"Baikalsk Pulp & Paper Mill (BPPM) [sustains] a town of 16.5 thousand people. It directly employs 2200 workers and supplies the town with hot water and heating. If the mill is to be stopped, this will lead to a social collapse and the town will practically die out." This is how the proponents of the mill's launch argue ? the same people who stopped the mill in 2008 and left 1500 people without means of subsistence.
Even such a grave situation does not appear to have caused a social collapse.
In June 2009 (directly after the now infamous protests on another plant belonging to Oleg Deripaska, in the town of Pikalyevo) about 40 former and current employees of the plant announced a hunger strike. However, they were calling not for the plant to be re-launched, but for their wages and benefits to be paid. There are several reasons for this.
Widespread and continuous rumours about the mill's imminent closure and regular delays in the payment of wages since 1999 (Vinokurov MA, Antonova LL, Ozernikova TG The Town Must Live: Problems of Baikalsk through the eyes of a sociologist Irkutsk: IGEA publishing house, 1999) caused uncertainty among workers about their mill's, and therefore their own, future. The inhabitants of Baikalsk have long begun to search for and find other income sources.
Research of the popular opinion in Baikalsk by the Centre of Independent Social Research (2007) showed that although emotionally people still identify with the factory, in financial terms almost every inhabitant of Baikalsk has other sources of income.
Redundancies at the BPPM began back in 2006 and were particularly noticeable under the directorship of Victor Voronovich. Already by early summer 2008 the plant's unprofitableness was perfectly clear. This prepared the Baikalsk population for the worst.
When the plant was stopped, 1400 people were fired. According to E. Koptseva, Head of Employment at GOU CZN, Slyudyanka District, Irkutsk Region, by 7 December 2009 Baikalsk had 971 people registered as unemployed. By end of January 2010, the number of registered unemployed went down to around 700 people, that is, 200 have found employment. 87 former employees of the paper plant went through retraining; about 200 carry out community work. A major part of the new unemployed are women who chose to remain on the benefit (around 6000 roubles or $200 per month) while their husbands have found new jobs.
Highly skilled workers of the mill have had no problem relocating to other enterprises of the region and the country. Meanwhile many of the lower-skilled workers also found employment thanks to help from the state and their community.
The local authorities have introduced a direct commuter train service to Irkutsk; a new programme for the development of the Sludyanka District was launched, including projects of alternative industries in Baikalsk; new subsidies and grants for small businesses have been introduced, and Baikalsk college introduced new courses in tourism management.
"When people hear the phrase "ex-employees of the Baikalsk PPM", many imagine a desperate crowd, drowning in alcoholism and violence" - says Marina Rikhvanova, co-chair of BEW (Baikal Environmental Wave NGO) - "But a large proportion of people in Baikalsk are educated, qualified specialists. And in these difficult times everyone really sticks together."
Another important and not well-known detail has been discovered by sociologists in 2007. Surveys show that young people already then did not want to associate their fortunes with the paper factory and strived to achieve alternative qualifications, mostly in Irkutsk or Ulan-Ude. For many families in Baikalsk this has become an important investment. As interviews show, for young Baikalsk inhabitants staying there after school is bad luck: and this perception of the factory was around long before its closure. Even when the plant worked, young people did not aspire to work there.
Situation at the mill
It is difficult to give a true evaluation of the mill's situation, because in recent years it has been practically closed to independent researchers. This is why environmentalists and scientists are calling for an independent investigation into its financial and technological situation, and its environmental safety. The data below come from the few available open sources.
- even if the mill should only produce bleached cellulose and dump waste into Baikal, the financial characteristics of the enterprise make it impossible to break even;
- the probability of bankruptcy of Baikalsk PPM is officially high;
- the enterprise's 800 million roubles (over $30 million, at mid-2008) accounts receivable allow to carry on production for half a year;
- the accounts payable present a serious problem and grow worryingly fast (60%) for no real ongoing production (over 1 billion roubles, or $40 million, at mid-2008);
- the low levels of depreciation costs (4%) indicate unacceptably depleted equipment;
- 1% of cellulose produced by the plant goes to Belarus, the rest is supplied to China.
Previously the mill's owners have attempted to solve the mill's financial problems by increasing the production of unbleached cellulose to 320 thousand tonnes a year. Research by Professor of the Moscow High School of Economics, expert in evaluating investment projects A. I. Fedorenko has shown that this change will not have the desired result.
The quality of Baikalsk cellulose leaves much to be desired, according to the analysis by GOU VPO "Siberian State Technological University" and "Krasnoyarskie Volokna" Ltd in 2006:
"For a long period of time between 2001-2002 "Krasnoyarskie Volokna" used [...] Baikalsk PPM-produced cellulose. It was of not very high quality. Our analysis showed that many of the batches did not conform to the appropriate standard. Their whiteness was less than required, the ash content excessive, and the blockage coefficient was above the maximum threshold of 50%. At the same time, the reaction capacity of the cellulose was stated by the manufacturer as high (80/11%). However, after chemical treatment this cellulose yielded badly if at all filterable viscose. This had negative consequences on the production process and on the quality of the thread: much dirtier viscose on the filters, lower indices of maturity of viscose, lower proportions of high quality product. All this negatively affected the economic indicators of viscose thread production, its net cost and sales."
On 22 January 2010 the Irkutsk Regional Government held a special meeting regarding the problem of the BPPM. A report by representatives of "Continental Management" showed that in addition to equipment depletion, lack of qualified staff, and large debts, the plant's management lacked a sound supplies plan. Moreover, the plant failed to acquire the necessary permits for emissions from the appropriate agencies.
According to first-hand witnesses, the plant's equipment was not properly cared for and even plundered over the time of shutdown. A hurried start-up with a lack of qualified staff and capital may lead to grave consequences. Not only the Lake Baikal but also the workers of the mill are in danger.
Today the mill experiences serious staffing problems. According to locals and newly hired staff, often qualified specialists are replaced with people lacking the appropriate experience and qualifications. Many former workers of the mill do not wish to return there, as they see no future in it for themselves and their families.
In 2008 the Siberian branch of the Russian Academy of sciences carried out an assessment of possible scenarios of Baikalsk development. The research considered the following options:
- Continued production of cellulose using a closed water use cycle
- Reorientation of Baikalsk industry to alternative sectors, and a complete clean-up of the paper factory's industrial complex and its accumulated waste
- A "zero" option: halt to existing production on the paper factory and no material support from its owners
The alternative industries option has been identified as the most economically viable. Wasteless wood works is the main identified alternative.