The Role and Meaning of GR Specialists in the Special Mission for Ukraine’s Recovery

The country’s recovery is no easy task and is one that requires enormous human and financial resources. This is especially so when we are talking about the actions of war criminals and monsters who, avoiding a fair fight with the Ukrainian army, “heroically” fight against maternity hospitals, hospitals, schools, kindergartens, residential buildings. Therefore, when rebuilding the country, there is a need to systematize efforts and allocation of resources in order to set priorities, sequence and effectiveness.

The effectiveness of such efforts largely depends on cooperation between the public and private sectors and on the joint search for proper solutions. The representatives of GR-practices should become a point of liaison between these two players. We are not talking about the usual mediation, in this case the lobbying experts should assume a range of other, much broader responsibilities, such as: the formation of the parties’ positions clearly and appropriately, the search for legal options to implement certain recovery projects and, finally, selection in view of the specific criteria and needs of the parties as well as beneficiaries. The last task is the most sensitive, as, in fact, it is about determining the order and priority of the assets that are to be rebuilt.

Today, the state of Ukraine is in the process of recording losses, creating respective registers, Internet resources and platforms administered by the authorities and non-governmental organizations, which provide for the recording of crimes and losses caused by Russia to our country and people. Ukraine is in the process of classifying losses based on the type of object (asset) and the purpose of ownership and developing methods for assessing such losses.

However, this is just a recording stage, whose nature is to establish losses. Then it is necessary to determine the areas of reconstruction, queueing and priority: private property of citizens (above all housing), state and communal property, including critical infrastructure assets, military facilities, real estate and assets owned by private business, indirect losses.

However, we should not rely on the fact that the country already has big “money bags” and the only question is where to spend this pile of money. Unfortunately, it is not so. The war continues, and the international tribunal for the investigation of racist crimes has not been established. Moreover, I will not be revealing a big secret when I say that there is no effective mechanism for compensation for damages caused by the Russian Federation. Everything that we have in this area today is pre-war legal mechanisms, including international ones. All these mechanisms can be partially applied and “attached” to the current situation, but none of them contains a direct causal link between the crimes of russia as a state and the recovery from it in favor of the victim.

This is, no doubt, better than nothing, but I want to offer a fundamentally different approach to solve the problem, which our team has been actively working on, and which, first and foremost, differs from all existing ones by the relative coverage of the deadlines for implementation, which is the most sensitive for a certain group of people. Because we are talking about the critical infrastructure destroyed by russia: bridges, roads, tracks, medical and educational institutions.

What is this approach about?

First of all, it is about the search for financial donors and contractors interested in the reconstruction of a certain destroyed asset. May we remind that even before the full-scale invasion, a significant part of the assets in Ukraine was built using this method. Those include targeted loan programs, grants and financing by international financial institutions. I will not explain the motivation behind each of the participants, but one thing is clear: this motivation is possible only by uniting the interests of all players within a particular project. This is the mission of a GR-specialist. However, the work of such a specialist should not be limited to the issues that require special knowledge, such as financial and credit mechanisms or engineering. The role of such a specialist should remind one of a certain prototype of an exchange market. It is the GR company that should become a platform offering a certain legal structure and, depending on the need, attract players to this platform.

It would seem that there is no need for GR lawyers when it comes to financing the construction industry. By contrast, another question may arise: how can a reconstruction project be implemented, except on the basis of a specific legal mechanism that would provide for the conditions and assets of financing, scopes, profits, guarantees. Building a clear legal structure is even more important when one of the parties to the legal relationship is the state, and even more so when funding is provided through the state. Today, no-one has canceled the specific statutorily-defined mechanisms for the use of funds by the state: tender and competitive procedures, other restrictions governed by legislation on the state budget.

The search for optimal models of fundraising, the format of legal relations between the donor and the contractor directly affects the efficiency and time limits for reconstruction projects. However, the solution of such issues is mainly subject to the regulations. And this is the task of the GR-specialist, namely to properly assess a situation and select an appropriate model of legal relations.

Thus, the legal relations of a public-private partnership are the most suitable by nature to solve the tasks set for the purposes of reconstruction. However, we can also find a range of specific aspects within cooperation between the state and an investor. In particular, the implementation of public-private partnership can be in the form of a concession agreement, asset management, joint venture agreement and other agreements.  Each of these forms of public-private partnership has its own specific features, restrictions and requirements, both in relation to the subject matter of the agreement and to the essence of legal relations. In addition, relations in a public-private partnership involve various forms of state support and a GR-specialist should also consider this issue objectively and professionally. Because one should understand that during a war the state cannot spend a single extra penny from the state budget on the one hand, and on the other hand, the project should be “manageable” for the investor.

