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20.09.2018 | Halya Coynash

Crimean Chemical Disaster will happen again while Ukraine helps oligarch Firtash bypass sanctions

Dmitry Firtash Photo - Centre for Journalist Investigaitons, Crimean Titanium factory photo Reuters
   

The Crimean Titanium Factory behind a major chemical accident in occupied Crimea is functioning with regular supplies of a vital component from mainland Ukraine. While the factory management’s attempts to blame Ukraine for the release of toxic substances over Armyansk are absurd, questions should be asked as to how oligarch Dmitry Firtash has managed to continue profiting from the factory as though Russia’s annexation of Crimea had never happened.

Valentina Samar and the Centre for Journalist Investigations have been closely following the developments in Armyansk from when it became apparent that something was wrong, soon after the emission of toxic substances during the night of 23-24 August.  In a hard-hitting article for Dzerkalo Tyzhnya, Samar writes that such chemical spillages will continue since the root cause is “the pathological greed” behind the willingness to harm other people, the environment and to sell out their country.  Nor is she only referring to Firtash and those linked to him.  She notes that, for the same reason, there is no sign of real attempts from the side of the Ukrainian authorities to avert the threat of an environmental disaster at least in this specific case.

The spillage on 24 Augustr and the resulting respiratory difficulties, allergic rashes, and oily slick over everything are all only symptoms.  To understand the core problem, Samar says, follow developments from 2012 when Firtash privatized the Crimean Titanium Factory, and opened a new section for the production of sulphuric acid.  The factory is now a major producer of titanium dioxide, used in producing paints, plastics, rubber, etc.

Firtash had close ties to the regime of Viktor Yanukovych, and the latter ceremoniously cut the ribbon at the opening ceremony back in 2012.  Those ties made it possible for Firtash to implement ambitious plans for production, by concentrating the entire production change under his control.  That included the mine in the Zhytomyr oblast where the ilmenite, or titanium-iron ore needed for the factory was obtained, the Zaporozhya Titanium & Magnesium Combine and Crimean Titanium.

There ought to have been problems from when the situation changed radically in February – March 2014.  After Russia’s annexation of Crimea, the supplies of ilmenite ore from the Zhytomyr oblast should have stopped.  The fact that Crimea stopped receiving water from the Dnipro River should also have forced the factory to close as the lack of water made accidents, like that which has now occurred, inevitable.

As reported, the reason for the emissions of a toxic substance, probably a sulphurous anhydride, is directly linked with the fact that the retention basin linked to the factory dried up.  Even if the heat and lack of rain were major factors, so too must be the lack of the water flow from the Dnipro River.

Very many Ukrainian businesses were simply taken over by the occupation regime.  Not so Crimean Titanium.  Firtash managed to both re-register this in March 2015 in Kyiv as ‘Ukrainian Chemical Products’, and in Moscow as a limited liability company ‘Titanium Investments’.  Both these ‘companies’ supposedly had ‘a branch’ in Armyansk, with the Ukrainian documents claiming that Ukrainian Chemical Products had leased the factory to Titanium Investments.

This, Samar points out, was made possible by the notorious Law on Crimea as a Free Economic Zone which Firtash had strongly lobbied for.  As reported, this law was condemned by human rights groups back in 2014 both because it discriminated against Crimeans and because it made it possible for Ukrainians to continue business as usual on occupied territory, thus aiding the aggressor state (details here).

In this case, Samar believes, the law enabled Firtash to retain his Crimean assets, using cloned legal entities under Ukrainian and Russian jurisdiction.

The Moscow-based company did come under Ukrainian sanctions in 2016, however the real difficulties were with both water and the ilmenite ore.

Ilmenite

Due to the law on a free economic zone and, probably, Firtash’s connections, the supplies of ilmentie to the factory continued even after transport to Crimea officially stopped at the end of 2014.  It was the Civic Blockade from September 2015 that changed both this arrangement and the direct flow of electricity to occupied Crimea.

Two routes have been used to get ilmenite from the Zhytomyr mine to Crimean Titanium, bypassing Ukraine’s ban on ships entering Crimean ports and EU and US sanctions.  The first, which involved the ilmenite being taken from Odesa and eventually reloaded onto a Russian boat before ending up in Crimea needed to be stopped after a journalist investigation, and then the involvement of Ukraine’s military prosecutor.

Now the routes are more circuitous, mainly via Turkey, and more expensive, but serve the same aim of masking the fact that Ukrainian ilmenite ore is being provided to a factory in Crimea under Russian occupation.

This is apparently also resulting in a situation whereby the Moscow-based Centre for Optimal Technologies is able to expert Titanium Dioxide from Crimea “to many countries” because they can provide Ukrainian certificates of origin.

Water

The flow of water was stopped soon after Russia’s annexation.  Although there was a political aim of putting pressure on Russia, it was the latter who refused to sign a new contract which correctly identified Crimea as occupied territory.  There were also outstanding bills which the occupation regime refused to pay.

In order to obtain fresh water, underground wells were drilled which, according to Samar, “dried out” the entire region.

Samar views this as a tale of corruption and greed, both Russian and Ukrainian.  With the dire situation regarding water, the factory, which contains high-risk areas, should have been closed down.  Instead, what she calls a chemical bomb on the border of the Kherson oblast and Crimea was allowed to continue working.

Russia and the occupation authorities push the version that the accident was because of fumes rising from the acid storage tank because of Ukraine having shut off water supplies to Crimea.  Backed by Ukraine’s ‘Opposition Bloc’, which arose out of Yanukovych’s ‘Party of the Regions’, they claim that the blocking of water is a violation of international humanitarian law.  The latter, however, stipulates that it is the occupation regime which must ensure all vital requirements, not the country that has suffered.

There is also ample evidence that Crimean Titanium has long violated safety requirements.   They were fined 300 million roubles in 2017, and over 700 million this year.  On 12 September, hacked documentation posted by Ukraine’s Cyber Alliance showed that there had been dozens of infringements at the dangerous sites of the factory.

Ukraine’s failure to take adequate measures to stop raw materials being shipped to Crimean Titanium is particularly galling given the evident danger, not only to occupied Crimea, but to the Kherson oblast.  Despite the fact that the retention basin is partly in the Kherson oblast, Firtash’s factory has not paid any environmental tax to Ukraine for pouring waste products into the retention basis, nor is it subject to Ukrainian controls.  Any such taxes, as well as fines, are paid to the state illegally occupying Crimea. 

The Centre for Journalist Investigations was told by the Kherson Regional Fiscal Service that environmental taxes were not being taken from Ukrainian Chemical Products because the titanium factory in Armyansk, which has just caused a major environmental hazard, was not working.

It should be stressed that, although the current level of toxic substances is exceptionally high, residents of Armyansk are accustomed to unhealthy fumes and emissions, and the chimneys, spewing out smoke, are visible for many kilometres, including in the Kherson oblast.  Anybody who didn’t ‘notice’ the activity of a factory  paying no environmental taxes to Ukraine and posing a potential hazard to people’s health clearly had reasons for keeping it that way.

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