VEB.RF Chief Legal Officer Igor Krasnov: Modern Russian Arbitration Centres Are Best Dispute Resolution Platforms
The conference focused on the five year reform of the Russian arbitration institute and moderated by Head of the Russian Union of Industrialists and Entrepreneurs Aleksander Shokhin was held as part of the Russian Business Week. The participants discussed the current state of Russian arbitration system and future measures aimed at its development and improvement of the respective legislation and enforcement practices.
VEB.RF’s Chief Legal Officer Igor Krasnov noted increased legal risks related to dispute resolution involving major Russian businesses in foreign jurisdictions and increased protectionism demonstrated by legal systems of certain states.
An arbitration court represents a single judiciary, and a claimant having an arbitration award may submit it to a competent jurisdiction for approval and obtaining a writ of execution. In addition, an arbitration proceeding provides for the selection of an arbitrator in accordance with set procedures. Therefore, dispute resolution by arbitration is much more effective, expeditious and confidential.
Igor Krasnov offered to use Russian arbitration centres as modern and independent forums to resolve complicated legal and economic disputes.
“We believe that disputes between Russian counterparties should be settled by negotiations and, where necessary, through mediation. If a dispute cannot be resolved amicably, then a modern Russian arbitration centre could become the best platform for dispute settlement and finding a compromise with partners and clients,” Igor Krasnov said.
He also noted that VEB.RF had set a legal framework governing interaction between development institutions and Russian arbitration courts, and determined the priority of arbitration in VEB.RF’s standard loan and collateral documentation.
“VEB.RF’s clients are advised to use arbitral clauses allowing them to have obvious advantages of arbitration proceeding: expeditiousness, thoroughness, democratic nature, progressiveness and high arbitration standards.
The second edition of the Finance in Common Summit (FiCS) ended in Rome today. VEB.RF Senior Banker Sergei Storchak told the summit about VEB.RF’s products and priorities contributing towards the UN Sustainable Development Goals, particularly those related to promoting the green finance market and facilitating energy transition in Russia.
VEB.RF is implementing its own transformation strategy to give a sharp focus to protecting the environment, improving the well-being of people and communities, and introducing best practices in governance,” Sergei Storchak said. “According to the IDFC methodology, green projects already make up more than a third of our portfolio, and we intend to increase their proportion. We are active in financing electric transport and clean energy sources, and helping Russian manufacturers to switch to low-carbon technology.”
According to Sergei Storchak, VEB.RF has a government mandate to develop Russia’s national taxonomy for green projects. Last month, the corresponding document was approved by the Russian Prime Minister. “Russia became one of the few countries with their own national taxonomies,” he said. “We have already started promoting our taxonomy domestically and will present it to the international community at the COP26 conference in November. It is 95% compliant with the new EU taxonomy, and we hope it will meet with a positive reception from the business and expert communities.”
In his speech, Sergei Storchak also told the summit of public development banks about inequalities in access to financing for decarbonisation and energy transition in different countries. VEB.RF is currently subject to restrictions on long-term borrowing from the international market. “Climate issues and related processes have no respect for political boundaries,” he said. “Limiting the ability of VEB.RF and other Russian institutions to raise capital for decarbonisation means putting obstacles in the way of the Paris Agreement. We believe that all restrictions of this kind should be lifted, at least in the case of financial instruments and projects recognised as green in accordance with internationally recognised taxonomies and verification systems. We are open to working together with the coalition members on these issues.”
The Finance in Common Summit (FiCS) is a large international event organised by a coalition of 530 development institutions from all over the world. The goal of the FiCS coalition is to reinforce the global financial architecture towards sustainable development, with public development banks playing a central role. The coalition brings together not only development institutions but also key stakeholders such as governments, regulators, the United Nations, private investors, civil society, academia and central banks. The inaugural Summit was held in Paris in November 2020.
