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31 May, 2011  ▪  Alla Lazareva

Camille Magnard: “Kryvorizhstal Is a Reflection of Contemporary Ukraine”

The French journalist Camille Magnard speaks about why the ex-CEO of Kryvorizhstal failed to stand the test of Ukrainian reality Camille Magnard’s report about Kryvorizhstal entitled “Arcelor Mittal tested by Ukrainian steel” and broadcast by Radio France Internationale on 2 March 2010, won the Louise Weiss Prize, an annual award from the Francophone section of the Association of European Journalists

ADVENTURES OF THE FRENCH IN KRYVYY RIH

U.W.: Was it hard to get permission to do your work at Kryvorizhstal?

“No, it wasn’t, but it took a long time. A chance to see the iron works presented itself when my wife and I met the CEO of Arcelor Mittal Kryvyy Rih, Jean Jouet, who is a Frenchman. He ran the company and, in a sense, the city. Initially, we spoke informally, off the record. I think he had these pent-up feelings which he wanted to share. Later we convinced him to go public with what was going on in and around the company. When you happen to work in countries like Ukraine, as soon as you touch metallurgy, mines and coal, your paths are bound to cross with those of oligarchs and criminals. Mr. Jouet told us the most incredible things.

“From the moment when he decided to take public steps, we had no problem with accessing information about Kryvorizhstal. We also met with Valentyna Semeniuk, the former head of Ukraine’s State Property Fund. She was against this privatization and thus embraced the opportunity to voice her criticism. Ordinary workers were reluctant to say much at the entrance to the company’s premises but were very forthcoming in answering all our questions when we were talking in their apartments. Incidentally, The Ukrainian Week’s photographer, Sashko, was of a great help to us. In general, it is not hard to speak with people in Ukraine unless they are in ministries and top administrations.

“Mr. Jouet is no longer working in Kryvyy Rih — he quit the job. There was pressure, intimidation and attacks on his assistants. In his last months in office he had to move around in a car with dark-tinted glasses in the company of his bodyguards. He was threatened. In the summer of 2009, shots were fired. Fortunately no one was killed, but some of his staff were badly wounded. A very unfriendly atmosphere…

“The status of the CEO of a big plant in post-Soviet territory is very different from the corporate culture in France. This man was used to the West European format, the standards of Arcelor. He did not find it too comfortable to work with the Indian top management, either.”

U.W.: Why?

“The Mittal group wanted to make the production profitable at any cost. This is a very liberal, aggressive strategy of putting profits above everything else. Mittal did not see any problem with using shadow schemes in agreement with the local oligarchs, while to Mr. Jouet the standards of business ethics are not empty words.”

U.W.: In your report you mention a conflict of three production cultures…

“Yes, it was an incredibly interesting thing to see. This was a mixture of Arcelor, a pearl in Western metallurgy; Mittal, an emblem of the cruel capitalism in rapidly developing countries; and of a socialist mono-industrial city in which everything revolves around one company. This is a unique industrial context. As a result, there were serious tensions – not only with highly active trade unions but also with the criminal groups. The company is, as it were, a picture of Ukraine as a whole.”

U.W.: What did the shadow businessmen demand from the company’s management?

“I believe the conflicts were caused by the fact that, among other things, the French CEO refused to play by the rules the local criminal authorities tried to impose on him. He told us, for example, that he refused to buy coal on conditions suggested by a Donetsk trader. It made sense to use Donetsk coal in Kryvyy Rih, but from the economic viewpoint the offer was inadequate. So Mr. Jouet decided to import coal from South America. They did not take it well in Donetsk. It seemed like [Viktor] Pinchuk, [Rinat] Akhmetov and other oligarchs still couldn’t come to terms with the fact that foreigners had won the tender. They did everything they could to make things complicated for the new owner, evidently hoping for another privatization. I believe that there was a risk of this happening, especially after [Viktor] Yanukovych was elected president. Many people in Ukraine would have gained from seeing a foreign investor like this leave the country.”

U.W.: Mr. Yanukovych is said to have received the Legion of Honor from the French government in 2010 precisely for protecting Kryvorizhstal against Ukrainian oligarchs.

“Maybe, but I think there was more to it. I heard from a high-ranking French diplomat that both Paris and Brussels put some serious pressure on Kyiv at the time. That the Prosecutor General’s Office dropped the case against Arcelor Mittal Kryvyy Rih immediately after Mr. Yanukovych’s return from Paris was hardly a mere coincidence.”

U.W.: In your opinion, why were both Louise Weiss prizes awarded for reports from Eastern Europe this year?

“Indeed, the other winner, Blaise Gauquelin, won the prize for his article published by L’Express about the death squads of Chechen President Kadyrov. The Association of European Journalists is thus emphasizing that Europe is not limited to the borders of the EU. The association has 25 sections, including a Ukrainian one.”

A WAYTO UKRAINE

U.W.: Unlike many French journalists you found your way to Ukraine bypassing Moscow, right?

“Yes, before coming to Kyiv my wife and I worked in Central Asia for a year. We wrote about Kyrgyzstan, Kazakhstan, Uzbekistan, and so on. Then, all of a sudden, we received an offer from Radio France Internationale to replace a journalist in Kyiv who incidentally had gone to Moscow. It all happened totally unexpectedly, but we thought: Why not? We already know one former Soviet region. We stayed in Ukraine for three years and returned to France in late 2010.”

U.W.: Did your earlier notions of Ukraine match your first impressions?

“This was early 2008, the decline of Orange illusions. Like most Western journalists, we viewed the Orange government from a distance as a moral and virtuous one. Once we came here, we quickly grasped that Ukrainian society, politicians and Western diplomats were becoming increasingly disillusioned with [Viktor] Yushchenko and [Yulia] Tymoshenko. We happened to sum up the results.”

U.W.: What were the conclusions you made as a foreign journalist? In your opinion, why did the Orange representatives lose in the presidential election?

“People were disappointed. Those who voted for them in 2004-2007 and who wanted to believe in the revolution later had to admit: these leaders had failed to keep their promises. What stayed with me personally from the reports we made in 2010 was the feeling of confusion and discouragement. I think that the bar had been set too high and, at the same time, the Orange government was not going to or could not abandon the practices of previous Ukrainian rulers. But it didn’t seem to me that it wanted real changes. This is not a uniquely Ukrainian situation. Look at what is happening with the Arab revolutions. We are being told that the changes are fundamental and irreversible. But in fact the force of inertia is pulling them down and the true tests are still ahead.”

U.W.: What topics did you cover in Ukraine?

“A bit of everything. A lot of political and economic stories. I won a prize from the Association of European Journalists for a report on the economy. My work on Kryvorizhstal was an attempt to figure out the games played by the economic and political elite. It is very hard to explain all these cobwebs of interests to the French, but I tried to overcome the established stereotypes.”


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