduct on Khanty tribal lands, but also

managing the activities of the indigenes themselves. Apparently, this is necessary for

some practical reasons, for example, that the oil-workers would not accidentally get

shot by the hunters. In order to constitute the whole territory of its licensed oil

concession, SPD attempts to make its own rules and regulations upon the local natives

and their tribal lands, whereas not all them are inscribed into written documents.

SPD’s foremost instrument to manage the indigenous persons is to raise their

awareness about its rules and to control their visits to their shared territories. To this

end, it performs its imaginations of the oil concession as a distinct geographical unit

with its own borders and regimes, at first, through the maps of oil-fields, which have

been enclosed in the framework agreement contracts signed with the natives, and

secondly, through the procedures established regarding their entrance through the

gate.

48

Figure 12. One of the hunting huts on tribal lands

Regarding the SPD rules and codes of conduct inscribed in documents, the idea of

indigenous land use rights as provided by the regional legislation seems to be

restricted by the framework contracts between the Khanty family leader and the CEO

of the oil company, which were signed in the presence of the chairman of NDACIPN.

Having read these contracts and having experienced the procedures of entering the

gate together with the SPD staff and the ‘landowners’, the author is able to anticipate

some ways in which SPD attempts to govern its indigenous stakeholders, and how the

territories of an oil concession are further constituted through this particular interaction

between the Khanty and the oil company.

Namely, the framework contracts give the head of the indigenous family a right to

49

visit his tribal lands via the previously described gate located on the main way from

Salym to SPD base camp. For this, the indigenous person is issued an entry permit to

pass through the gate’s checkpoint. For reasons that remained unclear for the

researchers, until recently these permits wore titles ‘Khant’ but new ones position them

just as ‘hunters’. According to the contracts, SPD will also provide the indigenous

person with an off-road vehicle and a driver to visit his lands to observe the progress

of their agreements, but this is guaranteed upon a preliminary notice at least 2 weeks

in advance and not more than three times a year.

In reality, the indigenous families own no cars and their entrances through the

gate depend on the willingness of SPD to provide them with company transport.

Considering the number of SPD cars driving in the village, it is not surprising that so

far no problems have occurred with organising this transport, even though the Khanty

do not always follow the rule of two weeks notice. This is not the only flexibility

regarding the implementation of SPD field regimes. For example, the framework

contracts do not address the family members or friends of the indigenous land-users.

The procedures of their access to the concession have been solved in a given situation,

but usually there have been no significant problems or delays with their permits been

issued.

On the other hand, the Khanty considered these procedures of gate-regulated

access to their ‘own’ tribal lands as an offence to indigenous dignity. They claimed to

exercise the right to order SPD transport as little as possible, and for most of the time,

to use alternative routes to the fields by avoiding the gate. This option means at least

a 30km journey over bogs and wetlands – by foot defying the mosquitoes in summer

as experienced by their ancestors for centuries, but most conveniently in winter, by

manoeuvring between the trees with snowmobiles, which have replaced the earlier

50

reindeer and dog sledges. However, even then the oil company can exercise a sort of

control over their activities, because the natives have to present their identification

documents and access permits, if they are requested to do so by SPD workers.

On 20 July 2007, this practice of a relatively flexible implementation of SPD field

rules was suddenly interrupted, when the native land-users asked the oil company to

provide transport for visiting their lands together with the researchers from Oxford

University. A jeep with a driver could have been easily provided within only two days.

Yet there were no procedures designed regarding such ‘high-level’ guests of the Khanty

and their connections to the external world. The procedures used during their first

field-visit no longer applied because these did not guarantee company’s control over

forthcoming events. Not only did the indigenous people need to be managed, but their

guests even more so. For that, new procedures had to be invented in order to

eliminate possible invalidations of the representations of a well-governed oil

concession, and possibly, also to minimize risks of potential attacks on its operations

and international reputation. After requesting its new stakeholders to follow all kinds of

new procedures, for example, to apply for an additional permit from NDACIPN, which

were however not described in any documents, the company decided in favour of even

stricter enrolment and surveillance measures.

