Archive for May, 2011

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By all means move at a glacial PACE, you know how that thrills me!

May 31, 2011

 Well dear readers, it is not very often I quote from films, but the title of this post comes from The Devil Wears Prada.

It seemed almost appropriate given the recent discussions between Ukraine and the President of PACE, Mr Mevlut Cavusoglu. Yes, I know – I’ll get my coat!

As expected whilst Ukraine has the chairmanship of PACE until 7th November, whilst Ukraine gets to point PACE in causes Ukraine favours and push the said causes, PACE also has 6 months unfettered, unobstructed and undeniable access to those at the very top of Ukraine.

There is no “Leave a message and I’ll get back to you” facility for Ukraine at the moment. (I know, I know, Rockford Files quote – No idea what is wrong with me today.)

A very useful time for PACE to continuously engage with Ukraine on matters such as human rights, freedom of speech, alleged political persecutions, reforms and all those other difficult and resisted matters (by some) withing the Ukrainian elite (from all parties).

Of course the most high profile case pending the courts is Ms Tymoshenko, ex-Prime Minister and leader of one of the now opposition parties. Vocally denounced by some of her allies within the European People’s Party (EPP) as selective prosecution, the PACE President stated “This is the result of an investigation. What is currently taking place [around the investigation into cases against the opposition] is a lawful procedure. Politicians must not influence this process.” – Quite (although politicians from all sides within and externally of Ukraine have indeed attempting to influence th process and will probably continue to do so!)

He also went on to comment on the glacial movement towards certain reforms that PACE has been pushing for long before the current administration took power. Specifically a State public television channel , something Ex-President Yushenko and ex-Prime Minister Tymoshenko refused to do, the latter probably now regretting that decision deeply.

Between you and I dear readers, the state TV channel is not so very far away from being achieved however PACE is absolutely right to apply pressure as there is a distinct lack of will to actually get it on air in certain quarters across all parties.

Other reforms that PACE have been citing for the best part of a decade relate to reforms in the Criminal Procedure Code and new laws relating to the Prosecutors and Defenders offices. Areas again, where there is significant resistance amongst law makers to make changes due to self interest.

This fact was acknowledged by the President publicly in Poland last week when he said “I understand very well that the events that are now taking place in the country and outside it, I mean different evaluations given to Ukraine, are very natural because Ukraine is going through reforms. There is fierce resistance in Ukraine both from the people carrying out the reforms and officials of different levels, who are used to living the old way. For this reason, the path now taken by Ukraine will give rise to different discussions.”

Quite true. the overt and covert last ditched feeding frenzy of the rich and powerful is obvious to anyone who cares to look, prior to the DCFTA and AA get signed with the EU and the easier times of acquiring monopoly control have passed for good.

The question is, can PACE apply sufficient pressure between now and 7th November on Ukraine to get more than glacial movement on the three issues it has highlighted via Mr Mevlut Cavusoglu?

The list of internationally pressured reforms from various sources is growing and growing (although you do have to wonder why none of them have been done before under other Ukrainian governments).

Maybe this is why there is a whole raft of changes going through the RADA which is less than perfect. Too much to do and so little time given the resistance to anything that equals a turkey voting for Christmas?

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Grain quotas abolished

May 30, 2011

The much derided grain export quota system has been abandoned by the Ukrainian government with immediate effect.

No doubt there will be much rejoicing amongst the agricultural companies as the opaque system allowed significant room for corruption.

The government will now introduce export duties on grain at 9% for wheat, 12% for corn and 14% for barley. Far more transparent!

That will of course make Ukrainian grain far more attractive than Russian grain which still operates under an opaque quota system. No doubt this move by Ukraine will cause ructions in the Russian market and may possibly force Russia to do the same.

If so, good news for a food market that is seeing prices go up and up across the globe.

It will certainly please some friends of mine who sell grain for export.

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A French victory in the Ukrainian courts

May 29, 2011

Just to go against the popular sentiment once again dear readers, a French company has just won a business dispute in the Ukrainian courts.

