Nornickel Asking not to Bring Case to Court

Nornickel Asking not to Bring Case to Court


Russia’s Federal Supervisory Natural Resources Management Service (Rosprirodnadzor) has filed a lawsuit for 147.7 bln rubles ($1.9 bln) against Nornickel. According to the watchdog agency, the damage of this kind was caused to the Arctic by a huge fuel spill at one of the company's facilities this spring. The case will be considered by the Arbitration Court of the Krasnoyarsk territory. A spokesperson for the court told that the claim was filed on September 10.

Norilsk-Taimyr Energy Company (NTEK,) a subsidiary of Nornickel, a Russian nickel and palladium mining and smelting company, is the direct defendant. It is NTEK that owns the tank from which dozens of tonnes of oil products were spilled on May 29 this year. Diesel fuel was discharged into the Daldykan, Ambarnaya, Pyasina rivers and lake Pyasino. This was an unprecedented environmental disaster in the Arctic zone, which had never previously happened in Russia. The first stage of elimination of its consequences, namely, the simple collection of fuel from the surface of the rivers, took all summer despite the fact that initially, promises were made to complete it within two weeks. Nornickel’s representatives said that it had already spent several bln rubles of its own funds for the works. However, it didn’t help gain the hearts of Rosprirodnadzor experts. At present, this agency requires almost $2 bln in compensation from the company.

Considering the amount of the fine, the federal authorities have even urgently adopted additional legislative initiatives. In this case, the monies would go to the state treasury and not to the budget of the area where the environmental disaster occurred, or more specifically, the Norilsk city district and the Taimyr Dolgan-Nenets municipal district.

Apparently, officials in Moscow thought that to get the sum of money several times higher than its annual budget would be too good for the municipalities in the Krasnoyarsk territory. The regional authorities continue to insist that Taimyr should receive at least some of these funds. Apparently, the lawsuit is expected to take quite some time. The legal proceedings have not started yet but Nornickel has already stated that it does not agree with it. According to the holding, Rosprirodnadzor’s conclusions are too hasty. First of all, it was necessary to clearly divide the assessment of the amount of fuel that got into water and soil. Secondly, it is necessary to wait for the end of diesel fuel collection and its study by experts. Then only on the basis of these data the amount of damages should be calculated.

“We believe that appealing to the court was premature as the liquidation measures at the water bodies have been completed,” the press service of Nornickel said. “However, the expert examination of the volume of collected oil products has not yet been done. The company actively participated in the experts’ discussion at the site of the work group of the Ministry of Natural Resources. Our joint work should result in a remediation plan. Only after the completion of the work and the expert review we can determine the exact amount of fuel that got into water bodies and soil, and, therefore, it will be possible to determine the correct amount of damage.”

At the same time, criminal proceedings are going on. On September 14, the Prosecutor General's Office announced that it had approved the charges in the criminal case against Rinat Akhmetchin, the former mayor of Norilsk. He is accused of negligence that led to the emergency. According to the investigation, he found out about the accident at the plant right after it had happened. In the two days after the disaster, he did not take any active measures to localize the spill and this eventually aggravated its consequences.

For people who are aware of the situation in the city, this behavior on the part of Rinat Akhmetchin does not seem strange. Nornickel is not just a city-forming enterprise. It is an industrial giant, and everything depends on it in the local industrial area. Including the agencies of power that are formed by the company's bosses. Akhmetchin, for example, worked for several years as Deputy HR-Director of Nornickel. Certainly, he was on the side of the company that, apparently, spared no effort to cope with the accident without informing the emergency agencies.

Interestingly, this factor caused a significant cooling of relations between Nornickel and the leadership of the Krasnoyarsk territory. In fact, Governor Alexander Uss was “framed up” in the eyes of Moscow authorities. He did not miss a chance to accuse the regional officials in Norilsk of playing an unfair game. Of course, they got offended. Local TV channels report that Vladimir Potanin, the owner of Nornickel, will demonstratively curtail Nornickel's social programs in the Krasnoyarsk territory, transferring them to Murmansk.

Meanwhile, as promised, Rosprirodnadzor began a large-scale inspection of all major enterprises operating in the Far North. In particular, Vankorneft, a subsidiary of Rosneft that is developing the field of the similarly-named in the Turukhansky district of the Krasnoyarsk territory, is undergoing a large-scale inspection. However, judging by the first inspection results, the company is likely to get “excellent grades.” “A number of positive practices to ensure the emergency stability of facilities and reduce the negative impact on the components of the natural environment have been noted,” said the report of this agency.

Hiding of emergency situations is the “chronic” disease of our business. And hiding the scale of an accident and the precise time when it took place reduces the efficiency of elimination efforts. “Nornickel tried to find a compromise with Rosprirodnadzor to estimate the amount of damage caused to water bodies,” Alexey Knizhnikov, the head of the WWF Program on Environmental Responsibility of Business in Russia, told “It is good that we didn’t come to a compromise. It is necessary to complete this bilateral processes between business and the government on environmental safety issues. The public should be an equal player in the issues of this kind. It requires open discussions, not secret ones.”

It should be added that at the end of last week, a commission of deputies of regional legislative assembly worked in Norilsk. It examined the place of emergency and listened to experts’ reports. The conclusions of the people's deputies are disappointing. It is too early to wait for the local rivers to be completely cleaned. Moreover, the accident at the thermal power plant revealed other skeletons in Nornickel's closet. “Oil products continue to flow into the environment – water bodies and the surrounding area,” said Elena Penzina, the deputy of Krasnoyarsk regional legislative assembly. “This is despite the fact that the plant has done large-scale works as part of the oil products collection operations. Experts have found that the maximum permissible concentration (MPC) for petroleum products has decreased by a factor of150. However, another problem has been detected. The excess of MPC was found for a number of heavy metals in the emergency area between Norilsk to lake Pyasino. This means that the disaster highlighted the real picture of the environmental state in the area of the plant. That is, the company has been regularly dumping production wastes into the tundra for 85 years. Despite the fact that when the investigative commission was set up by the deputies, it determined the scope of the questions, its conclusions might eventually be broader.”

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