Russia’s Blood Fossil Fuels

| June 23, 2022
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Drilling platform in the Okhotsk Sea. Photo credit: Maksim Safiullin via Wikimedia Commons

Since the beginning of Russia’s invasion of Ukraine, the question of whether to continue importing Russian oil and gas has been at the center of public debates in most Western countries. Backed by rare bipartisan support, President Biden signed an Executive Order in March “to ban the import of Russian oil, liquefied natural gas, and coal to the United States” as part of a sanctions package aimed at depriving President Putin of economic resources fueling his belligerent operation. The European Union, meanwhile, remains divided and unresolved over how to deal with Russian energy imports. As most European countries are heavily dependent on Russia’s oil and gas, the repeated calls to cut off the revenue stream supporting the aggressive illegal war against Ukraine seem to be giving way to considerations of political expediency, economic effectivity, cost-benefit calculations, and practical feasibility.

As it carries on its destructive offensive against Ukraine, Russia has continued to receive enormous sums of money for its hydrocarbons—it received about €62 billion from exports of oil, gas, and coal in the two months since the invasion began, doubling its revenues compared to its monthly average of €12 billion last year. As a result, the appeals to interrupt this supply chain are increasingly hard to ignore. In a recent BBC interview, Ukraine’s President Volodymyr Zelenskyy accused European countries of paying blood money for Russian oil and gas and called for an embargo. In a strongly worded Guardian op-ed, Zelenskyy’s economic adviser, Oleg Ustenko, called for cutting this blood-tainted source of income used by Russia to fund the war and appealed to consumers to boycott Russian resources since their leaders are afraid to act.

Is it morally permissible to continue trading with Russia—to be more precise, is it morally permissible to buy Russia’s most prized hydrocarbon commodities? In this essay I contribute to the debate by illuminating what exactly makes the goods at stake morally compromised and what kinds of obligations or responsibilities they raise. I argue that while the obligation to stop buying Russia’s oil and gas could be framed in the moral language of responsibility or complicity, as some political theorists of global justice propose, it can also be based—perhaps even more compellingly—on reasoning which underlies the use of economic sanctions authorized by international law to punish the breach of peace and security. Russia’s illegal war and the multiple serious violations of international law it involves represent a new context in which it is possible to make a clear-cut case for an obligation to stop buying its most revenue-generating commodities. This obligation is of a legal nature and is grounded in a state’s duty to impose sanctions in response to the violations of international law’s most fundamental norms.

 

Conflict Minerals and Blood Oil

 

To analyze the morality of purchasing Russian hydrocarbons, there are conceptions of morally compromised raw materials available in public policy and political theory upon which one could draw. The first underlies policies regulating trade with the so-called “blood diamonds” and other “conflict minerals.” The regulation of the diamond trade emerged in 2003 through initiatives developed by the United Nations, NGOs, and diamond industry stakeholders trying to end civil wars in Africa in which rebel groups seized diamond mines and used the proceeds from the sales to fund violent campaigns against civilians and governments. Atrocities committed during these conflicts—mutilations, mass killings, rapes, drafting of child soldiers, and other human rights abuses—created global outrage. This resulted in the establishment of the Kimberley Process, which certifies whether a diamond is “conflict free,” that is, not originating from mines controlled by rebel forces opposed to an internationally recognized government.

The Kimberley Process has become an inspiration for subsequent policy initiatives, first in the U.S. and now in the EU. Section 1502 of the Wall Street Reform and Consumer Protection Act, also called the Dodd-Frank Act, regulates the import of “3TG minerals” (tantalum, tin, tungsten, and gold) from the Democratic Republic of Congo and adjoining countries. Dodd-Frank requires companies listed on U.S. stock exchanges to check their supply chains for the presence of conflict minerals in their products and disclose this information to the U.S. Securities and Exchange Commission.  While companies are not required to stop buying commodities from this region, they are required to show they are exercising due diligence to make sure they are not using minerals that help to fund armed groups or human rights abuses.

