This is the first editorial in this week's issue of the Sakhalin Times

The international panel of experts of the World Conservation Union (IUCN) finally came to the conclusion that the Sakhalin-2 project’s operations are harmful for the endangered Western Grey Whale. This doesn’t come as a great surprise to the majority of people who were closely following this matter. The extinction of any animal species has dire consequences in the ecosystem and creates an imbalance in nature. This imbalance in turn is what causes many natural disasters.

Even the EBRD has decided to study this matter carefully and review financing of the project. The global community has a much better understanding of the Russian point of view thanks to unprecedented media attention over the last couple of years. Sakhaliners are increasingly starting to wonder why the environment around them needs to be destroyed for the energy requirements of Japan, China and South Korea, especially with the huge profits going into the coffers of foreign companies. To make matters worse, the Sakhalin Region still has power cuts and heating shortages in the winter.

The billions of dollars invested in this region have done little for its appalling infrastructure. The public transportation has not improved, connectivity from south to north is still as bad as it was in the 1980s and the lesser written about the airport the better. There is a growing resentment among locals that nothing’s in it for them and that the only beneficiaries of the massive projects are the oil companies and corrupt officials and politicians. The destruction of the environment might be straw that breaks the camel’s back as far Sakhaliners are concerned.

The good news for Sakhalin Energy is that the report isn’t as damning as the environmentalists would have wanted. The report does suggest a way out. The experts were of the opinion that Sakhalin Energy had to shift the place of installation of one of the gas producing platforms twelve miles away from the Sakhalin coast and also shift the pipelines running from the operating Molikpak platform. Environmentalists argue that this simply wouldn’t be enough. They say that earthquakes, cyclones and typhoons that this region is prone to, could cause ruptures in the pipelines, causing an environmental catastrophe.

If we are at some sort of a consensus on the benefits of this project for the average Sakhaliner, then a way must be found to continue with this project and at the same time protect the environment. A solution needs to be worked out by an expert panel, which consists of representatives of the IUCN, Russian Government, Sakhalin Energy and Sakhalin Environmental Watch. Such a solution would definitely ensure that the environment and Russia’s interests are protected and at the same time ensure the uninterrupted continuity of the Sakhalin-2 project.

This is the first editorial in this week's issue of the Sakhalin Times.

Since January 1, 2005, when the benefits-monetisation law came into effect, there have been almost as many protests in Russia as there were when Mikhail Gorbachev introduced everyone to the concepts of Glasnost and Perestroika. Justifiably the weaker sections of society have been the most vociferous opponents of the law. Sakhalin’s ageing population has almost two hundred thousand pensioners. How do 80 year-old World War 2 Veterans, who were ardent members of the Communist Party for most of their adult lives, understand the concept of development of a civil society?

Russian Prime Minister Mikhail Fradkov has been made the “fall guy” for the so-called mishandling of the benefits-monetisation law. The fact is that the Russian Government introduced the present changes in the social security system after President Putin secured a second term. The once-cherished popular ratings seemed of little consequence when this law was formulated and blindly passed by both houses of the State Duma.

Those affected by the changes have little choice but to wage a continuous set of protests. So far, the protests have led to a Federal compromise on public transportation benefits as well as an unprecedented 20 percent rise in pensions. With the Kremlin facing international pressure on a range of issues, this is the best time for protestors to aggressively ensure that their demands are met.

Sakhaliners crossed all political barriers when they protested against the government proposal to hand over two of the Kuril Islands to Japan. Unfortunately the same kind of unity was lacking last Saturday with a pro and anti-reforms rally taking place within one kilometre of each other. It wasn’t surprising to see senior citizens from several districts at the rally opposing the reforms; after all, they are the most affected. On the other hand, the pro-reforms rally was full of teenagers, most of whom were probably clueless on what is going on and why they’re at the rally.

Edina Rossiya, still smarting after their shock defeat in the Sakhalin Duma elections, organised this show of support for Moscow. It’s comforting to know that Russian politics is evolving and that political parties are learning the art of political gamesmanship. A few years ago, who could have possibly imagined professional protestors demonstrating in Sakhalin? We were told that these were just “patriotic young men” defending the motherland’s policies. It was only when the news came in the next day that it was obvious that this ploy was put into use across Russia. The Kremlin might feel vindicated because of these counter-rallies, but there is still a storm brewing in the teacup and those affected will not let the controversy of the benefits-monetisation law die down. The Kremlin and Edina-Rossiya better be ready for a long battle.

