bne IntelliNews – Multinationals under pressure to sever ties with Belarus

International multinational corporations are under increasing pressure to sever their trade relations with Belarus as opposition leaders apply a “name and shame” campaign in their fight to oust incumbent President Alexander Lukashenko.

German heavy engineering firm Siemens and Norwegian agricultural firm Yara have found themselves in the crosshairs in recent months, as both have significant business with Belarus.

Since the end of February this year, Siemens has been caught up in what the German press has called a “shit storm” after German Chancellor Angela Merkel made the English word popular in German after using it in a public speech. Last year.

Siemens has come under relentless criticism online for its ongoing business with Brestenergo, a regional utility company. Siemens enjoys massive activity in Eastern Europe which depends almost entirely on its supply of turbines which are not produced anywhere in the region for power plants.

Social media such as Facebook have been inundated with comments in English, German and Russian such as: “Stop cooperation with dictator Lukashenko! “,” Do not support violence and torture in Belarus! “,” The contract with Brestenergo is fucked up money. “

German bank Commerzbank has been hit by a similar protest campaign, albeit to a lesser extent, as it also has business with Belarus. Commerzbank participated in the loan to facilitate the supply of gas turbines manufactured by the Swedish company Siemens Industrial Turbomachinery AB to the Belarusian state-owned company Brestenergo. The deal was reached in February, although no official announcement was made. Belarusian activists found out about the deal and launched a protest accordingly, reports German public media Deutsche Welle.

Belarus has been rocked by mass protests since last year’s protest August 9 presidential elections, which were massively falsified, and saw Lukashenko return to power by a landslide, according to official results. According to independent observers, the elections were in fact won by opposition leader Svetlana Tikhanovskaya, who now lives in exile in Lithuania.

The opposition has already succeeded in forcing the International Ice Hockey Federation (IIHF) to cancel plans to hold the ice hockey world championship in Minsk this year, after protests angered the event’s sponsors, who threatened to withdraw their support.

Car maker Skoda, a wholly-owned subsidiary of Germany’s Volkswagen, cosmetics company Nivea Men, and motor oil and automotive chemicals maker Liqui Moly all announced in January that they were canceling their championship sponsorship, fearing reputational repercussions following the outbreak of violence. in Minsk last summer.

Part of Siemens’ business in Belarus is supplying turbines to the new nuclear power plant in Ostrovets (aka Astravets) which was built and funded by Russia last year and went into full production at the beginning of this year.

Tatiana Manenok told DW that “Siemens won the tender [to supply turbines] before the events of August and the political crisis. It was a good choice; it is the world’s leading manufacturer of this type of equipment. “

The first turbines were delivered in December and a second batch should be delivered in March, work on the second nuclear unit is underway. In total, Belarus has ordered 16 gas turbines in addition to the Ostrovets advance, which will be delivered to Brestenergo.

Lukashenko has invested heavily in Belarusian power generation capacity in the hope of weaning the country from Russian gas imports and also in an effort to make a little more money from electricity exports to neighbors. Westerners of the country: in January Belarus exported more electricity to the Baltic States and Ukraine than it did in 2020, as temperatures plunged just as Ostrovets entered the line.

More equipment orders could be underway after the Almaty-based Eurasian Development Bank (EDB), which is partly owned by the Belarusian government, signed an agreement with Minskenergo in the Belarusian capital to open a long-term credit line in the amount of € 101.2 million to finance the supply of part of the turbines ordered from Siemens.

EDB, which was formed as a joint venture between Russia, Kazakhstan and Belarus to invest in things like infrastructure, funded its line of credit by raising funding from German state-owned banks KfW IPEX Bank and Landesbank Hessen-Thüringen (Helaba), while the loan was provided by the Swedish National Export Credit Agency (EKN). All these institutions are now in the crosshairs.

The Commerzbank press service, in response to a request from DW to comment on the situation, noted that “the mentioned energy project serves to modernize the energy supply in Belarus and thus the energy security of the population”. In general, the bank does not operate in Belarus and focuses on financing German exports to that country, the Commerzbank press service told DW.

While the bank stressed that it had no direct contact with Belarus or the authorities, it stressed that “the EU has not imposed any sanctions on the supply of energy equipment to Belarus”.

