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Russia’s Lacking Rule of Law Hurts Everyone

I was forwarded this blog post by the FT’s John Gapper from a friend, which I thought raises some interesting points about the wider implications of the TNK-BP shareholder dispute. It finally seems like many are slowing coming around to the fact that the Yukos legacy casts quite a long shadow, and is not isolated in the state’s business affairs.

It has been obvious for some time that the rule of law does not apply in Russia to the international investors and companies which venture into the market in the hope of profiting from its natural resources. Now comes news that the Moscow authorities, petitioned by BP’s Russian partners, with whom it has fallen out, are squeezing out BP executives by refusing them visas. It calls to mind the way in which Hermitage Capital Management and its founder William Browder have been harassed using visa and tax laws. I feel a pang about BP because I wrote a column once asking whether it was wise to trust in its Russian joint venture and concluding that it was taking a reasonable chance. With hindsight, even my guarded optimism now looks naive.