In the past year or two, foreign victories in Ukrainian courts seem to be more and more frequent despite the western media doing its very best to portray Ukraine as the wild-wild east.

This time it was French bank CIB Credit Agricole who went up against one of Ukraine’s biggest company’s, TMM Ukraine owned by the rather affluent Mykola Tolmachev. Most of us, dear readers, would be happy to be only a $ few million behind him.

The incident comes about relating to bank loans and repayments. There are various figures floating around the Ukrainian media relating to the size of the outstanding amount, from $600,000 to $750,000. I am fairly reliably informed that the actual figure is just over $800,000.

Whatever the figure, the repayment is not going to hurt TMM Ukraine when it comes to balance sheets or interruptions in operating cash availability I am told. One can only assume that it will make it harder for TMM Ukraine to borrow from banks externally of Ukraine in the future however and borrowing internally of Ukraine results in ridiculous interest rates, so maybe a longer term faux pas on behalf of TMM Ukraine.

Anyway, whilst the result is not necessarily that helpful to TMM UKraine, it will certainly be helpful to Ukraine itself as this is yet another case where the courts have ruled in favour of the foreigners.

I am not the only one to think that way either. Jacques Mounier of CIB Credit Agricole, Kyiv obviously thinks the same way. He stated “It would have been wiser for Mr. Tolmachev not to enter into such litigation against our bank, a litigation which ridiculed himself, his businesses TMM, Sintal, and that, even if, eventually, he was not successful, tarnished Ukraine. We believe that such a judgment is good news for CIB Credit Agricole, but even more for Ukraine, and is a booster for the investment climate.”

Quite right! Whilst $800,000 is not a lot of money to either party, there was a principle at stake and the rule of law came through in Ukraine without interference and with a just result.

Unfortunately this tale of justice in the Ukrainian business world will undoubtedly not make it to the western media as news like this just doesn’t sell newspapers does it. It is though, yet another case I can cite to those who are interested in coming to Ukraine to do business but are wary as they believe all they read in the press.

It seems like a good news day in the business world involving Ukraine. This comes on top of the scrapping of opaque grain quotas and the imposition of transparent export duties instead. Another little shuffle by the State in the right direction.

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EU High Representative Statements and Ukrainian MFA rebukes

May 28, 2011

Well dear readers, what to make of this? That is the official statement from Cathy Ashton the EU High Representative over the detention of Yulia Tymoshenko by the PGO’s office in Ukraine via the courts.

Whether Ms Tymoshenko is guilty or not remains to be seen, although given the international reputation of Kroll Inc upon whose forensic accounting report much of the prosecution evidence is based, it would certainly suggest there are questions to answer.

It can hardly be claimed that Ms Tymoshenko has turned up every time she has been summonsed by the PGO and has often deliberately turned up without a legal representative to delay matters. Sooner or later her game of brinkmanship with the PGO was going to get a response.

I wonder how many times German or Dutch prosecutors would allow people to simply not turn up or turn up unrepresented to slow matters down before they were taken into custody?

Regardless, the statement of Cathy Ashton holds within certain inferences that may or may not have some foundation. Unfortunately inferences that political interference with the course of justice in Ukraine may or may not be the driver for the prosecution of Ms Tymoshenko may seem a little duplicitous to some when her own statement seeks to put political pressure on the judiciary in Ukraine during an on-going investigation.

The response from the Ministry of Foreign Affairs to the Baroness’ statement is a very forceful rebuke full of very useful contemporary comparisons and obviously interprets her statement as an attempt to use political weight to influence the sovereign judicial process in Ukraine.

“One of the fundamental principles of European democracy is the equality of all citizens before the law. Confirmation of the effectiveness of this rule is the anti-corruption investigations that were conducted or are underway against former Croatian Prime Minister Ivo Sanader, Sergei Stanishev of Bulgaria and Romania’s Adrian Nastaze. In this regard, a suggestion that someone of the former Ukrainian officials, and now the oppositionists, should be untouchable for the law enforcement agencies, would indicate an attempt in a dialogue with Ukraine to selectively use other European standards.” – MFA Ukraine

Quite – It is very difficult to prove, given that there are also a number of the party in the governing majority also under investigation, not to mention an ex-President in Kuchma, that this is indeed a selective witch-hunt as inferred by Cathy Ashton’s statement.

