Eight business leaders in Ukraine or their representatives showed their support on Sept. 16 for a statement of key principles for economic policy and the judiciary in Ukraine. Another seven signed on to the 15-point statement, which is hoped to become the standard way that Ukraine’s government operates.
During a press conference on Sept. 16 in Kyiv’s Fairmont Grand Hotel, John Herbst, a former U.S. Ambassador to Ukraine and director of the Atlantic Council’s Eurasia Center, said the idea has been in the works for a year.
“Ukraine has a high level of education, the talent is great, natural resources are enormous. With all these advantages, Ukraine should be a rich country. I believe that this day will come, but Ukraine needs such principles,” Herbst said.
Anders Aslund, a senior fellow at the Atlantic Council and a Swedish economist, said that “the meaning of this project is to show that business is standing for a normal market in the Ukrainian economy and that they want a judicial and law enforcement system to work normally.”
Serhiy Tihipko, the owner of financial and industrial TAS Group, signed on to the principles and said it is important to track of what Ukraine’s parliament and the Cabinet of Ministers will do for business. Tihipko said that if the government adopts these principles, then economic growth at 7-8 percent per year is possible. “I am sure that the problem of our country can be solved if the economic growth would be at 7-8 percent annual rate. If we achieve this goal, then I will be happy,” Tigipko said.
Oleh Bakhmatiuk, chairman of the board at Ukrlandfarming, a large agricultural company: “Ukrainian business wants to live by the rules, it suffers from legal conflicts. We hope that the first step of our cooperation will have a concrete effect and there will be a dialog (with authorities). So, they will hear us and listen to us.”
According to Jock Mendoza-Wilson, director for international and investor relations for billionaire oligarch Rinat Akhmetov’s holding company, the document clearly defines correct and transparent relations that should be between business and government. “Relations should be based on mutual trust and the independent application of the rule of law to international standards,” said Mendoza-Wilson. According to him, the fundamental principle is following the rule of law and playing an active role in the development of Ukraine as a responsible business. “We agreed on clear principles on the way in which business should be conducted in the country,” said Mendoza-Wilson.
According to Andrey Stavnitser, the chief of Terminals TIS Group, corruption is a bigger issue than Russia’s war for investors — and the recent $150 million Black Sea port agreement with U.S.-based agricultural and food giant Cargill was no exception. “The war is not the key question for foreign investors. Much more they worry about Kyiv’s Solomensky District Court and other courts,” said Stavnitser.
In addition, Stavnitser said if that Ukraine will have an agricultural land market, significant foreign investment will come into the country. “If we won’t be able to create a framework for such investments and every time we could use it to solve routine problems, then we won’t go far,” said Stavnitser.
Vadym Pozharsky, an adviser to the board of directors at Burisma Group, largest independent gas producer in Ukraine, said that authorities should hear these companies that were present during the meeting since they are the largest investors into the country.
“Looking at such companies, foreign investors decide if they want to work in Ukraine,” said Pozharsky.
Ivan Gerasimovich, risk management and security director at Smart Holding, raised the issue of excessive interference of the powerful law enforcement agency, the Security Service of Ukraine, or SBU, into business activities.
“It is important for the state that SBU not reported on the number of thieves who steal the property, but rather make an analysis to evaluate the situation in the country at the macro level,” said Gerasimovich.
Key Principles for Economic Policy and Judiciary in Ukraine
We the undersigned Ukrainian business leaders commit ourselves to the following principles of rule of law and economic policy in Ukraine. We do so in order to help establish sound principles for the further development of the Ukrainian economy. The following principles are not enumerated in order of priority.
- The fundamental problem in Ukraine is that law enforcement does not work appropriately, which leaves private property rights unprotected. The Prosecutor General’s Office should be deprived of its excessive powers deriving from Soviet times, and the reform of the prosecution should be redone to guarantee its competence, integrity, and independence from political influence.
- The judicial reform should be adjusted so that only judges of verified integrity are allowed to serve.
- The law enforcement agencies should work for the rule of law and not act as organs of corporate raiding. In particular, the department of the economic crime of the SBU should be abolished, and the SBU should not handle economic crimes.
- The set of anti-corruption bodies needs to be completed. A truly independent Anticorruption Court of real integrity should be established; the National Anticorruption Bureau of Ukraine (NABU) should be protected; the National Agency on Corruption Prevention (NAZK) should be reformed so that it can operate properly, and an effective anticorruption prosecutor must be appointed.
- Energy prices should be unified and determined by real markets that should be established as soon as possible.
- Harmful and outdated regulations, inspections, and inspection agencies should be abolished. All remaining unregulated monopolies should be eliminated, and effective competition policy should be pursued.
- Public procurement and public sales should be transparent, competitive subject to electronic bidding.
- Non-strategic state assets should be privatized through transparent and competitive auctions, while proper corporate governance with independent supervisory boards should be established at the remaining large state companies.
- Private sales of agricultural land should be legalized in such a form that the property rights of all landowners be guaranteed.
- The tax and customs systems should be simplified and made transparent and lawful, ensuring that everyone pays taxes.
- The ultimate beneficial owners of all enterprises and other assets of significant value in Ukraine should be publicly declared.
- Given the absence of prior asset declarations and the large gray economy, once ownership of enterprises and other assets have been declared, their legitimacy should be honored.
- The independence of the National Bank of Ukraine should be maintained.
- Strict rules for the conflict of interest for both public officials and parliamentarians should be established and enforced.
- Ukraine shall pursue European integration and fulfill the conditions of the Association Agreement with the European Union.
Our hope is that such conditions will be created in Ukraine so that business leaders will no longer have to go into politics to defend their legitimate rights as businesses.
The following is a list of representatives of large businesses in Ukraine who have expressed their preliminary agreement with the text of the principles:
- Rinat Akhmetov, SCM
- Vitaliy Antonov, Galnaftogaz
- Oleh Bakhmatiuk, Ukrlandfarming
- Halyna Gerega, Epitsentr
- Oleksandr Gerega, Epitsentr
- Vitaliy Haiduk, Industrial Group Consortium
- Vasyl Khmelnytsky, UDP
- Borys Kolesnikov, APK-INVEST
- Yuriy Kosyuk, MHP
- Vadym Novynskyi, Smart Holding
- Andriy Stavnitser, TIS
- Serhiy Taruta, ICD
- Serhiy Tihipko, TAS Group
- Oleksiy Vadaturskyi, Nibulon
- Mykola Zlochevskyi, Burisma Holdings
