PACIFIC ENVIRONMENTwww.pacificenvironment.org

Protecting wild places Empowering local communities Building global partnerships

Annual Report 2003-2004

A Green Movement for the Pacific Rim

Accounting for nearly 30 percent of world trade, the Pacific Rim is a growing eco-nomic powerhouse. But this growth has placed the region’s rich ecosystems inperil. And while some are reaping great wealth from this growth, it has costmany Pacific Rim communities dearly.

For nearly two decades, Pacific Environment has partnered with the communities that depend on the PacificRim’s ecological riches to preserve these shared treasures. With our partners, we’ve shielded millions of acresof forest, we’ve won protections for endangered species, we’ve forced oil, gas and mining companies to heedlocal concerns, and we’ve changed the way some of the world’s most powerful financial institutions work.

Grassroots activists form the backbone of our work to protect the Pacific Rim’s wild places and wildlife. In aworld filled with ‘ain’t it awful’ negativism and ‘if only’ defeatism, we take heart in the energy and commit-ment of our grassroots partners—brave, committed activists who don’t let long odds and determined foes getin their way.

In the past year, our partners have taken on powerful companies and their allies in government, pushed theboundaries of activism in countries where dissent is discouraged, and brought people together in commonstruggle for a sustainable world. This Annual Report shares some of their stories, highlights the supporterswho make our work possible and shows once again that even though we’re a small organization, we’re havinga big impact.

Every day, we at Pacific Environment are reminded of the profound interdependence that characterizes our world. Sometimes thesereminders—such as the brown cloud that crossed the Pacific Ocean from Asia to the northwestern U.S. in June 2003—make itclear not only that we share the earth’s distress, but also that those of us dedicated to relieving this distress can only succeed if wework in cooperation.

This is one reason I’m very proud to present our Annual Report, which outlines the key ways that Pacific Environment, our part-ners and our supporters have worked in the past year to build a Pacific Rim-wide green movement capable of ensuring the environ-mental health of the region.

Make no mistake; addressing the global threats we face presents complex challenges. But despite the challenges, we’ve accomplisheda lot in the last year. Our on-going support for grassroots organizations throughout Siberia and the Russian Far East has made itpossible for these partners to hold their own against an increasingly anti-environmental central government. And we’ve expandedour network of partner organizations in China, providing key support to that country’s burgeoning environmental movement.

I’m also proud to report that we expanded our efforts in North America in the last year. In 2003, we spearheaded the formation ofthe International Bering Sea Forum, a unique bi-national effort. And in 2004, we took a lead role in a statewide effort in our homestate to build a clean energy future for California.

None of what we do at Pacific Environment would be possible without the support of our donors, colleagues and friends. If you’rea current supporter, I thank you and congratulate you on what you’ve helped us accomplish. If you’re not yet a supporter, I inviteyou to join the Pacific Environment community that is protecting the Pacific Rim’s wild places.

Sincerely,

David GordonExecutive Director

StaffDavid GordonExecutive Director

Rory CoxCommunications Coordinator

Jennifer EyresRussia Program Officer

Melinda KramerChina and Marine ProgramAssociate

Misha JonesRussia Consultant

Amy MetzendorfOffice Manager

Sara MooreRussia and Policy ProgramAssociate

Doug NorlenPolicy Director

Michael O’HeaneyDevelopment Director

George ShuvarinDirect Support ProgramManager

Wen BoChina Representative

Board of DirectorsDebbie ChapmanBoard Chair

Stephen FowlerTreasurer/Secretary

Lisa TracyProgram Committee Chair

Mary Wells

Phillip Berry

Gary Cook

Dr. Thomas Baron Gold

Eliza Klose

Kevin Rowney

Shannon Wright

Dear Supporter,

Program Highlights

Tigers, Bears … and SalmonRussia is home to many of the world’s lastwild places and wildlife and providesimportant habitat for the Siberian Tiger,bears, and Pacific salmon. Over the years,

Pacific Environment has helped build astrong and effective, locally driven environ-

mental movement in Siberia and the RussianFar East. With continuing support from Pacific Environment ourpartners stopped efforts to route a major oil pipeline to the southof Lake Baikal, the world’s deepest fresh-water lake and a true

world treasure, and through the Tunka National Park. Thanks totheir work, Russian oil companies are now reviewing other routesfor the pipeline that avoid these pristine areas.

