31 august 2010

Prime Minister Vladimir Putin meets with Norilsk Nickel workers


At the meeting with Norilsk Nickel workers, Vladimir Putin said their company's problems would not lead to a situation like the one in Pikalyovo in 2009.

The regular part of the wages paid to Norilsk Nickel workers will be increased to 70%, the prime minister said. At the same time, reviewing social benefits, compensations and bonus payments, Putin stressed that "things could be improved."

Replying to a question about subsidised air fares for residents of remote regions, he said that this programme may be extended: residents of Norilsk would be able to fly at reduced fares not only to Moscow, but also to St Petersburg and Sochi.

Transcript of the meeting:

Vladimir Putin: There are a lot of you, so I will not go round to greet you, sorry.

Good evening! As you know, I failed to get here the first time, as the plane did not land... The first plane landed, and our plane was going to land too... and then it suddenly pulled up... The decision was the captain's, so we had nothing to get mad about. We cannot do anything about bad weather, and as you know, the climate here is very harsh.

We have talked much about the company's problems and the problems of Norilsk. Actually, it is good we did not land the first time, as I had the time to review the briefing on Norilsk and the plant. To tell you the truth, I did not think there were so many problems. So when we flew away, I asked my colleagues to work hard on possible solutions to these complicated problems. In my opinion, we managed to do something about it, to reach some agreements. For now, I think you have questions to ask me and I will tell you in detail about the agreements reached while answering them.

I don't want my speech to be filled with tedious slow monologues, and I want you to speak as well. You are welcome. This will be a comfortable way of talking - I will turn towards you. Let's start talking in this way. What questions do you want to ask me? What problems do you have? You are welcome.

Question: I have two short questions for you: I know you are tired.

Vladimir Putin: We are all tired.

Question: First, I wonder what good and bad things we are in for in the future? I mean after this meeting with the territory's local government and the company's management.

Vladimir Putin: It won't get worse for sure.

Question: The second question concerns people of my age. There are about 18,000 working pensioners in the company, and about 20,000 retired workers. If you don't help, if the territory's government does not help, we will never move out of here. Help us, please. Thanks.

Vladimir Putin: This question was one of the most important at the meeting. First, I'd like to thank both the management and the workers of the plant for the good work in 2009. The plant has come through this difficult period successfully.

With our help, of course: you know that taxes on nickel and copper were abolished, and the situation as a whole was stable. The economy has not fully recovered from the crisis, but the plant has, thanks to the personnel.

Now about moving out. This is an acute problem for all northern regions, including Norilsk. I looked at the number of issued certificates: a little over one hundred in 2009 and the same amount in 2008, which means that the queue for moving to the continent (this is how you call it, right?) is standing still. It is clear something has to be done.

By the way, my colleagues worked on finding solutions to this problem last week. I think our efforts may change the situation.

What is this attempt? I even took a sheet of paper with me containing the names and number of agreements that were signed by the federal government, the territory's government, the local government and the company. One of these agreements concerns joint financing to help people move to other Russian regions, which have a more favourable climate.

We agreed to allocate about 30 billion roubles in addition to the money already allocated for this programme and to improve the housing and utilities infrastructure, as it leaves much to be desired, to put it mildly.

Where will this money come from? We can't make it from thin air, but still we agreed to find sources.

What are these sources? The first source is Norilsk Nickel, because it needs to extend its resource base, as many of you know. The government will give Norilsk Nickel licenses for exploring areas with resources. These licenses will cost about 10 billion roubles. This is the money Norilsk Nickel will have to pay to the federal budget.

According to the general rules, this money will be included in the budget revenues and then redistributed in budget spending. I think we will easily settle this with the State Duma deputies. We will create a separate line for this Norilsk programme. We will give Norilsk's licensing money to residents here via this programme. In addition, both the company and the Krasnoyarsk Territory's government agreed to allocate about 9.5 to 10 billion roubles each for this programme. So the total amount of financing will be about 27 billion roubles, meaning that we will be able to move about 700-720 families to other regions each year. If this programme is successful, and I hope it will be, it will open up new perspectives for us.

However, we will not be able to launch this programme until the middle of next year. Why so? Because, according to current legislation, our federal service will have to make a public announcement, open a bid, etc. This licensing process to assess this 9.5-10 billion roubles will take another three months which means that we will get the money and allocate it to the programme at the beginning of the next year.

Sergei Kazantsev (chairman of Norilsk Nickel's association of trade unions): Mr Putin, I'm sorry, my name is Sergei Kazantsev and I represent the trade unions. I want to thank you.

