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Xenophobia masquerading as environmentalism How politics, money, and racism turned Irkutsk against a Chinese bottling factory at Lake Baikal

Source: Meduza

The construction of a bottling facility in the Lake Baikal area has been suspended, and the project’s Chinese investors might lose their lease on land that’s now home to a half-finished factory. For the past two months, the Irkutsk region and Moscow have witnessed a sustained mass campaign against the facility, even though there are other similar enterprises already operating at Lake Baikal. The factory's opponents include singer and cosmetic artist Sergey Zverev and television presenters Victoria Bonya and Elena Letuchaya, and there are more than 1 million signatures on a Change.org petition calling for an end to the project. Even Prime Minister Dmitry Medvedev has weighed in against the bottling facility. In a special report, Romb Story journalist Natalya Telegina explains how a Chinese factory became the target of a mass protest, and how this campaign benefits both local politicians and oligarch Oleg Deripaska.

Zverev, Bonya, Letuchaya, and then Medvedev and environmental protection officials came out against a factory that nobody had complained about previously

On March 3, dressed in a dark sheepskin coat, with a large golden crown on his head, singer and cosmetic artist Sergey Zverev braved Red Square’s subfreezing temperatures. He held a banner than read, “Against the construction of the plant at Baikal.” The next day, he repeated the display, except this time he wore a gold down jacket, and he’d added hearts, the words “I” and “superstar,” and his own elaborate signature to the poster. Ever since, the celebrity has regularly posted photos and videos about Lake Baikal.

At a press conference in Irkutsk on March 15, joining a panel of three relatively unknown but thoroughly embarrassed ecologists, Zverev expressed his feelings about Lake Baikal’s future and explained his protests against the local bottling facility. “They’re already starting to pump the water out of Baikal,” he announced. “We need to find out who specifically gave away control over this world heritage [site]. This bureaucrat presumably didn’t allow future generations’ heritage to be squandered for free.”

A day before Zverev’s press conference, a court in Irkutsk granted a petition by the Western Baikal Interdistrict Environmental Prosecutor's Office and suspended construction of the bottling facility in Kultuk. On March 27, the court definitively prohibited further work at the building site and revoked a permit issued by the local authorities. On May 7, following a lawsuit by the same environmental prosecutor’s office, an arbitration process began to terminate the lease rights issued to “AkvaSib,” the project’s investor, on land that’s now home to a half-finished bottling facility connected to pipes that extend into Lake Baikal.

Zverev is no stranger to Kultuk. Though the celebrity was born in the village of Guzhiry, on the other side of Baikal, he spent his childhood in Kultuk, where his mother worked as a technician at a meat-processing plant, and his father was a car mechanic. Nevertheless, Zverev’s opposition to the bottling factory in Kultuk marks the first time he’s gone public about an issue related to the Baikal area. He never demanded the closure of the Baikal Pump and Paper Mill, and he’s never discussed the toxic waste left behind after the mill closed down in 2013. Other bottling facilities that pull from the lake also failed to attract Zverev’s attention. Asked why he ignored these other enterprises, Zverev said, “I can’t do everything at once.”

The factory in Kultuk has enraged other celebrities, too. “You and I are temporary residents, and Baikal is our Father,” TV presenter and model Victoria Bonya wrote on her Instagram. “You can’t walk up to your own father, and stick him with an ice pick or a knife — he won’t die, the wound will heal, and his blood will be restored, but you can’t do this because it would hurt your father! So why do you think Father Baikal isn’t hurt by the pipes rammed into it?” Bonya asked her 6.3 million subscribers.

Since early March, Bonya and Zverev have posted several ominous reports about Lake Baikal, including a topographical drawing of the bottom of the lake with all the water removed. Television presenter Elena Letuchaya has joined their campaign, calling on her 1.3 million Instagram followers to sign a petition against the new bottling plant. Some popular media outlets have also promoted the effort. For example, the network NTV aired a segment about how the construction hurts local residents (they’ll be left without anywhere to swim) and different rare birds (they’ll lose their nesting grounds). An online petition at Change.org, created two years earlier, suddenly got more than a million signatures in a matter of days. (At the time of this writing, the petition has almost 1.2 million endorsements.)

In mid-March, when meeting the Russian team at the closing ceremony of the Krasnoyarsk 2019 Winter Universiade, Prime Minister Dmitry Medvedev also addressed the factory in Kultuk, vowing to investigate the enterprise’s compliance with “the highest environmental standards.” Following Medvedev’s remarks (which came several years after the construction started), the Western Baikal Interdistrict Environmental Prosecutor's Office suddenly revealed that the project doesn’t meet building standards. The factory hurts rare and endangered birds, officials say, and the investor (the company “AkvaSib”) allegedly violated regulations during public hearings before construction began.

