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ICE Case Number 139, by Anna Ferus

Latvia and Russia Dispute and Oil Trade

I. Case Background
II. Environment Aspect
III. Conflict Aspect
IV. Env. - Conflict Overlap
V. Related Information

I. CASE BACKGROUND

1. Abstract

1. The Issue

Map of Latvia Since the collapse of the Soviet Union and its declaration of independence in 1991, Latvia has gone through a period of transition in which life-conditions have altered drastically. Collapse, chaos, massive restructuration and a host of dislocating mechanisms have affected the life of the majority of the population. These dislocations are particularly drastic for the ethnic Russian minority.

On April 10, 1998 Russia cut oil exports through Latvia in a dispute over the discrimination of the ethnic Russians in Latvia. Given the ongoing discrimination against the 700,000 ethnic Russians living in Latvia, President, Boris Yeltsin, asked his government to diversify the routes of Russian oil exports. Russia wants Latvia to modify laws that have left the Russian-speaking quarter of the population effectively stateless.

According to Andrei Pershin, a spokesman for Acting First Deputy Prime Minister Boris Nemtsov, oil exports through the Ventspils terminal are cut 15 %. Ventspils handles 11 to 12 % of Russian oil exports, which last year ran 127 million tons, or 40 billion gallons.

2. Description

The dispute between Latvia and Russia involves more than the economic issues associated with the oil exports. The decrease of the oil supplies from Russia is closely associated with the human rights issues. This research will take a closer look at those issues. I will begin with the historical background of the economic relationship between Russia and Latvia. I will then proceed to description of the Russian minority in Latvia and the incidents that lead to the economic dispute and the economic consequences of this dispute. Since one of the major issues of this conflict is the request to alter Latvia's citizenship law, I will provide the audience with the recent developments. Historical background:
The oil products pipeline from the Russian refinery center of Samara on the Volga River has been closed since October 1992. The pipeline was closed by Russia when Latvia claimed ownership after its independence from the Soviet Union.

In April 1994 Russia reported that it is resuming to pump oil products to the Latvian port of Ventspils after a deal on joint ownership of a disputed pipeline. Latvia and Russia had agreed to set up a joint venture to run the Latvian section of the pipeline, with Latvia holding a 66 percent share and Moscow 34 percent. However, a dispute took its course once again, when Russian government, with the approval of the Russian President Boris Yeltsin, decided to cut oil exports through the port of Ventspils. This decision was made in order to pressure the Latvian government to modify its citizenship law to include the Russian minority as full members of the Latvian society.

Russian minority in Latvia:
Ethnic Latvians make up a little over half of the population of 2.5 million people while ethnic Russians account for about 34%. Latvian was made the official language over Russian in 1988. Since the break-up of the Soviet Union in 1991, Russia has increasingly accused Latvia of discriminating against some 700,000 of its ethnic-Russian residents, most of whom moved there after Stalin's forcible annexation of the republic in 1940. Around 550,000 bearers of old Soviet passports in Latvia will be left stateless when their documents expire in October 1998. Latvia defends the strict conditions, including knowledge of the Latvian language for those wishing to obtain citizenship, as part of a naturalization process.

However new tension arose in March 1998 when Russia accused Latvian police of brutality against elderly and predominantly ethnic-Russian residents of Riga, who were protesting against increases in utility rates. Russia was infuriated: Vladimir Lukin, chairman of the foreign affairs committee of the lower house of the Russian parliament and former ambassador to Washington, called Latvian cabinet "a gang of cretins."

In April 1998 a bomb detonated near the Russian embassy, resulted in damage but no casualties. The Russian foreign ministry connected the "disgraceful" attack with the current "anti-Russian hysteria" in Latvia. Therefore, citing pan-European criticism of Latvia's anti-Russian policies and the rise of right-wing nationalism in Latvia, Russia has threatened sanctions. Riga has claimed that sanctions are unjustifiable. "If Russia cuts the transit of goods, it will be harmful to its own economy as well as ours," Latvian Foreign Minister Valdis Birkavs said in a statement on April 8, 1998. Ernest Yurkans, deputy of the Latvian parliament told NTV that Russians in Latvia would be the first to suffer from sanctions.

