The deathly risks of doing business with Russia

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Russian President Medvedev and Christophe de Margerie. [The Kremlin]

The tragic death of Total CEO Christophe de Margerie in the recent plane crash at Vnukovo airport in Moscow is a lesson to be learned, writes Ram?nas Bogdanas.

Ram?nas Bogdanas writes for the website EN.DELFI.LT where this article was recently published.

On the evening of 20 October 2014, the first snow fell in Moscow. The CEO of one of the world’s biggest oil companies, Total, Christophe de Margerie had a meeting at the residence of Prime Minister Dmitry Medvedev, to discuss future investment in Russia.

Several hours later he boarded a private plane in Vnukovo Airport. Visibility was a mere 350 metres. During take-off, his little Falcon jet scratched a snow blower with its wing and crashed. The time of the accident was 11:57 PM local time. All four passengers on board were killed.

The crash did not happen in any ordinary airport – Vnukovo serves Russia’s highest officials and visiting foreign leaders. The crème de la crème of Russia’s oligarchs pay a fortune to station their jets there.

It is yet another sign that the country, enthralled in the “Crimea is ours!” euphoria, is actually falling apart. In another illustrative incident, one October night, a burglar ripped out an ATM machine in the Russian State Duma building, supposedly one of the best-guarded places in Moscow.

Christophe de Margerie was one of Putin’s most influential friends in Europe. He started a career at Total at the age of 23, and spent four decades with the company. His remarkable facial hair earned him the nickname “Big Moustache”. His real name was not aristocratic. When his mother, who came from the Taittinger family, remarried, Christophe took his stepfather’s name.

Oil and gas above everything else

M. de Margerie was a relentless profit-seeker. In 2006, he was charged with corruption linked to the UN’s Oil-for-Food Programme in Iraq. The charges were dropped eight years later due to insufficient evidence. After the 2008 oil embargo on Iran, de Margerie’s Total was fined $400m for giving 60 million dollar bribes in exchange for oil contracts in the Persian Gulf state.

De Margerie was also close with the military dictatorship in Myanmar. When his company was building a pipeline across the jungle, the government sent four battalions to help provide free labour, forcing local peasants and fisherman to work in the construction. While non-governmental organizations were urging Total to stop feeding the dictatorship, de Margerie claimed the company was creating jobs.

Total would contribute $450m a year in taxes to Myanmar’s oppressive regime, which was ostracised by most democracies, and helped the country ensure a steady stream of income from gas, which accounted for 30 percent of its exports. When confronted with questions about aiding a criminal regime, de Margerie would say that one has no business in how governments spend their tax money.

Total had so much influence in French politics that Paris kept opposing the European Union’s common position on Myanmar. Due to France’s pressure, in 2004 the EU eliminated gas and oil from its economic sanction list for Myanmar, in order to protect Total’s interests.

It was a similar story after Russia’s annexation of Crimea. De Margerie claimed that sanctions only pushed Russia closer to China, pointing to the Power of Siberia pipeline contract. It has now emerged that the contract has not even been signed yet. According to Big Moustache, Europe should give up plans to decrease dependence on Russian gas and concentrate instead on ensuring a secure supply.

Despite Russia having shattered Europe’s entire security system to pieces, de Margerie said last summer that “Russia is a partner and we shouldn’t waste time protecting ourselves from a neighbour.” After a Russian missile downed the MH17 passenger plane with almost 300 passengers in Donbass, de Margerie continued to insist that Total would not pull out of the Yamal project, a 27 billion dollar investment that might double Russia’s share in the global LNG market.

Russia’s most VIP airport

Ironically, the Kremlin’s best friend died in the most important airport of his investment haven. Russia has been leading world statistics in aviation accidents with human casualties. According to a study by the Massachusetts Institute of Technology, the chance of getting killed during a domestic flight in an economically developed country is one out of 8 million, in a developing one, one out of 0.5 million.

