To Points of Conctact of the Espoo Convention in Denmark, Germany, Sweden and the Russian Federation

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1 Date YM5/5521/2006 To Points of Conctact of the Espoo Convention in Denmark, Germany, Sweden and the Russian Federation Consultation in accordance with Articles 4 and 5 of the Convention on Environmental Impact Assessment in a Transboundary Context (Espoo Convention) for the Nord Stream Gas Pipeline Finland has received Nord Stream AG's "Nord Stream Environmental Impact Assessment (EIA), Documentation for Consultation under the Espoo Convention" (Espoo report) from Denmark, Germany, Sweden and the Russian Federation and has been given an opportunity as an affected Party to the Espoo Convention to comment on it by 8 June As stated in your letter, a notification in accordance with the Espoo Convention concerning the project was given on 14 November 2006; in Finland's answer to this notification an indication of willingness to participate in the EIA procedures of Denmark, Germany, Sweden and the Russian Federation was presented (letter dated 16 February 2007). Attached to the notification was a project information document "Offshore Pipeline through the Baltic Sea" (scoping document), and Finland provided comments on this document in a separate letter (26 February 2007). In a letter dated 7 November 2007, Denmark, Germany, Sweden and the Russian Federation informed Finland about the status of the route of the Nord Stream Gas Pipeline. Finland provided comments on this additional information on 18 January In letters given on 14 November 2008 Germany and Denmark informed Finland of the investigation of the S-route. Finland provided comments on this additional information on 22 January The Espoo report was put on public display and authorities and the public were given the opportunity to provide comments on the material from 9 March 2009 to 5 May Five information meetings were held to introduce the results of the EIA of the project in the city of Helsinki (10 March 2009), the city of Turku (11 March 2009), the city of Hanko (12 March 2009), the city of Mariehamn (16 March 2009) and the city of Kotka (19 March 2009). In addition, the national EIA reports of Denmark, Germany and Sweden were available for public viewing at the Ministry of the Environment and the Uusimaa Regional Environment Centre. Altogether 70 comments concerning the environmental impact assessment were made by: Authorities and research institutes: Ministry of Transport and Communications, Ministry of Agriculture and Forestry, Ministry of Defence, The Border Guard Department of the Ministry of the Interior, Ministry of Social Affairs and Health, Ministry of Employment and the Economy, Finnish Food Safety Authority (Evira), Finnish Meteorological Institute, Finnish Environment Institute (SYKE), Geological Survey of Finland, Finnish Maritime Administration, Metsähallitus (Stateowned enterprise), Finnish National Board of Antiquities, Finnish Safety Technology Authority (TUKES), Southeast Finland Regional Environment Centre, Southwest Finland Regional Environment Centre, Employment and Economic Development Centre for Uusimaa, Employment and Economic Development Centre for Southeast Finland, University of Helsinki (Tvärminne Zoological Station), State Provincial Office of Western Finland, State Provincial Office of Southern Finland, Government of Åland, Finnish Road Administration for Southeast Finland, Finnish Road Administration for Uusimaa. PO Box 35, FI GOVERNMENT, FINLAND

2 Municipalities: Hamina, Hanko, Helsinki, Inkoo, Kaarina, Kemiönsaari, Kotka, Lemland, Loviisa, Länsi-Turunmaa, Pernaja, Porvoo, Ruotsinpyhtää, Salo, Sipoo. 2/7 Regional councils responsible for regional planning: Regional Council of Uusimaa, Regional Council of Itä-Uusimaa, Regional Council of Southwest Finland, Regional Council of Kymenlaakso. Non-governmental organisations: Finnish Society for Nature and Environment, WWF Finland, WWF Baltic Ecoregion Programme, Finnish Association for Nature Conservation, Kymenlaakso Regional Organisation of the Finnish Association for Nature Conservation, Kotkan ympäristöseura ry ( Kotka Environment Association ), Finnish Association of Professional Fishermen, Federation of Finnish Fisheries Association, Nylands Fiskarförbund ry ( Uusimaa Fishermen's Association ), Estonian Naturalist Society, Estonian Academy of Sciences. 16 comments were received from private persons. The Finnish competent authority on EIA (Uusimaa Regional Environment Centre) will give its statement on the adequacy of the assessment in the Finnish EEZ in early July 2009, and this statement will be sent to your country thereafter. This statement will include a summary of statements and opinions received. The statements and opinions which have been received are mainly in Finnish, some are in Swedish and a few are in English; if you so request, all statements and opinions will be provided to your country. The developer will receive copies of the comments with the statement of the competent authority on EIA. According to Finland's Act on Environmental Impact Assessment Procedure, the Ministry of the Environment is the competent authority for the Espoo Convention; therefore, the Ministry is responsible for coordinating Finland's reply in accordance with the procedure of the Espoo Convention. The following comments are based on the comments received from the public and authorities and on further discussions with national experts. Espoo report general comments Protection of the Baltic Sea is one of the top environmental priorities of Finland's Government. It is evident from the scientific data and from field observations that the state of the Baltic Sea is alarming. The effects of human activity on both the entire catchment area and the sea area have increased, as have the impacts on the Baltic's ecosystems. The planned construction of the offshore gas pipeline from Russia to Germany is a major project. Finland considers it vital to ensure that the project will not worsen the state of the Baltic Sea as a whole or on a regional or local level. In Finland there are several national protection programmes that concern the Baltic Sea. Finland's Government also adopted the Programme for the Protection of the Baltic Sea in Subsequently, in