Latvian President Gunter Ulmanis has tried to stem the international criticism which has come from Russia and lately, western Europe. Italian Foreign Minister Lamberto Dini stated that the recent events had distanced Latvia from EU membership. Baltic neighbor Estonia has been given clearance to apply for membership; Latvia must wait. The Council of Europe, and the Organization for Security and Cooperation in Europe (OSCE), have also warned Riga that a number of provisions contained in a new language bill, designed to prohibit the use of Russian in the workplace, violate international human rights conventions guaranteeing free speech. Under this pressure, some changes to the draft have been presented.

Economic consequences:
According to the Russian Prime Minister Sergei Kiriyenko the Russian government has prepared a number of measures from President Yeltsin for introducing economic sanctions against Latvia. Certain limitations on purchases of goods will be imposed, he said. "The Latvian economy is rather closely linked with provision of services to Russian enterprises, including transit services," Kiriyenko said. "There are quite a few means of economic leverage," he said. "It would be better if Russia did not have to take such measures, but if the attitude towards Russians in [Latvia] remains as it is, we will do it," he said.

The oil products pipeline, part of the former Soviet unified system, can handle about 400,000 tones a month, mostly diesel fuel. The Ventspils Nafta oil terminal has been relying on rail supplies of up to 500,000 tones a month since its closure. Ventspils Port logo Ventspils handles 11 to 12 percent of Russian oil exports, which last year ran 127 million tons, or 40 billion gallons. Under the diversification measures, Russia shipped 610,000 fewer tons, or 192,150,000 gallons, from April to June, 1998 compared with the first three months of the year.

Russian oil exports will be reduced by 61,000 barrels a day. "This was a unanimous decision by both state officials and oil businessmen aimed at stabilizing the world oil market," Boris Nemtsov, first deputy prime minister in the Russian caretaker government, told journalists after a conference with oil company managers. "Russia, the world's third largest oil producer and exporter, must not stay out of" the reduction of oil exports by other countries, he said. The export of petroleum products will be cut by 4,900 tones a day, Nemtsov said. A special government commission is drafting contingency proposals on steps to counter emergency situations on the world oil market, he said. These steps will not be taken unless there is no other choice, because they would be very painful for the Russian budget, Nemtsov said.

Recent developments in Latvia's citizenship law:
The decree on the "Restoration of Latvian Citizenry and Basic Principles of Naturalization," adopted in October 1991, has been fundamental in the creation of the newly independent state and its history. According to this decree, all immigration in the Soviet period is considered illegal. People who settled in Latvia after 1940 and their descendants are defined as "illegal immigrants" representing an occupation power. Hence, the principle of exclusion and inclusion is based on "blood". Citizenship is gained if one can prove a consanguineous relation to persons of the first Latvian republic.

This situation leaves a group of 700,000 stateless persons out of a total population of 2.56 million (Vebers 1994). The vast majority of non-citizens are ethnic Russians or Russian- speaking Slavs. Being a non-citizen entails not only a total lack of polilitical rights; social and economical rights are also affected; "over 60 laws, decrees and other normative acts have been imposed upon non-citizens resulting in an array of restrictions of the social, economic, property and employment rights" (Tsilevich 1995). As a result of these restrictions, the Russians have been transformed from an ethnic minority into a socially disadvantaged group. Russian government is demanding that the Latvia's citizenship law be changed in order to grant Russian minority equal rights.

September 11, 1997. According to the letter from Mr. Valdis Birkavs, Latvian Minister for Foreign Affairs to H.E. Mr. Max van der Stoel, OSCE High Commissioner on National Minorities the developments in the field of human rights in Latvia have been slowly taking place. The Saeima (Parliament) adopted the Law on Refugees and Asylum Seekers on 19 June 1997. On the same day, the Law on the Ratification of the 1951 UN Convention on the Status of Refugees was adopted. On 4 June 1997 the Saeima adopted the law on the ratification of the European Convention on Human Rights and its Additional Protocols 1, 2, 4, 7 and 11. Latvia has accepted the Convention's control mechanism, i.e. the right to individual complaint and the compulsory jurisdiction of the European Court of Human Rights.

Many obtacles of Russian minority to become Latvian citizens were based on a very high naturalization fee and the difficult naturalization tests. On 22 July 1997 the Cabinet of Ministers accepted conceptually the proposal that the naturalization fee be reduced as follows: 1) the naturalization fee shall be 15 Lats for high school students and university students from indigent families; 2) the naturalization fee shall be abolished for orphans and children whose parents' rights have been taken away; 3) the Head of the Naturalization Board shall have the right to exempt from the naturalization fee persons who are recognised as indigent. Such a reduction should eliminate or at least diminish significantly applicants' problems with covering the naturalization fee.