Similarly, the EU implemented the Conflict Minerals Regulation on January 1 2021. This requires EU companies “to ensure they import 3TG minerals from responsible and conflict-free sources only.” It does so by imposing binding due diligence requirements, such as the establishment of company management systems, the identification and assessment of risks in the supply chain, the implementation of a strategy to address such risk, third-party audits, and annual reports on supply chain due diligence. As with Dodd-Frank, EU regulation is limited to 3TG but, unlike Dodd-Frank, it seeks to target trade with minerals from a wider area, including areas that are either in a state of armed conflict or fragile post-conflict, under weak or non-existent governance and security, and at risk of serious human rights abuses.

Conflict minerals regulations have achieved modest results in curbing illicit trade.1 However, they have been widely criticized for their limited scope and many loopholes, along with their exclusion of other highly contentious commodities, such as Myanmar’s jade or Afghanistan’s minerals, to name just a few. Conflict mineral policies also regulate only selected minerals mined in places of conflict or failed government control, so they remain marginal in the larger context of global trade, which includes other highly valuable commodities such as fossil fuels. The main stakeholders of this fossil fuel trade are governments, as in the case of Russia, and not local rebel groups or extractive companies; and the defects of this system are more structural. They result from how rights to the most valuable natural resources are distributed and structured by international law, to whom they are allocated, and who can legitimately exercise them. These rules allow the most egregious dictators to fully control these valuable assets and the enormous monetary benefits they generate.

It is precisely this systemic problem with existing policy that some political theorists have attempted to address.  Here, I focus primarily on the framework Leif Wenar develops in his book Blood Oil—Tyrants, Violence, and the Rules that Run the World.2 Wenar focuses his attention on how oil, the most prized raw material in our global economy, has become an asset controlled by authoritarian and corrupt governments. These governments use oil and its revenue as a means to sustain repression, corruption, and clientelism as a mode of governance, and to fund transnational violence. According to Wenar, the appropriation of resource rents by dictators is unjust, not only because authoritarian governance is in itself unjust and because resource rents are used to sustain human rights violations but also because it violates the collective property rights of the people to their natural wealth. These rights are firmly embedded in international law as a corollary to the right to self-determination and the system of human rights articulated in the human rights covenants. For Wenar, dictatorial and corrupt forms of governance mean that people are deprived of their authority to authorize policies and of their rightful claim to be beneficiaries of resource wealth.

Wenar’s most relevant contribution here concerns the role natural resources play in the perpetration of the injustice of authoritarianism. This stems, in part, from excluding the majority of a country’s population from the benefits of ownership, but this illegitimate authority is reinforced by a defective rule of global trade: the “might makes right” rule. This rule enables any government capable of maintaining power to sell its country’s resources, and it enables buyers to acquire goods from seller governments despite these governments not having any authority to dispose of these natural resources, in virtue of their politically illegitimate power. The “might makes right” rule essentially turns global trade into a global marketplace filled with stolen goods. Looking at the trade with oil, we can see that many major oil exporting countries do not meet minimum accountability criteria and that the populations are stricken by repression, corruption, violence, and civil strife. Oil from these countries is not only a stolen good but also a blood commodity insofar as its revenues fund the very governments that are harming or neglecting their people.

According to Wenar, the violation of the people’s ownership rights generates a duty of justice for the buyers to disengage from commercial relations with illegitimate and human rights violating governments. To translate this view into policy, Wenar proposes that each country should adopt a Clean Trade Act which prohibits commercial trade with countries that do not meet minimal accountability criteria, including where citizens are not granted certain civil and political liberties and rights. The Clean Trade Act could also restrict access to financial, commercial, and judicial facilities to vendors of a disqualified country’s resources, including for example the prohibition of the sale of real estate to them or barring them the entry to enacting-country’s stock exchange.3 Clean trade legislation can according to Wenar also be complemented by anti-corruption and transparency measures, resource validation schemes, embargoes and sanctions, or consumer boycotts.