June 2005, the Ministry of the Environment approved an action plan to further the implementation of this programme. The areas for action are combating eutrophication, decreasing the risks of hazardous substances, curbing the risks caused by various uses of the Baltic Sea, preserving and increasing biodiversity, increasing environmental awareness, research and follow-up. The aim is to achieve a good ecological state in the Baltic Sea. All the Baltic coastal countries are members of the Helsinki Commission (HELCOM), which has been the forum for international cooperation for over thirty years among EU and non-eu countries. The HELCOM countries have accepted the Baltic Sea Action Plan (BSAP), which summarizes the most important actions for the protection of the Baltic Sea. Finland recognizes that assessing environmental impacts with a sufficient level of accuracy in such an environment as the Baltic Sea is a demanding task. It is apparent that the developer has contributed to the assessment of the environmental impacts of the project after the notification was done. The developer, after taking into account countries' comments on the scoping document, did a more thorough survey than was originally planned. The impact assessment can be seen to have influenced project planning, as certain aspects, such as construction technology, have been refined compared to what is described in the scoping document; consequently, it has been possible to reduce environmental impacts. In regard to the report, the experts' view is that it covers the impacts of the project on the Baltic Sea as a whole on a fairly balanced scale. The general nature of the report though makes it more difficult to substantiate the extent of local and regional impacts and verify some of the conclusions by the developer. This is especially the case with transboundary impacts where the provided material does not clearly highlight specific areas where the impacts may

3 3/7 be problematic, for example, due to high concentrations of harmful substances or to extensive seabed intervention work. These impacts should have merited special attention in the report. It's worth mentioning that the report has been written and structured in such a way, with many cross references, that it is often difficult to follow and find relevant information. Even though the field surveys are generally done with good quality, the assessment of the impacts does not manage to describe the potential additional burden of the gas pipeline in the best possible way. Many impacts are assessed to be insignificant or minor, but in many parts of the report the developer does not clearly justify its conclusions. This is the first large-scale pipeline planned in the Baltic Sea and therefore the precautionary principle should be a factor in the assessment. It must, for example, be noted that many species are already now living at the very edge of their area of distribution and are under physiological stress because of the ecological state of the Sea. Additional stress may therefore affect their environmental tolerance more severely than shown in the assessment. Furthermore, an impact assessment should take into account the potential value of the Baltic ecosystems. Even though the environmental state of the Baltic Sea is poor at this time, with oxygen-deficient bottom areas, this does not lessen the value of these areas. The impact assessment usually clearly differentiates the impact assessment from mitigation measures. This is done to understand what the impacts of the project are as such. It is not clear in all cases which actual mitigation measures are intended to be carried out. The assessment of transboundary impacts is based on ecological subregions (ESR), a classification provided by the developer. As the classification does not follow national boundaries, it lends itself poorly to the primary perspective in an international environmental impact assessment, where the objective is to identify, first and foremost, transboundary impacts. Several ESRs include impacts in two countries. For example, ESR II covers a part of Russia and Finland, while ESR III covers areas in Finland and Sweden. While it is worthwhile to pay special attention to ecological entities in the assessment, this is useful only as a supplementary approach. It has not been possible to verify the impact on Finland without the Russian national EIA report. Russia has explained that under its legislation, the EIA cannot be disclosed to third parties at this stage of the procedure. It is understandable that Russia has not included all provisions of the international EIA procedure in its legislation, since it has not ratified the Espoo Convention. However, it should have been ensured that the Russian EIA report was disclosed to the affected Parties, together with the other countries EIAs as stated in the report. Finland recognizes that Russia is not a Party to the Espoo Convention, but with reference to the cooperation within this project, Finland requests that the Russian EIA be provided so that it can be made available for comments. Finland wishes also that after disclosure of the Russian EIA, Russia will reserve an opportunity for oral consultation in accordance with the Espoo Convention. Transboundary impacts of the pipeline construction on the neighbouring Party of origin's EEZ in the vicinity of the border have been described only generally and not in the context of other transboundary impacts. The impacts in the near-border regions need to be assessed more thoroughly. For example, such impacts may occur in the northern area of the Baltic proper, where concentrations of heavy metals such as cadmium and zinc are high along the border with Sweden. With regard to the above impacts, Finland requests Sweden and Russia to provide information that is specific to the border locations, including information about the construction activities taking place in the vicinity of the border, the baseline data of the environment, an impact assessment of these areas, and individual mitigation measures. Finland wishes to point out that the comments expressed in this statement are not exhaustive. Given the size of the report, it is not likely that all inaccuracies can be corrected. Examination of alternatives From the beginning of the EIA procedure, Finland has called for a broader study of the alternatives. This would facilitate an open assessment and comparison between the different alternatives to ensure that sufficient material on the environmental impacts is available for decision-making and that the environment is taken into account. Additionally, the Espoo Convention recognizes that the Parties shall, either individually or jointly, take all appropriate and effective measures to prevent, reduce and control significant adverse transboundary impact from proposed activities. In view of this condition, the report would have merited an unambiguous description of how the different alternatives and the pipeline corridor were formulated from the environmental point of view.