Kultuk locals initially welcomed the bottling plant, but later grew to hate it

Turning the dial on her gas stove, Lidiya Polekhina boils a large pot of pozy, a Buryat dish similar to Georgian khinkali that’s popular in the Baikal area. Periodically checking the food, she talks about Chinese expansion. Polekhina is a Kultuk city councilwoman and a member of the Communist Party of the Russian Federation (KPRF). Hanging on the wall is a portrait of Pavel Grudinin, the entrepreneur her party nominated for president in 2018. Seated at the table in her kitchen is her friend Galina Bogdanova, a former city councilwoman, also from KPRF. “Let the Chinese come here, and they’ll drain Baikal, one cup at a time. Each of them will fill a single cup, and there’ll be no more Baikal!” Polekhina says angrily. Her friend nods.

The two women say they attended a public hearing almost four years ago, on November 18, 2015, at a local school to discuss the construction of AviaSib’s bottling facility. Together with 50 other participants, Polekhina and Bogdanova voted in favor of the factory. At the time, they say, the project seemed like an okay idea: Kultuk’s population is just 4,000 people, and it’s roughly 100 kilometers (62 miles) to Irkutsk. During the Soviet era, Kultuk had more than 20 enterprises, not one of which remains today. Locals get by on subsistence farming and public-sector work. The bottling facility would have created 148 jobs, allowing the town to hold onto some of the young people who are now moving away in search of employment.

Governor Sergey Levchenko, the Communist politician who’d just come to power in Irkutsk, also supported the project. Representatives of the factory reported that AkvaSib passed its environmental impact survey, which supposedly found that the bottling facility would be so safe and ecologically friendly that it could be built within Baikal’s water conservation zone.

The public hearing in November 2015 didn’t last long. Polekhina says she asked a few questions, including one about average salaries at the factory (the answer: 20,000 rubles, or about $305, a month), and Bogdanova wanted to know if the project’s investor might consider also building a public bathhouse (the answer: no, not right now). And then everyone voted unanimously in favor of the construction.

“It was a farce, not a hearing. They merely informed us, after the fact,” Polekhina says today. “Even if I was without so much as a breadcrumb for my child, I personally wouldn’t go work for the Chinese. We have to get the Chinese out of here!” Bogdanova says, banging her spoon on the table.

When locals talk about “the Chinese,” they’re referring to AkvaSib, a company founded in 2012. Various media reports, as well as speeches by Sergey Zverev and other celebrities, have revealed that 99 percent of AkvaSib belongs to the business “Lake Baikal,” which is based in the Chinese city of Daqing, and the remaining 1 percent is owned by Olga Mulchak, a Russian national. Olga’s daughter, Olesya Mulchak, served as AkvaSib’s director. In 2013, she and her husband, Sun Zhenjin, were arrested for smuggling lumber, after working in the industry since the mid-1990s. Olesya was released, but her husband served five years in prison. Prosecutors originally estimated that the smuggling operation caused 2 billion rubles ($30.6 million) in damages, but later lowered this figure to 90 million rubles ($1.4 million).

In April 2014, someone named Arthur Mulchak (Meduza has been unable to determine his possible relationship to Olga and Olesya Mulchak) tried to bail out Zhenjin for 6 million rubles ($91,650). By this time, Olesya Mulchak and AkvaSib already had plans to build a factory that would supply China not with lumber but another precious resource: natural drinking water. The company hoped to build the facility on the shore of Lake Baikal by late 2019, and raise annual production to 193 million liters (51 million gallons) by 2022 — more than three times the 64 million liters (17 million gallons) of water bottled by Baikal’s existing six factories. AkvaSib’s total construction costs were expected to be about 1.5 billion rubles (almost $23 million).

Kultuk locals have expressed little interest in the dealings of Olesya Mulchak or her husband. Today, what matters to residents is the fact that the bottling plant is Chinese. In conversations, people in Kultuk repeatedly mention some Chinese school textbook that allegedly claims all Russian territory east of the Urals for the People's Republic of China. Locals fear the expansion of Chinese businesses is the first step in this land grab.

“Both China and India — the people living there are like cockroaches on manure,” says 59-year-old Mikhail Tarasov, a former forester who now works as a masseur in the Buryat resort village of Arshan. “In cellars! Underground! They’ll come here, and we’ll be living in underground cellars, too.”