 

Are Russia’s Hydrocarbons Bloody?

 

Unlike existing conflict mineral policies, Wenar’s analysis of blood oil provides a better starting point for critically assessing Russia’s hydrocarbons. Russia fits the model of a corrupt dictatorship addicted to fossil fuel rents to sustain its power. With a total freedom score of 19 out of 100, Freedom House ranks Russia among the bottom 20 percent of countries in the world. Russia’s power is fully concentrated in the hands of President Putin who is poised to stay in power until 2036. There is no meaningful separation of powers, the legislature is dominated by the ruling United Russia party, there is a very strictly controlled media environment, and the elections are marred by irregularities. Opposition and civil society groups are severely restricted and harassed by government officials, and security agencies exert tight control over society. Russia’s economy is based on a centralized yet highly informal and non-transparent distribution of wealth by a network of nomenklatura and oligarchs who work to fulfill President Putin’s policy aims in exchange for access to benefits.4

It is plausible to say that Russia’s resource wealth sustains its authoritarian and corrupt political rule. Russia is highly dependent on the rents its fossil fuel wealth generates. Oil, gas, and coal are its key economic assets and main export commodities. Russia is the largest natural gas exporting country in the world and the second largest crude oil and natural gas exporting country after Saudi Arabia. It is also the third largest coal exporting country behind Indonesia and Australia. According to the U.S. Energy Information Administration, the oil and gas sector constitutes 63 percent of total exports. These exports, along with domestic tax revenues from these exports, comprise approximately 43 percent of the government’s total annual revenue. Natural resources play an oversized role in maintaining the wealth of the Russian state, accounting now for an unprecedented 10.7 percent of its GDP according to the World Bank. About 50 percent of Russia’s oil exports and nearly 75 percent of its natural gas exports go to OECD Europe.

The main and outstanding problem with Russia is not only that its natural wealth reinforces authoritarianism and corruption, but that it has been using its economic and political might which is indeed derived from the abundance of energy resources to pursue highly controversial neo-colonial foreign policies. For the last decade, Russia has increasingly adopted illegal and belligerent practices toward its neighbors, ranging from military support for separatists to economic coercion (enforcing trade monopolies, price hikes, and supply interruptions), hybrid warfare, military and other political interventions, and territorial annexations.5 Russia’s full-scale invasion into Ukraine is continuous with this neo-imperial strategy, but it represents a higher level of criminality according to international law. It is the scale, brazenness, and the extent to which it violates international law that make Russia’s oil and gas “bloody” in the strongest sense of the term.

The invasion is a manifest violation of the prohibition of force contained in the United Nations Charter and an act of aggression that is in fact a crime and the most serious breach of international law. It violates the Article 2 of the United Nations Charter prohibiting the threat or use of force against the territorial integrity or political independence of any state. The illegal act of aggression is combined with other violations of humanitarian and human rights law. According to the April OSCE report, the conduct of military hostilities has involved systematic violations of international humanitarian law (attacks on civilians, hospitals, schools, and residential infrastructure) and human rights (including the right to life, prohibition of torture, and other inhumane and degrading treatment and punishment). Moreover, Human Rights Watch has documented war crimes committed by Russian forces that fall within the jurisdiction of the International Criminal Court—summary executions, rape, torture, and other forms violence against civilians, deportations, hostage-taking, and attacking schools and hospitals.