At the fields, indigenous representations of the petroleum development were

indeed contesting the ones offered by the oil company staff. In their imaginations,

somewhere at these lands were their hunting huts surrounded with forest, lakes and

rivers, which were full of berries, game and fish, all ready for harvesting. One of the

land-users even said that he rather avoids the sites with oil wells in order not to spoil

these imaginations. Questioning the innocence and invisibility of the oil exploitation,

the Khanty however told of the construction of roads, which have encircled their lands

51

hindering animals to move to traditional hunting grounds, and mentioned incidents of

spills, which have killed some wildlife.

Figure 13. Indigenous representations of oil operations: the exploration ‘profile’

For Khanty, their tribal lands out in the forest were safe and welcoming, as

opposed to the construction and progress undergone in the village, and the impurity

52

and hazards of the expanding petroleum extraction. By telling of their imaginations and

providing counter-representations, they disputed the practices of the oil company. For

example, contrary to the opposition between old and new styles of oil operations

described above, the natives now contrasted the Soviet-time forestry at these lands

with the exploitative activities of the Western joint venture. They wanted to show two

exploration ‘profiles’ from different time periods, which were cut through the taiga (see

figure 13). Due to a reckless harvesting by SPD workers, high stumps were bulking up

from the rest of the debris, which was not cleaned away. Observing the progress of

their ‘call-off agreements’, the Khanty now voiced personal concerns about the

violations of their expectations of how should their tribal lands be managed.

As suggested by Michael Watts (2004a, 2004b, 2005), the interaction between

local communities, oil developers and state authorities, which is territorially constituted

through oil concessions, may generate some ‘governable spaces’ within the petroleum

industry. The different representations and imaginations encountered during the two

field-visits characterise indeed particular ‘spaces’ – the physically overlapping but

mentally separated territories of the Salym oil concession and those of tribal lands,

which are created through the lived experiences of involved actors – the oil-workers,

native land-users and visitors. Furthermore, the different forms of rules, codes of

conduct and imagining described above also reveal some other social spaces produced

in this interaction of mutual governance.

Namely, over the last decade, the representatives of KMAO indigenous minorities

have increasingly voiced concerns in response to the exploration and extraction of

subsurface resources on their ancestral territories (see Aypin and Shustov, 1998;

Tammilehto et al, 1999; Toulouze, 2005; Balzer, 2006). Therefore, it appears that the

characteristics of materiality and territoriality of oil here provide a ground upon which

53

the claims in terms of indigenous rights are made and the territories of tribal lands are

constructed. However, abstracting from the fieldwork experiences, it appears that in

the context of post-Soviet resource politics the dominant ‘space’ of indigenous rights

and territories is produced and governed by the Russian authorities – by their legal

acts, codes of practices and administrative institutions regulating the competing affairs

of resources extraction and ‘numerically small’ people.

In the case of SPD, these administrative legacies have necessitated the design of

specific rules and codes to manage the indigenous people in order to minimize risks to

company’s operations and international reputation. For this purpose, SPD has

developed instruments to govern natives’ visits to the oil-fields. Some other

instruments, such as the ‘Code of Conduct on Tribal Lands’, also perform as tools for

demonstrating SPD’s care for its indigenous stakeholders to external observers.

On the other hand, the corporate attempts to manage its indigenous stakeholders

by establishing specific rules over the oil concession have also enabled the natives to

dispute, disregard and invalidate SPD regime by imposing their own imaginations and

representations upon the same territory. They can introduce flexibility into

implementing SPD rules or just ignore them. By doing so, they also contest the ‘space’

of interaction between oil developers and indigenous minorities as foreseen by the

state authorities.

In the next two chapters, the dissertation proceeds to discuss further examples of

governing indigenous affairs within the Salym oil industry. As will be argued, these

examples can be also characterised in terms of ‘spaces of indigeneity, which further

multiply the forms of interaction of constituting the territories of the oil concession

discussed in this chapter.

54

5.3 Mobilization or Cooperation?

In this process of producing the ‘territories’ of the Salym oil concession, the petroleum

developers and their indigenous stakeholders render some facts and lived experiences

visible but silence others depending on the impressions they attempt to make.

However, sometimes the silenced stories still emerge from the past of the Salym

project in order to inform its present and future.

