Putin move revives environment flap

Decree modifying restrictions on discharges in Russia's Lake Baikal will allow pulp company to resume operations
By RICHARD BOUDREAUX
MOSCOW–Russian Prime Minister Vladimir Putin, who plumbed the depths of Lake Baikal in a minisubmarine in August and pronounced the lake "ecologically clean," has given a well-connected tycoon's paper mill the go-ahead to resume dumping waste there, reversing what had been a landmark victory for environmentalists.
A decree Mr. Putin signed last week removed waste discharges in the production of pulp, paper and cardboard from a list of operations banned by environmental legislation in and around the world's largest body of fresh water.
As a result, OAO Baikalsk Pulp and Paper Mill said Tuesday it will restart operations that it halted in October 2008 after environmental authorities instructed the company to introduce a closed-loop waste-treatment system. Such a system would prevent discharges into the lake, but the company deemed it unprofitable, declared a permanent shutdown in February and began laying off its 2,000 employees. It started bankruptcy proceedings in March.
Mr. Putin's decree brought relief to Baikalsk, where workers had staged hunger strikes and blocked highways for a week in June to protest the demise of the Siberian town's biggest employer. It also resolved a problem for Oleg Deripaska, the tycoon whose control of the plant had cast him as the villain of those protests.
But the measure has enraged Russia's environmental activists, whose campaign against the mill gained widespread attention in the late 1980s as leading Soviet political and literary figures rallied behind it. The effortsucceeded after environmental groups sued the company and won a 2008 court decision banning the discharge of waste water into the lake.
The mill, built in 1966, can produce 200,000 metric tons of pulp and 12,000 metric tons of packaging paper per year. A portion of the pulp, a special grade that can be produced only by using lake water, is used in Russia's nuclear warheads. Environmentalists said the mill's discharge threatened hundreds of species of wildlife, including a rare type of freshwater seal.
"This decree undoes more than two decades of struggle to defend the lake," said Roman Vazhenkov, head of Greenpeace's Lake Baikal campaign. Greenpeace appealed to President Dmitry Medvedev to reverse the measure. "To allow chemical wastes to be dumped there," he said, "…what else can you call it but a crime?"
He added: "The only thing I can conclude is that Putin is doing this to protect the interests of one person—Oleg Deripaska."
Mr. Deripaska's LPK Continental Management, part of his Basic Element industrial group, controls 51% of the mill. The state owns the other 49%. People close to Mr. Deripaska say he has used direct access to Mr. Putin and other top officials to become a major recipient of Kremlin bailouts and preserve a sprawling business empire that was threatened by the financial crisis.
Mr. Putin's press secretary, Dmitry Peskov, denied any favoritism toward Mr. Deripaska. "The only interests we can speak about protecting," he said, "are the interests of the 16,000 people in Baikalsk, whose lives depend almost entirely on that mill."
Mr. Peskov said preserving the lake's ecology is a "high priority" that the prime minister had to weigh against the town's fortunes. He said Mr. Putin consults frequently with scientific experts on Baikal and had ordered "strict government surveillance" of the mill's discharges once they resume.
Some economists say Mr. Putin's focus on saving jobs has delayed the restructuring of inefficient Russian companies crippled by the crisis. The Russian leader has been making televised appearances around the country, visiting near-bankrupt factories, scolding their managers and owners, and ordering banks to issue loans to revive employment.
The decree to rescue the Baikalsk mill, published on the government Web site, was first reported late Monday by Russian media. Oksana Gorlova, a spokeswoman for Continental Management, said Tuesday that the government decision behind it had been made in July, a month before Mr. Putin's televised dive in the minisub.
"I see the bed of Lake Baikal and it is clean," Mr. Putin told reporters through a hydrophone from 1.4 kilometers beneath the surface. Later, he said, "There is practically no environmental damage" and hinted that the mill might reopen.
Mr. Deripaska invested $6 million in November to start reviving the mill, the spokeswoman said. She said the company recently upgraded its technology for purifying waste water.