To: Donald Brydon, CBE,
Chairman of the London Stock Exchange Group
cc: CEO, Chief Risk Officer, key management officials.
Re: En+Group IPO
Dear Mr. Brydon:
We recently learned that the En+Group is preparing for IPO at London Stock Exchange. We recognize that, in principle, public listing could help the company to become more transparent and socially responsible. We are writing to raise concerns regarding the En+ Group’s ability to meet standard information disclosure requirements as this is an area this company is failing to strengthen.
We believe that a stock market listing could do any good to a company and regions of its operations only if environmental and social impacts and associated risks are explicitly disclosed and mitigation plans explained to investors and potential shareholders. Unfortunately, little has changed since the Company’s attempt of listing in Hong Kong in 2011: environmental and social risks specific to the nature of company’s operation are not being fully disclosed and discussed before the IPO.
We would like to draw your attention to a potential risk related to the fate of Lake Baikal, a World Heritage Site, which contains one-fifth of the world’s un-frozen freshwater and a mind-boggling biodiversity of more than 2500 species of aquatic organisms. This Site is de-facto controlled by En+Group, as its giant Irkutsk dam exploits Lake Baikal exploited as hydropower reservoir, regulating the water level. Since the Soviet times, the Irkutsk dam, that raised the Lake’s water level by 1 meter, and the toxic Baikalsk Pulp and Paper Mill have been recognized among the main causes of lake degradation. That is why the mill was shut down and hydropower impacts were limited by special regulations. In 2017 World Heritage Committee voiced deep concern, by the fact that in response to recent drought the Government of Russia allowed more than a two-fold increase in water level fluctuations of the Lake Baikal. This was justified by need to sustain energy production at the hydropower plants of Angara River cascade and water intake by coal-fired thermal plants. Those plants belong to the En+ Group companies, but we do not see the Group publicly discussing problems and liabilities related to issues raised by the World Heritage Committee and the fact the Group’s facilities lack climate adaptation capacity.
The Greenpeace has been protecting Lake Baikal World Heritage site since the day it was listed. The Rivers without Boundaries International Coalition (RwB) consists of civil society environmental organizations with long-term involvement in monitoring and mitigating negative impacts of hydropower on Lake Baikal and its basin. In 2015 we helped local stakeholders from Mongolia and Russia to submit a complaint to the World Bank Inspection Panel (WBIP) questioning the process of detailed feasibility studies for two large dams on Selenge river in Mongolia part of Lake Baikal Basin. In July 2017, after two years of intense dialogue with project proponents, the WBIP closed this complaint based on the Government of Mongolia’s agreement to postpone feasibility studies on specific dams and condition future dam projects on outcomes of strategic regional environmental assessment of hydropower impacts in Lake Baikal Basin. Earlier the World Heritage Committee requested similar assessment. While locations of planned dams are in Mongolia, the source of existing hydropower impacts on the Lake Baikal is the regulation of water regime by the Irkutsk Hydro owned and managed by En+Group companies.
This above is the reason we are submitting an Appeal to You prepared by the Rivers without Boundaries Coalition (the appeal attached to this letter). We claim that unless the En+Group in its IPO prospectus recognizes risks and problems related to Lake Baikal and proposes mitigation measures, the company itself faces serious reputational and material risks. We also request that You to explore whether governmental institutions of the UK assisting the En+ IPO without making the company fulfill abovementioned requirement, are liable for breaching article 6 of the World Heritage Convention asking the parties to avoid causing damage directly or indirectly to world heritage sites in other countries.
Besides, we ask for Your kind assistance in obtaining the official text of the En+ Group Prospectus for this IPO, which, as we hope, contains information on how the Group addresses environmental and social risks and therefore it should be available to interested stakeholders.
Should you need any additional information or clarification, please do not hesitate to contact us at email@example.com, firstname.lastname@example.org, email@example.com or call 976-99185828.
Sukhgerel Dugersuren, Director. Rivers without Boundaries-Mongolia.
Eugene Simonov, Whitley Award winner(2013).
Coordinator of the Rivers without Boundaries International Coalition
Vladimir Chuprov, Energy Unit Head Greenpeace Russia