Vnukovo Airport is a joint-stock company. Most of its shares are held by offshore owners. Until recently, one of them was Genady Timchenko, a close friend of de Margerie and Putin’s and one of the people in the EU’s and Washington’s blacklist. According to the Russian media, the airport’s biggest shareholder is the country’s richest man Alisher Usmanov.

However, it seems, the airport’s prestige and stinky-rich owners have failed to ensure proper order and security, much like in the rest of the country. Developments in Russia increasingly follow the laws of the criminal-corrupt system that is falling outside the control of even the system’s architects. Chaos is encroaching on their own back yards, interfering with most ambitious plans. M. de Margerie had been working on a strategy of how to double carbohydrate production in Russia by 2020, but was killed in the airport where Putin keeps his own jet.

A year and a half ago, a state commission said that Vnukovo did not have enough monitoring equipment and recommended to install additional locators. The airport did purchase the system, but received an incomplete set: instead of two antennae, there was just one. Someone must have decided to save a buck or two and the rest just kept silent. On the night of the accident, the snow blower vehicle on the runway might have been missed by radars due to the missing antenna. The system can monitor airplanes, while snow blowers appear as tiny 1-millimetre dots on screens, according to a Vnukovo dispatcher. Substandard contact between the dispatchers and airport service vehicles prevents proper safety checks for manoeuvres.

Pandemic accidents and burglaries

The first publicly-named potential culprit was the drunk driver of the snow blower, a version readily accepted by international media. It emerged later, however, that the driver had a heart condition that prevented him from consuming alcohol. The revelation came too late, however, for the fast-paced news cycle and Russia had managed to divert attention from discussions on corruption-induced chaos as the main factor behind the accident. Not only was the driver detained by police, but so were dispatchers and the airport’s chief engineer. A 23-year-old dispatcher intern was subjected to interrogation so intense that she had to be taken to hospital after fainting. But it couldn’t be helped – the incident enraged the man at the very top, so there will be as many scapegoats as need be.

But there are limits to how much scapegoats can solve. Over the last seven years, there have been six emergencies at Vnukovo. A stray dog entered a runway; two planes collided on landing, and a poorly-maintained private plane crashed during take-off due to icing, to name a few examples.

Chronic burglaries are another problem at Vnukovo. Last summer, two masked armed men stole a bag with 20 million roubles at the arrivals terminal. In 2012, robbers disguised as policemen took 75 million roubles from collectors in the departures terminal.

The most impressive heist, however, took place in 2009, after the landing of a plane from Dagestan. Two passengers collected their luggage straight from the aircraft and boarded a minivan. But then an Audi A8 blocked its way 100 metres from the VIP terminal and armed masked men took the bags, which contained 44 million roubles. Apparently, the Audi had passed through security because it was sporting counterfeit plates of Moscow’s mayor. Security had been too intimidated to stop the car for fear of inconveniencing a VIP.

Importance of choosing a right runway

Any security failings that Vnukovo Airport might be guilty of, it more than makes up for on the ideological front. Last summer, Vnukovo funded a campaign in Moscow to mock Western sanctions on Russia. The campaign handed out free T-shirts with slogans like “Topol (Russian intercontinental ballistic missile) fears no sanctions” or “Sanctions? Don’t make my Iskanders laugh.” (Iskanders are Russian short-range ballistic missiles, possibly deployed in Kaliningrad). The initiative must have earned the airport untouchable status.

Christophe de Margerie’s death brushed away all his previous pleas not to be afraid of Russia or doing business with Moscow. Apparently, the manually-handled state cannot ensure safety for even its closest friends. Notorious MP Vladimir Zhirinovsky reacted to news about the crash with a cynical remark: “Well, why was he flying so late?”

In the end, de Margerie was killed by his own credo that one can do business with whoever can make one rich, while the rest is immaterial. A Russian snow blower on the path of “Big Moustache” asks us to think twice – one’s choice of a runway is not immaterial.

Putin posthumously conferred a state decoration on his Western advocate, possibly hoping to attract new ambitious parvenus to step in, forgetting that their predecessor’s death in the mess that is modern Russia was a rule rather than exception. There are always those who think that warnings are not addressed to them.

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