Moscow's Green Giant

Environmental honcho Oleg Mitvol isn't afraid to make enemies

He's fast becoming one of Russia's best-known public figures, and his face is seen regularly on television and in newspapers. Now, Oleg Mitvol is making waves internationally as he takes on Russia's biggest foreign investors.

Mitvol is deputy head of Rosprirodnadzor, Russia's environmental protection agency. Although Rosprirodnadzor had long been a government backwater, under Mitvol's lead the agency is waging a campaign against the huge Sakhalin II oil and gas project in the Far East. Mitvol says Sakhalin Energy Investment Co., 55% owned by Royal Dutch Shell PLC (RDS ), has caused up to $50 billion in environmental damage with its drilling platforms and pipeline. "We'll defend Russia's environment, and we'll defend it openly," Mitvol declares.

The Sakhalin II project is the biggest foreign investment in Russia (BW--May 15), but that's not stopping Mitvol from threatening to sue Sakhalin Energy for billions of dollars in damages. Prosecutors are also investigating whether the company violated any laws, which could lead to fines or prison for its executives. Sakhalin Energy acknowledges that the project has faced challenges but argues that it is doing its best to meet Russian demands. Royal Dutch Shell CEO Jeroen van der Veer says the company is trying to ensure that the pipeline is "in line with all regulations.... But if we make a mistake, we have to correct that."

Mitvol's eye for publicity is unusual for a Russian official. But he's no ordinary bureaucrat: The 40-year-old Mitvol became a millionaire in the early days of Russian capitalism, before he joined the government. He got his start organizing trips for Western tourists in the late 1980s and early '90s. Then he earned some $20 million through Russia's privatization program and by investing in media, chemical, food processing, and other companies.

In 2004, Mitvol quit business to work at Rosprirodnadzor. It didn't take long for him to make a name as an environmental gadfly. In one campaign, for instance, he targeted the luxury homes of pop stars and politicians that were built on protected land. Rosprirodnadzor "has done a great deal of good," says Ivan Blokov, campaign director for Greenpeace Russia. But some question Mitvol's motives in the Sakhalin effort, saying the Kremlin is using Rosprirodnadzor to pressure Sakhalin Energy to renegotiate its agreement with Moscow. Under the 1994 deal, Russia doesn't make money on Sakhalin II until after Sakhalin Energy recovers its costs, which the company announced last year would double, to $20 billion.

Mitvol denies he's following orders from on high. "No one tells me what to do," he says. Far from encouraging his campaign, he adds, senior officials are trying to put the brakes on it. In an odd twist, police raided Rosprirodnadzor on Oct. 18, seizing documents related to Sakhalin II. While Mitvol says he's not being investigated, it may be no coincidence that Rosprirodnadzor recently began looking into Russia's own energy giants. Undaunted, Mitvol says he'll challenge anyone who breaks the rules--even if that means making enemies of those with connections in high places.

By Jason Bush

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