Mikhail lives in the neighboring village, but every morning he comes to the shore, to the “Chinese factory,” and walks along the pier, leaning on his cane. At first, he watched the construction process and wrote reports on social media for local activist groups. Today, he checks to see if work at the building site has really stopped.

Tarasov’s wife, Elena, agrees: “I’m generally against the idea of the Chinese setting foot on my land [and] acting like they own the place. Why do we need foreigners at all? You know, I’m just a patriot.” She proudly recalls a woman-entrepreneur in town who wanted to sell her hotel, but refused to sell to the Chinese, even though they offered her a good price.

The pier where Tarasov takes his morning strolls is left over from a Soviet-era oil depot. In photos of the area from 2004, you can still see the old storage tanks. Asked if the oil depot wasn’t an environmental threat to Lake Baikal, Tarasov looks shocked, and says, “That was a state operation! Don’t go confusing private enterprise with the state! [Soviet workers] ran a tight ship, and never spilled a drop.”

Why the locals dislike the Chinese, and how Russia’s state-imposed prohibitions facilitate this animosity

Sitting in his office in Kultuk’s inconspicuous town administration building, Yuri Sharapov is clearly uncomfortable. In October 2017, he was the official who issued the building permit for AkvaSib’s bottling facility. Sharapov says the company passed all the long and tedious regulatory procedures, and he saw no reason to reject the project. Today, however, Sharapov’s constituents see him as a traitor and a homegrown accomplice of the Chinese.

When asked about environmental regulators’ issues with the factory and the allegations that public hearings were mismanaged, Sharapov throws up his hands and says everyone involved in the process four years ago thought the hearings were handled correctly. The endangered birds, he explains, do nest in the Talovskie Marshlands, but that area is actually slightly removed from where the construction site is. “There [used to be] oil storage tanks there. There couldn’t have been any birds there,” Sharapov says exhaustedly, before recovering and adding, “But the prosecutor’s office knows better, of course.”

It’s hard to say how Kultuk became so hostile to the Chinese. In the village itself, you encounter them only occasionally in tourist groups riding the Circum-Baikal Railway. Even this irregular contact, however, manages to upset the locals, who complain unashamedly about Chinese people being loud and messy.

Visitors from China are a more noticeable presence in Listvyanka and Olkhon, the two main resort towns on Lake Baikal, where they own many hotels and restaurants that cater primarily to Chinese tourists. A decade ago, only isolated Chinese groups came to the region, but interest has exploded more recently. In 2017, the Irkutsk region welcomed 136,000 Chinese visitors. A year later, the number rose to 186,000.

Like a lot of the local establishments, many Chinese hotels in the region were built in violation of environmental regulations, which has attracted increased attention from residents. Kultuk head Yuri Sharapov says the environmental prosecutor’s office tightened control over the area in early 2019 and forbid local entrepreneurs from building within Baikal’s water conservation zone. This, in turn, only intensified the animosity against AviaSib’s factory.

And there’s something else about the Chinese that gets under locals’ skin: illegal logging. The Irkutsk region is a major source of illegal lumber, and China is this black market’s main consumer. Chinese businessmen involved in the trade, moreover, often travel between villages in the area and oversee the process.

How a local political consultant became Lake Baikal’s defender and brought attention to the issue with Chechen leader Ramzan Kadyrov’s help

In February 2019, on a hillside overlooking Kultuk, a banner with Chechen leader Ramzan Kadyrov’s portrait and the words “RAMZAN! #SAVE_BAIKAL” suddenly appeared. It wasn’t there for very long — just enough time for people in passing cars to photograph the scene and share it on social media. It turns out this stunt was the handiwork of Irkutsk resident Denis Bukalov and his team, who a few months earlier registered a public organization called “Ekozashchita 365” (Environmental Protection 365) to help activists in Kultuk file an appeal with the local prosecutor’s office.

Around the same time, Sergey Zverev started picketing outside the Kremlin, Elena Letuchaya discovered the Change.org petition, and Victoria Bonya was suddenly inspired to write a short essay about Baikal. On social media, there was a campaign to promote the hashtags #спаси_байкал and #baikal_save, which was the title of a press conference Denis Bukalov held in Irkutsk in late February 2019 and the slogan of a public demonstration in late March. On social media, Zverev, Letuchaya, and Bonya all shared hashtags and hyperlinks to groups with these names, as well.

