Archive for November, 2012

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Off on holiday (of sorts)

November 18, 2012

Right.  Tomorrow I leave the dysfunctional state of Ukraine and head for (the less than) United Kingdom for 10 days or so.

I am tagging on some days holiday prior to, and post, a symposium I am expected to attend in the ever beautiful city of Bath.

Therefore I very much doubt I will be blogging, tweeting, emailing or any other kind of e-communicating between now and 2 or 3 December when I get back to Ukraine.

You will therefore have to entertain yourselves for a while!

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Anti-Corruption laws – Ukraine (It’s not the laws but ineffective implementation)

November 17, 2012

One of the (United-ish) opposition platforms for their next term in opposition has been stated as creating more anti-corruption laws as outlined here.

As I wrote only a few days ago, Ukraine does not need more anti-corruption laws.  It has plenty.

In fact, not only does Ukraine have plenty of anti-corruption laws, the laws it has are actually more than adequate on a pan-European basis.  The Global Integrity Index ranks Ukrainian anti-corruption laws at 100 from a scale of 0 (being non-existant) to 100 (being very good).  That score of 100 ranks Ukrainian anti-corruption laws alongside Germany.

Therefore more anti-corruption laws are simply not needed as I have said.  They exist in abundance and have been ranked highly by independent NGOs.

Why the (United-ish) opposition parties feel that drafting even more anti-corruption laws are necessary I am unsure.

Any government of any colour or stripe can write whatever laws they like in the RADA and pass them – and they have relating to corruption – but as I have written before on more than one occasion (so many in fact there are far too many to link to, so just put “effective implementation” into the search facility of the blog), it doesn’t matter what laws you bring into force if those laws are not effectively implemented – and no Ukrainian government has ever managed to effectively implement the anti-corruption laws they pass.

So, if the actual laws Ukraine already have are assessed as being as good as those in Germany, why are the opposition going to write even more?

What the opposition need to do is sit down and work out an achievable implementation plan for what already exists, some of which they wrote when in power not long ago, and encourage the government, civil society, media, society and foreign partners to back the plan.

As long as the plan is possible to implement effectively, then be noisy about it for their entire time in opposition if necessary.  Adding even more statutory anti-corruption laws to what exists is an absolutely and completely pointless exercise if like all the other anti-corruption laws, it will simply exist on paper and not in practice.

Ineffective or counterproductive implementation makes even the best laws and policies mute.

Effective heavily publicised strategies for implementation of what good laws already exist should be a major priority for the opposition at every media opportunity, and that is very likely to get far more cross party support throughout the RADA sooner or later.

After all, as a minority, getting any new laws passed that are drafted by themselves is not going to be easy – voicing effective implementation strategies and monitoring the results for those anti-corruption laws that already exist, is well within their ability.

As I have said for many years, effective implementation is where all Ukrainian governments fail – massively.  A point that the Global Integrity NGO also notes as where Ukraine fails.

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CPT Report – Ukraine

November 16, 2012

The latest CPT, (or Council of Europe European Committee for the Prevention of Torture and Inhumane or Degrading  Treatment or Punishment) has just been released relating to Ukraine.

Just as grim a read as it was in 2009.

It seems there have been no improvements under this government compared to the last one.

One wonders if there will be any improvement in the 2015 report which should see the results of the implementation of the new Criminal Procedures Code which comes into force now.

We will see – but I am not convinced there will be any major changes noted 3 years from now.

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Ukrainian OSCE Chairmanship

November 15, 2012

Ukraine officially takes over the chairmanship of OSCE on 6/7th December 2012 at the OSCE ministerial council meeting in Dublin, when Ireland hands over, and will thus chair OSCE through 2013.

That on the back of some robust criticism by OSCE of the recent Ukrainian parliamentary elections – their final and authoritative report on said elections unlikely to be published before the OSCE chairmanship handover.

Also unlikely before Ukraine takes over the OSCE chairmanship is the swearing in of the new parliament subject to the recent elections and OSCE monitoring, which will be no sooner than 10th December and is more likely be 17th December.

One wonders if the 5 constituency seats that are to be re-run will also have taken place by 6/7th December as well – maybe, maybe not.

One cannot help but see some irony in the timing of all this.

Anyway, the Ukrainian agenda for its chairing of OSCE in 2013 is broadly outlined here.

