Environmental organizations raise stink over MHP’s poultry farm

22 September 2015, Kyiv Post

There’s an ill wind blowing in Vinnytsa Oblast, and if one of Ukraine’s biggest agriculture companies keeps growing, things could get worse for the people living nearby, environmental, corporate and bank watchdog organizations from the European Union and Ukraine say.

MyronivskyHliboproduct (MHP), which runs the biggest poultry farm in Europe near the village of Ladyzhyn southeast of Vinnytsa, was the subject of two reports released this September after a fact-finding mission of six environmental watchdogs visited the area in May.

The foul odor produced by the huge poultry and fodder production operation was at the top of the list of problems reported to the mission by locals.

The mission consisted of representatives from Bankwatch Network (a Czech-based network of environmental organizations that monitors international financial institutions), Both Ends (the Netherlands), SOMO (the Netherlands), the National Ecological Center of Ukraine, the Estonian Green Movement and the Latvian Green Movement. The EU completely or partially finances all of them, apart from SOMO, which was founded by the Dutch Ministry of Foreign Affairs.

According to reports published by SOMO and Bankwatch, about 100 polled local residents in the area expressed fears over MHP’s operations. In particular, residents complained about the foul odor from warehouses where chickens live and manure stored in open-air facilities.While the Ministry of Ecology and Agriculture Ministry say there have been no violations of the law, locals say they are worried about the spread of animal-borne diseases, contamination of groundwater, road safety, and about cracks appearing on their homes from the heavy vehicle traffic rumbling through their villages.

During its visit, the mission recorded foul odors from various sources, including trucks passing with loads of live birds on their way to the slaughterhouse, rearing zones where chickens are kept, and heaps of manure piled in fields and at a major raw manure storage site. The facilities contribute to the area’s bad air quality, the mission found.

“Depending on the wind, the odor affects not only villages located near the MHP facilities, like Olyanitsa, but also the (more distant) village of Ulianivka,” says the “Black Earth” report by Bankwatch.

But MHP senior ecologist Oleksandr Semenets says locals’ fears are overblown.“Yes, it’s possible there’s a smell, but we operate according to sanitary zone rules – there are no excess(odor) levels closer than 1.2 kilometers to villages,” he told the Kyiv Post by phone on Sept. 21

The mission also reported heavy truck traffic damaging roads, causing noise, raising dust, and causing vibrations affecting houses in the area. “We counted more than 30 heavy vehicles in one day. The traffic is very heavy for these villages,” one of the reports’ authors,Fidanka Bacheva-McGrath, told the Kyiv Post by phone on Sept. 21. “Residents also showed us cracks in their houses, saying vibrations from the traffic caused them,” she said.

However, according to MHP, the company uses only those roads that are available for trucks, and it even builds its own roads.

“The company’s trucks use both local roads, which were always overloaded with heavy trucks (not only ours), and those MHP built itself, which even locals use,”the head of the investor relations and communication department of MHP, Anastasiya Sobotyuk, told the Kyiv Post in a phone interview on Sept. 21.

The mission also saw several heaps of manure piled in the fields, without any clear indication of how or if it would be used. Manure had already been applied to the fields surrounding the heaps, so the remaining dung appeared to simply have been left there.

The mission also visited the company’s manure storage site. “The facility basically consists of a concrete floor and side walls made of concrete. Neither the floors nor the walls were waterproof, and there was no roof or rainwater cover above the manure, meaning that nutrients could easily seep into the groundwater, and methane emissions could escape into the air,” the mission report reads.

When Kyiv Post contacted Nataliya Kolomiets, a representative of National Ecological Center, she confirmed that Ukrainian laws regulate methane emissions in the country and in theory cover this case. “The problem with MHP is that the company does not release Environmental Impact Assessments (EIAs), which are supposed to be public,” Kolomiets, who was also a member of the mission, told the Kyiv Post by phone on Sept. 21.”

“Neither can we assess the contamination from MHP ourselves due to the moratorium on the inspection of private enterprises,” she said.

MHP said an organic mixture based on chicken manure is placed on the fields of MHP’s grain production enterprise according to standards. “The local sanitary and epidemiological station approved our operations with manure and can provide documents that prove it,” Semenets said. “Those who wrote these reports are not ecologists. How could they take proper measurements?”

MHP’s Vinnytsia poultry farm does not just create inconvenience – it also provides jobs to large numbers of local and regional residents. According to the mayor of Ladyzhyn, the town has around 24,000 inhabitants (including the nearby village of Lukashivka), with MHP currently employing 5,000 of them, and potentially another 3,000 after its expansion. According to the company, the average salary at the rearing facility is Hr 5,205 (210 euros) per month, and at the slaughter facility – Hr 5,146 (220 euros) per month.

Bacheva-McGrath thinks a lack of information might be the main reason locals complain about the company. “With no information, people start to be afraid, start to ask questions about the spread of disease, about ground water being affected, and there’s no data to calm their fears,” she told the Kyiv Post.

MHP, however, denies it’s hiding anything. “We planned special tours for locals, including deputies, leaders of communities, and members of village councils to all our facilities before and after they were put into operation,” Sobotyuk told the Kyiv Post.

Semenets added: “Data about our plans and operations is available. People can find it in local newspapers, in archives, or simply come to us and ask.”

According to its 2014 annual report, MHP produced approximately 60 percent of the factory-farmed chickens in Ukraine and 35 percent of the poultry consumed in the country last year. The company, which is 66 percent owned by Ukrainian billionaire Yuriy Kosyuk, slaughters eight million chickens per week, or more than 400 million chickens annually. The company has total land holdings of about 400,000 hectares in twelve regions of the country.

In 2015, 18 percent of sales were exports to the EU. According to Dutch watchdog SOMO, in the EU only the Netherlands imports significant quantities of Ukrainian poultry meat.

Since 2003, MHP has received more than half a billion dollars in loans from the EBRD, the EIB, and the IFC (the latter put half of all its investments into MHP). The company says it has invested in resource usage efficiency and environmental sustainability measures.

The EBRD is now planning to give another $85 million credit to MHP. The bank will take its final decision at a meeting of the board of directors on Oct. 14.

“If it’s approved, the money will be used for circulating capital and fodder purchases,” the EBRD’s press secretary told the Kyiv Post.

Bacheva-McGrath says the company is likely to continue to grow in future.

“As long as there is a market in European and Arab countries, and interest from investors, MHP has no reason to stop expanding,” she said.

“(But) the villagers are not being treated fairly. Will (MHP) engage with the local residents?”