The difficulties of balancing the needs of industry and the desires of leisure-seekers are quickly grasped in a short stroll along the boardwalk in Tuapse, the anchor city of Tuapsinsky district.

Along the seafront are all the usual attractions: open-air cafes and restaurants, the largest called simply Black Sea boasting a large terrace overlooking the eponymous water; kiosks selling drinks, souvenirs and snacks and even offering karaoke; and relaxed-looking people of varying ages promenading up and down. But the stroll is short by necessity because the walkway is cut off abruptly by gates for the port of Tuapse.

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Turn around and walk back the other way and it is mere minutes before a seafront ambler encounters a fertiliser transshipment terminal, with a huge warehouse hulking behind. Children dive off rocks into the summertime sea less than a football-pitch’s distance from the terminal. A railway line runs parallel to the boardwalk, as does a road, disconnecting the waterfront from the rest of the city.

Differences of opinion

The fertiliser terminal, with its industrial nature, prominent position and large size, is a flashpoint for debate over how to preserve the area’s natural beauty – not only for its own sake but also for the benefit of the tourism sector – while at the same time making economic use of its strategic logistics position.

Some look at the terminal, owned by the Russian company EuroChem, as a crucial source of jobs and income; others see it an eyesore that blights the beach and, worse, threatens the environment. So fraught is the debate, that conspiracy theories circulate that Turkish interests are funding industrial development in Tuapse so as to sabotage its tourism potential.

“Pursuing a dual development strategy of industrial and tourism development, there is inherent conflict between the two, especially when in such a condensed area. Naturally it has caused conflict,” says Andrey Ilyin, chief financial officer of EuroChem. “You have to find a balance and it’s a tough balance between industrial development, tourism and the environment.” 

Waiting game

EuroChem would know. The company spent millions building the transshipment terminal only to have to wait a year and a half to make the first shipments, while facing down fierce opposition from local residents and interest groups.

EuroChem is Russia’s largest fertiliser producer. Headquartered in Moscow, the company employs 21,000 people. It has six plants in Russia (including one in Krasnodar, 100 kilometres from Tuapse) and one in Lithuania. It exports around the world from its own terminals in Russia.

“It costs a lot to ship abroad so to lower the costs of fertiliser production overall, we decided to lower the costs of logistics through the use of these terminals,” says Vladimir Torin, head of the public relations department at EuroChem’s headquarters. There is one in Murmanck, in the north of Russia, one is being built at Ust-Luga near St Petersburg and then there is Tuapse.

Construction started on the Tuapse terminal in 2008 and was completed last year. No cost was spared. “We are very proud of this terminal, it’s a combination of many practices and innovations,” says Nikolay Snytkin, director of the terminal. As of writing, a shipment has yet to be made from the terminal, although first trainload of materials arrived in late July and was emptied under the watchful eyes of some 30 or so regional and state environmental activists and experts who were invited to witness the unloading procedure. A vessel will be loaded for international shipping in early August.

Problem solving

In a 2011 report on the topic published by EuroChem, the company said: “We have worked hard to ensure that situations similar to last year’s protest against the launch of the Tuapse terminal do not happen again.” It explained the situation thus: “We built a transhipment terminal in Tuapse, fully compliant with the highest international standards for industrial and environmental safety. Following trials in March 2010, some of the local community expressed concerns relating to the potential impact of the terminal on the local environment. During these trials, which were carried out in accordance with the regulations governing of tests and trials, a dust-filter coupling was disconnected which led to the release of some fertiliser dust into the air which subsequently settled on the vessel.”

The furore seemed to catch the company off guard, but upon realising the extent of the public opposition it went into overdrive trying to deflame the situation. Delegations of environmentalists, journalists, non-governmental organisations and students were brought in to tour the terminal and check out the environmental safeguards; an environmental impact study, carried out independently by environmental consultancy ERM, was published; and a Rbs35m ($1.27m) round-the-clock environmental monitoring system installed, with results displayed in real time on electronic screens in the town.

Cash injection

The company relocated 42 families from apartment blocks in the sanitary protection zone of the facilities to new purpose-built homes, at a cost of Rbs117m; spent Rbs6m buying buses to transport Tuapse residents to a nearby (unindustrialised) beach at Agoi; and Rbs24.5m repairing local roads and courtyards in Tuapse; along with several other social projects.

“Overall, we spent Rbs154m in social and environmental projects in the town during 2010.  We believe that our openness, transparency, willingness for dialogue and commitment to taking on board the views of the local community have resulted in the acceptance of the Tuapse transhipment terminal,” the company reported. Disgruntled parties remain but much of the fire of the initial protest has petered out.

Managers at EuroChem are now at pains to stress that a valuable, if costly, lesson has been learned. “It’s a lesson for us about communities and environment and even in Russia you have to take these into consideration, which is a good development,” says Mr Ilyin.

His colleague Mr Torin agrees. “We admit it was our own problem not to inform the local population of the good that this project will bring,” he says. “Now people are more approving; they understand it will develop the local economy rather than destroy the culture. And maybe it’s for the best that we had these problems because it forced us to create all these standards and pushed us to be the best.”