Likewise, the Siemens press service insists that it is not breaking any law. The company “strictly follows, of course, all applicable national and international regulations and ordinances,” the company told DW. “We are, of course, watching very closely how people in Belarus demand more democracy and the current development of events.”

Belarus

The situation with Belaruskali, the Belarusian potash producer, is a little different, as it is a very large state-owned enterprise and one of the country’s cash cows.

Belarus is home to very large deposits of potash, one of the most efficient fertilizers. It exports a large part of its products to China, but is present as an important player in most of the world’s markets. Belaruskali sells over 10 million tonnes per year (tpa) of potash and claims to control 20% of the world market, making it one of the world’s largest fertilizer companies.

During the mass protests, some of the Belaruskali workers joined the general strike which began the first week after the elections and 50 were quickly sacked by the company or even arrested and harassed by the authorities. But in January, the management of the southern Minsk-based company announced what it described as a turnaround, saying it was ready to take back the striking workers.

It came after Yara, a Norwegian-based agribusiness giant, called on the Belarusian company to take back the laid-off workers and sent senior company officials to Belarus to make the point face to face with the leadership of Belaruskali.

Yara was pressured by Tikhanovskaya and others to stop doing business with Belaruskali in order to put pressure on the Lukashenko regime.

“Yara continues to engage and seek advice from stakeholders inside and outside Belarus to assess how this can have the most positive impact. Yara’s main concern remains health, safety and the welfare of Belarusian workers, ”Josiana Kremer said in an email. comments to RFE / RL, adding that the company has the support of independent Belarusian unions.

“In Belarus, Yara’s approach to seeking influence was supported by both the Belarusian Independent Trade Union (BITU) and the Belarusian Congress of Democratic Trade Unions (BKDP),” Kremer said.

The political crisis has already hurt the company’s operations, and Belarusian potash exports fell 16% year-on-year to $ 2.2 billion in January-November, Interfax reports, citing the country’s statistical service.

In total, more than 100 Belaruskali workers are said to have taken part in a strike. Dozens have been arrested and at least 55 have been fired, according to reports. In August, a strike leader in Belaruskali was sentenced to 15 days in prison, reports RFE / RL.

On January 20, Belaruskali said that workers who had been made redundant could return if they filed an application and that financial penalties imposed on employees as a disciplinary measure would be removed. He also said he was ready to cooperate with Yara on industrial safety and accept specialists from Yara to monitor the production process.

But while welcome, these concessions are small. Tikhanovskaya performed in October when she issued a “People’s Ultimatum” and called a general strike in hopes of causing intolerable economic pain and overthrowing the government. The strike was met with a lukewarm response and the gambit graded.

Nonetheless, the opposition keeps the pressure on and hopes to put pressure on Lukashenko by intimidating big companies that work with Belarus and making life in Minsk as hard as possible.

Belaruskali’s descent came nine days after Tikhanovskaya urged Yara chief executive Svein Tore Holsether “to consider suspending or not extending the contract with his Belarusian partner at this point.”

“It is crucial that Yara conditions the collaboration with Belaruskali unless the repressions of the workers cease,” Tikhanovskaya wrote in a letter to Holsether posted on his website on January 11, as quoted by RFE / RL.

The pressure on international companies is a continuation of the initial efforts to mobilize the international community to support the Belarusian people by the opposition leaders. Tikhanovskaya tirelessly traveled across Europe pushing for sanctions and support. While the EU imposed sanctions on Belarusian elite, including Lukashenko himself, with Russian backing, Lukashenko could easily ignore harsh rhetoric from Brussels.

More and more Tikhanovskaya and his colleagues from Coordination Council have slowly improved their game and are targeting the economic interests of Belarus. It means trying to cut the state’s export revenue.

“While Belaruskali management continues to intimidate workers, we believe that the signing of a new potash supply contract between Yara and her Belarusian business partner will not be seen as a sincere commitment to the guiding principles of the process. ‘UN on business and human rights, as stipulated in Yara’s internal regulations, “Tikhanovskaya wrote to Holsether.

Belaruskali did not say whether someone who was fired has actually returned to work. The Belaruskali strike committee has repeatedly stated that it will only return once its political demands have been met, including the resignation of Lukashenko.


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