Europe

Ukraine’s robber barons must be held accountable

On June 1, Ukraine’s Ambassador to Canada, Andriy Shevchenko, was called to testify before the Parliaments Standing Committee on Foreign Relations and International Development. When questioned about the ongoing, but yet frustratingly unsolved legal dispute between TIU Canada, Canada’s leading  investor in Ukraine’s renewables industry, and the already sanctioned, Igor Kolomoisky, he said, “(we) take this whole situation very seriously. The situation is ongoing (judicial) but we hope there will be a good outcome.”

But what would be a good outcome? And are there other possible outcomes that should be considered?

The Ambassador didn’t elaborate.

Of course, the best outcome would be for Ukraine’s judicial institutions to enforce the rule of law. In this case, to resolve, what was a blatant transgression of Ukraine’s laws by a notorious oligarch, whoillegally disconnected the Canadian company from the grid and terminated its access to the electricity distribution system. However, has the Ukrainian judicial system shown the integrity to deliver a fair and just decision when it adjudicates over cases involving the most notorious oligarch?

This illegal act of disconnection, if allowed to stand, would set a very dangerous precedent for it would clearly demonstrate the vulnerability of both domestic electricity producers and foreign investors to the lawlessness of the electricity market and to the “raiding” and monopolization practices still being practiced in what was conceived to be a renewables” industry based on fair and free-market principles.

In addition, such unauthorized disconnections from the grid constitute a danger to Ukraine’s energy security and have the potential to destabilize Ukraine’s national security. If not dealt with, similar type scenarios are likely to reoccur.

Thus, this has become more than a legal battle, but also a saga of national security.

Ukraine’s government policy as stated in the decision of the National Security and Defense Council of Ukraine dated May 6, 2015, “On the National Security Strategy of Ukraine”, categorically states that energy security is one of the main principals of state policy for the national security of Ukraine.

In a letter published on March 03, 2020 (No. 8/16/157-20), the State Energy Supervision of Ukraine acknowledged that the Canadian company’s relevant appeals to the National Energy and Utilities Regulatory Commission and to the Antimonopoly Committee of Ukraine were in order and that action should be taken at stopping continuing violations of national legislation by Kolomoisky’s company by recognizing that the deliberate disconnection was a violation of laws governing Ukraine’s electricity market.

Put more simply, the actions by Kolomoisky and his company, undermine Ukraine’s national security.

However, for more than 16 months, Ukrainian state bodies have failed to stop these violations. This is both unacceptable and untenable for a country that has declared its desire to develop a national energy system according to European standards.

Now, if this can happen to a company such as TIU Canada, one of the largest foreign investors in Ukraine’s renewables sector, having invested $65 million of its own capital in the construction of solar power plants and directly contributing to establishing Ukraine’s energy national security, no investor is protected.

At present, the decision facing the Ukrainian government is whether it will choose to act decisively in the fulfilment of its stated policy to eliminate dependence on Russian energy and uphold Ukrainian law.

In its construct, the decision is not hard, but it is a challenging one.

It is not a secret that in Ukraine there are entrenched interests who want to see a weak central government in Kyiv and who want to maintain financial and trading connections to Russia.

These interests, represented by characters such as the already sanctioned Medvechuk, Kolomoisky, Rinat Akmmetov and Dimitry Firtash, are not afraid to assert their selfish economic interests over the national and security interests of the country.

One of the sad realities of Ukrainian society is the failure of political leadership to create a symbiosis and a unity of purpose amongst business and national interests.

That is why some have no problem in describing oligarchic behavior and actions as treasonous during a time of war.

With the sanctioning of Medvechuck, the government has set a precedent that it is not afraid to act against those who collaborate with the enemy and who profit by doing deals with Russian entities, especially in regard to energy.

For example, since autumn 2019, Ukraine has resumed electricity imports from Russia, These imports have been undertaken by various oligarchs including Kolomoisky. The resumption of imports was championed by MP Andriy Gerus, a Kolomoisky advocate. Buying energy from an aggressor is not only foolish, it is treasonous. And then allowing the disconnection of green energy producers from aligned countries like Canada, Ukraine is inflicting damage to its own energy security.

Sanctioning such treasonous behavior in a time of war, and within an industry that is essential for Ukraine’s short and long term security, is necessary. Trading and co-operating with the enemy in a time of war, in all circumstances and definitions, is an act of treason. Treason is a crime betraying one’s country by attempting to either overthrow or deliberately weaken one’s government through waging war against the state, or materially aiding its enemies.

Ukraine’s government must ensure that its energy markets are not be damaged or undermined by those who have a record of working with the country’s declared and obvious enemy, Russia.

What should be done?

A “good outcome”, to use the words of Ukraine’s Ambassador, would be:

  1. To sanction both the companies and the individuals who are illegally working to undermine the establishment of  energy independence on the basis of national security;
  2. Increase the efforts of enforcement of “anti- monopolization” legislation;
  3. Commence formal investigative proceedings against those who are suspected of breaking Ukrainian law and consider possible criminal charges against those involved
  4. In terms of the legal proceedings that our now in their forth iteration, begin official investigations of judges to explore possible conflicts of interest and possible graft and outright forms of corruption.

All these efforts by Ukraine’s government would show that both foreign and domestic participants in the energy sector, must submit to the rule of law. These individuals and corporate entities with decades-old histories of both corruption and treasonous actions will be sanctioned in a time of war as their behavior undermines the country’s national security.

Such assertive actions by the organs of the central government will show that it is courageous, committed and prepared to act decisively against those who deliberately act to undermine the authority of the national government in a time of war.

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