Volume 11 Numbers 1/2

Winter/Spring 2002

Constitutional Watch
     A country-by-country update on constitutional politics in Eastern Europe and the ex-USSR

Russia - President Vladimir Putin began the new year with a new round of initiatives aimed at controlling the scope of public debate, strengthening the central state, and liberalizing economic relations. While debate raged among competing factions over the closure of the last independent television broadcaster in the country, TV-6, critics were charging the government with systematic intimidation of journalists and academic researchers. Meanwhile, Putin was signing a range of important legislative acts on labor relations, pensions, and judicial reform, shepherded through a compliant Federal Assembly, and implementing measures designed to strengthen the "vertical power" system.

At midnight on January 21, the Moscow Independent Broadcasting Corporation's TV-6 was taken off the air, effectively ending the battle over the last remaining television broadcaster in Russia not closely associated with the Kremlin. As with the demise of NTV last year (see Russia Update, EECR, Vol. 10, Nos. 2/3, Spring/Summer 2001), the closure of TV-6 was met with howls of protest from the affected journalists, many of whom had formerly worked at NTV. Foreign governments also expressed concern, but the Russian public showed little of the passion that produced street protests in support of NTV in 2001. The closure of TV-6 followed closely the pattern established in the NTV case. The company's failure to turn a profit was used by minority shareholders, in this case the oil giant LUKoil, to obtain a court order liquidating the company and forcing out its owner, former Yeltsin supporter Boris Berezovsky. According to the ruling of the Supreme Arbitration Court, TV-6 was to be liquidated and a competition held to reallocate the company's broadcasting license. This process was expected to take about six months, during which time it was expected that TV-6 would be allowed to continue broadcasting. However, by January 21, after various efforts by TV-6 journalists to rid themselves of the association with Berezovsky and organize a new bid for the broadcast license, the broadcasters rejected the temporary deal they had reached with the media minister, Mikhail Lesin. Lesin then sent in the police to close the station and cut off electricity, telephone, and internet connections.

The manner of the station's closure prompted several Russian NGOs to write in protest to the Council of Europe, while a Russian media expert, Aleksei Samokhmalov, told Moscow reporters that the closure was illegal since the company's liquidation should have taken place over the six-month period rather than being implemented immediately. However, lacking jurisdiction over the affair, the Council of Europe could offer little more than political support to the ousted journalists.

After the closure of TV-6, its frequency was turned over to free broadcasting of sports events, allowing many Russians to watch extended coverage of the Winter Olympics and significantly damping public dismay over the loss of TV-6 programming. A poll conducted among 1,500 people nationwide by the Public Opinion Foundation confirmed the general apathy of the broader public. In the poll, reported by Interfax on January 24, only 51 percent of respondents said that they could pick up the TV-6 frequency, while 63 percent said they were not interested in the ongoing controversy over the station.

As it had in the NTV case, the Kremlin publicly distanced itself from the TV-6 affair, claiming it was a business matter unrelated to press freedom or Kremlin influence. Political observers, on the other hand, had little doubt of the Kremlin's involvement. TV-6's majority shareholder, exiled tycoon Boris Berezovsky, had been conducting an increasingly vocal campaign against Putin, even threatening to implicate him in the 1999 apartment bombings in Moscow and other cities. Like NTV boss Vladimir Gusinsky before him, however, Berezovsky is at best a tarnished champion for liberal values like media freedom. A former Kremlin insider and leading member of Yeltsin's political "family," Berezovsky himself had fought viciously with Gusinsky when the succession to Yeltsin was still open. After falling out with Putin, Berezovsky was forced to flee charges of corrupt dealings at the airline Aeroflot and has been linked by Federal Security Service (FSB) director, Nikolai Patrushev, to funding "Chechen terrorists."