4 4/7 Although a national EIA was not launched in Estonia, the developer did make a proposal for an alignment (survey corridor) which would be more southern from the originally proposed route and which would run, in addition to Finland, also on the Estonian side. However, the survey permit was rejected by Estonia and the developer decided to withdraw from further consideration of this alternative. Finland regrets that the EIA could not be extended in this respect to enable a comparison of different alternatives from the environmental point of view in this part of the Gulf of Finland. Finland sees it as a positive development in the EIA that Nord Stream, with the support of Russia, has considered the alternative south of Gogland (Suursaari). Unfortunately, this alternative was taken up mainly as a desk study and it has not been as thorough as the investigations on the north of Gogland alternative. This alternative was excluded from further study. However, this alternative should have been kept in the assessment as an equal alternative since it is still being considered in the ongoing Finnish national EIA. The south of Gogland route is preferred in the comments received in Finland because it is more remote and it is expected to have potentially less environmental impact on the Finnish side, especially in the nature conservation areas. In the absence of the Russian EIA and more detailed survey data it is not possible to verify the conclusions by the developer. It must also be noted that the amount of harmful substances in the seabed would be a very important criterion when comparing the different alternatives. This criterion is not applied in the comparison. Finland would like to receive from Russia a more thorough description of the basis on which the south of Gogland alternative was developed and a more detailed comparison of the two routes. A possibility for oral consultations should be reserved concerning discussions on this alternative. No-action alternative. Even though the description of the no-action alternative is somewhat too focused on the project's positive outcomes, it has been accurately noted in the report that, on the whole, the impact area would be affected less if the project was not implemented, as this would cause no environmental hazards. In the first phase of the EIA procedure the developer stated that it would, under the no-action alternative, also examine complimentary gas pipelines from West Siberia to Europe (new Yamal and Amber pipelines), other possible routes to Europe (Caspian and Middle East areas, Algeria, Norway, Libya and liquefied natural gas) and other sources of energy (renewables). Even though this has not been dealt with in the section on alternatives, it has been included in the report. Although it was pointed out in the comments by some authorities and the public that an assessment of an option for an onshore pipeline (i.e. land route) should have been included in the EIA, Finland considers that the noaction alternative has been generally dealt with to the extent that can be required in this EIA procedure. Specific impacts Sediments. The assessment of the effects of the pipeline installation on the resuspension of sediment and subsequent release of nutrients and harmful substances seems to be based on the modelling of resuspension and resedimentation of mainly mineral particles. When resuspension of organic particles occurs, the resedimentation rate is slower compared to that of mineral ones. Organic particles usually contain more harmful substances than mineral ones. Even though the main sediment load may be resuspended in the vicinity of the construction site, the estimated dispersal area of the suspended sediment is not limited to 2 km. For Finland it is important to know how much sediment may be resuspended and where resedimentation is estimated to take place. The geochemical data on sediments on the Russian side does not support the general understanding of existing concentrations of harmful substances in the area and needs clarification. It must also be pointed out that the description of sea currents in the coastal area of Russia is not quite correct, as it may underestimate the regional and local stream velocity. In addition, the release of especially phosphorus from the sediment pore water does not seem to be included in the estimated effects. Sediment pore water normally contains much higher amounts of phosphorus than the particulate material. The assessment of dioxins is minimal and radioactive substances are missing in the report. It should be clearly pointed out to what depth sea bottom disturbance is expected to extend. Finland requests that the assessment of resuspension is clarified with sedimentation of organic particles in the vicinity of Finland. Cumulative transboundary impacts from constructing two pipelines with repeated seabed interventions should be addressed more specifically. Even though the map material provided is clear and facilitates understanding of the impacts, more maps should have been provided in a small scale, and a higher number of overlapping investigations should have been made available. Providing a single map illustrating the location of alternative routes, construction activities and recent (modern) muddy clay areas, including other soil types with concentrations of harmful substances would have been of special help. Such areas in the vicinity of Finland exist in Russia and in the northern area of the Baltic Proper, in Sweden. Finland asks for the above-mentioned material regarding Russia and Sweden.