The argument goes that the PoR people being investigated are not of the same level as that of Ms Tymoshenko and former Ministers, but then how can they be as they were not in power to be a former Prime Minister or Minister. To abuse the office, you must first hold it would seem to be a reasonable consideration, no matter how high or lowly that public office may be. Ergo if the ruling PoR people under investigation for corruption have never had the opportunity to hold and abuse high office, the profile of ex-Prime Ministers and ex-Ministers will always put theirs in the shadow. It does not necessarily make them any more or less corrupt however.

What is exceptionally interesting, was this statement “The Ministry of Foreign Affairs reminds that the confirmation of Ukraine’s openness has become a recent meeting of the General Prosecutor of Ukraine with ambassadors of EU member states and the U.S. ambassador, during which they have been presented a detailed explanation of all legal cases that are of interest to them.”

If that is true, and there has been no rebuttal of this statement by any EU Member Ambassador or the US Ambassador that you would expect if it was a lie, then the case of Ms Tymoshenko will be one that all have an interest in. One imagines there were a lot of cables and communiques sent back to home nations after that meeting.

It is also interesting that there was such a meeting at all over an internal legal matter. Obviously Ukraine is well aware of the sensitivities of the case within the EU even though it is an absolutely sovereign affair.

So the question is, was Cathy Ashton’s statement well considered?

Rather than fill it full of inferences and implications, would something along the lines of “The EU High Representative is aware of the detention of Ms Tymoshenko and is monitoring the situation very closely” not a far better (and shorter) statement to make?

It would not have caused any ruffled feathers in public for those in Kyiv but would have made sure that those in charge insured things are as they are meant to be, plus taking into account the wider geopolitical issues the EU and Ukraine are deeply involved with at this time to the annoyance of Russia. Publicly annoying Kyiv will only encourage the Kremlin.

I wonder what my fellow blogger, unofficial mentor, retired Ambassador and former FCO speech writer, Charles Crawford would make of Cathy Ashton’s statement in light of the current geopolitical struggle between the EU and Russia over Ukraine, the subsequent rebuke from the Ukrainian MFA, and who won that little war of words.

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Enreg nuclear stress tests and Ukraine

May 27, 2011

Oh dear.

Dear readers, as a qualified Radiation Protection Supervisor (courtesy of RWE Nukem and the excellent tuition of Mr Nick Trafford) not to mention a Civil Engineer who knows a little bit about steel and concrete by design (and default), I am slightly dubious of the EU “Stress Tests” for the civil nuclear industry on the continent.

As is always the case, the stress tests have been reached by consensus amongst the EU nations. As is always the case that means the lowest common denominator has been reached which all to often is almost a complete waste of time and involves a lot of money.

Discounting Russia, Ukraine, Switzerland and Armenia there are just under 150 civil nuclear power plants in Europe. Counting them it is way over 150. As the plan is to “stress test” all nuclear facilities within the EU and actively encourage the neighbouring nations to do the same within the same parameters, that is a lot of “stress testing”.

The “stress tests”, such as they are, require a re-assessment of the safety margins used in the licensing of European nuclear power plants, which is fair enough, but that is not a “stress test” simply a regulatory change. There is also to be checks relating to the ability to withstand a combination of natural disasters such as the earthquake and subsequent tsunami despite the fact Europe is not Japan. If the Czech Republic was to be hit by a tsunami then a flood of Biblical proportions would have wiped out most of Europe.

What are the chances of the Czech Republic having had nuclear facilities designed to withstand a level 9 earthquake followed by a tsunami?

I will happily assert that Dungeness, Aldermaston, Sellafield and all those currently working or being decommissioned plants such as Trawsfynedd were not built to withstand a tsunami or a level 9 earthquake. Why would that have even been a consideration in their design and build? The chances of many of the EU civil atomic facilities passing this part of the test (if it is a genuine scientific test and not a whitewash) must be very low indeed with regards to a tsunami.