There was one such story, which none of the parties was happy to remember but

which nevertheless found its way through the rest of the representations. When told, it

revealed that during the early years of Salym industry, there was a potential for

another type of interaction between the oil developers and indigenous people, which

was however never fully realised. Not only was Evikhon initially intended to act as a

commercial ‘regional development company’, but also it was seemingly established

under the modern principles of common resource governance. Either Evikhon’s

founders did it for a sincere purpose to support KMAO’s indigenous population or just

for ‘buying it out of an issue’, in effect, they allocated 10% of Evikhon’s shares to an

indigenous organisation ‘Save the Yugra’ (Spasenie Yugra), more specifically, to its

branch office in Nefteyugansk district. Whatever the exact motivations, the results are

remembered with shame. The indigenous activists in Nefteyugansk soon sold the

shares back to the industry and the money just disappeared from the organisation

together with these people.

During the perestroika of the late 1980s, ‘Save the Yugra’ had first emerged as

an informal group of female indigenous activists in Khanty-Mansiysk. By the time the

Salym oil development began, it was registered as a central regional advocacy

organisation representing the interests of Yugra’s indigenous minorities. For quite some

time, it functioned as a non-governmental organisation articulating indigenous

55

concerns about the expanding exploitation of the region’s natural resources. (Balzer,

1999: 148–150) However, by the time of this research, it had been developed into a

partly government-operated organisation – in fact, its current chairman held a parallel

position in the regional government.

Although Salym has been allegedly the only case when ‘Save the Yugra’ acquired

company shares, other cases of accepting oil money have undermined its reputation

among the natives. Some of its former leaders have therefore moved to work for the

region’s authorities, hoping to implement their visions of indigenous future in this way.

Other representatives of indigenous intelligentsia are increasingly expressing their

personal opposition by undertaking independent actions against the industrial

development in their districts (Toulouze 2005).

In Nefteyugansk district, however, there are no such outstanding indigenous

activists. After ‘Save the Yugra’s representatives in Nefteyugansk lost their credibility,

the office is no longer considered to represent the interests of the district’s indigenous

population despite being still officially registered. No new civil society organisations

have been founded either. While this district is located too far south of Surgut and

Khanty-Mansiysk cities, it also remains distant to the everyday indigenous politics

there. In short, no organised forms of indigenous mobilisation in response to the oil

extraction have occurred.

Quite the contrary, the Salym natives seem to have regarded their interaction

with the petroleum development, at least initially, rather in terms of cooperation than

opposition. Even though the Kintus yurts descendants have not forgotten how the

Trans-Siberian railway was built across their graveyards, they helped the first railway

constructors to survive the Siberian winter (Yusupov and Shevtsova, 1999). When

Evikhon conquered their tribal lands, similar type of collaboration between the natives

56

and the developers took place at first. The company acted in the interests of the

indigenous people using the territories of the oil-fields. In 1993, it built a house for one

of the indigenous families in the middle of the fields, although none of the natives had

ever permanently lived there. However, after experiencing all the difficulties with

constructing this house in the forest, another family leader was given money to build

himself a new home in Salym village and yet another decided in favour of purchasing

an apartment in one of the blockhouses. Additionally, Evikhon provided a market for

the indigenous ‘traditional nature use’ activities. Similar to feeding the railway

constructors just couple of decades ago, the natives now supplied Evikhon’s dining hall

with fresh meat and other forest-harvested products.

Since Shell took over the project, these informal agreements of mutual

cooperation were substituted with the contracts of financial compensations only. The

joint venture increasingly appears to regard its indigenous stakeholders as simply a

nuisance, while the natives are calling back the ‘Evikhon-times’ of larger and non-

financial ways of support. Hereby, a question of sustainability emerges once again.

Whereas Evikhon was said to encourage the Khanty to continue with their traditional

ways of using renewable natural resources, the joint venture attempts to control and

diminish the scale of these activities. At the same time, it has initiated no social

projects to help the natives develop alternative economies – soon become a serious

issue if the oil-fields are further expanded and there is literally no space for indigenous

subsistence.

In the light of this ‘Evikhon’s 10% story’, the single incident of such industry-

indigenes relationship in KMAO, it appears, that there was a potential for another

‘space of indigeneity’, where the natives would have possibly had a better position to

govern their relations with the oil industry (cf. Slezkine, 1994: 379). However, these

57

were the early years after the August Coup, when oil business was related to “big

money, big lies and blood” as the former chairman of ‘Save the Yugra’ described,

explaining why the central organisation had distanced itself from the activities of its

branch. During the coming years, the relations between indigenous minorities and oil

developers were taken under the control of regional authorities, as discussed above.

