Wednesday, April 26, 2023

Ukraine's Iron Harvest and the Oligarchs - Richard Kemp

 

by Richard Kemp

Serious consideration should be given to finding a way to hold the beneficiaries of Putin's largesse even more accountable, if possible, and direct their assets to rectifying the damage that their patron-in-chief has caused.

  • The media prefer to talk of mansions and opulent yachts rather than the corporate assets which continue to generate profits for the oligarch class that includes men like Alexei Miller, Igor Sechin, Roman Abramovich, Boris Rotenberg, Vladimir Potanin, Viatcheslav 'Moshe' Kantor, and Igor Shuvalov as well as their sons and daughters who occupy key banking and business roles too. All of these have been sanctioned and some of their assets frozen.

  • Serious consideration should be given to finding a way to hold the beneficiaries of Putin's largesse even more accountable, if possible, and direct their assets to rectifying the damage that their patron-in-chief has caused. It is likely that tens of billions of US dollars of Putin's oligarchs' assets have already been frozen under international sanctions. This means Russia cannot use them, but as things stand, they cannot be confiscated and put to work to help Ukraine re-build, much as there is the desire in the US, UK and EU to do so.

  • A series of bills has already been introduced in the US Congress towards this aim, but they would all appear to fall foul of domestic laws as well as international investment laws. What is now needed therefore is a coordinated legislative effort in Washington, London and like-minded capitals to permanently deprive Russia of these funds and use them to help offset the massive reconstruction bills that will otherwise fall entirely to US, British and European taxpayers.

The carnage wreaked on Ukraine has been visible on our screens every day, as we have watched the conflict unfold over the past year: human beings torn apart, apartment blocks levelled, cars mangled, roads cratered, train stations smashed and sometimes whole towns reduced to piles of smoking rubble. Pictured: Firefighters in Kyiv, Ukraine try to put out a fire in a four-story residential building, in which three people were killed when it was hit by a "kamikaze drone" (many of which are supplied to Russian forces by Iran), on October 17, 2022. (Photo by Paula Bronstein/Getty Images)

The World Bank estimates an overall reconstruction bill for Ukraine at $349 billion, an eye-watering sum that is rising by the week. Ukrainian government sources put it at more like $700 billion. Somehow this has all got to be paid for, and it's not going to come from Ukraine, whose economy is in tatters after months of fighting for its very survival. The chances of getting Russia to cough up are close to zero, whatever the talk of war crimes trials and reparations.

Meanwhile, sanctioned Russian oligarchs, who themselves bear considerable responsibility for Putin's aggression, simply alter the ownership of their corporations to avoid penalties, often with their vast fortunes residing in Western banks and property empires. It is time for their wealth to come under greater scrutiny as the world figures out how to put Ukraine back together when the war eventually comes to an end.

The carnage wreaked on Ukraine has been visible on our screens every day, as we have watched the conflict unfold over the past year: human beings torn apart, apartment blocks levelled, cars mangled, roads cratered, train stations smashed and sometimes whole towns reduced to piles of smoking rubble. Less visible, and therefore rarely talked about, is the colossal environmental damage caused by Putin's war — so far costed at a massive $51 billion, which is likely to be far from the final bill.

Warfare leaves what has been called an 'iron harvest'. In northern France and Belgium, over a century after WW1 ended, thousands of tons of munitions are cleared each year, and regularly a couple of farmers die after ploughing fields littered with shells, grenades and mustard gas just below the soil surface. It is estimated it will take 500 years to finally clear these rusting Great War munitions since 1.5 billion shells were fired at the Somme alone.[1]

Ukraine is a country almost the size of Texas. It is not as unvariegated as outsiders imagine. Sixteen per cent of the country is forested, and another 29 per cent consists of natural and semi-natural vegetation such as grasslands and hedgerows. It has 23,000 rivers, while the northern end of the Carpathian mountain range comprises a third of all plant species in Europe. Ukraine is home to 70,000 species of wildlife, as well. [2]

Even dolphins in the Black Sea are not safe because of increased naval and sonar activity. The first four months of fighting saw 37,000 major fires, many of them triggered by shelling. This affected about a quarter of a million acres of protected forests and other valued ecosystems. Fields filled with wheat and barley were set alight, too. Loss of machinery, farm infrastructure and crops has been put at over $4 billion alone.

Worse, where Russian separatists took power, legal logging collapsed in favour of a free for all, resulting in the theft of vast quantities of valuable timber. About twenty-five per cent of potable water comes from ground water sources and aquifers. Many of these have been contaminated. There has been huge deliberate damage to sewage and water treatment plants, as well as water towers and dams, so much so that about five million people lack access to safe drinking water. Stomach disorders ensue as people wash and clean in contaminated water, which is often intermittently supplied at best.

