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Russia gives Gazprom right to form armed units

Reuters | July 5, 2007

MOSCOW (Reuters) - Russia's parliament handed gas giant Gazprom the right to form its own armed units on Wednesday with a law one legislator said opened a "Pandora's box" that could lead to the creation of a private army.

A law backed by 341 lawmakers in the 450-seat State Duma lower house of parliament gave Gazprom, and oil pipeline monopoly Transneft, special exemption from strict limits on private businesses wielding arms.

The two state-controlled companies will for the first time be allowed to employ their own armed operatives instead of contracting an outside security firm. Their armed units will also have access to more weapons and more freedom to use them than private security companies.

Gazprom is already described by some observers as a state within a state: it has 430,000 employees, controls some of Russia's biggest media outlets, has a firm grip on gas exports and owns the country's third largest bank.

"This law is like a Pandora's Box," said Gennady Gudkov, a lawmaker with the left-wing Fair Russia party who opposed the law on its third and final reading in the Duma.

"Gazprom and Transneft are proposing the creation of their own corporate armies," he told the chamber.

"If we pass this law we will all become the servants of Gazprom and Transneft. These companies seem to be following the maxim ... that what is good for them is good for Russia."


Supporters of the law said it was needed to improve protection of oil and gas pipelines -- the economic lifeline for a Russian economy driven by revenue from energy exports -- from attacks by militants.

Russia supplies almost a quarter of Europe's natural gas and is the world's No.2 exporter of crude oil, after Saudi Arabia.

"A couple of terrorist acts and an ensuing ecological catastrophe would be enough to immediately declare Russia an unreliable partner and supplier of energy resources," said Alexander Gurov, one of the deputies who drafted the law.

Gazprom's press service said in a statement sent to Reuters: "This law will allow us to increase the reliability of protection for Russia's unified gas supply system."

Gazprom owns all trunk pipelines transporting natural gas across Russia and exporting it abroad. Transneft controls Russia's oil and oil product pipelines.

The weapons that Gazprom and Transneft armed units will be allowed to carry under the new law are restricted to hand-guns and pump action shotguns. The law includes no restriction on the number of armed employees.

They can be deployed only to protect infrastructure. But given both firms' have pipelines throughout the vast country, that would mean they could operate almost anywhere.

One security analyst said it was already common practice for big companies to have their own armed security units, but their legal status was murky.

"They (private armies) already exist to a certain extent so this is just sort of legalising it," said Pavel Felgenhauer.

The law adopted on Wednesday must be approved by the Federation Council, or upper house of parliament, and signed by President Vladimir Putin before it comes into force.

Under the new law, the armed units of Gazprom and Transneft will have powers to use weapons similar to those enjoyed by interior ministry security guards.

(Additional reporting by Tanya Mosolova)


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