These multiple and serious violations of international law including jus cogens norms—norms accepted and recognized by the international community of states as a whole from which no derogation is possible—trigger a number of legal consequences.6 The unlawful and prohibited act of aggression not only activates Ukraine’s right to self-defense; it also obliges the international community to impose measures in response to this criminal act threatening peace and security. The primary institution with authority over this conflict is the UN Security Council (UNSC) which has the authority under Chapter VII of the UN Charter to determine the existence of any threat to the peace, breach of the peace, or act of aggression and decide what measures shall be taken to restore international peace and security. While the UNSC can authorize the use of force to restore peace, it can, also, authorize measures short of military intervention, including a complete or partial interruption of economic relations and severance of diplomatic relations. While the Russian veto disables the UNSC from fulfilling this role, all states have a right under international law to hold Russia responsible for the wrongful act of the aggression. As Adil Haque has argued, the breach of the prohibition of the use of force implies that every state in the world is legally obligated not to assist Russia’s aggression, not to recognize as lawful any situation arising from Russia’s aggression, and to cooperate to bring Russia’s aggression to an end through lawful means.7 Given the gravity of the crime and the peremptory status of the norm it breaks, states have an obligation owed to the international community as a whole and ought to take countermeasures against Russia to bring its aggression to an end. Unilaterally imposed economic sanctions and trade embargoes are such punitive countermeasures representing these legal rights and obligations of states vis-à-vis a state which breaks international law.8

 

Is Ending the Trade with Hydrocarbons a Duty of Justice?

 

In the conflict minerals regulations according to Dodd-Frank Act, the due diligence steps a company must take to address the adverse human rights impacts and to avoid contributing to the dynamic of conflict are soft-law instruments which rest on voluntary ethical standards of a good business practice. The EU’s new conflict mineral regulation is the first attempt to transform these soft law recommendations into hard law obligations. Wenar’s political theory of blood oil endorses the view that the trade with natural resources which manifestly contributes to human rights violations is morally wrong and that it is a duty of justice to stop such commercial relations. This view has been shaped, in part, through Thomas Pogge’s influential conception of a “negative duty of justice.” According to Pogge, there is a moral duty to not contribute to unjust circumstances which themselves arise or are maintained through our direct or indirect involvement.9 In our world, the fact of a shared global order—that is, our interconnectedness via legal, political, and economic institutions, and the overall system which determines the patterns of the global distribution of goods and other benefits and burdens—is taken to be normatively significant because it has implications for how advantages and disadvantages are unequally distributed. This, in turn, gives rise to duties of global justice, prominently to those who benefit from this system.

On Wenar’s account, dictatorial rule and other corrupt forms of governance mean that people are deprived of their authority to authorize resource policies and their right to be the primary beneficiaries of resource wealth. In the case of oil and comparable valuable raw materials, the links are direct and obvious. Both governments and consumers buying fossil fuels from the despots and dictators put money in their pockets and enhance and incentivize their long-term ability to control, rule, and oppress, thus making buyers and consumers responsible for the suffering and deprivation they inflict on their people.10 The violation of ownership rights, as well as the way this violation contributes to other human rights abuses, generates a duty of justice for the trading partners to stop buying the stolen goods.

Conceptions like Wenar’s have the benefit of looking at the global trade of natural resources from beyond the narrow economic perspective. These latter accounts study the efficient allocation of unevenly and randomly dispersed natural resources to those who want or need them on the basis of the supply and demand laws of the market. They neglect the “travails” of natural resources: from violent and illegal forms of acquiring control, exploitative and harmful practices of extraction, corrupt governance, opaque deals and illicit trade, and the failures to distribute resource benefits properly. From a critical perspective, like Wenar’s, legal, political, and economic institutions have to be assessed in light of their role in enabling these cursed effects and making the system defective, distorted, and unable to produce just, equitable, and sustainable uses of natural resources. It is also correct that moral accounts raise questions about taking remedial action and consider what responsibilities should be allocated to the most important agents (governments, international organizations, corporations) on the basis of their power, privilege, knowledge, contribution to the problem, and capacity.