VEB.RF Officially Starts Selecting Verifiers of Sustainable Financial Instruments
VEB.RF has started selecting organisations to be included in the permanent list of verifiers of sustainable financial instruments. The process was launched in accordance with Ordinance of the Russian Government No. 3024-r of 18 November 2020 and Resolution of the Russian Government No. 1587 of 21 September 2021. The launch of the verifier selection process is a key stage of implementing the mechanism for sustainable financial instruments verification, and it represents the full-fledged launch of the green finance market in Russia.
From now on an organisation may submit to VEB.RF an application for the inclusion in the list of verifiers. The applicant should confirm its compliance with verifier requirements in accordance with Resolution No. 1587 in respect of having sufficient experience in conducting assessments, adequately qualified experts, effective business processes, an organisational structure that allows the applicant to verify financial instruments, verification methodologies, a positive business reputation, and compliance with minimum business duration requirement (1 year).
At the current stage, in order to submit an application for the inclusion in the list of verifiers, an organisation should fill in the application and questionnaire templates posted on VEB.RF’s website and attach supporting documents. An application with attached documents should be routinely sent by e-mail at email@example.com and officially by mail to VEB.RF’s address. VEB.RF is currently developing a digital platform for sustainable financial instruments that will automate the process of submitting applications. VEB.RF should consider applications within 60 business days.
Before the permanent list of verifiers is made, the temporary list of verifiers posted on VEB.RF’s website applies.
VEB.RF representatives highlighted the implementation of a Yakut SIB project related to assisted living during the meeting of the project committee chaired by Vice-President Olga Balabkina. According to Yakut-Sakha Information Agency, the repair of the assisted living facility was completed in the second quarter, young people with mental health disabilities were successfully adapting to their new home, acquiring new skills and obtaining employment.
The project committee members discussed the stages of the social impact project in the area of social services.
“This is a key quarter. The first stage was preparatory, while the second one was marked by important events. The assisted living facility was repaired and furnished with new furniture. From 1 August 2021 through 1 September 2021, social beneficiaries were moving into the building and are currently occupying the premises. All arrangements have been timely completed,” Director of VEB.RF’s Russian Government Agent Office Denis Bokov said.
He noted that the stage was considered important due both to the repair completion and the people’s adaptation. For instance, the survey results show that the young people find their living conditions quite satisfactory.
“Additionally, 16 staff members were recruited including home carers, psychologists and social workers. All of them have the required qualifications, and 12 people received off-the-job training in St. Petersburg. It’s a pleasure to note that the adaptation process is developing rapidly, and six people have already obtained employment. Thus, we can say as early as now that there has been no significant deviations from the planned schedule. In the third quarter we will start working with home bred children, and we acknowledge the importance of parental involvement.
Yakut Minister of Labour and Social Development Elena Volkova informed the participants about maintenance services, renovation works and project implementation plans.
According to Project Manager of Saint Petersburg–based association of disabled children’s parents GAOORDI Alexey Ignatenko, the tenants accommodated in that quarter were category 1 beneficiaries. The rest of the families also had contacts with project managers.
“Planned individual and group adaptational training is under way. We have also organised online meetings with tenants of our facilities. Young people were able to communicate, become acquainted and give each other gifts. We are planning to arrange such meetings in future, since they give the positive emotional backing these people need.
According to Head of the Assisting Living Service Lena Denisova, the young people have good labour potential. An individual employment plan was prepared for each beneficiary.
“Young people develop social and domestic skills every day. They do powerlifting, go swimming, practise athletics and improve the level of computer literacy at a Book 0.3 specialised library. Our specialists also hold special events, help young people to develop cooking skills and handle money. We will continue to teach them and help them to better adapt to life,” Lena Denisova said.
In conclusion, Managing Director of VEB.RF’s Russian Government Agent Office Mikhail Alashkevich gave a positive opinion on the project implementation in the Republic of Sakha.
“We are now at the very beginning. It is especially important to maintain the results. I believe that this project is about the future, about people who haven’t ever discussed their future before and who are not only discussing it now, but also translating their dreams into reality. We are pleased that we could increase the project scope and attract additional people,” Mikhail Alashkevich said.
