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Russia: Oil Boom May Bring Wealth To Evenkia, But To Whom, And At What Cost? (Part 2)

By Jolyon Naegele and Jeremy Bransten

An oil boom is erupting in one of Russia's poorest and least developed regions -- Evenkia in central Siberia. The vast Evenk Autonomous Okrug extends over an area nearly as large as Turkey but has barely 20,000 inhabitants -- 8,000 of them indigenous Evenks. In this, the second of a three-part series on the region, RFE/RL correspondents Jolyon Naegele and Jeremy Bransten explore the impact the oil boom could have on the local labor force and the environment.

Prague, 7 February 2002 (RFE/RL) -- In recent years, the Evenk Autonomous Okrug in central Siberia has rated near the bottom of the list of Russia's 89 regions in terms of investment potential.

The "Kommersant" daily suggested two months ago that Evenkia is one of at least seven economically plagued regions that would qualify for bankruptcy if Russia's Finance Ministry goes ahead with a proposal to declare certain regions bankrupt.

That may all be about to change, however, now that Russia's second-largest oil company, Yukos, has discovered oil under Evenkia's taiga and is building a pipeline to get it to markets in Russia and abroad.

Russian President Vladimir Putin signed an agreement last year with Chinese President Jiang Zemin for Russia to deliver some 25 million tons of oil a year to Beijing.

Last April, Yukos's Moscow-based director for development, Boris Zolotarev, a native of the sub-tropical Krasnodar Krai, won a slim victory in elections for governor of Evenkia. Many voted for Zolotarev in the belief he would bring jobs to a region plagued by unemployment for almost a decade.

According to Evenk Electoral Commission officials, cited in the newspaper "Segodnya," the poll was one of the "dirtiest" in the region's history. Zolotarev's main rival was struck off the ballot and barred from campaigning just five days before the election, only to be reinstated at the last minute.

Yukos's Moscow-based international spokesman, Hugo Erikssen, tells RFE/RL that the fact that Zolotarev won the Evenk gubernatorial elections -- joining other captains of industry at the political helm of Russia's resource-rich north -- is a positive sign, indicating Russia's economic progression.

"I think it is quite natural that at the stage of its economic development that Russia is in now, that the population is looking for candidates with another background than the one traditional Soviet leaders had. And industrial leaders can provide a lot of the expertise and the will and the decisiveness that is needed to bring these regions out of very serious economic problems. And the question of conflict of interest is an issue that can be raised in any country. And that is something that has to be taken care of by legislation."

Yukos announced in December that following its acquisition of the Eastern Siberian Oil Company last year, it has been "providing aid to the Evenk peoples of the Evenk Autonomous Okrug and to other numerically small peoples of the Far North."

Yukos thus took control of Eastern Siberian's 25-year licenses for geological exploration and development of two oil and gas deposits discovered in Evenkia in 1982. Yukos's website says the start of oil production is planned for the third year of the fields' development, with the maximum output level of 3.4 million tons of oil a year to be achieved in the seventh year of the trial production.

An oil pipeline should be built to Evenkia's regional center, Tura, by 2005.

In a speech in Moscow during a visit by UN Secretary-General Kofi Annan in November (19 November), Yukos's chairman of the board, Mikhail Khodorkovsky, noted that Yukos had signed (on 12 October) a framework agreement on cooperation with the UN Office for Project Services (UNOPS). As their first project, they had chosen what he termed "the comprehensive development" of the Evenk Autonomous Okrug.

Khodorkovsky said, "We're talking about the entire region, the economic and social underdevelopment of which is absolutely staggering." He said Yukos had deployed specialists to work with the okrug's administration on the development of the project and that an advance party of UNOPS experts would soon be on their way to Evenkia.

There are concerns, nevertheless, that the Evenk environment and the region's indigenous population, which makes up about 40 percent of the district's 20,000 inhabitants, are both at risk from Yukos's activities. While Zolotarev and Yukos are creating jobs in Evenkia, there are questions whether many Evenks will ever be hired. Most Evenks lack professional experience and adequate education.

Pavlina Brzakova is a Czech doctoral candidate in anthropology at Charles University in Prague. She recently returned from her seventh expedition to Evenkia in the past decade.

"There is a strong administration. Zolotarev is trying to reduce the number of civil servants, although this is the only opportunity for working here other than being in a [drilling] expedition. There are some seasonal jobs. That means in the hunting season going a few kilometers to one's [native] territory, to hunt. But that's all there is."

Brzakova says Zolotarev has begun to finance cultural programs promoting what she describes as "Evenk revivalist tendencies." But Brzakova says there is another trend developing in Evenkia -- laying off local people from the administration, which she says poses a threat to the indigenous population.

"The economic situation in Evenkia is precarious. There is some hope that things will improve. The question is how it will be carried out in practice. Of course, the hopes are not totally false, I think. If there were more funds available, there would be helicopters, transportation, and the entire situation would be improved."

Yukos spokesman Erikssen says it is natural that outside managers and workers will continue to be brought in if Evenkia turns into a major oil producer. But he says local people -- among them the native population -- will be able to benefit if they so choose.

