Global Standards and Benefit Sharing among Russian and Transnational Oil Companies on Sakhalin Island

This article compares benefit sharing arrangements set up between indigenous people and Russian and transnational oil companies. It demonstrates that Russian oil companies interact with indigenous communities in a paternalistic way, while transnational consortiums, operated by Sakhalin Energy and Exxon Neftegaz Limited, use the partnership mode of benefit sharing. Typically, both kinds of firms set up tripartite partnerships involving companies, indigenous peoples and the state. The paternalistic model of benefit sharing overall provides few opportunities for indigenous peoples to participate in the distribution of funds, and thereby offers little procedural equity. In terms of distributional equity, it is hard to compare Russian companies with their transnational counterparts as the different companies cover different aspects of indigenous
peoples’ well being. Russian companies are involved mostly in building social infrastructure, while transnational firms support indigenous entrepreneurship and the revitalization of indigenous subsistence lifestyle, languages and cultures.