5 5/7 Fish and fishing. Impacts on Baltic Sea fish stocks and fishing from construction work, and from commissioning and de-commissioning of the pipelines, are one of the major concerns of Finland with regard to the project. According to the comments received, the current impact assessment is insufficient. The release of harmful substances from sediment, as they may be resuspended into the water column and enter the production chain from vertically migrating zooplankton to fish and humans, should have been addressed in more detail. Special attention should also be paid to impacts on spawning sites (especially at Bornholm deep). Additionally, the possible effects of fish remaining close to the pipelines within possible restricted areas and hence outside the reach of fisheries should be assessed. The analysis of fish catches should cover a longer and more recent time period than the years 2004 and 2005 and an analysis of the future catch potential should be done. Commercial fishermen in Finland engage in pelagic and bottom trawling, netting and long-lining, and they operate on a regular basis in all the EEZs of the EU Member States bordering the Baltic Sea. As described in the impact assessment report there are risks connected to both bottom and pelagic trawling close to or above pipelines. This is why the report mentions the possibility of prohibitions on trawling and technical solutions to trawling. Even without prohibitions the pipeline may adversely and permanently affect fishing activities. The report mentions that fishing vessels in general need to avoid fishing over the pipelines. The impacts on fishing are on a general level and cannot be specifically assessed, as the possible restricted areas for fishing are not clearly determined. As stated in the report, the effects could particularly concern the Finnish and Swedish waters where free spans are abundant. The impacts of the pipeline concern trawling for herring and sprat along with netting of and trawling for cod throughout the pipeline area in the EEZs of all the EU Member States. The possibility for full compensation for the losses to and adverse impacts on fishermen and the owners of the fishing rights (i.e. the coastal states) should be studied further. Compensations would have to be based on a representative catch history and the potential future catch of the areas. Additionally, compensations would have to cover the whole time period during which the pipeline would cause losses and adverse impacts. The Finnish fishing vessels would also be entitled to such compensations due to their fishing history and right of fishing in the EEZs of all the EU Member States around Baltic Sea. Finland requests identification of possible restricted fishing areas, an assessment of the losses and adverse socio-economic impacts they and the pipeline in general have on fisheries, and a description of possible compensation measures for the losses and adverse impacts on Finnish fishermen who fish in the EEZs of the EU Member States. Maritime traffic. Finland wishes to point out the lack of grounds given for the forecasts of maritime transport used in the EIA report. The SAFGOF project evaluated the increase in maritime traffic in the Gulf of Finland during the years ; the results indicate that the volume of transport is increasing considerably faster than the level stated in the EIA report. Moreover, the report lacks explanation of the methods used for conducting the risk assessment of ship collisions during the construction phase. Finland holds the view that the deficiencies discussed here must be rectified. Finland also points out that as the laying of the pipeline and the related construction require a high volume of traffic on the Baltic Sea, it is important to ensure that appropriate transport equipment is used and that the equipment and its operation comply with the International Maritime Organisation's (IMO) and World Meteorological Organisation's (WMO) maritime safety standards and systems (such as the requirement for double-bottom ships). The developer must also commit to transporting wastewater from ships to ports. Weapons and munitions. Detonations of wartime munitions will cause dispersal of seabed sediments and thus increase the environmental load in the Baltic Sea. The report proposes potential mitigation measures but does not suggest any alternatives to detonation. The developer should demonstrate its commitment to mitigation measures and must confirm before any clearance activities that there are no sea mammals, large shoals of fish or diving birds within reach of the impact. There are experiences that mitigation measures such as bubble curtains can be used around a detonation area, thus decreasing the impacts from the detonation. The suitability of different mitigation measures must be investigated. Information on munitions found in Russian waters is not included in the material provided. Finland asks for data on the locations of the proposed detonations of munitions in Russia, particularly in recent muddy clay areas, in the vicinity of the border, and data on concentrations of harmful substances in the seabed in such places and information on mitigation measures.