Nearly 700,000 tons of petrochemicals have been burned as a result of shelling, and 1,600 tons of pollutants have directly leaked into bodies of water. After coal mines were left unattended from 2014 onwards, some 650,000 feet of polluted mine water has been released into the environment. Ukraine has about 465 tailings (mineral waste) storage facilities, of which two hundred are in the war zone. These store 6 billion tons of hazardous liquid industrial waste.

Many industrial facilities have been pulverised by war, a health hazard as so many of them contain deadly asbestos, as do residential apartment blocks since Ukraine was late to ban the substance. Chemical plants like the one at Syvererodonestsk are a special worry – in this case because shelling of storage tanks resulted in a pink nitric acid cloud which is fatal if ingested.

Ukrainian farmers risk their lives whenever they plough and sow their fields because of the sheer number of landmines left by the Russians, not to mention unexploded ordinance. Even many of the missiles that fail to explode release highly toxic chemicals. Both the radioactive zone around the Chernobyl reactor and the huge reactor complex at Zaporizhzhia are of special concern not least to the IAEA. The first requires constant monitoring of ambient radioactivity levels, while even though the six reactors are shut down and could survive a plane crash on them, spent fuel rods are stored in pools of water which have to be maintained at certain temperatures. Constant artillery duels around these sites risk a terrible accident.[3]

Western governments have seized $300 billion of Russian state assets and about $33 billion of the fortunes that remain in private hands. There is much political and legal debate about how these sums could be re-routed to aid the reconstruction of Ukraine. Since outright distraint seems problematic, this includes talk of using the yields on specially devised bonds.

The media prefer to talk of mansions and opulent yachts rather than the corporate assets which continue to generate profits for the oligarch class that includes men like Alexei Miller, Igor Sechin, Roman Abramovich, Boris Rotenberg, Vladimir Potanin, Viatcheslav 'Moshe' Kantor, and Igor Shuvalov as well as their sons and daughters who occupy key banking and business roles too. All of these have been sanctioned and some of their assets frozen.

Governments tread gingerly around the sensitivities of sanctioned oligarchs (who like Kantor simply change the ownership structure of their fertiliser businesses) while daily Ukraine suffers the environmental as well as structural effects of war. As other examples such as World War 1 show, these could still be felt in a century or more.

Serious consideration should be given to finding a way to hold beneficiaries of Putin's largesse even more accountable, if possible, and direct their assets to rectifying the damage that their patron-in-chief has caused.[4] It is likely that tens of billions of US dollars of Putin's oligarchs' assets have already been frozen under international sanctions. This means Russia cannot use them, but as things stand, they cannot be confiscated and put to work to help Ukraine re-build, much as there might be the desire in the US, UK and EU to do so.

A series of bills has already been introduced in the US Congress towards this aim, but they would all appear to fall foul of domestic laws as well as international investment laws. What is now needed therefore is a coordinated legislative effort in Washington, London and like-minded capitals to permanently deprive Russia of these funds and use them to help offset the massive reconstruction bills that will otherwise fall entirely to US, British and European taxpayers.

Colonel Richard Kemp is a former British Army Commander. He was also head of the international terrorism team in the U.K. Cabinet Office and is now a writer and speaker on international and military affairs. He is a Shillman Fellow at Gatestone Institute.

[1] https://www.military-history.org/behind-the-image/behind-the-image-the-iron-harvest-on-the-western-front.htm. Since 1918 360 people have been killed and 500 wounded by legacy munitions on the Western Front

[2] Giovana Faria, 'Scorched Earth: The Catastrophic Environmental Costs of Russis's Invasion of Ukraine' Radio Free Europe 28thJune 2022

[3] Yale School of Environment report 'One Year In, Riussia's War on Ukraine Has Inflicted $51 Billion in Environmental Damage E30 Digest 22 February 2023 and Ross Peel https://www.kcl.ac.uk/shelling-of-europes-biggest-nuclear-power-plant-exposes-multiple-risks. See also Bulletin of Atomic Scientists report by Jessica McKenzie. dated 19 August 2022 https://thebulletin.org/2022/08/a-ukrainian-climate-expert-on-the-zaporizhzhia-situation-and-the-winter-energy-outlook/

[4] Isabella Kaminksi 'Could Russia be prosecuted for environmental harm in Ukraine' Open Democracy 24 March 2022 is a good discussion of the legal issues surrounding environmental harms stemming from war.


Richard Kemp is a former British Army Commander. He was also head of the international terrorism team in the U.K. Cabinet Office and is now a writer and speaker on international and military affairs. He is a Shillman Fellow at Gatestone Institute.

Source: https://www.gatestoneinstitute.org/19605/ukraine-iron-harvest

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