In the eastern Ukrainian city of Mariupol, Metinvest Group is everywhere, including in residents’ lungs.
While the Azov Sea port city of 450,000 people in Donetsk Oblast relies heavily on Metinvest’s plants, which provide 35,000 jobs, the company has been dubbed “Deathinvest” by locals for the pollution generated by its two steel plants: Ilyich Iron and Steel Works and Azov Stal.
Visiting Mariupol, one cannot miss the so-called “Slag Mountain,” a 30- to 40-meter-high heap of industrial waste rising over Azov Stal, surrounded by foul water polluted with chemicals and metals.
Mariupol residents are exposed to 10 times more industrial pollution than the average Ukrainian. It’s the second most-polluted city in Ukraine, according to the Central Geophysical Observatory, a state agency. One in five residents dies of lung cancer. Citizens and eco-activists blame the main industrial polluter, Metinvest, owned by the influential oligarch Rinat Akhmetov, that runs two plants in the city. Yet the company had never been fined for pollution — until now.
But it seems Ukraine’s long-feckless ecological regulators are finally starting to deliver results. On Feb. 19, Yegor Firsov, the head of the State Ecological Inspection agency, wrote on Facebook that Metinvest paid some $400,000 for slag dumping at the Ilyich plant.
Ivan Stanislavskiy, a journalist for Mariupol.tv, called it a “truly historic event.”
“For the first time in its existence, the Ilyich plant was fined for environmental damage,” he told the Kyiv Post.
“This fact, although bizarre, gives us hope that environmental authorities in Ukraine may begin to fulfill their functions,” he said. He wondered, however, if “the State Inspectorate’s work would be effective and systematic or a single precedent.”
Several days later, another enterprise from Akhmetov’s empire was fined for pollution: Ladozhynska power plant in western Ukraine, which belongs to the oligarch’s energy company DTEK. According to Firsov, the plant would be fined roughly $140,000.
Turning point
The State Ecological Inspection unit was formed in 2011 to protect Ukraine’s ecology, but the body has largely avoided policing the biggest polluters, often owned by the rich and powerful. Instead, it has focused on small enterprises.
But on Feb. 3, Ukrainian Prime Minister Oleksiy Honcharuk ordered the unit to conduct mass and comprehensive inspections of enterprises “posing a threat to the environment,” beginning with a list of 200 top polluters that included Metinvest.
While agreeing to pay the $400,000 fine, Metinvest called the slag dumps for which the company was fined “secondary materials” that shouldn’t be subjected to penalties.
In 2019, Metinvest had revenue of $5.8 billion and a net profit of $400 million, which means the fine amounts to less than 0.01% of its proceeds.
Need for modernization
In August 2019, the CEO of Metinvest, Yuriy Ryzhenkov, said in an interview to business outlet GMK that the group would inject $285 million into modernization projects at Azov Stal and Ilyich Iron and Steel Works to cut pollution generated by the plants.
In 2017, the Ukrainian government introduced a program aimed at reducing atmospheric pollution in compliance with European Union norms as part of the association agreement between the EU and Ukraine.
In accordance with the program, the country’s largest polluters pledged to voluntarily reduce their emissions over a period of 16 years, starting from January 2018.
“For Ukraine, reducing the emissions of harmful substances into the atmosphere is not only an important project associated with the country’s European integration. This is primarily about the life and health of our citizens,” ex-Minister of Ecology Ostap Semerak said.
Yet, Semerak also acknowledged it wouldn’t happen overnight.
In 2017, Metinvest vowed to invest more than $318 million by 2020 into modernization to decrease dust emissions in the city by more than 10 times, according to a statement posted on Metinvest’s official website.
Still, the 123-year-old Ilyich Iron and Steel Works and the 87-year-old Azov Stal remain in dire need of modernization.
So far, some of the blast furnaces responsible for the toxic fumes have been updated at the Azov Stal plant, but the Ilyich Iron and Steel Work still needs to undergo modernization that it pledged to complete by the end of the year, Maksym Borodin, a local lawmaker and environmental activist, told the Kyiv Post on Feb. 26.
Borodin and his team will review the modernization by the end of 2020. If Metinvest delivers, it might be a game-changer for atmospheric pollution in the city, he said.
Not enough?
But Borodin added that the new inspections and fines are not enough and create little or no incentive for Metinvest.
“Metinvest paid without a problem, because the inspection was superficial and only focused on waste management,” he told the Kyiv Post on Feb. 25.
The Kyiv Post reached out to Firsov for a comment regarding the quality of the inspection, but he has not yet responded.
According to Borodin, paying the relatively small fine over slag waste was a good outcome for Metinvest because “they could have been fined more” if the State Ecological Inspection conducted a check of the whole plant and got to a more serious issue, air pollution.
It also means that the next unannounced inspection of the plant can happen no sooner than in one year. The State Ecological Inspection cannot conduct a surprise inspection more than once a year because of a special order of the prime minister.
The State Ecological Inspection unit can conduct scheduled and unannounced “extraordinary” inspections. According to legal experts, owners of plants in Ukraine know about such checks well in advance, before December of the previous year.
Besides, owners or their representatives are entitled to be present during the inspection and to prevent officials from conducting a deeper inspection if it violates the rights of their plant.
When reached for comment, Metinvest stated that the company “operates under the requirements of Ukrainian legislation and has paid the fine in an amount specified by the government authorities.”
Metinvest considers it “unacceptable to judge the quality of the inspection conducted at the company, as well as to make comments on the rumors or assumptions spread in social networks and the media.”
Metinvest also stated it “intends to take legal action in the event of further dissemination of misleading information” regarding comments on pollution caused by the company.
Skepticism
Lawmakers and eco-activists do not believe the fine will encourage Akhmetov’s plants to modernize and cut emissions.
Even if the air in the seafront city has been more breathable recently, it’s due to the decrease in production linked to the crisis in metallurgy, not to the long-awaited modernization of the factories, Borodin said.
He keeps the company under scrutiny and is ready to fight for Mariupol residents’ right to breathe fresher air. He already protested in September 2018, gathering up to 5,000 people to rally in Mariupol against oligarch Akhmetov.
Stanislavskiy shares Borodin’s distrust of the company and the State Ecological Inspection’s role in Ukraine.
“It is just a one-time penalty,” he said. “And it changes nothing for the residents of Mariupol. The huge slag mountain, for which Metinvest has been fined, will remain in place and continue to adversely affect the environment.”
