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“The People’s” utilities

March 8, 2015

For those that have been following issues other than the “ceasefire” (which would be better described as a move from “hot” to “warm” warfare, not to mention the increasing internal turf wars between “anti-Kyiv” forces) within the “People’s Republics”/occupied territories in eastern Ukraine, the past fortnight has been somewhat interesting regarding utility supply – electricity and gas in particular.

On 27th February, Luhansk Governor Hennadiy Moskal stated ” “As of today, the self-proclaimed Luhansk People’s Republic has completely disconnected from the Ukrainian power supply.”  Thus Russia was supplying the territory that was not under Kyiv control with electricity thereafter.

Quite who was, or is, to pay for this electricity remains unclear – but the answer to who pays is important.

Around the same time, Russia began to supply gas directly to the regions that are not under Kyiv’s control – but nonetheless expecting Ukraine to pay for the gas delivered there, despite it having no control or any idea about how much was being delivered.

Kyiv promptly stopped gas supply to the occupied regions from Ukraine, claiming damaged infrastructure, and also unambiguously told The Kremlin and Gazprom it would not be paying for any gas directly delivered to The Donbas -because in supplying The Donbas directly, Gazprom was violating the “Winter Contract” mediated by the EU.

This chain of events prompted President Putin to state Kyiv’s actions “smells like genocide” – whilst simultaneously threatening to cut off supply to the entirety of Ukraine – which apparently wouldn’t be genocide, or even remotely smell like it.  Kyiv, Mr Putin and Gazprom insisted, had to pay for the unknown quantities of gas supplied directly to The Donbas regions outside of its control.

That position, however, changed following a meeting in Brussels last week.  “We’ve agreed that the amounts of gas that have been recently supplied by Gazprom to certain regions in Ukraine’s south-east will be now factored out. They will not be taken into account when calculating prepayment for the winter package, according to which gas is currently being supplied” – Russia’s Energy Minister, Aleksandr Novak.

Only the most naive of people believe the war between Russia and Ukraine is being conducted solely on the ground in eastern Ukraine.  It is raging politically, in the media space, diplomatically, and of course, economically – including energy supply.

Why then, has The Kremlin (via Gazprom) suddenly decided not to include gas it directly supplies to the occupied territories in the Ukrainian bill?

Direct supply to Transnistria and then sending the ever accumulating bill to Moldova, was done deliberately to provide yet another enduring bone of contention.  Why turn away from a previously successful tactic that produces long-term problems in Moldova, that could be equally as successful in eastern Ukraine?

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The answer, it appears, can be found within far more “switched on” lawyers today, than could be found during the consolidating years of the “Transnistrian” infrastructure.

Indeed, as Professor Alan Riley points out rather clearly, (as law professors from law universities generally do,) there are legally troublesome issues for The Kremlin to be found within the Geneva Convention regarding current events in eastern Ukraine.

“The real danger for Moscow here was that Ukraine was accidentally by Gazprom’s pre-payment claims being given the opportunity to identify Russia as the ‘enemy occupier’ on its territory. Kyiv could have for instance invoked the Geneva Conventions arguing that Russia is refusing to undertake its obligations to the people under occupation. A state party to the Geneva Conventions can seek a Red Cross inquiry into the level of support provided to persons in the occupied territory. Kyiv could also have sought to widen its arbitration hearing proceedings in Stockholm to deal with the inclusion of gas used in occupied territories. This could lead to a ruling that eastern Ukraine was indeed occupied. Thirdly, and most dramatically Ukraine could have sought a vote in the General Assembly of the United Nations to submit a case to the International Court of Justice against the Russian Federation over its failure to protect persons under occupation contrary to the Geneva Convention.

Any such ruling or finding would have been a PR disaster for Russia. It could also have resulted in significant ongoing civil liabilities exposure, both to support the population and to repay Kyiv for any costs Moscow had sought to shift on to it.”

Ergo, a very swift Kremlin U turn, lest all those hundreds of millions of dollars spent on disinformation, misinformation and agitprop in the media space be completely wasted in light of an unfavourable ICJ ruling.

Ukraine now claims to have repaired the infrastructure that prevented gas delivery to the occupied territories, however the “People’s Republics” are publicly insistent that the gas they are receiving is coming directly from Gazprom and not via Kyiv – repaired infrastructure or not.

Thus Russia continues to supply gas (and electricity it seems) for free to the “People’s Republics”, for fear of falling foul of the Geneva Convention and subsequent litigation that would follow.

However, these are harder economic times in Russia, and whilst The Kremlin will not unnecessarily risk gaining the legal status of “enemy occupier”,  for the Kremlin’s domestic audience, supplying the Donbas regions under its de facto control free of charge, is perhaps not the impression it may want to portray at home.

Yesterday brought a statement from Alexander Zakharchenko of the “Donetsk People’s Republic” that the “DPR is actually ready to pay for the Russian gas.” which seems somewhat unlikely considering the condition of the economy (and theft) within the “People’s Republics”.  That notwithstanding the fact The Kremlin wants to keep “the republics” unquestionably within Ukraine, and by accepting any payments from the “People’s Republics” now, rather than the nation of Ukraine, it may also very well create legal issues for The Kremlin that it would (currently) want to avoid – similar to the apparent gas and electricity own goal above.

The humanitarian issues naturally concern the supply of utilities to the people of the region regardless of who supplies them – the legal issues regarding who supplies, picks up, and pays the bill, and under what circumstances, may well set the precedent for a lot of litigation to come.

The problem with hybrid warfare in eastern Ukraine today, is that it is likely to lead to a lot of hybrid lawfare at the ICJ tomorrow.  Who pays for what, or just as importantly, who is not asked or allowed to pay for what, will matter a great deal.

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