As a reminder, the first assisted living care home was opened in Yakutia. The project initiated by Yakut authorities is aimed at introducing new social services in the region for people with mental health disabilities that are alternative to specialised in-patient facilities.
The programme is part of the SIB agenda initiated in Russia by VEB.RF. Currently, more than 1,100 people with mental health disabilities are living in special care institutions in Yakutia. The project is designed to replace in-patient treatment with home care, so that people with disabilities could habituate themselves to living at home or in conditions close to living in family, and unlock their labour potential.
State Development Corporation VEB.RF has become a member of the Zero Waste Charter (hartia.ru) aimed at developing an efficient waste management sector in Russia. A respective announcement was made during the ESG-day event organised by VEB.RF.
Cooperation of major public and private companies is an important step towards introducing a circular economy and zero dumping in Russia.
The Charter agreement was previously signed by Business Russia, Russian Environmental Operator and RT-Invest. Ten companies are now involved in joint work focused on complying with sustainability principles and improving quality of life in Russia.
“We welcome the fact that VEB.RF acceded to the Charter designed to develop an efficient waste management sector and ESG-principles in Russia. Sustainable development basically means a long-term trend materially affecting all types of companies. Businesses are well aware of investor attention to, and a growing consumer interest in sustainability, and are under great pressure from supervisors, regulators and intergovernmental institutions. The Environmental Protection national project provides for 100 percent waste sorting and a two-fold landfill decrease by 2030. Together with its partners, Business Russia hopes to efficiently achieve the ambitious goals of the national project. We are ready to consolidate our efforts to attain the goals set. As far as we know, RT-Invest is consistently developing a comprehensive MSW management system. High level competencies of the Charter participants will enable Russia to accelerate the creation of a comprehensive waste management system and generate steady demand for the use of recyclable materials to produce new goods. We will introduce circular economy principles in cooperation with all stakeholders (manufacturers, processors and consumers),” Business Russia’s Vice-President and Head of the Executive Committee Nonna Kagramanian said.
The Zero Waste Charter participants are keen on creating in Russia a comprehensive waste management system and generating demand for the use of recyclable materials to produce new goods. Manufacturers, processors and consumers will be actively involved in introducing the circular economy principles including separate collection, recycling and reuse, composting of organic waste and construction of energy-from-waste facilities. Thus, all types of waste will be recycled and reincluded in the economic turnover.
Nikolay Tsekhomsky, First Deputy Chairman and Member of the Management Board, VEB.RF:
“Environmental agenda is extremely important for VEB.RF as a financial partner in a whole range of waste management projects. VEB.RF is currently considering projects for separate collection, sorting and disposal of municipal solid waste. These projects will help to improve the environment, encourage additional investment in Russia’s industrial sector and create high-technology jobs in the regions. We are also planning to attract commercial banks, financial institutions and private investors to these projects, including through public-private partnerships and green bonds.
VEB.RF believes that in order to achieve economic and social development goals and improve quality of life in Russia, the Charter participants should prioritise ESG projects and be guided by global best practices in sustainable development. That is why VEB.RF offered to include these provisions in the text of the Charter.”
The efforts of the Charter participants intended to develop the circular economy include creating and developing the system of bottle/can recycling kiosks, introducing separate collection of waste, constructing waste recycling and disposal facilities and energy-from-waste facilities, and landfill reclamation and full rejection.
“We are pleased that VEB.RF has a clear strategic view of the sector needs. As a financial development institution, VEB.RF is developing a national practice for operating with green socially responsible capital. The company supports projects aimed at achieving the goals of zero dumping. RT-Invest has offered a programme for developing an efficient comprehensive waste treatment system designed to recycle each kilogram of waste into new goods and energy. Our goal is to close by 2035 and to prevent opening of 200 new landfills across the country,” RT-Invest General Director Andrey Shipelov said.
All these measures will help to eliminate landfills altogether at first in resort clusters and cities with population over one million, and then across Russia. The Charter will be another important step towards zero dumping in Russia.