Grant programs and donor financial assistance provided by international financial institutions deserve special attention. In this case, a GR-specialist should represent the interests of potential contractors both to the state and to the donor at a high level. He/she needs to prove their ability to ensure the performance of works, correspondence to the tender requirements.

In addition to the above and other existing legal models, GR-specialists should apply innovative and advanced approaches to solve current challenges. One such innovative approach is the introduction of tolling transactions based on the use of raw materials supplied by a customer. In this case, the proper statutory regulation is required. Experience shows that the most effective way of statutory regulation is to take into account the opinions and search for compromises between the state and market participants of the respective industry. The main task of a top GR-specialist in the process of adopting novelties and amendments of fundamentally new legal mechanisms for attracting investments for the reconstruction of the state is to represent the interests of the customer and search for the fastest way to adopt regulations. If necessary, it includes the development of a package of documents for submission and presentation to the main committee of the Verkhovna Rada of Ukraine, negotiations with the parties of the legislative initiative with respect to their adoption. In some cases, when the draft laws have already been partially considered by Parliament, it is appropriate to consider the possibility of introducing materials in the form of amendments and proposals, negotiations on the support of the proposals and amendments submitted in the committee and in the parliamentary session hall.

In view of the situation in which our country finds itself, it is reasonable to work on improving and revising the applicable laws of Ukraine, both at the level of laws and by-laws in order to avoid unjustified bureaucratic procedures, excessive regulation and inappropriate formalism, because the issues here are human life and the fate of the country. In this case success also depends on how effectively the market representatives and representatives of the GR-industry cooperate, when the former make the problems of the industry publicly available, while the latter offer legal and rule-making ways to solve them.

Finally, we should all think about the life and development of our country after we have attained victory. And in this post-war process of recovery and establishment of the state, we will need this “liaison” between the state and business entities that will include professional representation of business in state authorities in all evolutionary processes: from climate modernization to obtaining full access to the G7 and European Union markets through the cancellation of all quotas and import duties for Ukrainian goods; from deregulation and minimal state interference in business to ensure the priority of exports of finished (processed) products in the metallurgical and agricultural industry and export of raw materials.

Simply put, we can describe the role of the GR-industry as the highest possible partner cooperation between the state and business for the sake of a single goal: the prosperous country of a happy people.

  • Viktor Zalizniuk

    Counsel, Attorney, Head of Government Relations Practice, ADER HABER

    Viktor Zalizniuk possesses many years of experience in interacting with government authorities. Combining legal knowledge and tactics of working with government agencies, he is able to successfully build dialogue between business and government and implements comprehensive projects.

    Viktor Zalizniuk has been involved in developing the legal field in Ukraine for 20 years. Including working in senior positions at the Ministry of Justice of Ukraine, advising parliamentary political parties, factions and people’s deputies of Ukraine. He has also worked on the Parliamentary Committee on Legal Policy and headed expert groups on drafting legislation on various issues.

    Viktor Zalizniuk actively participates in the preparation and promotion of regulations both at the level of public organizations and at the level of expert councils created under government authorities.

    He specializes in providing legal support in large investment projects and public-private partnership projects, ensuring effective interaction with state bodies and local governments at all levels.

    Legal services in the GR segment are an essential condition for high-quality project support and provide an integrated approach to the business objectives set by of our clients.

    In 2021 ADER HABER law firm was awarded “Law firm of the Year in Government Relations” by Legal Awards 2021.

ADER HABER

Address:

Business Center Carnegie Center, 14th Floor,

7 Klovsky Uzviz,

Kyiv, 01021, Ukraine

Tel.: +380 44 280 8887

E-mail: office@aderhaber.com

Web-site: www.aderhaber.com

ADER HABER is a recognized leader in the provision of comprehensive legal services in Ukraine and is in the TOP 20 leading law firms in Ukraine.

ADER HABER confidently takes a leadership role in GR, retail, real estate, construction, land, tax, family law and litigation practice.

Our team has both legal knowledge and experience, as well as industrial insight. This allows us to take into account forecasts, trends and possible risks of the industry, in which the client works, at all stages of project planning and implementation.

We focus on spheres that form the country’s economic stability: industry, agriculture, service sector, wholesale and retail trade.

We have 16 years of successful work with foreign and local corporations, governments, state-owned companies, and public sector organizations, investors, banking institutions and private clients.

ADER HABER lawyers represent the interests of flagships of the national economy and international companies in national courts and international arbitration. We manage real estate portfolios of national and international brands. Our experts advise on tax risks and protect the interests of large businesses in tax disputes. We provide comprehensive legal assistance to banks, financial institutions and investors.

ADER HABER constantly expands the range of services provided, as well as opens up new possibilities outside the national jurisdiction, which enables improvements to be made to the quality of the company’s work.

Our clients trust the expertise of ADER HABER, so they can confidently continue to do business while we resolve their legal issues.