Alexela chair on Kaljulaid decision: Business choices never black-and-white

Marti Hääl appearing on an earlier edition of 'Esimene stuudio'.
Marti Hääl appearing on an earlier edition of 'Esimene stuudio'. Source: ERR

Former president Kersti Kaljulaid's decision to step down from the board of fuel retailer Alexela, in the wake of reports the company had imported for sale Liquefied petroleum gas (LPG) of Russian origin earlier this year, was fully understandable, board chair of the firm Marti Hääl says.

For politicians, Hääl added, choices like this are much more black-and-white than they are for businesses, while the temporary reliance on Russian-origin LPG, used for instance in key sectors such as drying out harvested grain, was the lesser of two evils when compared with the economic damage a complete bar would have led to – while at the same time benefiting Russia itself.

The switchover also came at a time when there were supply problems in the Central Asian Republic of Kazakhstan.

Appearing on ETV politics show "Esimene stuudio" Thursday, Hääl said of Kaljulaid's decision to step down in the light of this that: "I understand this … since, as a politician and a public figure, these categories are black-and-white.

"For an entrepreneur, they are not so black-and-white, but rather more shades [of gray]," he went on.

Hääl said that in any case, all Russian-origin imports had been replaced by those of Western or Central Asian origin.

Kazakhstan's leadership in April had been anxious to avoid a repeat of the unrest seen in January 2022, following an energy price hike at that time, and had anticipated the price rise seen in spring.

"The fact that the situation suddenly changed due to the Kazakh crisis and we realized, somewhere in June, that we had not been able to stockpile enough gas of non-Russian origin for the start of crop drying season, meant it was necessary to make that decision in order to ensure food security," Hääl added.

"It was inevitable; any entrepreneur must make such decisions which take into consideration various circumstances. Since we are providers of a vital service, we bear the responsibility of ensuring energy supply, and of fulfilling our promises to our customers. That's just how it is," he said.

"There is not too much black-and-white in real life," Hääl went on, noting that moral questions relating to sanctioning are for the political leadership, not the business leadership.

"Had we stopped [LPG supplies] that very day, we would all have been in trouble. There is only one solution to this: Politicians should calibrate a moral compass and find a solution where this commodity would be sanctioned," he said.

The issue had been discussed a couple of times at Alexela board level, Hääl said, meaning Kaljulaid would have been aware of it.

"There are few entrepreneurs in Estonia who would think that doing business with 'Mordor' is okay," Hääl said, referring to the  realm and base of the evil Sauron, in the fictional world created by J.R. R. Tolkien, a common reference in memes and other commentariat when referring to the Russian Federation.

" The dilemma of whether to do business with Russia also exists for an entrepreneur, but each case should be looked at separately, as a morally correct decision can spell millions of euros in losses for an entrepreneur, and billions of euros for large companies – and all these losses are Russia's gains, in fact."

"The question is what is the price of exiting it and whether it is only the Estonian economy, the Estonian people who pay it, or whether it also has a negative effect on the Russian side.

"Finns and Germans have large state-owned companies that have business in Russia worth billions. They do have an exit plan. If you hand over the keys to these investments – Estonian entrepreneurs in the range of millions, Finnish heat producer Fortum billions – putting them in the hands of Russian oligarchs, and then leave, then the loser is on this side of the border, on the other side of the border, there are only winners," he added.

The energy crisis in Kazakhstan also saw LPG sold on short term bases from a local refinery owned by U.S. multi-national energy corporation Chevron being restricted, Hääl said.

Hääl put the figure of industrial customers of LPG at 226, with district heating firms aomg them, in addition to smaller farms, food producers, and firms who dry out grain produce.

Finding alternatives would have also led to significantly higher input prices during that interim period when Russian LPG was used, Hääl said.

Kaljulaid, president 2016-2021, announced last week she was stepping down from the Alexela board, over the Russian-origin LPG imports.

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Editor: Andrew Whyte, Marko Tooming

Source: 'Esimene stuudio,' interviewer Mirko Ojakivi.

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