In the mean time, today, the EU/Ukrainian cooperation committee meets in Brussels.  On that agenda – political dialogue, justice, freedoms, security, visa regimes, economics, energy and trade – much to go at there!

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“The Opposition” – looking forward

November 14, 2012

So the opposition parties in Ukraine have accepted the election results as called by the CEC, with the exception of 5 seats that are to be re-run.  One presumes that having done so, the call for the elections to “represent the genuine will of the Ukrainian voters” as per the EU press statement of two days ago has at least been met – if that is all that has been met.

Thus 5 more years of opposition awaits them beginning sometime mid-December 2012 when the new RADA gets sworn in.

Not that the opposition is united over the idea of accepting the CEC results.  Anatoliy Hrytsenko who has advocated not taking up the opposition mandates en masse for weeks still believes that is the right course of action for the opposition parties a position I outlined last week.

In fact, Mr Hrytsenko has refused to sign a document drafted amongst the opposition parties relating to opposition strategy and goals in the forthcoming parliament, as his blog makes clear.

Further, despite the damning language used in the preamble to the opposition strategy and goals statement in the link above, on twitter at the very same time the opposition direction was being published, Vyacheslav Kyrylenko, another opposition leader wrote:

“@KyrylenkoVyach

 Я вдячний особисто кожному,хто був біля ЦВК ці 8 днів і ночей.Не все вийшло як гадалося,але це перший крок,зроблений для майбутніх перемог.” – 9:00 PM – 12 Nov 12

In short, he personally thanks everyone the CEC despite the fact things didn’t happen as smoothly as they could have.

Not a particularly promising or united start when all opposition parties do not feel able to sign up to the agreed strategies and goals or rally behind statements condemning the CEC.

That said, when looking at the opposition goals, worthy or not as they may be, the opposition clearly have not got to grips with what being in opposition means – and that is that they are the minority – thus very rarely will they have sufficient cross party support to pass any laws or amendments to laws that they want to.

Their demands, if presented as demands, will simply be rebuffed.  They will need to be far more nimble, sly and persuasive to achieve any goals they set given the fact they are the minority.  Timing is also crucial as to what and when they submit anything for consideration – something I will come on to.

So let us look at their stated goals, none of which appear deliverable from the opposition benches.

The impeachment of President Yanukovych.  Firstly there is currently no mechanism to impeach a Ukrainian president.  Therefore a law must first be drafted, then adopted – meaning 226 RADA MPs or more must vote for it, a number the opposition parties fall far short of – and then signed by the president and published before it can come into effect.

Any new law could hardly be applied retrospectively if the opposition were to expect any support from the international community.

However, if such a law is to stand any chance of becoming reality, the timing of its submission to the RADA for consideration is crucial.  To simply go away now, draft it, submit it and expect it to pass so soon after an election the opposition lost would be stupid.  More guile is needed than that.

You will recall not long ago I wrote about the “Who’s in and who’s out” within the Party of Regions structure.  For such a law as one creating a method to impeach a president to get through the RADA, it would require some support from within the PoR/Communist coalition.  That will mean the support of those “who are out” and those who are controlled by “those who are out”.

If Poroshenko and Khoroshkovsky are still out when such a law is presented to the RADA, given their considerable media holdings and wealth, should such a law be proposed much closer to the presidential elections, it may find some unlikely and very public support.

Add to that the large number of “independent MPs” about to enter the RADA that were financed by the oligarchy from both sides in their campaigns, those MPs are far more likely to tow the line of their oligarchy sponsors than that of the president.

If the wrong noses are out of joint close to the presidential elections, then that is likely to be the optimum time to submit a law outlining a method of presidential impeachment.  It would stand far more chance of gaining maximum publicity and covert oligarchy support via their owned “independent MPs”.

That does not take into account any international meddling and supportive noises towards any rich and powerful PoR politicians currently “out” who may consider running against Yanukovych themselves – with or without PoR party mandate.  Such meddling if it comes, will not become energetic until much closer to the presidential elections as it is only then that the abilities of the “in’s” and “out’s” are obvious when it comes to “external support”.

Naturally, I do not expect the feckless opposition to consider such things.  I anticipate a draft law on presidential impeachment submitting almost immediately, thus rebuffed, and for the opposition to say “Well, we tried”.  Another false dawn for their voters.

