Lithuania Railways CEO to resign over Belarus potash transport

Potash from Belarus loaded on train wagons. [@HannaLiubakova Twitter]

The head of Lithuania’s state-run railways, Mantas Bartuska, agreed on Tuesday (14 December) to step down to “de-escalate” public outcry over the transport of potash from sanctions-hit Belarus, but the company said it could not stop facilitating it for now.

The issue has shaken public opinion in the Baltic state, one of Europe’s most vocal critics of human rights abuses in Belarus, forcing Prime Minister Ingrida Simonyte to consider resigning, although she announced on Tuesday she would stay in her post.

Landlocked Belarus uses Lithuania’s Klaipeda port to export potash from state-owned producer Belaruskali, one of the world’s largest producers of the crop nutrient, which is Minsk’s main foreign currency earner.

“The board and the CEO agreed that in order to de-escalate the situation and to minimize the risks to the company’s reputation … the best decision is that the CEO leaves after a transitional period,” Lithuanian Railways (LTG) Chairman Kestutis Sliuzas told a news conference.

LTG added in a statement that it lacked sufficient legal grounds to stop the transportation of potash.

Belaruskali was sanctioned by the United States in August, one year after a crackdown following a disputed presidential election which President Alexander Lukashenko said he won.

A ban on sales of potash took effect on 8 December after a four-month wind-down period, but potash continues to be transported via Lithuania.

US, allies ratchet up the economic pressure against Belarus

The United States and its allies, including the European Union, on Thursday (2 December) imposed sanctions against dozens of individuals and entities in Belarus in a coordinated move to escalate punitive action against President Alexander Lukashenko and his government.

Outgoing CEO Bartuska said last week that LTG expects to continue transporting Belaruskali’s fertiliser despite the sanctions, because they only apply to US-connected entities.

He said LTG has a contract with Belaruskali which expires at the end of 2023 and that Belaruskali had paid in advance for railway services throughout December and a part of January.

The company attempted to return the advance last week, immediately after Bartuska’s meeting with Simonyte, but Belaruskali’s bank did not accept the transfer, Sliuzas said.

Seeking alternatives

Opposition parties have said the continued transport of potash has damaged Lithuania’s reputation among Western allies.

But Simonyte said in a statement after a late-evening meeting with Foreign Affairs Minister Gabrielius Landsbergis and Transport Minister Marius Skuodis to consider her resignation and offers of the two ministers to step down that political instability was also a concern.

LTG’s Sliuzas said Bartuska was in contact with both ministers as he worked out whether to keep transporting the potash.

“Given … the challenges posed by COVID and migration, it would be irresponsible to risk the uncertainty that would result from even an attempt to form a new majority or change the composition of the government significantly,” she said.

Lithuania, alongside Poland, has seen a steep rise in the flow of people from Middle East and Africa seeking to cross its borders from Belarus this year, in a migration crisis the European Union says is being orchestrated by Lukashenko.

Lithuania declares state of emergency on border with Belarus

The Lithuanian parliament decided on Tuesday (9 November) to declare a state of emergency at its border region with Belarus, a first since the country declared independence from the Soviet Union in 1990. 

Simonyte said Vilnius would look for a “path that poses the least risk to the state before refusing cargo” from Belarus, while maintaining its support for sanctions pressure.

LTG’s Sliuzas said the company might be able to stop potash transport if the Lithuanian government changes legislation to allow it to break its contract or when a US Treasury’s wind-down period on transactions involving BPC expires on 1 April.

Without legal grounds, LTG could face international arbitration and fines that could bankrupt it, Bartuska said last week.

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