Meduza sat down with Bukalov at a cafe in one of the shopping malls in Irkutsk. He arrives dressed in a white sweatshirt labeled “Baikal,” the same one he’ll wear at a rally in defense of the lake in late March. He says little about himself: he lived in St. Petersburg, moved to Irkutsk in 2010, and works in advertising. Today, he concentrates all his energy on saving Lake Baikal. According to Russia’s Unified State Register of Legal Entities, Bukalov owned a lumber wholesaler from 2011 to 2017.

For the past three years, Bukalov has built a reputation in Irkutsk as a public relations consultant. His “creative communications agency,” named after Soviet cosmonaut Yuri Gagarin, established itself through several campaigns released through its “Explosive PR!” social-media accounts. For his first major client, power-lifter Oksana Kosheleva, Bukalov organized events where she towed a Mi-8 twin-turbine helicopter and later multiple streetcars weighing more than 42 tons. Afterwards, with Bukalov’s help, Kosheleva mounted a search for her biological parents, who she says killed a man when she was two years old. They supposedly tossed her overboard from a boat while fleeing the police, and she miraculously survived.

Next, Bukalov’s agency turned its attention to social issues, directly confronting the Irkutsk region’s Communist Party leadership. In August 2017, dressed as the Grim Reaper, Bukalov dragged four small coffins to the front of the Regional Administration Building, ostensibly to raise awareness about children dying at a local psycho-neurological nursing home. (Six months earlier, an intestinal infection outbreak at a facility in Cheremkhovo killed four minors.)

Asked why he’s concerned about the bottling plant in Kultuk, when there are already six active factories along Lake Baikal, Bukalov says he’s only responding to the assessments of environmental protection officials. “I’m telling you: the problem emerged here, and we got involved,” he explains somberly. “If it hadn’t come up, we’d be dealing with the waste at BTsBK [the Baikal Pulp and Paper Mill].” And then, suddenly animated, Bukalov adds, “You know, some people call us clowns, and some people say we’re would-be ecologists.”

On March 24, activists assembled for a rally at a public park in Irkutsk in support of Lake Baikal. The demonstration was supposedly apolitical, but it included a speech by the city’s mayor, United Russia member Dmitry Berdnikov, who declared that the people of Irkutsk are Baikal’s greatest defenders. The event also featured a performance by a Buryat dance ensemble, the crowd sang songs about the lake, and after two hours everyone lined up in the shape of a heart for an aerial drone photo.

What’s in it for the local politicians?

The gates of the Kultuk factory are closed tight. There’s a large sign posted that says all construction work has been suspended, and tarps cover the unfinished plant’s doorways. When Meduza visits, there are three souls wandering the site: AkvaSib chief electrical engineer Alexey Markulis, a security guard named Viktor, and a dog named Naida. Markulis was born and raised in Kultuk, and he spent six months working on the factory, before regulators shut it down. He has his own theory about why the village turned against the project: “It’s psychotronic technology — brainwashing. It’s not about the facility or the bugs or the cockroaches of the migratory birds. This is about politics.”

Markulis and Naida walk along Baikal’s ice, passing a trench that threads pipelines into the lake to draw water. At the shore, the pipes are supposed to be buried in the sand, emerging only underwater. The plan was to pump at a depth of 400 meters (a quarter of a mile), 2.5 kilometers (1.6 miles) from the coastline. These are the same pipes that “painfully wound Father Baikal,” according to Victoria Bonya.

“I think these activists are playing political games. Our governor is a communist, and the mayor is from United Russia. It’s a competition! A political competition,” Markulis says, adding that he doesn’t really care about the factory, and only hoped to earn a decent living before he retires.

Sergey Bespalov, an Irkutsk politician who supports anti-corruption activist Alexey Navalny, thinks he knows who’s behind the attacks on the Kultuk factory, and why the construction has become a political issue. He says Markulis is right: “We’re witnessing a real, honest fight between United Russia and the Communist Party. Governor Sergey Levchenko is a communist, and KPRF also has a majority in the regional parliament. And United Russia has a monopoly on the [Irkutsk] city council, which also appoints the mayor. This September, however, there will be new elections, and United Russia’s position doesn’t look so good. If the party loses the city council, it will have definitively lost Irkutsk,” explains Bespalov, who is running in September’s race as an independent.

But how do the bottling facility’s Chinese investors factor into this political conflict? “The funny thing is that both sides — United Russia and the Communists — have used anti-Chinese rhetoric. They’ve said things like: let’s close the Chinese factory! It’s become a sort of hockey puck,” Bespalov says. “But it played out more convincingly for United Russia, because it was a communist governor who allowed the project.”