However, another interviewed indigenous leader regarded this story as a good example

of common resource governance practices, which should be introduced again in the

future, thereby making quite explicit claims over the subsurface resources under the

indigenes’ historical territories.

5.4 The ‘Rabbit Ears’ of Salym Petroleum Development

Today, when arriving at Salym, an outsider can witness the presence of SPD

everywhere she goes. The green-blue SPD logo displayed on the entrance passes of

numerous cars in the village serves yet further purposes as one might assume at her

first glance. Firstly, the logo aims to accommodate the Western company into the

context of Siberian symbols and values. Secondly, it performs as the foremost tool

visualising SPD’s corporate social responsibility and commitment to sustainable

development. As explained in SPD’s corporate booklet and on its web-page,

“The two arms represent the horns of the Siberian reindeer, reflecting the

spirit of joint activity and partnership. The drop of oil symbolises how the

joint venture is committed to the safe and environmentally-conscious

development of the Salym oilfields” (SPD, 2004c: 2; 2007d).

However, the villagers referred to the logo with a knowing smile. While the

abbreviation of SPD refers to exactly the same words transliterated either into Cyrillic

or Latin, the figure on its corporate logo has a different meaning altogether in the

58

native culture. For the locals, the KMAO regional flags and the ‘Yugra’ passenger trains

passing through Salym village, for example, presented the patterns of reindeer horns,

but the crossed ‘arms’ on the SPD logo revealed ‘the rabbit ears’ of the Salym

petroleum development.

Despite such drawbacks, SPD increasingly appears to “produce, acquire and

develop knowledge” about the local socio-cultural environment (Bridge and Wood,

2005) by learning from and claiming to protect Khanty traditions. For example, on 7th

April 2007, a remarkable event was organised in Salym, which was immediately

publicised with press releases on SPD’s bilingual web-page. The company drillers

gathered in the local Culture and Sports Centre, where the sustainable development

coordinators gave them a presentation on the new social projects launched during

2006–2007. An additional slide show introduced the Khanty culture and traditional way

of life in the Salym area. On the last slide titled “Our beloved ones” the drillers were

presented with photos of native girls wearing their colourful national dresses in forest

huts. In addition, the Centre’s theatre group of local children performed a play based

on Khanty fairy-tales, explaining to the oil-workers how in local culture “each pattern

has special symbols and purpose, and is only applicable to certain items” (SPD,

2007e).

The researchers witnessed another interesting example of producing and

developing corporate knowledge about indigenous culture when they first visited one of

the indigenous land-users. The accompanying sustainable development advisor asked

him for “10 words in Khanty language”. It turned out that SPD was preparing to

publish a new company booklet using examples of Khanty language. It also planned to

enclose an appendix CD of Khanty fairy-tales with parallel translations into Russian.

Although these examples may seem insignificant at first, both are remarkable

59

when one remembers the history of Salym indigenes. While SPD was interviewing a

Kintus descendant about words in Salym Khanty language, the ‘beloved’ natives in the

slide show were the Yugan Khanty, who had immigrated to the areas quite recently.

Settled at the riverbanks south of Salym village, the ‘forest people’ as the villagers

called them are supposed to be the representatives of the most traditional Khanty

culture. Living in the wooden huts, sustaining a small-scale reindeer herding and

harvesting products from the forest, they depend largely on a subsistence economy.

According to local sources, some of them speak no Russian, only Khanty. Moreover,

only 15 out of 64 ‘forest people’ are supposed to be literate. This makes them the most

vulnerable group to oil exploitation, which is now rapidly expanding to the upstream

banks of Salym River, where the huts of Yugan Khanty are located.

In the light of these examples, the legislative privileges of land-use rights and

compensations that the local indigenes have enjoyed compared to the rest of Salym

population have to be examined again. Namely, the situation as explained in section

5.1 has not remained the same. After a course of changes in the legislation regarding

the rights of the indigenous minorities to their ancestral lands, a new regional law ‘On

the territories of traditional nature use of indigenous numerically small peoples of the

North’ from 27 February 2006 is going to re-organise the administrative legacies of

tribal lands completely.