Next they propose to release Yulia Tymoshenko and other political prisoners – somehow.  It is already clear that the only way she (and others) will be released is via an ECfHR ruling demanding her release.  Should she be released it will have absolutely nothing to do with the opposition, but the discharge of the obligations of Ukraine to the ECfHR.  There is no guarantee that Ukraine will discharge its obligations to the ECfHR any more than any other nation does – and many don’t.

They also want an electoral system with open lists.  Quite right – but in this last election the party lists were made public as to who stood in what numbered position on the party list.  The constituency seats by their very nature were open and people knew who they were voting for.

Ergo, if Party X won 50 seats by proportional representation, I can look at the published list and know that those candidates numbered 1 – 50 will now be RADA MPs – plus those from Party X who won constituency seats.  That seems to me to be quite open already.

Then we have a list of heads the opposition wish to sever.  The Prime Minister, Minister of Internal Affairs, heads of all law enforcement agencies, the Attorney General etc.  Simply wishful thinking, as the only way those people will go is if they either fall out of favour with the presidential administration, or the opposition had won – which they didn’t.

Gaining cross party support to remove these people would probably prove far harder than gaining support for a well timed impeachment law, as nobody within the PoR has anything to gain by their removal unless they happen to be next in line for those particular thrones.

Next, the personal attendance at the RADA of MPs if they are to vote for a bill.  This is definitely a case of the pot calling the kettle, but it is a principle that I certainly support 100%.  At present there is a cross party tradition of all colours and political persuasion, with very few exceptions when it comes to specific MPs, that their voting cards are given to others if they cannot or will not attend the RADA to vote in person, so that their vote is cast.

It is known here as “piano playing” when MPs run around the voting terminals with other MPs voting cards in order to register the votes of those absent for whatever reason.

Some leaders of the opposition who have signed up to this strategy are historically guilty of this themselves and thus they will henceforth have to lead by example or be very quickly named and shamed I suspect.

Last but not least, the usual drafting of anti-corruption legislation of which there is plenty already – it is just not effectively implemented.  More anti-corruption legislation will change nothing.  A drive to effectively implement what already exists would go a long way though.

And that is the opposition strategy and goals looking forwards according to the opposition themselves.  All of which quite clearly cannot be achieved – at least on their own – and so feckless are they that I do not expect them to have the patience or cunning to build solid support with those on the other side to get any of it done.  Especially so when Yatseniuk, Klitschko and Tyahnybok will have one eye on the 2015 presidential elections and cannot afford to stand in the shadows of one another for too long.

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Must be something in the water……

November 13, 2012

Many readers will not have a clue what or who IDS Group Ukraine is.

IDS Group Ukraine is part of IDS Borjomi International, owned in part by influential shareholders from France, the UK and USA amongst others – and The Netherlands where IDS Borjomi International is headquartered.

IDS Group Ukraine is most well know for the production of  mineral water from its two production plants in Myrhorod and Morshyn.

Despite persistent media rumour that the major shareholding of IDS Group Ukraine is held by my almost ever absent neighbour Boris Berezovsky, that is actually not true.  It’s not the first time, or the last, that the Ukrainian media will get it completely and utterly wrong.

The major shareholder of IDS Group Ukraine was in fact the late Arkady “Badri” Patarkatsishvili, and now by default his surviving family, who as the name suggests hails from Georgia.  He was indeed an associate of my ever-absent neighbour Mr Berezovsky, but Mr Berezovsky has never had any shareholding in IDS Group Ukraine, a fact that Borjomi International will confirm if you bother to ask – Please take note Ukrainian media!

Anyway, it appears that IDS Group Ukraine is currently subject to something akin to what is known here as a “raider attack”.  I say “akin” as traditionally “raider attacks” in Ukraine not only involve nefarious court rulings allowing said “raiders” to send in large numbers of hired thugs to throw out existing employees from premises and barricade themselves in – whilst either court action occurs to try to reverse the previously nefarious court orders – or shareholders “negotiate” a solution.

In this case however, there are local court orders allowing the local tax authorities into the operating plants and homes of senior executives.  No hired thugs as is traditionally the case.  No barricading of the production facilities either.

Quite whom is behind this “raid” is unclear – if it is indeed a “raid” in the traditional Ukrainian sense – with the family of Patarkatsishvili still holding the majority of shares in IDS Group Ukraine, and IDS Group Ukraine is ultimately part of IDS Borjomi International.