The existing history test (naturalization exam) has been designed in accordance with the Law on Citizenship which prescribes that an applicant has to know the history of Latvia. Therefore, the essential issues of the history of Latvia have been included in the test. It should also be stressed that all questions that are included in the test are covered by a book by J.Taur´┐Żns, "The Main Questions of the History of Latvia and the Constitutional Principles of the State". The history part of the exams has been simplified - the number of required correct answers has been reduced significantly. Initially, the applicants had to prepare 300 possible questions, which were unknown beforehand; now there are only 150 questions which have been published. The number of required correct answers has been reduced from 12 out to 18 to 11 out of 18. The Latvian language test has been redesigned so that it is less connected with remembering large portions of text. These tests have been designed in collaboration with experts from the Council of Europe.

June 4, 1998. After voting against considering amendments to the citizenship law as an urgent measure , the parliament approved the draft in the second reading. Under the amendments, which comply with OSCE recommendations, children of non-citizens born in Latvia after 21 August 1991 would automatically be granted citizenship if their parents requested it. Also on 4 June, "Diena" published a letter from British Prime Minister Tony Blair urging his Latvian counterpart, Guntars Krasts, to help ensure that Latvian law and practice "fully conforms with the standards of international society."

June 22,1998. The parliament approved an amendment to the citizenship law in the third and final reading whereby citizenship will be granted to all children born to non-citizens after 21 August 1991 if their parents request it. In an emergency parliamentary session called by the opposition Democratic Party Saimnieks, lawmakers voted by 54 to 14 to adopt the amendment. The parliament also voted to abolish the so-called "naturalization windows," which placed quotas on granting citizenship, and to simplify language tests for people over 65. The OSCE had strongly recommended that the parliament adopt those changes.

August 7, 1998. Latvian Railroad Minister Vilis Kristopans told reporters that the country's GDP may decrease by 2-3 percent owing to worsening relations with Russia, ITAR-TASS reported. Kristopans said budget revenues will fall because of a decrease in transit cargo and in Latvian exports to Russia. The minister, who is planning to meet with leaders of Russian transportation departments next month, said it will be difficult to discuss anything if the amendments to the citizenship law have not gone into effect by then. A campaign is currently under way in Latvia to collect signatures in support of a referendum on the amendments.

August 27, 1998. Russian Deputy Foreign Minister Aleksandr Avdeyev, addressing a news conference following a regional foreign ministers' meeting in Vaesteraas, Sweden, said he has confidence in Latvia's commitment to changing its citizenship legislation, which left many ethnic Russians stateless after Latvia became independent in 1991. But at the same time, he said the proposed amendments contain provisions that "raise doubts about the government's sincerity." "Latvia will still have to do a lot to improve political and civil rights," he commented. Singling out the provision for automatically granting citizenship to all children born of stateless parents in Latvia since 1991, Avdeev noted that the proposed change requires that a citizen have no criminal record for five years. Since the children in question would be no more than seven years old, that provision implies the citizenship process will drag on for years, he argued.

3. Duration

4. Location


Continent: Europe
Region: Eastern Europe
Country: Latvia

5. Actors

Latvia and Russia

II. Environment Aspects

6. Type of Environmental Problem

Energy

7. Type of Habitat

Temperate

8. Act and Harm Sites:

Russia and Latvia

III. Conflict Aspects

9. Type of Conflict

Interstate

10. Level of Conflict

Threat

11. Fatality Level of Dispute (military and civilian fatalities)

None

IV. Environment and Conflict Overlap

12. Environment-Conflict Link and Dynamics:

13. Level of Strategic Interest

Bilateral

14. Outcome of Dispute:

Compromise

V. Related Information and Sources

15. Related ICE Cases

16. Relevant Websites and Literature


Europa World Year Book
Political Handbook of the World
The World Factbook
World Population Prospects
"Post Perspective: Latvia-Russia." Editorial, The Washington Post. April 14, 1998.
Rosengaard, C. "The Past is a Lost Country: Family Narratives among Ethnic Russians in Latvia." Anthropology of Eastern Europe Review 14(1) 1996.
Deutsche Presse-Agentur (in German)
Reuter News Service
Interfax News Agency
Ventspil Free Port
"RFE/RL NEWSLINE"
Center for Russian Studies