Paper Mill Upsets Baikalsk's Hopes for Strawberries and Skis

BAIKALSK, Irkurtsk Region — Baikalsk, a town of 15,000 located on the shore of the famed Lake Baikal, is haunted by two fears: unemployment and accompanying social unrest or foul waste that would endanger the world's biggest freshwater lake.

Tatyana Glukman, deputy mayor of Baikalsk, shows a colorful brochure listing “fresh mountain air” and “Baikal water” among the five reasons to visit the town during an upcoming Strawberry festival in mid-July.

But she concedes that efforts to attract tourists are rendered useless by the presence of the Baikalsk paper mill, which dumps its wastewater into Baikal.

The problem is that the plant, opened in 1966, also employs 1,600 people, or about one-third of the town's work force.

“On the one hand, I want the plant for the jobs it gives,” Glukman said. "But now it is disrupting the city's development. It is impossible to develop tourism while the plant is functioning.

“It is hard to live in a 'to be or not to be' situation."

A public campaign to close the plant has been ongoing since the mid-1980s and involved many environmentalists and public figures, including the renowned Russian writer Valentin Rasputin.

But the drive has failed so far. The plant, until recently controlled by billionaire Oleg Deripaska, was shut down in October 2008, but Prime Minister Vladimir Putin ordered in January that the mill resume operation.

Putin's move was viewed as an attempt to avoid public protests similar to the one that shook the town of Pikalyovo in 2009, necessitating Putin's personal intervention. Pikalyovo, a town in the Leningrad region based around three main plants, including one owned by Deripaska, faced social collapse after the plants started shutting down.

Baikalsk workers also protested the closure of the paper mill in 2008. Those rallies prompted the government to start developing a plan to rescue the town from its dependence on the mill, possibly even turning Baikalsk into a model example for hundreds of similar single-factory towns nationwide.

But nothing ever came of it other than Putin's order to resume the paper mill's operations, Baikalsk residents told The Moscow Times.

"We even registered a cooperative for strawberry conservation back then, but no help from the government came in the end," said Yury Levinsky, a local resident and advocate for alternative industries in Baikalsk.

The town is known throughout the region for its delicious and abundant strawberries, and even organized a weeklong strawberry festival after the mill closed. The second annual festival will open July 17.

Levinsky said that only the state can provide businesses with reasonably priced loans because "banks ask for highly liquid collateral of up to 150 percent and only give one-year loans."

He said the government should focus on supporting private initiatives that would provide employment without threatening the lake. ? 

"Baikalsk does not need this mill. I don't know why they launched it — it is beyond logic," he said.

When the plant stopped operations, local tourist operators crossed their fingers. ? 

“The time when the plant was not working was very promising for us,” said Natalya Sorokovikova, marketing manager for the local Gora Sobolinaya mountain ski resort, located a 10-minute drive away from the rundown center of Baikalsk.

Neat wooden houses at the resort look a far cry from the town's shabby buildings.

Sobolinaya, which styles itself “the best resort in Eastern Siberia,” hosted about 30,000 visitors from Irkutsk, Krasnoyarsk and Chita last year.

Incidentally, the resort, now partly owned by Sberbank, was built in 1999 by the paper mill's management.

Business is going well, but Sorokovikova acknowledged that the odor of emissions from the plant's smokestacks turns away many potential visitors.

“I hope that the reopening of the factory is a temporary measure and it was done to shut it down properly,” Sorokovikova said.

Some of the paper mill's former workers remain reluctant to return to the plant despite high unemployment in Baikalsk.

Svetlana, 23, has found a job as an assistant in a local church. She said she earns much less than she did at the mill, but she still wants it to be closed.

“I don’t want this plant [because of] all of the professional illnesses I got were from work,” she said, adding that she developed a constant cough at the plant.

She declined to give her last name, saying she feared retribution from the plant's management.

But on the whole, environmentalists do not get much support from the locals in Baikalsk.

“People are indifferent to politics. They just want to grow strawberries,” Taisia Baryshenko, a retired teacher and activist with Baikal Wave, an environmental watchdog, said as she walked past artificial ponds filled with wastewater from the plant. The place around the ponds has been turned into a huge garbage dump.

The case reached the United Nations in June when UNESCO received a petition with 125,000 signatures collected by Russian environmentalists protesting the reopening of the plant.

Francesco Bandarin, UN's assistant director general, has agreed to discuss the Baikal issue at an UNESCO meeting in Brazil on July 25.

“We are confident that the authorities will understand that Lake Baikal requires decisions that will effectively protect its conservation,” Bandarin said in a statement.

Bandarin made no predictions for Baikal, but Igor Ogorodnikov, a member of Baikal Wave, said UNESCO might strike the lake off the World Heritage list.

The mill finished collecting all required permits in May, but will not start work full-scale until October, the deputy prime minister of Irkutsk region, Vladimir Pashkov, said in June. It is currently running in test regime.

The mill needs to convince its suppliers to provide timber, chemicals and other materials — and, more important, solve its huge debt problems.

The plant owes about 1.7 billion rubles ($54 million) to more than 60 companies, the regional arbitration court said in April. It also owes 16 million rubles ($514,000) in taxes to Baikalsk, Deputy Mayor Glukman said.

"The mill presently has no idea where to get the money," one of the creditors said on condition of anonymity. "They are holding talks with the government, but no decision has been made yet."

A representative from Continental Invest, the company that holds the controlling stake in the paper mill after buying it from Deripaska in March for an unspecified sum, said the plant is vital for Baikalsk.

“We all want to live in a clean environment, but it is a town-forming enterprise, and people need jobs,” he said, promising that the plant would monitor the environmental situation in Baikal.

A possible solution for the problem is introducing a closed production cycle, which does not require dumping wastewater into the lake. But industry experts doubted that the company would stay afloat with this technology.

“The closed circle will skyrocket the costs, since the company would be obliged to buy expensive wastewater treatment facilities,” said Dmitry Baranov, an industry analyst with the Finam brokerage.

Ogorodnikov of Baikal Wave said that closing the plant could only be done through a political decision by the authorities.

“We need to try to achieve it,” he said.

The Federal Inspection Service for Natural Resources Use has been issuing warnings to the Baikalsk plant for years. Natural Resources and Environment Minister Yury Trutnev said in 2007 that the mill’s pollution exceeded the allowed limits by 1,000 times, adding that such “carelessness is unacceptable.”
But the government apparently found it acceptable again now, and the Supreme Court seems to agree because it threw out in June a suit by Russian environmental organizations contesting Putin's decree to reopen the mill.

The single important battle won by pro-Baikal activists happened in April 2006, when the state-run Transneft oil pipeline monopoly was planning to build a pipeline to China on the lake's shores, threatening a possible oil spill.

The story caused such an outcry that Putin eventually ordered that the pipeline be moved away from Baikal. A televised report showed him personally drawing an alternative route for the pipeline on the map with a pencil.

“I don’t know what the authorities might use this time to shut the mill. Maybe a marker?” Ogorodnikov said.