Similar to the above-discussed grey-green map of overlapping geographies,

where the tribal lands wore just black numbers of their users, who were further

identified in the legend, the new law now separates the tribal land allotments from the

use-titles over them. In order to sustain their rights over these lands, the indigenous

families have to submit new applications and to prove documentarily how they are in

fact still continuing with indigenous ways of traditional resource use (Duma of KMAO,

60

2006). What exactly is considered to be ‘traditional’ is however not explained. It is

unclear, whether the natives are supposed to live permanently in the forest like the

Yugan Khanty or can they also sustain their land use rights if they live in the village

and use their hunting grounds only seasonally, like the Salym Khanty do.

Although to date there are no further orders issued with instructions on how to

implement this law and a reasonable transition period is given until 2009, in

Nefteyugansk district, NDACIPN has actively started to apply the new requirements. On

11 July this year, the day when the researchers arrived to the village, there was a

peculiar meeting organised between the chairman of NDACIPN (see figure 14) and the

indigenous representatives from Salym neighbourhoods. Even the ‘forest people’ had

arrived to discuss emerging future issues. What issues were discussed, was however

unclear. For NDACIPN and SPD, there was an issue of community consultation with

regard to a potential new social investment project to construct a historical park in the

village for introducing Khanty culture. However, for the gathering Khanty, both literate

and illiterate, there was an issue of new documents, which they were asked to sign in

order to apply for new use rights over their tribal land allotments. During this event, a

sort of mobilisation emerged, when most of the natives refused to sign these

documents and asked for explanations as to why they have to apply for new rights if

they supposed to ‘own’ these territories confronted by existing and future oil projects.

Given the changes in the legalisation and the expanding oil development, the

rights of the local indigenous minorities no longer appear to be so well established. In

the imaginations of Salym land-users, the close collaboration between SPD and

NDACIPN has now become a symbol of something else than an advocacy system for

protecting their interests against oil exploitation. They regard with growing suspicions

the donations, which SPD has given to NDACIPN outside the framework of other social

61

investments, as well as their recent plan to invest into the historical park. Whereas the

outcomes of previous donations, such as a first aid booklet for the ‘forest people’ are

found to be just ridiculous, the perspectives of an entertainment park constructed at

the shores of their sacred lake, at first demanding new archaeological diggings and

later welcoming the whole Salym population (according to SPD funding criteria) as well

as tourists, make some of the natives even more concerned.

Figure 14. The chairman of NDACIPN posing together with Putin, Filipenko and

Semenov represents all three levels of Russian authorities for the local indigenes.

Far beyond the local indigenous imaginations, suspicions, expectations and claims

is yet another context of Russia’s resource politics, which challenges the Salym

petroleum development. One might propose this context as a possible explanation for

62

why SPD has recently determined the indigenous affairs to be a key social issue, and

why it is now so eager to demonstrate its contributions to protecting local traditions

and constructing a Khanty historical park. Considering the remarkable changes in

Russian business climate for Western multinationals after the Sakhalin-2 events in

December 2006 (Turkeltaub and Bailey, 2007), Shell is not as firmly positioned in West

Siberia either, as it may have appeared to be in the beginning of its operations. In this

new set of powers, compliance with all existing regulations and even better relations

with local authorities becomes crucial if SPD wants to secure its licences ‘to operate

and grow’. This includes KMAO’s legislative requirements and codes of conduct

regarding local indigenous minorities. Although the indigenous issues are minor

compared to the number of other relevant regulations, they might still perform as

serious violations, especially when local industry-community encounters are taken over

and amplified by international activists.

In this complicated situation of changing federal resource politics, it is not clear

anymore, who is making ‘rabbit ears’ to whom. SPD has not yet won another award at

the Black Gold of the Yugra contest – Company of the Year for Work with Indigenous

Peoples. The oil company now produces new governable spaces through its

instruments of social performance. For that, it demonstrates publicly its social

investments into community development, targeting currently children and youths, but

in the future possibly also indigenous minorities. By collaborating with NDACIPN, it

additionally attempts to employ native culture for its corporate marketing purposes. In

this peculiar interaction, the Salym Khanty are however not convinced that they will

sustain their use rights over SPD oil-fields, and that it is necessarily their disappearing

culture, which will be protected by SPD social spending and marketing activities. Not

surprisingly, the join venture silences these aspects of indigenous issues and problems.

