Magazine article The Spectator

Does Medvedev Really Believe in the Rule of Law? the Fate of TNK-BP Is the Test

Magazine article The Spectator

Does Medvedev Really Believe in the Rule of Law? the Fate of TNK-BP Is the Test

Article excerpt

Is President Dmitri Medvedev of Russia -- who looks and sounds like a liberal-leaning modern technocrat -- really his own man, or is he merely the stooge of his predecessor, the sinister, warmongering Vladimir Putin? The mad situation engulfing BP's Russian joint venture, TNK-BP, is surely the test of this question.

Its BP-appointed chief executive, Robert Dudley, has met such hostility from the gang of oligarchs who are BP's partners in the company that he is now trying to run it by email from a secret address somewhere in eastern Europe. The oligarchs, led by the combative multibillionaire Mikhail Fridman, claim BP has managed TNK-BP (which accounts for a quarter of total BP oil production) more like a subsidiary than an independent venture, refusing to let it pursue opportunities where it might cross other BP interests. In consequence, they say, TNK-BP has underperformed Russian rivals such as Lukoil.

They may have a genuine case, or they may just be trying to run BP out of town in the lawless Russian cowboy-capitalist style usually associated with the Yeltsin era. But what is outrageous is the way in which various arms of the Russian state, including the visa authorities, have been deployed to make life as uncomfortable as possible for BP's expatriate managers, to the extent that BP is now close to losing any effective control of its massive investment. The Kremlin has done nothing to indicate disapproval of all this -- even though Putin gave his public blessing to BP's participation in the original venture in 2003, and neither Fridman nor his fellow investors, Viktor Vekselberg and Leonard Blavatnik, are known as Kremlin favourites. Frankly, no one really knows what's going on, but one theory is that Putin wants control of TNK-BP to pass to Gazprom, the state-owned conglomerate which is his weapon in international energy politics -- and is not bothered whether that is achieved by bullying BP out of Russia or by forcing the oligarchs to part with their own stakes, or both; the oligarchs, naturally, prefer the first of those scenarios. Either way, the Russian legal system would be ruthlessly deployed to serve Putin's objectives.

Yet when Medvedev was sworn in as president in May, he promised to 'fight for a true respect for the law and overcome legal nihilism'; he has since 'ordered' state agencies to stop harassing businesses, and repeatedly said he wants Russia to be more attractive to international investors. My man with his ear to the Kremlin wall tells me that as a lawyer from a family of lawyers, Medvedev actually means what he says about the rule of law, and is beginning to show his colours in some of his appointments: Alexander Konovalov, his new justice minister, was his university classmate and is known to share his views; more obscure, but intriguing to Kremlinologists, is Medvedev's choice of Boris Ebzeyev, a former judge of the constitutional court, to be president of the troublesome Caucasian republic of Karachayevo-Cherkessia. A modest start, perhaps, but as BP chairman Peter Sutherland has said, 'The fate of TNK-BP will be an early test of the ability of President Medvedev to turn his vision into reality.

Much of the world is watching.'

Aux marchés libres At this time of year I retreat, editorial duties permitting, to a delightful French village called St Pompon (after a 6th-century bishop of Naples whose corpse oozed miraculous fluid, since you asked). …

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