I am of course not the only person to have thought this, so the “stress tests” go on to state that “natural disasters” will include earthquakes, flooding, extreme heat or cold, snow, ice, storms, tornadoes and heavy rain, taking in to account the previous seismic and meteorological history of a particular location. Far more realistic as far as the original parameters of any design and build of current or decommissioned reactors.

The “stress tests” will also include man-made failures and will include the ability of plants to withstand airplane crashes and explosions close to nuclear power plants. I have little doubt that most will do OK with explosions close by, however aircraft crashing into a reactor building as per 9/11? Undoubtedly no significant problem with a Sopwith Pup plummeting from the sky but an Airbus? That means getting out the calculators and doing the math as to whether any existing concrete structure would withstand such an impact notwithstanding taking into consideration the decay of the concrete over time and exposure. An opportunity to fudge some numbers ?

Further more, irrespective of the cause, power plants will have to prove that they have enough back-up power systems in place in case the power supply is cut for several days. Whilst that is possibly already in place at certain facilities it probably isn’t at them all. However, of all the “fixes” to the “stress test” it is certainly one of the easiest to remedy, although it will not be cheap.

Who is going to do all this? Well the energy producers are, not Ensreg who are responsible for creating the “stress tests”. Will RWE or Eon and any other nuclear power producers provide answers and statistics that show they will fail the tests?

To combat any such shenanigans, Enreg will then reply on the national regulators asking them if the answers given by the energy producers are “credible”. That sounds like peer review to me. We already know what to think of peer review:

Richard Horton, editor of the British medical journal The Lancet, has said that – “The mistake, of course, is to have thought that peer review was any more than a crude means of discovering the acceptability—not the validity—of a new finding. Editors and scientists alike insist on the pivotal importance of peer review. We portray peer review to the public as a quasi-sacred process that helps to make science our most objective truth teller. But we know that the system of peer review is biased, unjust, unaccountable, incomplete, easily fixed, often insulting, usually ignorant, occasionally foolish, and frequently wrong.”

Drummond Rennie, deputy editor of Journal of the American Medical Association remarks – “There seems to be no study too fragmented, no hypothesis too trivial, no literature too biased or too egotistical, no design too warped, no methodology too bungled, no presentation of results too inaccurate, too obscure, and too contradictory, no analysis too self-serving, no argument too circular, no conclusions too trifling or too unjustified, and no grammar and syntax too offensive for a paper to end up in print.”

Why do we think that peer review will be any better from the national regulators of the nuclear industry given the undoubted political and industry pressure they will be under to insure the lights do not go out?

What of terrorist threats? They are not to be covered by the Ensreg “stress tests” as it does not fall within their area of competence. Apparently that will be covered separately by a panel of national security advisors, so we can only assume that the explosions and planes falling from the sky into reactors included in the “stress tests” are accidental occurrences and not deliberate.

Is there really any chance that the majority of existing atomic energy facilities will fail these tests even when they probably should if the tests are applied in an unbiased and scientific way?

What of the IAEA? Should it not be they how set the “stress tests” for a global understanding? What if the IAEA set a much more robust test than that which has been negotiated down to the lowest common denominator and is so open to pressure from national governments on their own particular results?

The EU neighbours are not members of Ensreg as they are not in the EU, but they are members of the IAEA. Whilst Ukraine, firmly on an EU integration path will undoubtedly volunteer to take part in the Ensreg “stress tests” other may not be willing. An IAEA decree will be much more persuasive than an Ensreg request.

Business as usual will no doubt be the outcome for existing operations with new recommendations and regulations for those under design now…..maybe.

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Visa-free suspension formula created by the EU

May 26, 2011

As you are all quite well aware dear readers, the Eu and Ukraine are well down the path of Visa-free travel negotiations. Road maps have been officially given and received, and I am informed that Ukraine will be over 90% of the way towards achieving the parameters of the road map by the end of 2011.