Vladimir Putin: You are welcome.

Remark: Thank you.

Grigory Torgonsky: My name is Grigory Torgonsky. I am a smelter. There is one question that bothers us. It is the grain market situation, which is complicated enough.

Vladimir Putin: Wow, I thought we would talk nickel.

Grigory Torgonsky: You just said the company performed well. Even in the most difficult year.

Vladimir Putin: Yes, that's true.

Grigory Torgonsky: So we are reassured on that score.

Vladimir Putin: You earned a good profit. In the crisis year your indicators improved 10%.

Grigory Torgonsky: We tried our best. But the question is: we are interested in tomorrow's price of bread and cereals and how the government will respond to swings in the grain market.

Vladimir Putin: You know this is a very current subject and no surprise. It concerns everyone in the country wherever they happen to live. I had a meeting with road workers just recently and explained everything to them. Now I will reiterate what I have said before.

In order for us to feel secure about food, we must grow and harvest 77 to 78 million tons of grain annually. In previous years we harvested much more and in recent years we have turned from a total food and grain importer into a stable exporter. I think we used to export and sell abroad something like 10 to 15 million tons. Our export potential had reached 20 million tons of grains.

This year we all see what is happening - it is a drought and one that has not been seen for a long time: a devastating drought. And we, instead of having a record crop as in previous years, will have a shortfall, a sizeable shortfall. We'll gather something like 60 million tons.

The country's domestic consumption is 77 to 78 million tons, as I said. Nevertheless, this is no reason to raise prices. I will tell you why. Because in addition to this year's harvest, we have a grain reserve of 9.5 million tons, with 3.5 million tons in fodder grain, which must serve as feed for livestock. This is very important, because survival of livestock depends on it and so do meat and meat product prices.

In addition, the farms have a so-called carry-over surplus - 21 million tons. This means that, 60 plus 9.5 makes almost 70, and plus 21 is a bit more than 90, whereas our home consumption is 78. It seems we are even left with an export margin.

Even so, as you know, I said we must stop exporting grains. This is due to the fact that we do not know how the farming situation will shape up next year. We are already having problems with next year. This is because we have not sown enough winter crops because of the drought. It makes no sense to plant seeds in dry soil, and also to use diesel fuel to do it.

This is the problem we are facing. Why is it so challenging? Because instead of fulfilling our export contracts, we are forced to think about our own population, about our country.

But these are problems for next year, if they do occur. Perhaps we will have a bumper crop: we don't know. So we have to hedge our bet in some way. But this year the grain situation should raise no fears. Which means there are and must be no motives for profiteering when setting prices for bakery products and everything related to them: flour and so on.

Certainly, since our country is a country with a transient economy, our inflation rate is high enough, though to date it has been the lowest ever in Russia's new history. That is to say, we have strongly clamped down on prices, truly. But still they are higher than in developed or sustained-growth economies, although the crisis has shown that they, too, have problems despite their sustained progress. But their inflation is lower.

When inflation, or higher energy, transport and other costs, force prices up, we can understand it. But when things move beyond natural boundaries, we have a speculative growth scenario and then this is a job for the Federal Anti-Monopoly Service.

We recently introduced a rule. If any region shows a steady growth in the prices for basic necessities within 30 days and by 30%, a cap can and must be put on further growth. This is our guideline, and I am strongly recommending that the Federal Anti-Monopoly Service follow it. Let's wait and see what will happen on the market. Again: there is no reason for price leaps.

Remark: Thank you.

Remark: Mr Putin, it so happened that in 2008 I had to return to Norilsk from Pikalyovo, Leningrad Region, after a 12-year absence.

Vladimir Putin: Why this trekking back and forth?

Remark: I was born in Pikalyovo.

Vladimir Putin: I see.

Remark: I was born in Pikalyovo. After graduating from an institute I worked in Norilsk and then returned home. I thought it was forever. But certain developments forced me to go back to Norilsk, and a little later I had to evacuate my family - my wife and three daughters - if that is the right word. They are now in Norilsk with me.

I know at first hand how they treat ordinary workers at Mr Deripaska's enterprises. I know that profit comes first and people come last. Like many citizens of Norilsk, I am worried about the ongoing dispute between Norilsk Nickel's main shareholders. I would like to ask you: how well protected are our workers if there is a fallout from this dispute? And I do hope, and I am sure, that there will be no repeat of the situation in Pikalyovo. But can we count on the government's support?

