I have a Rails app running on nginx/passenger. It restarts happily in a shell using sudo /etc/init.d/nginx stop|start|restart. But Passenger throws an error when the system is rebooted: "Missing the Rails #{version} gem". But GEM_HOME and GEM_PATH are both set in /etc/environment so surely they would be available to all processes during reboot?

/etc/environment

PATH="/usr/local/sbin:/usr/local/bin:/usr/sbin:/usr/bin:/sbin:/bin:/usr/bin/X11:/usr/games"
GEM_HOME=/var/lib/gems/1.8
GEM_PATH=/var/lib/gems/1.8

/etc/init.d/nginx

#! /bin/sh

### BEGIN INIT INFO
# Provides:          nginx
# Required-Start:    $all
# Required-Stop:     $all
# Default-Start:     2 3 4 5
# Default-Stop:      0 1 6
# Short-Description: starts the nginx web server
# Description:       starts nginx using start-stop-daemon
### END INIT INFO


PATH=/usr/local/sbin:/usr/local/bin:/sbin:/bin:/usr/sbin:/usr/bin
DAEMON=/opt/nginx/sbin/nginx
NAME=nginx
DESC=nginx

test -x $DAEMON || exit 0

# Include nginx defaults if available
if [ -f /etc/default/nginx ] ; then
        . /etc/default/nginx
fi

set -e

case "$1" in
  start)
        echo -n "Starting $DESC: "
        start-stop-daemon --start --quiet --pidfile /var/log/nginx/$NAME.pid \
                --exec $DAEMON -- $DAEMON_OPTS
        echo "$NAME."
        ;;
  stop)
        echo -n "Stopping $DESC: "
        start-stop-daemon --stop --quiet --pidfile /var/log/nginx/$NAME.pid \
                --exec $DAEMON
        echo "$NAME."
        ;;
  restart|force-reload)
        echo -n "Restarting $DESC: "
        start-stop-daemon --stop --quiet --pidfile \
                 /var/log/nginx/$NAME.pid --exec $DAEMON
        sleep 1
        start-stop-daemon --start --quiet --pidfile \
                 /var/log/nginx/$NAME.pid --exec $DAEMON -- $DAEMON_OPTS
        echo "$NAME."
        ;;
  reload)
      echo -n "Reloading $DESC configuration: "
      start-stop-daemon --stop --signal HUP --quiet --pidfile  /var/log/nginx/$NAME.pid \
          --exec $DAEMON
      echo "$NAME."
      ;;
  *)
        N=/etc/init.d/$NAME
        echo "Usage: $N {start|stop|restart|force-reload}" >&2
        exit 1
        ;;
esac

exit 0

$ opt/nginx/sbin/nginx -v
nginx version: nginx/0.7.67

Ubuntu lucid