The Moscow Times: Clearly Guilty Whenever It Is Convenient

Tuesday, May 29, 2007. Issue 3666. Page 8.

President Vladimir Putin’s regular calls for “dictatorship of the law” when he took office seven years ago have faded into memory. What we have today is something very different.

An example of how things have changed emerged Monday when an Irkutsk court threw out a lawsuit by TNK-BP to stop regulatory authorities from taking away its license for the Kovykta gas field. At issue is whether TNK-BP has met the terms of its production contract. The court said the lawsuit was out of its jurisdiction.

The ruling is no surprise, especially since it follows Shell’s experience with the Sakhalin-2 project. In the Sakhalin-2 case, pressure from regulatory agencies only eased when Shell agreed to sell Gazprom a 51 percent stake in the project. Gazprom had long made it clear that it wanted in, and it got what it wanted.

There is little chance that any oil or gas company operating here can meet the exact letter of the country’s vaguely worded laws. In most cases, little attention is paid to violations, particularly those involving fields developed by state-run companies such as Gazprom or Rosneft. It seems the problems only begin once the state sets its sights on some asset or other.

This, in essence, is the problem with the system as a whole: Everybody is guilty. Anyone who has paid a bribe to a fire code inspector, a bureaucrat at a licensing agency or an administrator at a public kindergarten without reporting the incident to the police has broken the law. Any migrant worker from Central Asia who has worked here after finding it almost impossible to get his passport registered also has broken the law. Given the haphazard approach to legality in the privatizations and tax regimes of the 1990s, it is doubtful that any company has managed to emerge from the decade without having broken the law.

This situation is ripe for abuse. A former member of government who decides to move into the opposition can become an immediate target for corruption charges. Migrant workers who are abused by law enforcement agencies or employers know enough to keep quiet — the law won’t be on their side.

And if the government wants more control of strategic sectors of the economy, there is always going to be enough evidence on hand to convince a Russian court that a contract should be voided, a company bankrupted, or, in extreme cases, owners should be sent to prison.

Trying to get people to obey the law isn’t the point. Being able to establish guilt when you need to is. Dictatorship of the law? Hardly. Selective application of the law is much closer to the truth.
 
http://www.themoscowtimes.com/stories/2007/05/29/005.html

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