Estonia's Operail on business related to Russia: We've met all expectations by owner

  • 2022-12-08
  • BNS/TBT Staff

TALLINN - Commenting on news reports of Estonian state-owned transport and logistics company Operail preparing to transport Russian nickel in Finland, chairman of Operail's management board Raul Toomsalu and board member Merle Kurvits said that the management board has fulfilled its duty of care and met all expectations by the company's owner.

Earlier this week, Finnish public broadcaster Yle reported that Operail is preparing to transport Russian nickel in Finland instead of the Finnish state-owned rail company VR. Estonian Foreign Minister Urmas Reinsalu said at the government's press conference on Thursday that Operail should give up any business related to Russia, regardless of whether it is legally correct.

Toomsalu and Kurvits said in their joint statement that any claims of Operail's management board acting in an unauthorized and unethical manner by transporting goods from Russia are incorrect.

"Expectations by the owner are documents signed by the state-owned company's sole shareholder, which determine the operational guidelines the supervisory board is to give to the management board. Members of the management board are contractual employees who have been tasked with managing the company pursuant to instructions from the owner and supervisory board. Regardless what Urmas Reinsalu believes, the management board of the state-owned company has no legal right to make any economically harmful decisions according to its own beliefs or ethics," they said, adding that the objective of the company is to earn a profit and prevent losses for its owner.

The management board members said that pursuant to the valid owner expectations to AS Operail, signed by the minister of economic affairs and infrastructure, the objective of the company is to engage in profitable and efficient economic activity and maintain transport capability on the Estonian railway infrastructure while adhering to all sanctions and gradually ending business relations with Russian and Belarusian entrepreneurs, if necessary. The government and the supervisory board are being informed about the company's activities on an ongoing basis and have approved all important decisions of Operail this year, they added.

The management board of Operail has been acting in accordance with said instructions, according to Toomsalu and Kurvits.

"Due to Russian and Belarusian transit ending, cargo volumes transported by Operail have declined by a half year over year, and more than 200 people have either lost or are about to lose their job," they said.

By gradually reducing the transport of goods from Russia and not ending it abruptly, the company aims to reduce the related damage.

"Not all trade with Russia has stopped because there are still goods that are necessary in Europe for the coping of businesses and people. Operail's customers include Estonian companies whose activities so far have depended on raw material from Russia -- they have also needed a transition period for switching to raw material from elsewhere in the world to ensure their operations are not suspended and people are not laid off," Toomsalu and Kurvits said.

The management board, supervisory board and owner of Operail are in the process of jointly discussing fully terminating the transport of Russian goods. If the owner approves the new expectations, the decision will need to be confirmed by the supervisory board after which the management board will get new instructions.

The management board members said that if the transport of Russian goods is terminated, Operail's cargo volumes may further decline 65-70 percent next year, which will be accompanied by more redundancies.

"If restrictions are only established for Operail as a state-owned business, only the competitiveness of the Estonian state-owned company will deteriorate, because private companies as well as Latvian and Lithuanian state-owned businesses will be able to continue transporting Russian goods," they said.