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Bad old days of corruption in Ukraine’s mining sector could be back

First workers’ protest in Ukraine since Russia invaded erupts over embezzlement fears in the country’s coalfields

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Kateryna Semchuk
31 August 2022, 9.40am

2 August: miners at Novovolynsk Mine No.9 prevent new management and energy ministry officials from entering the building

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Image: Bug.org.ua. Used with permission

Miners in western Ukraine have gone public about their fears of a return to the corruption that once plagued the country’s coal industry – and are worried about losing their jobs as a result.

They blockaded the office of Mine No.9 in Novovolynsk to stop a new director from taking up his post earlier this month, citing his alleged link to an embezzlement scandal at a previous workplace. Following the confrontation, the new director has signalled his intention to turn down the job, although he denies any wrongdoing.

The mobilisation near the Polish border is the first worker protest to take place in Ukraine since Russia invaded the country and martial law was introduced.

Volodymyr Zelenskyi had previously pledged to stamp out corruption in Ukraine’s coal sector, which has a reputation for insider influence.

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Speaking to workers in February 2020, the Ukrainian president declared an end to the coal industry’s so-called ‘overseers’, or smotriashchie.

These are the unofficial, behind-the-scenes advisers who influence managerial appointments and supervise embezzlement, illegal diluting and sales of coal, and middle-men schemes connected to enrichment factories.

The war began, and the so-called smotriashchiye appeared again. I don’t know why

But according to the mine’s current director Volodymyr Yurkiv, who is still in post, the ‘overseers’ could be using the Russian invasion to make a comeback.

“After the president’s speech [in February 2020], things calmed down for us. There were no smotriashchiye,” Yurkiv told openDemocracy.

“We were able to work in peace, no one was coming from the outside.

“Then the war began, and the so-called smotriashchiye appeared again. I don’t know why.”

Yurkiv says he was given no reason for his demotion to chief engineer and replacement as director, other than that it was “to do with the ‘[ministry’s] vision’.”

Serhiy Petryk, a section chief with 18 years’ experience at Mine No.9, said he too saw no reason for the sudden change in leadership.

“Why should we change director if we have a good director who really works for us, cares about the mine, and if we get a decent salary?” he asked.

On 2 August, a large crowd of employees gathered outside the doors of Mine No.9’s office building, where they used a tractor as a barricade to prevent the new manager, Viktor Herashchenko, and a senior energy ministry official from entering.

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2 August: the proposed manager, Viktor Herashchenko, and a senior energy official talk with Mine No.9 employees

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Image: Bug.org.ua. Used with permission

Herashchenko had previously been chief engineer at another mine in the region: Buzhanka, a part of regional state-owned coal company Volynvuhillia.

Key executives at that company are now under investigation for embezzlement relating to a state contract, according to a letter from the regional prosecutor’s office seen by openDemocracy.

Herashchenko told openDemocracy he had nothing to do with the embezzlement of state funds currently under investigation. He became chief engineer at the Buzhanka mine several weeks after the contract currently under investigation was signed, he said.

“I went there to work, not to fight,” Herashchenko said.

We are ready to stand till the end, even to go on strike if it’s necessary

He said his appointment at Mine No.9 was justified by the energy ministry on grounds of increasing coal production. According to a 2015 order from the same ministry, the mine has already exhausted its reserves and is on the verge of liquidation.

The mine’s assistant anti-corruption director Pavlo Holota says another sign of a potential return of smotriashchiye in the region is the fact that Volynvuhillia recently appointed a new production manager who is due to appear in court shortly on a charge of selling coal illegally at Mine No.9 before 2020.

Managers at Volynvuhillia declined to speak to openDemocracy.

Ukraine’s Ministry of Energy is yet to rescind its order for Yurkiv’s replacement, and miners in Novovolynsk remain concerned about their future.

For them, the new appointment not only signalled a possible return to embezzlement, but poor management practices such as wage delays and non-repair of equipment. Most of all, they fear that the mine will close sooner than it is supposed to, currently 2023.

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Image: Bug.org.ua. Used with permission

Dirty work

When I visited Mine No.9, a week after the public confrontation with Herashchenko, the mood was gloomy: 48 employees had received letters ordering their mobilisation to the Ukrainian armed forces.

“Spirits are low. People are worried about their work, their families, as well as about the company, about what will happen next,” Petryk said.

Miners felt that the conscription order was a reprisal aimed at making them stop their campaign. Stopping more miners from working also increases the risk of closure for the mine, they said.

Some miners, however, told me they would not hesitate to join the army. Volodymyr Hordiyov, a miner who didn’t take part in the protest but supports it, said: “If I have to go to fight, then I will go fight.”

“We’re told you need to stop interfering, or something might happen”

Mine No.9 workers bake pies for Ukrainian soldiers in their canteen and sent the equivalent of £44,500 to the army – a month’s salary for all of the mine’s workers. About 50 workers from the mine have already been conscripted to the army and are fighting on the front line, and employees who are still at work are trying to keep coal production at the required level.

The conscription office in the nearby town of Ivanychi declined to comment on why the mobilisation letters were sent on 4 August, stating simply that “there’s war in the country”.

But signs of reprisal do not end there. Holota told openDemocracy that four men drove to his home in Novovolynsk on 13 August. They told him they had come on behalf of a smotriashchiy, and warned him not to write letters and not to make enquiries at the Ministry of Energy.

According to Holota, the men said: “We’re told you need to stop interfering, or something might happen.” Holota had previously contacted the Ministry of Energy over his concerns about new management on several occasions.

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Images: Kateryna Semchuk

Fight till the end

When I entered the gates at Mine No.9, it felt as if time had frozen. The whole coal mine, both above and below ground, looks like the set of a Soviet film. Yet these are the real conditions that miners have to work in. Uniforms, showers, the mine buildings and even paintwork look unchanged since the 1980s.

Most of the mining equipment has not been upgraded since the last decade of the Soviet Union, except for the ageing computers. The main excavating machine dates from 1938 and is German-made. Metalworkers at the mine often revive outdated scrap in order to repair equipment.

Even if the mine is slated for closure next year, many of the workers want to continue working until then – with wages being paid on time, good equipment and trustworthy management.

While Novovolynsk is a relatively small operation – it extracts 2,100 tonnes of coal a month, according to Yurkiv, compared to a neighbouring Lviv mine that extracts nearly twice that figure every day – mines in western Ukraine are the only domestic producers of coal for what is likely to be a difficult winter in the country.

“We are ready to stand till the end, even to go on strike if it’s necessary,” Petryk says.

The Ukrainian Ministry of Energy did not respond to requests for comment.

Several images used from Bug.

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