The cry of the dying swans has been heard at the Novotroitsk plant

19.10.2011 — Analysis

The state has levied a fine of two billion rubles on OJSC Novotroitsk Plant of Chromium Compounds for pollution. The company turned to the courts for protection, but prosecutors are convinced that the manufacturers are doing irreparable harm to the environment, because the plant is not capable of operating without violating environmental protection laws.

Rosprirodnadzor, the Russian federal service for the oversight of natural resources, conducted an unscheduled inspection of Novotroitsk Plant of Chromium Compounds in June, 2011. According to Lyubov Chernova, the head of the Rosprirodnadzor office for the Orenburg district, pollution of the soil, water, and air was identified. In particular, an area of several hundred square meters was found to contain an excessive concentration of hexavalent chromium, and contamination of the groundwater that flows into the Ural River and high emissions of chromium in the atmosphere were also discovered. Her office imposed an astronomical fine of two billion rubles for the year 2010, but the manufacturers are contesting that sum in the Court of Arbitration. It is possible that similar penalties will be assessed for past years.

The Novotroitsk factory, which is located in the Orenburg district, is under the control of the Izmalkin family and is the largest producer of chromium compounds in Russia. Public attention focused on the plant several years ago when a local resident wrote to the Minister of natural resources, Yury Trutnev, concerning the mass death of swans at the company's sludge disposal site. Inspectors did not find the dead birds, but the minister said that he would insist on eliminating the causes and circumstances that led to the swans' death as the birds were migrating. He believes that the plant's managers should work more quickly to adopt technology to produce sodium monochromate using sludge, a process that will reduce the amount of hazardous industrial waste in the tailings pond.

Environmentalists took an interest in the chromium company after the incident with the swans, and they organized some pickets and noisy protests. In July, 2011, the plant was searched and documents were seized. According to press reports, law enforcement agencies suspect the company's management of not paying taxes and stashing their foreign currency earnings abroad. Between 2005 and 2011, Novotroitsk Plant of Chromium Compounds used a Swiss company to export their products at prices 15-20% below market average, and a total of over $500 million worth of goods were sent overseas in this manner.

Vladimir Latyshev, the prosecutor in Novotroitsk, claims that he is not aware of any currency violations at the chromium compounds plant. He himself did not take part in the inspections, and the police did not inform him about the results of the actions taken at the company. Tatyana Kulakova, the head of the Federal Tax Service office for the Orenburg district, told RusBusinessNews that their tax inspection did not begin until September of 2011, and thus it is too early to comment on any legal violations that may have been committed at the factory.

For several years the plant has been claiming that the government accusations are nothing more than a corporate raid. Sergei Garvrilin, the press secretary for OJSC Novotroitsk Plant of Chromium Compounds, notes that the government had no grievances against the company until 2007 and that no one accused the plant of improperly applying for limits on storing hazardous waste. According to him, the company has committed only insignificant violations of environmental protection laws, and those infractions can easily be remedied.

But government officials feel that it is unethical for the owners of the Novotroitsk plant to attempt to portray themselves as the victims of corporate raiders. What is the definition of a corporate raid? Corporate raiders act in the interests of private individuals. But a business must answer directly to the state for its actions, and in this case the state is representing the interests of a large number of Russian citizens, not working for the benefit of a single bureaucrat or businessman. Ecologists might finally demand that the environmental protection agency "roll up its sleeves" and get to work in Novotroitsk. This is actually a question of setting a precedent at the federal level. If the government officials really wanted to put pressure on the chemical company, then why did they take the matter to court? It would be more discreet to simply demand a bribe. This two-billion-ruble fine is the government's way of warning all manufacturers that it is weary of watching obsolete technology desecrate the natural world!

Rosprirodnadzor claims that the Novotroitsk factory has not only been polluting the environment for several years, but in addition, the plant did not pay the required fees to store hazardous waste in its sludge disposal site that contained over five million tons of toxic material by early 2010. And no basic waste-disposal permits limiting the quantity and location of the tailings were found at the factory.

Aleksandr Karandeyev, a representative of the civic organization Ekologicheskaya Bezopasnost, says that the chromium compounds plant has been in operation for almost 50 years, and has been managed by Vasily Izmalkin for over 20 years. And it is true, prior to 2007, the company was not considered to be a very hazardous enterprise, compared to OJSC Yuzhuralnikel and OJSC Ural Steel, which are also located in the Orenburg district. The issue became a hot topic only after the Russian Public Chamber took an interest in the Novotroitsk factory's tailings pond.

According to Mr. Karandeyev, the biggest metallurgical companies are owned by Russian oligarchs who pay no attention to either the environment or civic organizations. So he is pleased that Rosprirodnadzor is filing any charges against this chemical monster.

Vyacheslav Belokurov, the interdistrict environmental prosecutor in Orsk, told RusBusinessNews that all manufacturing businesses, and particularly the larger ones, violate environmental protection laws, because there is no way for them to operate in Russia without breaking the law. The joint inspections carried out by the prosecutor's office and Rosprirodnadzor only reinforce this truism. And the claim that the grievances against OJSC Novotroitsk Plant of Chromium Compounds simply appeared out of the blue does not hold up under scrutiny. According to Mr. Karandeyev, the managers of the company have repeatedly faced disciplinary action for polluting the environment.

This two-billion-ruble fine that was levied based on the results of the most recent inspection of the Novotroitsk factory is testament to the fact that official patience has finally been eroded by the tons of poison. The dead swans deserve their full measure of justice.

Dmitry Buzdalov