Vladimir Putin: Yes, of course. As you have seen, in Pikalyovo, too, we took the side of the workers.

Remark: Without your support, who knows what would have happened.

Vladimir Putin: Yes, we lent our support primarily to the workers. But the situations in Norilsk and Pikalyovo are completely different. In Pikalyovo, a single industrial complex was split into three enterprises after being privatised.

These enterprises cannot effectively function without the other two, and this was the root of the conflict that eventually broke out: each of these three parts wants to do better at the expense of the other two. This is not the situation in Norilsk. Norilsk is still a single production complex, it has not been split up. And the fact that there is a dispute among some shareholders over how to handle certain issues (I will speak about this later on) - this is not what brought Pikalyovo to a standstill. They were struggling against one another: one enterprise against another... they are independent so they cut off the supply of raw materials. One enterprise stopped supplying raw materials to another. This is not the same as your situation at all. The ongoing dispute between the shareholders is of a completely different nature. The outcome cannot be the same because the production process has not been broken up.

As for the dispute, yes, we must admit that it exists. I can tell you frankly that I did not even discuss it today. By law we are not supposed to interfere. But certain things caught my eye. I looked at how the dividends were distributed. I looked at how they have been distributed in other global companies similar to Norilsk Nickel. The Kazakhs (Kazakhmys) distributed 6.6%, Rio Tinto, I think, 18%, BHP 38% plus. The Norilsk Nickel shareholders paid out 50% of their profits in dividends, the largest amount. I think that is enough. It is several times more than other companies pay.

Their argument is over how much to pay in dividends, how to use them and how to develop the company. How should the dividends be used? At the end of the day, strange though it may seem, in general these arguments may benefit rather than harm the company because the different parties are hammering out the optimal development plan.

Today we discussed the programme to relocate tenants, environmental problems and so on. You have to hand it to the shareholders, they did not begrudge the extra cost and they did not object, they all agreed at once.

Remark: That is the whole point. What happened in Pikalyovo didn't make any sense.

Vladimir Putin: Well, yes.

Remark: Absolutely. It was unbelievable. Maybe it is unlikely to happen in Norilsk, but you can see how it could happen in theory. Common sense must prevail. 50% - yes, but not 115%.

Vladimir Putin: Yes, of course. I hope they will stop there, especially now that I have made an issue of it.

Remark: Thank you.

Vladimir Putin: But I repeat, in Pikalyovo the seeds of the conflict were sown during the course of privatisation. I know these privatisers, I know them personally. I simply did not know about their behaviour in Pikalyovo, but I was surprised to see some familiar faces there. I worked with some of them at St Petersburg City Hall. When I saw them I said: "Hello, now everything is clear." Thank God, the situation there is under control, although there has not been a final resolution, there are still problems. But I hope that they have enough common sense not to regress to the situation there eighteen months ago.

Remark: Thank you.

Question: I am Roman Lyashko and I represent the Norilsk Nickel social and labour council. This is our question...

Vladimir Putin: The trade unions?

Remark: Representatives, a representative body of the employees. The trade union is something different.

There were reports in the media last month that the Ministry of Healthcare and Social Development had proposed amendments to the procedures and terms of awarding benefits to workers in hazardous occupations. The media made it sound very dramatic. The government will take away the benefits, slash them, this was how it was presented in some reports. The document itself has not been published. On this point...

Vladimir Putin: What was the name of the document?

Remark: Kommersant wrote that a draft document was under consideration that would change the procedure, the way benefits and compensation are allocated to workers in hazardous jobs. These headlines caused us to worry.

We would like to ask you what is in store for this category of workers? And what is the government policy here?

Vladimir Putin: Government policy must defend the interests of working people. I say this without any irony. I mean what I say. That's the first thing. Secondly, such documents are never adopted outside the so-called tripartite commission in which the trade unions are equal participants in the negotiating process. And they are very active, sometimes even aggressive, but on the whole they are right because they defend the interests of the people they represent. There is no way it will be adopted without the trade unions. If it is adopted at all. It has not yet reached my desk. And it cannot and must not make the terms worse.

Question: But on the whole, is the intention to maintain the current benefits, or are the government and the ministry going to consider...?

Vladimir Putin: No proposals to reduce these benefits have reached my desk, I have not seen any. So, it may be still at the working level, at least it has not been considered at my level. You know that sometimes even the trade unions make such proposals.