In addition, there may be no more important front in the struggleto protect wild salmon than Russia’s Kamchatka Peninsula, one ofthe world’s last truly wild salmon sanctuaries. Yet poaching andindustrial development threaten much of the salmon habitat. Inresponse, Pacific Environment launched a major initiative onRussia’s Kamchatka peninsula this past year to conserve the region’swild salmon by working with local communities to protect keyspawning habitat.

Supporting China’sEnvironmentalHeroesChina’s prioritization of eco-nomic growth over ecologicalhealth has sent its environmentto the tipping point. Inresponse, Pacific Environmenthas been supporting an emerg-ing movement of Chinese envi-ronmentalists—scientists, com-munity leaders, journalists, stu-dents and others.

With our partner GlobalGreengrants Fund, PacificEnvironment supported 50grassroots organizations withsmall grants and capacity-build-ing assistance in the past year.While these groups spanChina’s geography and are tack-ling numerous issues, PacificEnvironment has put a strategicemphasis on supporting marineconservation work in China. In2004, we helped to found theSave China’s Seas Network—the country’s first nationwidemarine conservation network—uniting local and internationalenvironmental groups, mediaoutlets and leading academicinstitutions.

Sustaining the BeringSeaThe Bering Sea is one of themost robust fisheries in theworld, providing the U.S. withover half of our seafood. Butoverfishing, global warming,pollution, and other threatshave put increasing strain onthis critical habitat.

In 2003, Pacific Environmentresponded to the threats facingthe Bering by spearheading theformation of the InternationalBering Sea Forum, an inde-pendent body made up ofindigenous leaders, fishermen,scientists, and environmental-ists from both Alaska andRussia. These diverse stakehold-ers will impact marine policy inboth the U.S. and Russia byadvocating for practices thatsustain both the marine envi-ronment and local economies.

Thus far Forum members havebegun to chart strategies onissues such as the rights ofindigenous peoples, fishingpractices such as bottom trawl-ing and driftnetting, theimpacts of pollutants on theBering, and establishing pro-tected areas.

Protecting theEndangered WesternPacific Grey Whale Our Responsible Finance cam-paign continued to advocatefor best practices on SakhalinII, the world’s largest integratedoil and gas project, which islocated in the pristine marineenvironment off of SakhalinIsland, Russia. The project, ledby Shell Oil, threatens thehabitat of the Western PacificGray Whale, one of the world’smost endangered whale popu-lations.

This year we concentratedpressure on the major publicinstitutions considering financ-ing the project, and won adelay from the European Bankfor Reconstruction andDevelopment, who called theproject’s environmental impactassessment “unfit for purpose.”This decision pushed Shell toshelve plans to construct amajor underwater pipelinethrough the feeding habitat ofthese majestic creatures while itconsiders other alternatives.

Fighting for a FossilFuel-free CaliforniaLast year, we learned thatdespite the clean energy rhetoricof our home state’s leaders,California is rushing into afuture of increased dependenceon fossil fuels with the importof Liquid Natural Gas (LNG).This would be sourced fromendangered ecosystems aroundthe Pacific Rim, includingSakhalin Island and thePeruvian Amazon.

In response, PacificEnvironment spearheaded theformation of a statewide coali-tion, Ratepayers for AffordableClean Energy (RACE). RACE’sactivities have slowed the fast-tracking of LNG by pressuringpublic officials to hold hearingson the need for LNG, as well asthe environmental consequencesof such imports. RACE has alsoadvocated for clean energy alter-natives, producing a study thatconcludes the state can meet itsfuture energy needs with greaterefficiency and renewable devel-opment.