"It is obvious that if there is significant production of oil eventually in Evenkia that will result in a tremendous boost in revenues for the local budget, which the local authorities and the peoples in the area will have to decide how they will want to spend. And I hope that they will be intent on spending that in a way that will contribute to job creation. But it is obvious that, even at the exploratory stage, there will be working opportunities not only for oil men flown in from other parts of Russia but also for the local authorities to help organize opportunities for the local population. And I see a tremendous opportunity for them. It's there for them to grasp."

Russian oil industry officials -- speaking on condition of anonymity -- are less diplomatic. Many say they are shocked by the level of alcoholism they have witnessed on visits to Evenkia. Jobs for Evenks at drilling sites, they acknowledge, will be few and far between.

Unfortunately for the Evenks, the message from Moscow is clear. President Putin has said oil exports should continue to be a priority for the Russian economy. As for the environment, one of the Putin administration's first acts was to dissolve the State Committee on Ecology and the Federal Forest Service. Their functions were transferred to the Ministry of Natural Resources, removing independent environmental monitoring functions and placing those responsibilities within an agency whose mandate is resource extraction.

Czech anthropologist Brzakova says an infusion of investment will certainly benefit the region, although concerns about a possible ecological catastrophe remain. She says there is a widespread perception in Evenkia that Governor Zolotarev, who had no ties to Evenkia when elected, other than being a Yukos executive, was only motivated to run for the position because of the potential for financial profit.

She says that, considering the thoughtless way Siberian oil expeditions in the 1970s and '80s treated the local environment, concerns about the negative impact of Yukos's activities on Evenk society and on the environment may well be justified.

Henri Myrttinen, an expert on ecological and social issues, analyzed the impact of Russia's Siberian oil development while working for the Finnish Environment Ministry. "It's quite obvious that there has been a shift away from environmental concerns towards an exploitation of natural resources." Other regions in northern Russia already have been devastated by uncontrolled development.

For thousands of years, the Khanty nomads lived in the swampy taiga of western Siberia, maintaining a traditional lifestyle that revolved around hunting, fishing, and reindeer herding. But in the 1960s, when oil was discovered in the region, everything changed. Thousands of wells were drilled, polluting the water table. Tens of thousands of kilometers of pipeline were laid, cutting off reindeer migration routes. New cities were built, and more than a million outsiders moved in to fill jobs generated by the mushrooming oil industry.

Today, the Khanty are a tiny minority on their own territory. Save for a few individuals still living in the wild, most have been conned into signing away their land rights in exchange for a snowmobile or a few cases of vodka.

Myrttinen tells RFE/RL that oil booms seldom benefit native peoples, who lack the technical skills and education to take advantage of new job opportunities. "Most of the time, the jobs that are created are not created for the local community but rather for experts who come from abroad, from other parts of Russia or also from other countries."

Instead, native peoples must bear the consequences of the environmental destruction oil exploration often entails. Myrttinen said: "That track record has been extremely poor in Russia. There have been numerous major spills. One of the largest ones was in the Komi Republic, in the early 1990s, which was a massive oil spill. But almost on a daily or weekly basis, there have been minor oil spills because of the poor condition of the pipelines. Also, during the drilling stage, [the] prospecting stage, there are a lot of negative environmental impacts through these activities."

The Komi spill, near the town of Usinsk, occurred in 1994 when more than 100,000 tons of oil from a leaking pipeline burst through a containment dike onto the frozen tundra, contaminating an entire river system that provided the sole source of food for local communities.

The scale of the Komi disaster can be understood by comparing it to the notorious Exxon Valdez tanker spill in southern Alaska, which -- although it garnered far more global attention -- actually resulted in a release of only a quarter of the oil spilled near Usinsk.

Yukos spokesman Erikssen, who is Norwegian, acknowledges Russian oil producers' checkered histories, but says his company has adopted new standards that will ensure that the mistakes of the past are not repeated in Evenkia.

"You don't have to be an expert to know that the track record of the Soviet oil industry with respect to the environment was dismal. But what you also have to acknowledge [is] that the most advanced Russian oil companies -- and Yukos is definitely one of them -- have a completely different attitude towards environmental issues. And we have just made a decision to upgrade the environmental services that we have, and we are investing large amounts of money in upgrading pipeline facilities, [in] buying the latest in high-tech [equipment] that will allow us to reduce to the absolute minimum the impact that this might have on the environment. So you can rest assured that in our work in Evenkia, we will be very cautious and pay maximum attention to environmental issues."

Siberian oil expert Myrttinen is not sure the issue can be so easily brushed off. As in a classic "company town," the fact that Evenkia's political executive, elected to safeguard citizens' interests, maintains close ties to the region's main business raises questions about whose interests he will really be looking out for.

"It's not only the environmental impact, the environmental issues which are at stake. Questions such as press freedom on a local level, on a regional level, are affected, as the oligarchs own a lot of the local media. As the governors, they're supposed to make sure that there is a certain amount of press freedom. But on the other hand, they own most of the media, so I think there's a conflict of interest there."

Myrttinen says it will be extremely difficult, on a local level, to criticize the oil and gas industry, which he says has been functioning as a state within a state, on a local level, in many northern regions.

Nevertheless, the arrival of Zolotarev and the buildup of Yukos's presence have resulted in an end to widespread, long-term electricity blackouts thanks to the import of heating fuel and electric generators, benefiting everyone. But social support for the indigenous, formerly nomadic population is still in short supply.

(The third and final part of the series to be issued tomorrow focuses on the region's rampant alcoholism.)