The crunch looms. At some point in coming days, the Government will set out the findings of an investigation into Aughinish Alumina in Co Limerick.
At issue is whether alumina refined in the Shannon Estuary is being used in aluminium for missiles, tanks and aircraft in Russia’s four-year war on Ukraine, a friendly country in talks to take its place in the European Union alongside Ireland. The stakes are rising fast
“This can’t be left in a void,” says an official figure familiar with the Aughinish file. “It’s a given that this should be wrapped up as quickly as possible, with consequences and conclusions.”
In these first weeks of Ireland’s rotating presidency of the Council of the EU, the future of the Limerick plant raises questions for Taoiseach Micheál Martin.
While the ultimate decision on any sanctions or export curbs against Aughinish Alumina is an EU matter, Martin and his Ministers will have to deal with the fallout.
At the heart of it all is the credibility of the response.
But the issues go far beyond war diplomacy and the disturbing vista of material made in Ireland being potentially used in a relentless military campaign against Ukraine and its people.
There are doubts over hundreds of jobs in the Midwest region, questions over who funds vastly expensive environmental remediation plan, concerns to avoid an interruption of alumina supply into European automotive and aerospace industries – and anxiety that Oleg Deripaska, the sanctioned billionaire Russian oligarch with shares in Aughinish, is running rings around Ukraine’s EU allies.
This is to say nothing of the real-time complexities of imposing penalties on the company, the threat to production if Deripaska and his group Rusal take flight and the likelihood that the loss of major Russian sales would lead Aughinish into large trading losses.
[ Aughinish: Minister ‘can’t give assurances’ to workers that jobs are safe ]
Senior Dublin figures readily accept a Rusal exit would lead Aughinish to lose Russian-supplied bauxite. Bauxite is raw ore, imported into Ireland from other parts of the Deripaska empire and which is refined into alumina in Aughinish before alumina is sent to Sweden, France and Russia to be smelted into aluminium.
“No bauxite, no plant,” says a person familiar with discussions among Ministers, although others speak of ongoing efforts to procure alternative bauxite supplies outside Russian networks.
No matter where this leads, there are uncertainties and threats at each turn – and practically every option carries new hazards.
Do nothing and risk the public ire of countries such as Sweden and Estonia, who are pressing for action, and of critics who say it’s naive or fanciful to believe Irish-made material is not in the Russian war machine?
Impose sanctions and risk the loss of 459 jobs in the closure of a plant going since 1983 whose critical role in industry was on the school curriculum?
Nationalise the company but seek an EU subsidy to cover trading losses at a time when Irish tax coffers are bulging with cash and Dublin is out of Brussels’ favour over agricultural nitrates and rejecting the Mercosur trade deal?
These are some of the potential trade-offs. Still, Aughinish is a critical link in the supply chain for major European industries. It is assumed, therefore, that the powerful Franco-German duo at the core of the EU won’t countenance losing the plant. But how far would they go to protect it?
In the hot seat right now is Minister for Enterprise, Tourism and Employment Peter Burke. With the clock ticking down loudly and the Dáil due to rise on Thursday for the summer recess, there is pressure to settle matters before the summer break.
[ Aughinish Alumina report ready ‘within 10 days’, says Minister for Enterprise Peter Burke ]
Not doing so raises the prospect of Aughinish questions lingering through the holiday season into the autumn. With European politics soon to shut down for August, decision time is approaching.
“It’s ripe for action,” a diplomatic figure says.
The issue has festered since a report published by The Irish Times in March – after a joint investigation with the Organised Crime and Corruption Reporting Project (OCCRP) – said Limerick alumina had entered Russia’s weapons supply chain. Contrary to claims made for years that the Kremlin-linked Deripaska remains a minority Aughinish shareholder, it later emerged that Sweden’s tax authority has found the Irish business is under his direct control via parent company EN+.
The lack of sanctions against the Limerick plant since Russian president Vladimir Putin sent troops into Ukraine in February 2022 speaks volumes.
But the media disclosures have since stirred a reassessment in Brussels, with some high-level figures speaking of the need to accept “short-term pain” while dealing a blow to the Russian war machine.
As investigations intensify, Burke has suggested his department still faces hurdles as it seeks conclusive evidence to prove Irish alumina is in Putin’s war machine.
“I expect to have the report within the next 10 days,” Burke told the Dáil on Thursday.
“At this point in time, we are working on a number of clarifications with the Ukrainian authorities. I met with the Ukrainian ambassador earlier this week. We have also been engaged with the Swedish authorities in connection with their investigations,” he said.
“We need some clarifications. We have to reach a certain evidential threshold before going to the European Commission. That is very challenging. I have been honest and open about that. It will be challenging to get evidence that meets that threshold.”
Burke went on to say Government support for Ukraine was clear, “but we have to get our evidence together”.
The reporters involved in the OCCRP investigation were also “very honest when they stated in their report that there is no direct evidence” that the alumina was in Russian military items, the Minister said.
“We are working so hard to get the direct evidence to ascertain that, but it is challenging,” he said.
These are critical questions.
“If they don’t have evidence can they take action?” asks the diplomatic figure who goes on to suggest political pressure may have already reached the point where Dublin and Brussels “will have to do something”.
Of course, not uncovering a chain of evidence to substantiate direct links between Limerick alumina and Russian arms does not necessarily mean such links do not exist.
Still, justifying radical action against the company is more difficult in the absence of evidence. Equally, the lack of evidence may be a reason for not taking action. But how credible is that?
Burke says Irish investigators will draw on information from Sweden and Ukraine. Sweden’s interest in Rusal operations goes beyond tax.
In May Swedish police investigating “violation of international sanctions” arrested the chief executive of Rusal’s Kubal aluminium smelter in Sundsvall city. Might it be that Swedish information proves decisive?
For its part, Aughinish Alumina neither acknowledged nor replied to questions on its engagement with investigators and whether Burke’s department had set out any draft conclusions.
Still, a well-placed local figure familiar with arguments advanced by the company said it insists “all information humanly possible” has been provided to the department.
But this, too, raises questions. How likely is it in a time of war – or any other time – that a business facing punitive measures can simply hand over evidence to prove the case against it?
One suggestion discussed in Limerick circles is to introduce a “workaround” in which the company agrees to intrusive monitoring aimed at providing reassurance about the ultimate destination of alumina exports to Russia. Whether that can be credibly done in a war situation is another matter.
The investigation remains centred in the Department of Enterprise. There is little enough at the moment to suggest formal Irish overtures have to made to Brussels with the message saying “this is what we want to do and this is the help we need from you to do it”.
Equally, it seems Burke’s department has not yet brought other departments into talks. That would be a prerequisite if radical action such as nationalisation were in prospect – with co-ordinated emergency steps required to avert even a temporary halt to production, which could damage the plant, and provide money to keep the lights on.
When Putin invaded Ukraine there was quiet talk about a draft Aughinish nationalisation Bill being prepared in case rapid intervention was required.
But writing draft law is one thing, enacting it quite another. These tend to be lightning manoeuvres with a long road ahead as the full extent of company liabilities becomes clear.
With the fate of Aughinish in the balance, questions abound.