Oleg Deripaska has his own bottling facility, and he’s no fan of Governor Levchenko

On January 21, 2019, Oleg Deripaska shared a photo of a frozen lake on his Instagram account, with a short caption that read, “Went to Lake Baikal instead of Davos. To fish.” Fishing isn’t the billionaire’s only connection to the region, however, and Alexey Navalny revealed some of Deripaska’s local investments later that same day. In a long blog post, Navalny claimed that Deripaska orchestrated the criminal prosecution of Nastya Rybka. His report cites three recorded telephone conversations uploaded to YouTube that supposedly include Deripaska. The first two calls are about Nastya Rybka, while the third concerns the purchase of a bottling factory.

In the third recording, someone (supposedly an employee at Deripaska’s aluminium company, Rusal) discusses the launch of “48 enforcement proceedings in Irkutsk” with the aim of putting pressure on a certain stubborn businessman. “We’ll enter into talks with him, take the water, and that’s about it,” says the man. Another voice (apparently Deripaska’s) then complains that too much time has been spent on this project. After Navalny’s report, Deripaska got a legal injunction demanding the deletion of the YouTube videos, but two of the three remain accessible to this day. The court’s ruling, moreover, says all but explicitly that one of the voices on the tapes belongs to Oleg Deripaska.

Journalists in Irkutsk suspect that the conversation was about a bottling plant in the Baikal area called “Legend of Baikal Trading House.” The company has a permit to pump more than 70 million liters (18.5 million gallons) from the lake each year, but between 2015 and 2017 it only managed to draw 3 million liters (792,516 gallons) annually. In late 2018, after lengthy negotiations, the factory was acquired by businesses tied to Deripaska for 150 million rubles ($2.3 million).

The facility is currently a small operation (the company earned only 50 million rubles, or $772,250, in 2017, employing just a few dozen people), but the new owners are expected to expand production volume. Without a doubt, the most promising market for these goods is in China.

Oleg Deripaska is one of the most powerful businessmen in the Irkutsk region, with two aluminum factories (in Bratsk and Irkutsk) three hydroelectric power plants (in Bratsk, Irkutsk, and Ust-Ilimsk), and various infrastructure enterprises.

For more than a year, Deripaska and Governor Levchenko have been at loggerheads over the Irkutsk airport — one of the few airports in Russia that is still fully state-owned. In 2015, the federal government transferred shares in the airport to the regional government on the condition that local officials hold a bidding process to find a private contractor to build a new terminal. In May 2018, however, Levchenko’s office revealed that he would hire the companies himself, without any bidding process, for 7 billion rubles ($108.1 million). The governor then selected Roman Trotsenko’s Novaport transport company and the state corporation Rostec. Deripaska, who had planned to compete for the airport contract, was not happy.

“There’s a scandal unfolding over there about why the project was awarded to this company and not that one, and Oleg Deripaska allegedly wanted to participate over there,” Rostec CEO Sergey Chemezov acknowledged in an interview with the newspaper Vedomosti in late December 2018.

After the airport deal, the Irkutsk branch of Russia’s Federal Antimonopoly Service carried out onsite inspections of Governor Levchenko’s administration, searching regional officials’ offices, which prompted lawsuits against the agency. To this day, the fight over the airport isn’t over, and both sides will meet in Moscow’s Arbitration Court (though a date hasn’t yet been determined).

“It so happened that Deripaska’s interests intersected here: the bottling plant and the war with the governor,” says a representative for AkvaSib, not wishing to disclose their name. “We’re not sure that he’s somehow involved in the campaign against us, but we believe it’s entirely possible.”

The director of a local research institute that studies Baikal’s natural environment (who also prefers to remain anonymous) says AkvaSib’s factory poses no threat. Bottling water is the safest enterprise that exists in Baikal, the researcher says, and the lake’s water supply is in no jeopardy. “The mighty Angara River flows from Baikal, and in the end it’s nothing. It hasn’t made Baikal any shallower,” the source says. “The Chinese are in shock, of course. They spent several years doing everything the right way, filling out all the paperwork, and then suddenly it’s attacks, public hysteria, manipulations, and the prosecutor’s office trashes a 1.5-billion-ruble [$23.2-billion] project, like it’s nothing. Right now, this looks like a victory for AkvaSib’s opponents, but this whole story will catch up to our country at the international level.”