Foundation, Corporate andGovernment SupportAlaska Conservation FoundationAmerican Bird ConservancyCharles Stewart Mott FoundationEarth Share of CaliforniaGlobal Greengrants FundGordon and Betty Moore

FoundationGrassroots FoundationOak FoundationOpen WorldPatagonia Inc.Richard and Rhoda Goldman FundRockefeller Brothers FundThe Purple Lady Fund The William and Flora Hewlett

FoundationTrust for Mutual UnderstandingUnited States Environmental

Protection AgencyWallace Global FundWeeden FoundationWestWind Foundation

Individual SupportersAlan Harper & Carol BairdAlan TracyArmin RosencranzArthur SowlsBarbara MeislinBill DavorenCarol VeseckyChris & Julie FranklinCynthia & Charles ArchDan SilverDaniel ShivelyDavid GordonDavid WimpfheimerDeborah ChapmanDodd & Nancy FischerDonald SladkinDoug Murray & Peggy BlumenthalEdgar FreudEdward & Jocelyne MainlandElani AquinoEliza KloseElizabeth BeiswengerElizabeth O’Connell

Enid SchreibmanEric Gerber & Viki MaxwellErik BreilidEve WittenFrancis MacyFred & Ruth CoxGary CookGeorge LeesonGordon BlueHeather RosmarinIngrid GordonJane EdsallJoan GorrellJohn CourtneyJohn GussmanJohn RoderickJudy TracyJulie FranklinKate GessertKenneth PowersKenton WohlKevin RowneyLaura Kurre & Michael O’HeaneyLenore Carroll

Lida KvashinaLisa TracyLynda CouchLysbeth RickermanMaria SakovichMark GieseMark SpaldingMary WellsMichael FischerMichael MurphyMike MakiMortimer FleishhackerOctavia MorganOlga McAllisterPaul JohnsonPaul MossPete HendricksonPeter SlatteryPhilip & Connie MicklinPhillip BerryRichard BridgmanRichard CharterRichard KangasRoy YoungRuth DyerSamantha & Stephen MillerSandra & Michael ColemanShannon BiggsShannon WrightSibyl DiverStan & Carl WeidertStephen FowlerSteve DoyleSteven KohlStuart KaplanStuart SmitsSusan & Masatoshi YamanakaSuzann SpeckmanTad SchwagerTerry JohnsonTom Gold & Lucy HarrisToni SmithViktor ZholudevWalter ParkerWelling PopeXan Augerot & Josiah Fisher

For a complete financial report contact Michael O’Heaney, Development Director, at (415) 399-8850, ext. 313.

311 California St., Suite 650 • San Francisco, CA 94104 • 415-399-8850 • info@pacificenvironment.org

Support and RevenueGrants . . . . . . . . . . . . . . . . . . . . . . . .$1,300,829

Public Support . . . . . . . . . . . . . . . . . . . .$20,073

Other Income . . . . . . . . . . . . . . . . . . . . .$7,077

Interest Income . . . . . . . . . . . . . . . . . . .$12,080

Total Support and Revenue . . . . . . .$1,340,059

ExpensesProgram Services . . . . . . . . . . . . . . . . .$785,589

Re-Granting . . . . . . . . . . . . . . . . . . . . .$487,658

Management and General . . . . . . . . . .$331,577

Development and Communications . . .$156,622

Total Expenses . . . . . . . . . . . . . . . . . .$1,761,446

Other Income

Interest Income

Public Support

Grants

Development and Communications

Management and General

Re-Granting

Program Services

Decrease in Net Assets . . . . . . . .$133,523

Net Assets, April 1, 2003 . . . . .$1,532,790

Net Assets, March 31, 2004 . . .$1,399,267

2003 – 2004 FINANCIAL STATEMENTSTATEMENT OF ACTIVITIES AND CHANGES IN NET ASSETS