This is the first editorial on this week's issue of the Sakhalin Times

Ever since the present Russian regime dismantled Yukos and put Sakhalin-3’s Kirinsky block on the international market, there has been a buzz about government clampdowns on Sakhalin’s oil giants. Sakhalin’s communists along with their allies have been ranting for years that there are several financial discrepancies in tenders and awarding of contracts. Several cases of negligence by the oil giants’ sub-contractors have been reported both in this publication and the Russian language media.

The Russian State Auditor Chamber’s accusation that Sakhalin Energy has caused damage to state interests worth up to US$ 2.5 billion is hardly surprising. Sakhalin Energy, however, needs to be commended on its handling of the situation. Shell’s Russia-head expressed the need for a dialogue and assured the audit chamber full cooperation in clearing misunderstandings over Sakhalin-2’s finances.

The audit chamber needs to take a better look into the role of government officials in the overspending. The green signals for most deals come from the government and it is alleged that many a fortune have been made by humble public servants in Sakhalin. Deeper investigations might just open a Pandora’s Box into a possible nexus between corporates and influential officials.

Realistically, Sakhalin Energy has little to fear from the Russian State Audit Chamber, which has no executive power. The chamber can only issue recommendations and doesn’t have the kind of power to give the Shell group any nightmares. If however, the storm reaches the Kremlin, there might just be an unpleasant chain of events in Sakhalin. President Putin has been tremendous pressure in Russia after the benefits monetisation law came into being. The Russian leadership might just try its favourite ploy of diverting public attention away from the benefits law and demonise a big bad global corporation. The Russian people more often than not fall for state-sponsored nationalistic scams, as this helps their wounded pride.

A government attack on the one of the largest international energy corporations is unlikely. Investors are still nervous about Russia and an attack on Shell, close on the heels of the destruction of Yukos, would do Russia’s reputation no good. The audit chamber would do the country a far greater service by inspecting the 400 million dollars that has been injected into Russia’s “public purse.” We all have a right to know how government officials have handled Russian public money.

This is the first editorial in this week's issue of the Sakhalin Times

The Sakhalin Administration bowed to increasing public pressure and postponed the implementation of the law that replaces welfare benefits with cash compensations. The hugely unpopular law has been met with similar protests across Russia. To the authorities these benefits represent the last relic of communism in Russia. Over the last fifteen years, there has been a deliberate attempt to wipe out most systems that were put in place at the time of the USSR, whether they benefited the country and people or not. Of course red tape, bureaucracy, the police and judiciary have been untouched.

The government insists that Russia is no longer a welfare state and is no position to be a benefactor for an ageing population. The poorest of the poor however get by on this subsidy. Senior citizens hardly have the means to pay for expensive imported medicines and healthcare. Government officials have stated that these kinds of benefits are not available in any western countries. They need to understand that no western country’s citizens lost their entire life savings twice in one decade on account of poor government policy.

The agreement between the Federal Government and many regions including Sakhalin to keep public transport free for senior citizens is a populist measure at a time when Putin’s Russia is heading towards turmoil. Most protests came on account of the first step in implementation of the reforms, which is the charging of pensioners for using public transportation. Many regional administrations claimed that they couldn’t afford to replace the benefits with cash payments as they had a shortage of funds. This defies logic as the whole purpose of replacing benefits with cash is to remove the burden off the state. It’s no wonder that we hardly see any municipal buses in Yuzhno-Sakhalinsk. The money that is needed to have a proper public transportation system goes straight into free transport for pensioners, war veterans and the poor.

The protests are just going to increase when the full effects of the law are felt by the people. In a few days, former-beneficiaries across Russia will see more expensive utility bills. Pensioners will be told to pay for medicines in the near future. As the weather gets warmer, more people, including students, will want to use their benefits like free sanatorium facilities. Is the Federal Government going to bow down each time to pressure? If it does do so, then Russia is more a democracy than any of us ever imagined. Unfortunately the very purpose of the law, that is to save the Federal Government from going bankrupt, will be defeated.

There are simple temporary solutions to these problems. When the benefits replacement law was passed, another law was passed to offer very similar benefits to bureaucrats. The government needs to temporarily scrap that law. Secondly, the Federal Government announced that it would increase spending on the FSB by 25% in 2005. The FSB is a very poor successor to the KGB and has hardly been successful in stopping any terrorist attacks on Russian soil. No one really knows how much Moscow spends on the FSB, but this proposed 25% increase can be diverted and spent on temporarily prolonging the benefits.

The Federal Government needs to work on a solution for Russia’s huge fiscal deficit. A long term solution that can be slowly implemented and not imposed on the people like the benefits-replacement law. Historically, it’s always quick, hasty decisions that have harmed Russia.