6 6/7 If the pipeline route in the vicinity of Gotland is planned to follow the eastern border of the Swedish EEZ, it will cross a wartime dumping site of chemical weapons. The planned S-route near Bornholm also crosses a dumping site of chemical weapons. The ongoing research funded by the European Union (MERCW, Modelling of Ecological Risks related to Sea-Dumped Chemical Weapons) has done investigations near Bornholm. The preliminary results show it is difficult to assess a risk level when the seabed is disturbed and chemicals are dispersed into upper water columns. In worst case scenarios, observations on the accumulation of chemicals in marine populations and the dispersal of chemicals over wide areas do not confirm the conclusions that the project will have only local impacts. Should these route alternatives be chosen, proper risk assessments and management plans, including a description of transboundary impacts, should be provided by Sweden and Denmark. Natura 2000 network. In the southernmost part of the proposed pipeline route there are several important Natura 2000 sites designated as Special Protection Areas (SPA) and Sites of Community Interest (SCI) by Germany. These sites have a special importance beyond national borders throughout the Baltic Sea since they are key wintering and staging sites for a large variety of waterfowl, sea birds and waders. The area is also the most important part of the Baltic Sea for the harbour porpoise population. Finland emphasizes the importance of the mitigation measures presented in the EIA and underlines the need to take them fully into account in the permit procedures. In the eastern part of the pipeline route the project activities in Russia are planned to be located a few kilometres from the nearest Natura 2000 sites of Finland. Council Directive on the conservation of natural habitats and of wild fauna and flora (92/43/EC) requires that the competent authorities shall agree to the project only after having ascertained that it, either individually or in combination with other plans or projects, will not adversely affect the integrity of the site concerned. In the EIA, the impacts are described on a too-general level without presenting the grounds of the assessment. Therefore, the Finnish authorities need to have a proper assessment of the impacts on these Natura 2000 sites also from the Russian part of the pipeline. Scientific heritage. A chain of sampling stations for long-term environmental monitoring is located close to the central line of the Gulf of Finland from the area off Loviisa, Finland to Landsort, Sweden. Data on marine conditions have been collected for decades at these stations for national and international scientific purposes. As many of these stations are located close to the planned pipeline corridor, they will have to be moved to maintain continuity with the original environmental conditions, as the construction and operation of the pipeline will otherwise have an impact on the sampling data. Before relocation of the stations, detailed mapping and analyses of the bottom conditions need to be carried out at the original and proposed new sites prior to, during and after the pipeline installation. This should be secured by the countries concerned. Scheduling of construction work. It is important that the construction work and maintenance work during the operational phase of the pipeline are scheduled so that no unnecessary direct or indirect harm is caused to marine fauna (especially fish, birds and marine mammals) and that no restrictions are placed on the recreational use of the areas. Break-up of ice during their breeding season has significant impact on both the ringed seal and grey seal. As the local populations of the ringed seal and grey seal are low in the Gulf of Finland, it is important to avoid any disturbance during their breeding season. It is important that special caution be exercised around ringed seals because their numbers are low throughout the Baltic Sea. In order to minimize the risk of maritime accidents, it is necessary that the construction work in the Gulf of Finland is planned to be carried out during open water periods. Construction work on recent muddy clay areas should not be done during stormy weather. Pipe-laying vessels. The developer has stated that a dynamically positioned vessel in the Finnish and Russian waters will be used in the construction work instead of a pipe-laying vessel that uses anchors. Such a vessel is considered to cause less environmental impact; however, a detailed description and impact assessment of a dynamically positioned vessel is missing. The use of such a vessel along the whole pipeline route could have been studied as an alternative, as there may be other places in the Baltic Sea where the use of such a vessel would also be more beneficial, like close to the chemical dumping sites or the northern area of the Baltic Proper. Discharge of the pressure-testing water. The EIA report provides conflicting information about conducting pressure testing. The location of discharges of pressure-testing water and the possible oxygen scavenger treatment clearly remain undecided. According to the report, an alternative test using fresh water without oxygen scavenger treatment is also being considered. It is likely that the discharge and intake areas will be located in Russian waters, where the water has a lower saline concentration, is deeper, and dilutes faster than in Greifswald. However, the alternative proposed in the report involves separate pressure testing for the middle part of the pipeline from the Finnish junction, 300 km (from the starting point in Russia) to the junction in Sweden at 675 km. A more transparent and detailed investigation should have been conducted to find alternatives for the location of discharges of pres-

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