The trade unions in some industries, for example, are asking us to lift restrictions on the length of the working day and other such things so that workers can earn more. We have to turn down their proposals because it is unclear how employers will exercise that right. I think the government's position on this is correct. We must have common rules and protect the interests of citizens, especially someone who works in difficult conditions.

Incidentally, we discussed this issue with many of the parties concerned in Kuzbas. Representatives of various agencies there suggested lifting certain restrictions on work in coal mines. That is dangerous and, of course, we cannot agree to this.

Question: Yelena Tumanova, Taimyrsky mine. This year our young people and pensioners were able, for the first time, to fly to Moscow on discounted flights. The airlines got federal subsidies. Will this programme be continued, and is there a chance that the list of cities will be expanded? Because our students study in Krasnoyarsk, in Novosibirsk, Samara and St Petersburg - all kinds of different cities. This is the first part of my question. And the second part: is it possible to include other categories of citizens in this programme, the company's employees, for example? You see, we have our fares paid for us once every two years, and for a family of four to just fly to Moscow in the summer costs at least 112,000 roubles.

Vladimir Putin: As you know, this is an issue of budget constraints. We have to cut spending, and it is clear why. The Russian Federation's budget revenues have fallen because of the global economic crisis. Although oil and gas prices have rebounded, and the revenues from these commodities are huge, and metals also bring in huge profits, on the whole the economy has contracted a bit in 2009 and the total budget revenue has fallen. That is why we have to cut spending.

Even so, we have decided to keep this programme at the current level. We allocated 2.5 billion roubles this year and we will allocate the same amount next year. For now it is difficult to expand it.

As for increasing the number of cities to which one would be able to fly for reduced fares, we discussed it with the governor today and I agree with him in principle. He proposed to increase the number of cities - by adding, for example, St Petersburg and Sochi - but keep financing at the same level as today. How much did we allocate for Norilsk? 80 million I think. Let it remain 80 million, but give people the opportunity to fly not only to Moscow, but also to St Petersburg and Sochi for a holiday or to visit with relatives.

Remark: And to Krasnoyarsk.

Vladimir Putin: My reply to him was guarded and my answer to you will be guarded. When I get these questions I am wary of saying, "Yes, we will do it." Because if I say, "Yes, we will do it", we will have to pay through the nose. As this has to do with budget spending, my answer will be very careful: we will almost certainly do it. When we take up financing targets for next year, we will stipulate that people will be able to fly to several cities: in addition to Moscow, there will be Petersburg, Sochi and, let's say, Krasnoyarsk.

Remark: Thank you very much.

Question: My name is Pyotr Sapelnikov, and I work at a copper plant. The Russian media have recently squashed the idea of raising the pension age. Does the government plan to do this?

Vladimir Putin: No. There is a lot of talk about it, and it has to do with the demographic situation in the country, the fact that the number of workers is falling and the number of non-working people, people of pension age, is increasing But the contributions to social funds come from those who work - and there are fewer and fewer of them. And those who draw on these funds are becoming more and more numerous. In many European countries - as you know - the pension age is being raised. I won't be so bold as to speak about the situation in specific countries, but the retirement age for men there is already 67. And by the way, they draw no distinction between women and men, in some countries in Europe it is I think 65...

Remark: Their standard of living is higher.

Vladimir Putin: It is not a question of standard of living. You know there is an ugly-sounding term, which I will use now. Life expectancy here is lower, although it has been on the rise recently. I think we have raised life expectancy by four years over a period of five years, to 69. That is a good pace for any country. Infant mortality is going down and people are living longer. In Europe, life expectancy is higher.

There is one indicator on which we are very similar to the European countries, and the unpleasant term is this: "remaining life." But this is a specialist term meaning how long a person is expected to live after retirement. The time after retirement in this country is roughly the same as in Europe, but the total lifespan is shorter. Why? This is because many people, especially men, die at a relatively young age. Alcoholism, traffic accidents, and other such things - these are the main causes. Also, of course, diseases, but we see positive trends on that note - with respect to cancer and cardiovascular diseases, and we have dramatically reduced the number of deaths from traffic accidents. All the same, I think there is no need today to even to put the issue of raising the pension age on the agenda. True, the Pension Fund has a deficit, but we are still able to cover the deficit from the federal budget. Budget revenues permit us to do that. So, we are not even considering raising the pension age.

Remark: Thank you.

Remark: Anatoly Vershansky, Komsomolsky mine. There were many forest fires this summer. You visited the affected regions many times, fought the fires yourself, and helped the victims. One can see that you are very committed.

