Russia Update: Duma Likely to Strip Opposition MP Ponomarev of Immunity

For the first time, the Polish Defense Ministry has recognized a group of volunteer paramilitary organizations and has signaled that these groups could be called up in time of war. Reuters reports:

There are an estimated 120 such groups in Poland, with total membership around 10,000. Eight hundred members gathered on Friday in Warsaw at a meeting organized by the Defense Ministry, the first time they have been given official recognition.

Defense Minister Tomasz Siemoniak told them his ministry would pay the wages of 2,500 people who would form the backbone of local volunteer units to be mobilized in the event of a war.

The Polish president’s chief security adviser, General Stanislaw Koziej, said the new approach had been prompted by the conflict in neighboring Ukraine, where Russia is accused of fighting alongside pro-Moscow separatists.

“Until recently, paramilitary organizations treated defense as a pastime,” he said. “Today, as we face a war across our border, they realize that this pastime could contribute to the country’s security.”

Enrollment in such groups has been expanding as Russia is increasingly aggressive, but Reuters adds that Poland, a NATO member, is not seeing enough support from its allies, which is one reason that paramilitary organizations are getting larger and the Polish government is turning to them:

Poland is a member of NATO, but the defense alliance rejected requests from Warsaw to establish a substantial permanent presence on Polish soil. That has shaken Poles’ faith in NATO’s resolve, officials in Warsaw say.

Polish President Bronislaw Komorowski has been one of the world leaders who has been trying to raise alarm, especially inside NATO, that a more robust deterrent to Russian aggression is needed. A statement published March 18 on the presidential website highlights the shift in NATO’s thinking on its relationship to Russia:

Komorowski said that the main conclusion stemming from the Wednesday RBN sitting was that Poland needed to upgrade its defence abilities. In Komorowski’s opinion Russia’s current strategy signified a “strategic turnabout” in its relations with the West, which called for the western world to “strengthen its unity and defence potential”.

The president noted that Russia’s current stance was “openly confrontational” towards the West, which demanded “far-reaching conclusions. In this context he stressed the importance of executing decisions regarding the reinforcement of NATO’s eastern flank made at the Alliance’s recent Newport summit.

Bronislaw Komorowski also remarked that changes in NATO’s basic strategic conception would be a fitting response to Russia’s current doctrine. He also voiced concern about Russia’s announcement that it gave itself the right to intervene in neighbouring countries whose policies ran against Russian interests.

“This is a new and disturbing line of thought”, Bronislaw Komorowski observed, adding that this policy was especially visible in Russian activities in Ukraine. (PAP)

— James Miller

Rosneft, the state oil company headed by Igor Sechin, requested as much as 89 billion rubles ($1.6 billion) from the National Welfare Fund (NWF) to build out the Zvezda wharf in Primorsky Territory in Russia’s Far East, Kommersant and TASS reported.

On April 3, Vice Premier Arkady Dvorkovich said the Kremlin may support the request, although regarding other Rosneft requests there is “no final decision”. The Zvezda project was attractive because it fit with the Russian government’s plan of import replacement in the wake of Western sanctions and retaliatory boycotts from Moscow. Dvorkovich did not name a figure, but said the sums “were substantial.” A source in the Ministry of the Economy told Kommersant that “only the first stage” is passed although “a positive conclusion had been sent regarding the strategic significance of the project.”

According to a Kommersant source familiar with the ship-building industry and close to Rosneft, the company wants to get 89 billion rubles ($1.6 billion). The total cost of the project has risen from 11 billion to 130-140 billion rubles and it is not clear if the entire sum requested will be received; under Russian law, the amount requested from the NWF cannot exceed 40% of the project. But sources also said this would be insufficient to fund the project due to the weak ruble and expensive loans.

Zvezda, a “super wharf,” was begun in 2009 by the South Korean company DSME and was oriented toward getting offshore orders from Rosneft and Gazprom.

But DSME pulled out of the project in 2012, citing uncertainty from the partners, lack of funds and lack of a plan for orders. The consortium was turned over to Rosneft and Gazprombank in 2013, which were supposed to get 75% ownership of the Far East Ship-Building and Ship-Repair Center. But it failed to attract investment although it was expecting a loan from VEB bank of 100 billion rubles and an allocation from a state ship-building program of another 27.5 billion rubles. Putin criticized the project in November 2014 for failing to have a portfolio of orders through 2018 and ordered it to define its sources of financing in the near future. Vice Premier Dmitry Rozogin also criticized the pace of the project on March 25, 2015.