The eventual resolution of the TV-6 affair reveals the complexity and fluidity of Russian politics. In January, Minister Lesin scheduled the tender for the frequency used by TV-6 for March 27, and he underlined that TV-6 journalists were welcome to participate. TV-6 general director, journalist Yevgeny Kiselov, initially expressed skepticism at this offer. Nevertheless, on March 27, a partnership called Media-Sotsium unanimously won the broadcasting tender. Media-Sotsium's general director is Yevgeny Kiselov, and its financial partners include an A-list of pro-Kremlin oligarchs, including Yevgeny Primakov, head of the Chamber of Commerce and Industry; Arkady Volsky, head of the Russian Union of Industrialists and Entrepreneurs; Unified Energy Systems head Anatoly Chubais; and Chukotka governor Roman Abramovich. Primakov and Volsky have promised they will not interfere with the station's editorial policy. Kiselov has announced the station will resume broadcasting in late April or May.

Critics of the arrangement include Ekho Moskvy editor-in-chief Aleksei Venediktov, who said the deal "completes the redistribution of television property in Russia from one oligarch who was not loyal to the authorities to others that are," and Mikhail Gorbachev, who expressed skepticism of the independence the station would enjoy. Gorbachev's foundation had been one of the losing bidders in the tender.

Concern over press freedom these days is not limited to major broadcast networks but extends to the growing intimidation of journalists and academic researchers that is generating a climate of extreme uncertainty. In a Radio Free Europe/Radio Liberty report of January 28, physicist Pavel Podvig of the Center for Arms Control, Energy, and Environmental Studies claimed that at least 12 cases against researchers are currently making their way through the Russian judicial system. Podvig charged that each of these cases follows the same pattern of evidence fabrication, intimidation, and biased media coverage of closed trials. In particular, Podvig cited the case of defense analyst Igor Sutyagin, arrested and charged with treason in 2000 for preparing analyses based only on open sources. On December 27, 2001, a Kaluga court ruled that although the case against Sutyagin had been "fabricated," the accused must remain in custody while further investigation is carried out. The decision in the Sutyagin case came on the heels of a December 25 finding by a military court that former military journalist Grigory Pasko was guilty of "high treason in the form of espionage" for passing information on the dumping of nuclear waste by the Pacific Fleet to Japanese television.

The Pasko case saw a dramatic turn on February 12, however, when the military collegium of the Supreme Court supported an appeal by Pasko's lawyers and voided the secret 1990 list of state secrets used by the Ministry of Defense as the basis for prosecutions. On the following day, the Supreme Court, acting on a second appeal from Pasko, invalidated a law banning servicemen with access to state secrets from speaking with foreigners. The FSB claimed that Pasko's treason conviction did not depend solely on the invalidated decrees and refused to void his four-year sentence. On February 28, Amnesty International launched a campaign for Pasko's immediate release, claiming his conviction was a "political reprisal" for his exposure of nuclear dumping by the Russian Navy.

On December 30, 2001, President Putin signed a new Labor Code that came into force on February 1, 2002. The code, which has been several years in preparation, is a landmark piece of legislation that replaces the Soviet Labor Code of 1971. Consisting of some 14 sections and 217 articles, the Labor Code sets both the broad framework of labor relations, and many of the specific details of such matters as working hours, labor contracts, health and safety in the workplace, discipline, remuneration, and so on.

After passing a first reading of the bill in July, a government commission, including employers' representatives and leaders of the largest labor-union confederation (FNPR), hammered out a compromise proposal that ensured substantial majorities in both houses of the Federal Assembly. On the third reading in the State Duma, the bill passed by 289 votes to 131, with the liberal Yabloko faction joining the government's majority. In the Federation Council, the vote was even clearer with 104 senators in favor, 4 against, and 4 abstentions. Opposition to the Labor Code that had stalled its passage for several years largely melted away in the face of the alliance between the FNPR and the government. Communist and labor deputies and independent unions remained opposed to the legislation, but they were unable to mobilize mass support without the FNPR. Their protests, including a series of hunger strikes by air-traffic controllers in October, found little echo in Moscow.

