UKRAINE'S ORANGE BLUES - CITIZENS DERAIL OLIGARCH'S MINING DEVELOPMENT PLANS IN UKRAINE

01.03.13


WORLD AFFAIRS. The residents of Kremenchuk, a city of 230,000 southeast of Kyiv on the Dnipro River, and its environs are up in arms over oligarch Kostyantyn Zhevago’s plans to build the Bilaniv Mining and Enrichment Combine (HZK) on the Psol River in Kremenchuk District. According to Zhevago’s plans (pdf), about 12 villages comprising one fifth of the district’s territory would have to go to make room for the combine.

Besides opposing the displacement of thousands of villagers, the inhabitants of the region, together with community activists and scientists, fear an environmental catastrophe—ranging from the destruction of the Psol to massive air and water pollution to permanent changes in the area’s ecological balance. The specific bone of contention is the “Draft Plan of the Territory of Kremenchuk District” developed by the Urban Construction Division of the local government, the Kremenchuk District Administration. The activists insist that it fails to safeguard the region’s environment and must be revised. The bureaucrats and Zhevago people say it’s fine.

The 39-year-old Zhevago is worth a few billion and has a growing mining and minerals empire in Ukraine. He controls the “Finances and Credit” group and has been a parliamentary deputy since 1998, usually as a member of the Yulia Tymoshenko Bloc. Most recently, in the October 2012 parliamentary elections, he ran as an independent candidate in the town of Komsomolsk and won 60 percent of the vote. Komsomolsk happens to be the site of one of his plants, the Poltava Mining and Enrichment Combine (HZK).

As Lyudmyla Kucherenko, an environmental activist, president of the Poltava Province Media Club, and critic of Zhevago’s plans, says bitterly: “It’s unlikely that the oligarch, who lives mostly abroad and views Kremenchuk District as a colony for acquiring large profits from the extraction of resources, will listen to the people or heed the laws that he, as a legislator, approves! It’s small wonder that Karl Marx wrote in Capital that there is no crime a capitalist wouldn’t commit for the sake of 300 percent profits.”

Construction of the Bilaniv plant is part of an ambitious plan for Kremenchuk District developed by Ferrexpo, a Swiss-based iron-ore-producing company controlled by Zhevago. Ferrexpo built the Poltava HZK and is currently completing construction of the Yerystiv HZK. Also in the works is the mega-plant, Vorskla-Stal. According to its website, “the management company Vorskla Steel AG is currently managing metallurgical assets in Ukraine, Hungary, and Denmark. Currently our largest asset that is being built is an electric steel plant of direct reduced iron with the use of natural gas in Komsomolsk, Poltava region, Ukraine…. The capacity of Vorskla Steel plant is 3 million tons annually that is 8-10% of production volume of metallurgical branch of Ukraine.”

Read the following, also from Vorskla’s website, and you’ll understand just why local inhabitants are worried (and English-language purists should be aghast):

As of today 410 000 m³ of soil has already being taken out, 350 km of drainage trenches have being laid out and filled with 400 000 m³ of macadam and 2 mln m³ of sand. In a peak period up to 360 people and 180 pieces of equipment have been working on the site…. Now project has full support of local authorities and community. Vorskla Steel is a socially responsible company that is why it has started plenty of philanthropic projects, like supporting local school and kindergarten, patronage of local veterans organization. The company cares of cultural and educational development of region, therefore constantly supports organization of ethnic festivals, competitions, and various celebrations. Vorskla Steel is aware that this project is an extraordinary one. There are no analogues in Ukraine, therefore obviously, certain problems and obstacles can occur, but having the team of professionals it successfully overcomes them. The factory will be built on time. And along with development of this project the whole region will be developing.

Extraordinary, perhaps—but the “full support of local authorities and community”? The local authorities for sure, but that’s because Zhevago runs Komsomolsk. As to the community, it’s pushing back, while the self-satisfied tone of the above paragraph more than lends credence to villager complaints that the developers are running roughshod over the countryside and ignoring their interests.

The push-back has been going on for about two years, and its latest expression was a public demonstration on February 13th before the Kremenchuk District Council and District Administration. (Significantly, right-wing Svoboda activists were there, winning brownie points with the local population.) Holding posters with the following demands—“Hands off our God-given land!” “Shame on the enemies of the environment!” “Poltava Province is the heart of Ukraine: Don’t rip out its heart!”—the activists insisted that the draft plan be taken off the council’s agenda. Amazingly, the council caved, at least for now.

What’s next? Kucherenko isn’t optimistic: “There are no guarantees that the oligarchs and venal bureaucrats will abandon their intention to transform the district into a gigantic quarry, while making billions by neglecting the rights of their poor countrymen and women and by mercilessly exploiting natural resources.”

Still, Zhevago and the other oligarchs now know that their greed has to be curbed—if only a bit. More important, the people are fired up. They care.

The Ukrainian rock star Skriabin sings an awfully sad song with the following refrain: “My country is a total ruin / How can they detest it so much?” He may be right about much of Ukraine—but definitely not about Kremenchuk District.

Alexander J. Motyl's blog



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