63

6. CONCLUSIONS

This dissertation aimed to give further insights into the ways in which multinational

corporations can reshape the industry’s relations with indigenous communities by

producing new ‘governable spaces’ in the oil-producing societies. The case of Salym

petroleum development in West Siberia has the advantage to render these ‘spaces’

visible due to its particular location and history.

Regarding location, SPD extracts oil on the traditional hunting grounds of Salym

Khanty people. Within only couple of decades, this disappearing indigenous group was

turned into an insignificant ethnic minority in its own settlement, when Kintus yurts

were overrun by one of the Siberian main routes of highway and railway, plus oil and

gas export systems. Addressing history, Salym oil-reserves were set into development

during the early years after the Soviet Union collapse, when the regional companies

introduced commercial principles and indigenous activists started to express their

concerns in response to the expanding industrialisation of their homelands. This

resulted in a single incident in the West Siberian oil history, when Evikhon, a new oil

company was established with a purpose of socio-economic development of Salym

indigenous population and 10% of its shares were allocated to an indigenous adovacy

organisation. However, this peculiar interaction of common resource governance was

later re-organised, when the project proceeded.

Shell’s entrance into the Salym project has had interesting implications. Firstly, it

has drawn even more, and increasingly international, attention to the existence of a

specific group of Khanty people within the village’s multiethnic population. The Salym

case study therefore supports Michael Watts’ theory in its broadest sense. The

petroleum development provides the necessary ground upon which SPD’s social issue

of indigenous peoples are constructed. Secondly, the currently insecure position of

64

Salym Petroleum Development itself, being a major foreign project in Russia, reshapes

the relations between the state authorities, oil developers and indigenous community.

Michael Watts has suggested that such an interaction can produce a ‘space of

indigeneity’ within the oil industry. However, the Salym case reveals that the

complicated relations between the Russian authorities, SPD, the community of Salym

village, its Khanty residents and KMAO’s indigenous population have generated rather

multiple indigenous spaces, which are territorially constituted through the socially lived

experiences of the oil concession. Overall, three such spaces can be abstracted from

the past and present of the Salym project.

First, the Russian authorities have introduced a dominant regime of their

legislative requirements and codes of industry conduct, which have granted Khanty

people specific indigenous rights and territories, privileging them compared to the

majority of the population. In Nefteyugansk district, this administrational indigenous

space is performed through the NDACIPN’s activities of governing local indigenous

affairs in the context of expanding oil development and changes in the regional

legislation. Given these changes, the indigenes’ rights and territories are no longer so

well established as they had imagined in the beginning of Salym oil operations.

Second, the indigenous persons themselves have undertaken various actions in

response to Salym petroleum development at local, district and regional levels. This

space has been the most unstable and contentious, but contrary to Watts’

understanding, it has not resulted in a large-scale indigenous mobilisation, not to

mention violence. Rather, the indigenes have historically understood and performed

their interaction with the oil producers rather in terms of cooperation than opposition.

Two examples described this attitude on the side of the indigenes: the acquisition of

Evikhon’s shares by some KMAO’s high-level indigenous representatives and the

65

collaboration between Evikhon and local land-users in the beginning of the Salym

operations. However, Shell’s entrance into this interaction has challenged these forms

of cooperation, and increasingly, positioned the Khanty to oppose the oil development.

Third, Shell has contended to secure itself a position in the West Siberian oil

industry and to respond to the ethical concerns of the international public. Prevailingly,

this approach is performed through making social investments into community

development, which have not yet directly targeted the social issue of indigenous

people. Additionally, SPD also manages the risks to its operations and international

reputation from confrontations with indigenes. For that, it attempts to establish the

Salym oil concession with its own specific regimes and codes of conduct and to manage

the indigenes entitled to alternative land-use rights. Furthermore, SPD has started to

employ native culture for corporate marketing purposes, demonstrating an ethical

conduct based on its own imaginations about learning from and protecting Khanty

traditions. The Salym Khanty, on the other hand, are not convinced that these

activities necessarily protect their cultural heritage and ancestral lands.

In conclusion, the Salym project reveals multiple spaces of indigeneity, which

have been produced through different imaginations and various forms of rule and

conduct. Being both material and mental at the same time, these socially lived

governable spaces are overlapping, instable and contentious. However, this instability

has so far produced neither large-scale indigenous opposition to the oil development

nor violence.

66

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