Though the Federation Council chairman, Sergei Mironov, stressed that the new code was "four fifths the same as the old Code," many of the similarities deal with largely technical matters, and the legislation, in fact, introduces a number of significant changes to the way that labor relations in Russia are conducted. The key innovation is to introduce a notion of social partnership that greatly enhances the position of employers and the successor organization to the unions of the Soviet era, the FNPR, at the expense of more democratic post-Soviet independent trade unions. The legislation compels employers to enter into collective agreements but only with unions that organize more than 50 percent of the total workforce of a given enterprise. This provision will effectively isolate some of the most effective trade unions formed in the post-Soviet period, such as those representing air-traffic controllers, drivers, longshoremen, and other occupationally based unions that rarely make up more than 20 to 30 percent of the total workforce in a given enterprise. Moreover, only organizations that represent more than 50 percent of the workforce in an enterprise will be permitted to organize strikes. This will make the task of organizing coordinated industrial action along occupational lines extremely difficult, while greatly enhancing the institutional position of the quiescent FNPR at the expense of its more radical competitors.

The Duma majority and the senators supporting the legislation, on the other hand, stressed that the new code would, for the first time, offer secure legal guarantees to workers. These guarantees include recognition of the 40-hour week and 8-hour workday for most categories of workers, with increased compensation to be paid for working overtime. Workers will also be entitled to 28 days of paid leave that are acquired as of right after six months in a new job, rather than after the 11 months stipulated by existing legislation. Steps were also taken to address wage-arrears issues that have been endemic since the early 1990s. A ceiling of 20 percent on the proportion of wages that can be paid in kind was set, while wage arrears are to be indexed at 1/300th of the refinancing rate of the central bank for every day of arrears. When arrears have reached more than 15 days, workers are entitled to stop reporting for work. In addition to these measures, the new legislation was also sweetened by the inclusion of an additional public holiday, Defenders of the Fatherland Day on February 23. Another key "concession" by the government was a clause that requires the minimum wage to be no less than the government's estimated subsistence minimum. If implemented this would be a significant change since the minimum wage as of December 2001 stood at 450 rubles per month ($15), while the government estimated the minimum subsistence income to be 1500 rubles per month ($50). However, many were extremely skeptical that this commitment could be upheld, with Russia's Regions deputies estimating the cost to the government of doing so at about 2 trillion rubles.

This gap between promise and reality is emblematic of the deeper problem of the design of the new Labor Code at this point in Russia's history. The code is based on a highly institutionalized conception of labor relations in which coordinated bargaining replaces conflict, and interests are pursued within limited organizational contexts. In theory, force and compulsion are to be replaced by law. Such a system requires a very high degree of institutionalization and the strong rule of law to be effective. The level of institutionalization of labor relations in Russia is extremely low, however, and the rule of law is very weak. It is possible that the Labor Code will provide a framework within which the necessary institutions will be nurtured and grow. More likely, employers will continue to exploit their vastly greater strength relative to workers, even as labor will be forced to resort to the sporadic revolts, hunger strikes, railway blockades, and other extrainstitutional forms of protest that have characterized labor relations in the 1990s. Given such eventualities, the institutions of labor relations will remain largely discredited.

The Labor Code was just one of a series of important pieces of legislation adopted around the turn of the year. On January 6, President Putin signed three highly touted pieces of legislation, On Work Pensions, On State Pensions, and On Mandatory Pension Insurance, which together set the stage for a thorough overhaul of the pension system planned for early 2002. The aim is gradually to convert the pensions system from a pay-as-you-go arrangement in which current payments are financed by current contributions, into a fully funded system in which individuals progressively accumulate their own pensions. In the meantime, little will change for current pensioners, with the system of a baseline pension of 450 rubles per month ($15) and an annuity based on the number of years worked being retained. These elements will continue to be financed out of current contributions. However, starting in 2002, a third savings-based element will be added to the system. The intention is that 2 percent of all contributions to the Pension Fund will be savings-based in the first year, and that this element will increase every year, becoming the fundamental component of the system by 2040.

The switch to the new system has generated considerable excitement among financial-services companies, given the potentially enormous pool of savings that could be created and the potential profits to be gleaned from managing the investment of this money. Various estimates suggest that the accumulated pension contributions will be as much as $50 billion by 2010. With so much money at stake, the battles over the text were intense, and both insurance companies and the influential Russian Union of Industrialists and Entrepreneurs (RSPP), in particular, lobbied hard for a role for private companies in administering the system. In the initial stages, the Pension Fund will monopolize the market, but the legislation foresees allowing nongovernmental pension funds (NGPFs) to participate from 2004 on. The government has indicated that insurance companies and mutual funds will also be allowed to participate eventually, though the law as passed is silent on this.