The application to the NWF was submitted a half year ago for a total of 1.5 trillion rubles for 16 projects. A government source told Kommersant that Rosneft can “realistically expect” financing only for the Zvezda project.

Nadezhda Malysheva of PortNews said the Zvezda project has to be finished because the gas companies need offshore technical capacity and if for no other reason “from the perspective of image.” Thus a bloated project that even the president and premier have criticized may go forward just because of the political exigencies of the “import replacement” mandate and because otherwise “it looks bad.”

Both Rosenft and Sechin personally are under Western sanctions and Putin has stated a number of times that companies hit by such sanctions would be helped by the government.

Meanwhile, there was news of a Rosneft-related oil spill today in Sakhalin, a province already facing the crisis of a sacked government and the arrest of the governor, and the fishing trawler disaster in which 56 fishermen lost their lives, likely due to the navigator’s error.

Environmentalists at the Sakhalin Ecology Watch report an oil spill in Okhinsk District on the grounds of the Ekhabi Votstochnoye oil plant, a subsidiary of Rosneft.

The spill was discovered March 31 although it had begun earlier. It is not clear if authorities have managed to bring it under control. 

Several thousand square meters of soil have been polluted by at least several tons of oil. Sakhalinmorneftegaz, a local marine oil and gas agency is trying to stop the leak but has not filed a report about it as it is obliged to do by law.

— Catherine A. Fitzpatrick

The attorney for Zaur Dadayev, the main suspect in the murder of opposition leader Boris Nemtsov, will request that he be given a jury trial, RBC.ru reported. Dadayev also announced that he has an alibi for the time of the murder of Nemtsov, RosBalt reports.

He says he was in a restaurant on Nezhinskaya Street and then headed back to an apartment where he was staying on Veyernaya Street.

Dadayev said he confessed to the murder only because he was threatened with death, RBC.ru reported.

RBC.ru also reported that investigators have also interrogated Governor Sergei Yastrebov of Yaroslavl Region and his deputy, Aleksandr Senin, who was forced to step down from his post after exposes of alleged corruption by Nemtsov and his fellow party members in the Yaroslavl legislature.

Nemtsov seat in the Yaroslavl Duma will pass to another member of his party RPR-Parnas.

Over the weekend, supporters and opponents of Nemtsov clashed on the bridge where he was killed. A 40-day memorial in the Russian Orthodox tradition is planned for tomorrow April 7.

Dadayev once served in the elite forces of the Interior Troops loyal to Chechen leader Ramzan Kadyrov, and was praised by him as a “brave warrior,” although he conceded that if he had committed murder, he would have to face trial.

Ever since the investigator announced that the perpetrators were Chechens, independent Russian media and observers have asked when the connections will be made between these Chechen policemen or relatives of policemen, and the top leadership of the country.

These include two powerful Chechen senators, Adam Demlikhanov and his brother Suleiman Geremeyev, said to be related to the contractor of the assassination of Nemtsov.

This past week, Kadyrov, Adam Demlikhanov and others have been on a trip to the United Arab Emirates where they have sought investors.

Kadyrov uploaded to Instagram a photo of the group having a late-night tea:

Ramzan Kadyrov, 3rd from left, and Adam Demlikhanov, 2nd from left and other relatives and government associates in UAR April 2015.

In a post with the picture, Kadyrov wrote (translation by The Interpreter):

Dear Friends!

Last at night my dear brothers and I gathered for a cup of tea. State Duma deputy Adam Delimkhanov, Magomed Daudov, head of the administration, Bekkhan Taymaskhanov, vice premier and representative of the Chechen Republic to the President of Russia, Khasan Khakimov, vice premier on questions of the economy; Galas Taymaskhanov described the meetings that took place in UAR during which were discussed issues of attracting investments in various spheres of the economy and also projects connected to education, health and tourism.

Kadyrov said UAE investors were looking at his proposals and had repeatedly visited Chechnya to discuss projects.