However, in the current context, accusations of “complicity” for creating and perpetuating the injustices that Russia is engaged in Ukraine may not be the most effective strategy to induce action, neither from consumers nor from governments. Consumers have hardly any responsibility for these legal and commercial structures of oil trade and have no meaningful choices of how to heat their homes and fill up their cars. Further, governments that engage in trade with Russia may feel wrongly accused of bad intentions. They may plausibly argue that opening economic relations with Russia was a way to help bring about liberal reforms. Here, I posit that the language of legality and legal obligation to sanction the breach of the jus cogens norms of international law is more compelling in this context. As Allen Buchanan has argued, the language of legality has a great advantage over direct appeals to morality since it embodies a common language of accepted, institutionalized, and rule-governed practices. It has much greater potential when it comes to influencing the behavior of states and motivating their collective action since it offers assurances of reciprocity and coordination and includes mechanisms of enforcement. There is evidence that international legality matters greatly to states11

Russia, according to Fareed Zakaria, has turned into the world’s leading rogue state intent on ignoring the very heart of the international order prohibiting unprovoked military invasion and forcible change of borders. As it relentlessly pursues its illegal and destructive military offensive—which entails violating civilian human rights, destroying infrastructure on a massive scale, committing war crimes, mistreating prisoners of war, blocking ports and shipments of goods—it is necessary to ask what punitive sanctions and deterrence measures ought to be applied by the international community insofar as it has compelling interests to uphold a peaceful and rule-based international order. As a response to the most serious violations of international law and threats to peace and security, economic sanctions and natural resource trade embargoes are lawful and legitimate countermeasures, even when imposed on a unilateral basis. They are best thought of not as duties arising from responsibilities of trading partners for the creation and sustenance of injustice but as coercive measures aimed at punishing for the violation of the fundamental norms of international law and inducing the rogue state to stop the criminal behavior. In Russia’s case, an oil and gas embargo would be the most effective countermeasure to limit Russia’s material ability to exercise power and continue its illegal actions in Ukraine. The obligation to impose an embargo appears to be even more stringent as the continued payments obviously enhance the ability to keep the war going. The language of legality and legal obligations is better suited to motivate the behavior of states and remind them that what is at stake is the risk that a rule-based peaceful order will give way to pure power politics.


Petra Gümplová

Petra Gümplová holds a PhD from The New School for Social Research, New York and Habilitation in Political Science from the University of Erfurt. She currently works at the University of Jena where she leads a research project on Global Commons. She works in the field of international political theory, global justice, and international law, with a substantive focus on natural resources.

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  1. Chiara Macchi, “A Glass Half Full: Critical Assessment of EU Regulation 2017/821 on Conflict Minerals,” Journal of Human Rights Practice13, no. 1 (2021).
  2. Leif Wenar, Blood Oil–Tyrants, Violence and the Rules that Run the World, (Oxford: Oxford University Press, 2016).
  3. Wenar, Blood Oil, pp. 283-284.
  4. Clifford G. Gaddy and Barry W. Ickes, “Russia’s Dependence on Resources,” The Oxford Handbook of the Russian Economy, eds. Michael Alexeev and Shlomo Weber (2013).
  5. Domitilla Sagramoso, Russian Imperialism Revisited: From Disengagement to Hegemony (Routledge, 2020).
  6. Adil Ahmad Haque, “An Unlawful War,” AJIL Unbound 116 (2022), pp. 155–159.
  7. Haque,“An Unlawful War,” p. 158.
  8. Kern Alexander, Economic Sanctions. Law and Public Policy (Palsgrave Macmillan, 2009), p. 62. Alexander argues that unilateral punitive sanctions which punish a state for the violation of jus cogens international norms are justifiable and part of customary international law, subject to limits resulting from the doctrine of proportionality prohibiting infringements of international humanitarian law.
  9. Thomas Pogge, “Severe Poverty as a Violation of Negative Duties,” Ethics & International Affairs 19, no. 1 (2005), pp. 55-83.
  10. Wenar Blood Oil, pp. xvi-xxviii.
  11. Allen Buchanan, The Heart of Human Rights (Oxford: Oxford University Press, 2013), p 8.

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