On December 18, 2001, Putin put his signature to a package of measures that, together, were heralded as constituting the next major step in judicial reform and forming the cornerstone of a new relationship between the judiciary and the public. The measures consisted of amendments to three laws: two constitutional laws, On the Legal System and On the Constitutional Court, and one federal law, On the Status of Judges. In addition to regulating some controversial personnel matters, such as introducing an age limit of 65 for federal judges and 70 for Constitutional Court justices and limiting tenure in all courts except the Constitutional Court to two consecutive six-year terms, the legislation dealt with some important issues affecting judicial independence and the relative powers of prosecutors and defendants. Despite fierce opposition from the judiciary, the broad immunity from prosecution enjoyed by judges has been limited. Judges can now be indicted on criminal charges or face administrative punishment at the request of the procurator general following a decision of a panel of three Supreme Court judges.

After some debate, and Putin's personal intervention, it was agreed to provide judges with an extra layer of protection, by requiring the assent of the Supreme Qualification Collegium of Russian Judges to any charges. This additional layer involves judges' peers in protecting them from unfounded harassment by the executive. The courts were also further strengthened within the system by moving, as of 2004, the right to issue arrest and search warrants from prosecutors to the courts, although prosecutors will still play a role in the appointment of judges and will still have to approve any investigation.

The law also promises to introduce jury trials for all charges involving violent crime by 2003. The right to a jury trial is guaranteed by the Constitution of the Russian Federation but is currently only available in 9 of the 89 regions. Appeal courts, currently only available in 9 regions, as well, are promised for all regions. While the broadening of the right to jury trials and appeals should do something to begin to address the overwhelming power imbalance between prosecution and defense, it is unlikely that such changes will be dramatic. In the first instance, the introduction of jury trials has been balanced by strengthening the powers of judges to overturn jury verdicts, while nothing has been done to address such glaring inequities as the requirement that defense lawyers get the agreement of prosecutors before calling witnesses.

In addition to being a period of signing major legislation, the end of 2001 saw the final implementation of President Putin's reform of parliament's upper house, the Federation Council. The sitting chairman of the Federation Council, Igor Stroev, returned to his native region of Orel, to be replaced by Putin's choice, Sergei Mironov, from the president's hometown of Saint Petersburg. From January 1, 2002, the regional governors and chairmen of regional legislatures that had served as "senators" in the upper house were replaced by members appointed by each regional governor and legislature. In making these appointments, the regional authorities have generally chosen representatives intended to strengthen their lobbying power in Moscow. While the patronage possibilities of the appointments are being exploited to meet the tremendous variety of local political circumstances, many of the appointees are Moscow-based businessmen and lobbyists rather than figures with a public political profile in the regions. The East-West Institute's Russian Regional Report (vol. 7, no. 1) estimated that approximately one third of the new Federation Council members have a background in business rather than public politics or administration. Among the most flagrant examples of this practice was the appointment of a celebrated Moscow power broker, and head of Mezhprombank, Sergei Pugachev, as senator for the remote Republic of Tyva. Similarly, the president of the Republic of Kalmykia, Kirsan Ilyumzhinov, appointed two outside bankers with no public political standing in the region. Igor Provkin of the Russian Bankers' House was quoted as saying that he had had offers of Senate seats from a range of different regions but considered the Kalmyk offer one he could not refuse.

Part of Putin's package of reforms of the system of relations between the center and regions came under scrutiny by the Constitutional Court in January. The parliaments of the republics of Adygea and Sakha argued before the justices that the powers granted to the president to remove regional governors and dissolve regional legislatures were excessive and beyond what the Constitution allowed. As the law currently stands the president may dismiss a governor if a court has ruled that the governor in question had failed to bring regional legislation into conformity with Federal law, or if serious criminal charges had been brought against him. To dissolve a regional legislature the president must present appropriate legislation to the Duma. To date, it seems that these powers are sufficiently circumscribed as to be largely unusable, though experience with them is still very short. A ruling is expected in the spring.

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