Russian Railways dropped its libel suit against Nemtsov due to his death, TASS reported. Nemtsov’s attorney Vadim Prokhorov appealed to keep the case open, to clear Nemtsov’s name. Russian Railways claims that a report published by Nemtsov, Winter Olympics in the Sub-Tropics was factually incorrect, a claim that his attorney and supporters reject.

— Catherine A. Fitzpatrick

In what seems like a sign of the growing economic crisis in Russia, Rostec (Rostekh) announced it will lay off 40,000 managers by the fall of this year, Snob.ru reported, citing a report in Kommersant.

Out of 85,000 managers, about 40,000 will be dismissed including half of the 620 employees at the head office. The rest will be made redundant by September-October 2015.

A total of 475,000 work in the company.

But Rostec said it wasn’t making the enormous cuts because of the economic crisis, but due to “entering a new stage in the company’s development.” They said that using an outside consultant, they had conducted a staff audit and found some employees insufficiently qualified.

Rostec unites about 700 companies in the Russian defense industrial complex, says Kommersant.

Under Russian labor law, those dismissed will receive compensation and training for jobs in other areas.

Last year, AvtoVAZ, a company where Rostec owns shares, laid off 14,000 workers, Kommersant reported. This year the company plans to fire 1,100 managers due to the drop in demand for cars.

The announcement came after a statement by Aeroflot, the Russian airline, that 10% of the staff would be cut, and other announcements from various car manufactures that thousands of workers will be laid off. The news has already led to strikes in Kaluga which authorities have responded to by arresting or intimidating labor leaders.

Kommersant reports that sources in Rosneft say the company has decided to reduce its Moscow office by 20-25% , but this might refer only to a reduction in vacancies. Russian Railways said in March that 5,000-7,000 people may be let go (about 8%). The Chelyabinsk firm ChTz-Uraltrak, controlled by Uralvagonzavod may cut 6,000 employees (80%). Other machine-building plants say they may make reductions as well.

— Catherine A. Fitzpatrick

RBC.ru reports that Russian-language Forbes magazine has published a story today claiming that at a closed meeting with members of the Russian Union of Industrialists and Entrepreneurs (RSPP) on March 19, 2015, President Vladimir Putin said that Ukrainian President Petro Poroshenko had offered to him to incorporate the Donbass into Russia during the “Normany Four” negotiations in Minsk on February 11-12, but Putin had refused.

The story comes from an unnamed source described by Forbes as “familiar with the content of Putin’s talk at the RSPP.”

The Interpreter has translated an excerpt:

He (Poroshenko–Forbes) told me outright: “Take the Donbass.” I replied to him: “Have you gone mad? I don’t need the Donbass. If you don’t need it, then declare its independence.” Poroshenko, according to the Russian president said that the Ukrainian authorities would not go for this. Then the Ukrainian authorities must pay the pensions and welfare of the Donbass and restore the banking system, Putin insisted.

A participant in the meeting who requested confidentiality confirms that Putin told the business [community] about the unexpected offer by Poroshenko to take the Donbass, and his refusal to do so. “Poroshenko offered Russia to take the Donbass for financial compensation. But Putin said that this could only be discussed if the Donbass would be incorporated into Russia, and as long as the Donbass is part of Ukraine then all payments should be from the Ukrainian side,” the source told Forbes.

Putin also told the businessmen that he didn’t believe the Minsk agreements would be fulfilled.

Presidential press secretary Dmitry Peskov said he couldn’t confirm or deny the statement made by the Forbes‘ source, since the talk at the RSPP was closed. Poroshenko’s press secretary Sviatoslav Tsegolko has not answered repeated phone calls. A representative of Chancellor Angela Merkel said that Merkel considers the process of withdrawal of heavy armor from the conflict area insufficiently transparent and could not comment on Poroshenko’s alleged offer to Putin. The office of French President Francois Hollande could not be reached, said Forbes.

Yevhen Perebyinis, spokesman for the Ukrainian Foreign Ministry had a wry explanation, based on the similarity of words in Ukrainian that might be misunderstood in Russian.

In Ukrainian, “Zabiraytesya z Donbasu” would mean “Get out of the Donbass.”

In Russian, this would be said as “Ubiraytes’ iz Donbassa.” “Take the Donbass” would be said, “Zabirayte Donbass.”

fetching tweet…

Translation: “Get out of the Donbass” does not mean “Take the Donbass,” but quite the opposite.

— Catherine A. Fitzpatrick