In recent years, such “raids”, if that is what it is, with regards to entities with foreign owners have been rather unsuccessful when appeals have moved up the judicial food chain.  The Netherlands and France in particular, have managed quite successfully to defend their corporate interests in Ukraine through the Ukrainian judicial system – and both those nations have an interest in IDS Borjomi International and thus IDS Group Ukraine by continuation.

The outcome of all this, given recent history, is likely to be that the “raiders” will be unsuccessful – but ultimately the “raiders” will also be identified – and that is what will be the really interesting part to this entire incident.  Who is trying to muscle the Patarkatsishvili heirs, or are the  Patarkatsishvili heirs trying to muscle IDS Borjomi International?

Who wants IDS Group Ukraine so badly that they are prepared to ignore recent legal outcomes in Ukraine where foreigners have been involved and put themselves in the spotlight?

Is it something they put in the (mineral) water here?

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Invest in Odessa – new city website

November 12, 2012

Well, well, well!

No – not three holes in the ground filled with water, but rather a sarcastic acknowledgement that Odessa City Hall has finally got around to creating a new website – Invest in Odessa.

I deliberately use the word “finally”, as way back in autumn 2007 when I first met Mikhail Freidlin, he was working as a special advisor to the Mayor of Odessa (then Edward Gurvitz) on strategic planning and had developed a dozen or so very good presentations for investors on CD Rom for specific projects.  Amongst those dozen or so projects, there were  4 or 5 that were capable of giving a reasonable ROI in a reasonable time frame.

Mikhail was, at least at the time, one of the very few in Odessa who truly understood PFI/PPP and quite a number of the projects were of that nature.  Naturally we hit it off as I have done numerous PFI projects when working with Mowlem PLC many years ago, after leaving the service of “The Crown/HMG” in various roles.

Unfortunately, the global financial prolapse occurred and as a consequence, fear of risk, particularly in central and eastern Europe, replaced the previous desire to find projects to invest in.

However, back then when nobody knew the financial collapse was about to happen, I had several meetings with Mikhail, and agreed to push some of the projects under the noses of some then interested and affluent investors in all things Eastern Europe with experience in PFI/PPP, special purpose vehicles et al – needless to say the timing proved to be less than fortuitous.  O fortuna indeed!

At the time I questioned why such projects were not available on-line to download and why, in fact, there was no such thing as an “Invest in Odessa” website to which interested parties could be initially directed and have an overview of all projects the city was wishing to pursue.  “Tempters”, for want of a better expression.

Time stands still for no man of course, and soon the vast majority of the western world became engulfed in monetary and fiscal consolidation rather than the risks involved in expansion and development.

A few days ago I noticed the launch of “Invest in Odessa” website by City Hall.  Many of the projects on the website are exactly the same as those identified and developed by Mikhail, although the website still does not allow for downloading his very good presentations.

It also has to be said that not all the pages are translated into English on the English language profile, and that the list if links to legislation, or what appear to be links, don’t actually work – although at least it points readers in the direction of relevant legislation.

Nonetheless, a little of what was discussed in autumn 2007 appears to have become a reality in autumn 2012 (but by no means much of what was discussed) – not that this is the fault of Mikhail, from 2010 we have had a new Mayor who doesn’t listen to anybody, least of all advisors to the previous Mayor.

Now it remains to be seen quite how this new website and new drive to attract inward investment into Odessa will progress.  As anybody who works on the Internet knows, content is king.  Plus the more roads you have leading back to Rome (or in this case links to Invest in Odessa) littering cyberspace the better.

It also does not replace the “roadshow” of sending people to every possible high grade investment gathering around the EU and beyond pushing the projects or actively finding potential investors etc.

A website is a public platform that more often than not is direction-less when it comes to finding the target audience.  Investment audiences do not need to surf the Internet to find projects in which to invest.  Serious projects find investors – actively – rather than passively via a website, unless the website is some sort of generic  “crowd funding” vehicle.

I do not want this entry to become a lesson in attracting project finance or basic strategic marketing, but you get my point I’m sure.

Anyway, “Invest in Odessa” now exists – and about time – even if we are still to emerge from the financial prolapse that began in 2008.  How effective it will be remains to be seen however.

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