All jolly good. It seems likely that Ukraine will join the other 41 nations who enjoy Visa-free travel with the EU (relating to short-term stay/tourism) with those notable tourist powerhouses to the EU tourist trade of Brunei, Macau and St Kitts and Nevis.

Unfortunately, everything works well within the EU until it doesn’t. An example being the Euro and the ECB, when one action helps certain nations but inherently harms others. Nations opting in or out of specific legislation for their own national interest is another. The EU Working Time Directive is another example.

This issues with Schengen have been brought to light in such regard. There was the issue of the Roma in France and then currently Italy giving large numbers of illegals from Libya temporary leave to remain and France subsequently closing its border with Italy and removing numerous Libyan nationals from the train before they could enter France.

Last year, Albania and Bosnia were also granted Visa-free travel with the EU, shortly after Serbia and Macedonia had been given the same visa-free regime. Unfortunately the good citizens of Serbia and Macedonia used this new found freedom to travel to enter certain EU nations and promptly claim asylum. Asylum was of course refused and these citizens returned to their respective countries.

The EU has now decided that any agreed Visa-free regime with any specific nation can be temporarily suspended should there be a recognised influx of those overstaying or seeking asylum.

Apart from Ukraine, other nations currently negotiating visa-free travel with the EU are Moldova, Georgia and also a push from Russia.

It is muted that Tunisia, Egypt and Libya will also eventually start along this path (with the obvious carrot and stick diplomacy from the EU towards democracy, rule of law, freedom of speech etc should they want the prize). That will obviously not sit well with Turkey should they get visa-free before them considering Turkey is a fellow NATO member and the most democratic Muslim state on the planet.

It seems to me that although I very much doubt there will be a long-term exodus from Ukraine of asylum seekers and over staying citizens, that there should be a prolonged and highly visible (to the point of irritating) media campaign informing Ukrainians of the rules and the effects of breaking the rules for their fellow countrymen and women should they do so in sufficient numbers.

As many a “Ukrainian wife hunter” has found out to their cost, Ukrainians are not that keen to live outside of Ukraine anymore. The allure of living in “the West” is not what it once was 10 or 15 years ago. Many have been to “the West” already and returned without overstaying their Visa numerous times. Whilst it is a concern, it is unlikely that several million Ukrainians will enter the EU and not return. Quite frankly, most EU nations are no better off than Ukraine and quite a few are no further developed in hard infrastructure either.

Nevertheless, it is still my opinion, that as the time draws near to Visa-free travel for Ukrainians, towards the end of 2012 with a fair wind, a very brazen and “in your face” information campaign would do neither the EU or Ukraine any harm whatsoever. I would consider it necessary to avoid the issues of Serbia and Macedonia.

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A small success story for the UKTI in Ukraine – Water treatment

May 25, 2011

Now it is not often that a genuine British input into Ukraine, rather than a Ukrainian owned UK registered company, gets any mention here.

I suspect those in HM Embassy Kyiv will have ticked numerous boxes in those absolutely pointless time and motion surveys/auditing surveys whilst assisting in pulling off the latest UK interests in Ukraine.  After all, there is a UKTI face within HM Embassy Kyiv, so boxes will have to be ticked!

The British are into Ukrainian water.  Deals have been done and everyone seems happy.  Maybe the British can corner the water treatment market in Ukraine through JV’s with Ukrainian companies?  Literally, we could take the p***!

Partnerships always work best here rather than trying to force your way in uninvited and the precedent is now set.  There looks to be two strong partners in this particular JV.

(If anyone involved in this project is reading this, I still have the complete ISO 9002 and ISO 14001 Health & Safety,  Environmental Policy, Risk Assessment matrix etc,  I so time consumingly crafted for Balfour Beatty relating to a waste water treatment works in Aberdeen not so very long ago, on this very computer, should you want the policies to reach ISO standards that is.)

Still, well done to B&V from the UK, well done to HM Embassy Kyiv and to the UKTI.

Let us hope this deal lasts a long time and will set a high standard that can be cited when the more paranoid, timid, risk averse or simply morose are citing all the reasons not to do business in Ukraine.

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