Vladimir Putin: Well, actually I did not put out the fires. I went up in one plane, but not in order to extinguish the fire. I wanted to see how the aircraft work because we allocated an extra 10 billion roubles to buy these planes. I had to see how they perform.

Remark: Clearly you are very concerned. But still...

Vladimir Putin: I am. So many people have suffered.

Question: Don't you feel a sense of guilt? What measures will be taken to prevent this from happening again? Thank you.

Vladimir Putin: The answer is no. How can you blame someone for the weather? At first they said that it was the hottest summer in Russia in the last 140 years, but when I talked with experts they said that Russia has never experienced such hot weather. Not a drop of rain for two months in a row all across Central Russia and temperatures of 38-40 degrees Celsius. Can anyone remember such temperatures? No one. Things combust all by themselves. If a bottle is left in a forest, it works like a lens. I am not talking about people being careless with fire, which is not uncommon. Even a piece of glass dropped in a forest several years ago works like a lens when the sun shines from morning till night every day.

When I flew on one of the airplanes, we took off and we saw smoke everywhere. It became clear that given this scale of fires, the available resources and manpower were not sufficient. But no one could imagine the enormous scale of the fires. If such fires happen once in a hundred years, let alone in a thousand years, you can imagine the cost of having all this equipment just in case. Maintaining it over a hundred years will cost so much that it may be cheaper to handle these fires when they happen. That being said, it is of course a great tragedy.

Nevertheless, conclusions must be drawn about how the available assets and resources were used: what has worked effectively, and what has worked less effectively and what needs to be done in addition. There is food for thought there and something to rectify.

For example, I mentioned purchasing additional aircraft and other equipment. We also must come up with a solution for how we monitor the situation in the forests. Under the Forest Code, we delegated responsibility of the forests to the Russian regions, something they have repeatedly asked for over many years. We were told that from Moscow we could not control what was happening in the Far East and in the Siberian forests. "Let us take care of that, we know the situation on the ground better and we will handle it better." So, we handed it all over to the regions. By the way, we handed over not only the forests, but the forestry complexes with all the property, including the equipment for monitoring the state of the forests and putting out forest fires. But this property was not sufficient considering the scale of the fires. Anyway, oversight functions are now concentrated in a single place.

Formerly, oversight functions were distributed between three agencies: the Agriculture Ministry, the Federal Service for Veterinary and Phytosanitary Supervision (Rosseslkhoznadzor) and the specialized Forestry Agency. Now the government will take it all over, away from the Agriculture Ministry and all the oversight functions will be concentrated in a single agency. I hope this will also improve the situation. And of course we will have to see how that system functions and how advanced it is in the Russian regions.

There are grounds for thinking that in some regions two functions, the use of forests and control of forests, are combined. That implies an obvious conflict of interests, and where these functions are combined they certainly must be separated. We are doing that now, the government has issued corresponding instructions, and we will address this situation together with the regions.

Question: Nikolai Levshin, Oktyabrsky mine. I am interested in the following situation. Krasnoyarsk, like Norilsk, has the status of a territory. Krasnoyarsk is like a northern region, meaning the conditions there are the same as in the north. But we who live in Norilsk pay 10,000 roubles for an economy class three-room flat with an average living space of 65-70 square metres. Krasnoyarsk is a similar territory, but they pay 5,000 roubles for economy-class flats of the same size. Why the difference?

Vladimir Putin: You mean the housing and utility rates?

Answer: Yes. The utility rates.

Vladimir Putin: We have to look into that. The governor is sitting in this room, let him handle the numbers. On the whole - I have looked at a comparative analysis of Norilsk and the other regions and I can say (these are authentic data and not the data that your bosses have cited here) - the housing and utility rates are near the average for Russia and even below average for northern regions. I have the graph here, I can show it to you. As for the comparison with Krasnoyarsk, one should look at the structure of payments. Because in addition to electricity rates, there are rates for water, for this and that...

Remark: For power consumption.

Vladimir Putin: Yes, for heating and so on. One should look at the structure of the spending.

Remark: But it can't differ by a factor of two.

Vladimir Putin: Yes, I agree. Incidentally, based on the information I have, early in the year your utilities rates increased by 5%-7%-8% whereas in some other Russian regions - I have just been to Kamchatka - they increased by 35%. We had to do a bit of persuading there, and they cut it to 25%. Here it is 5%-7%, that is not so bad. But why there is such a discrepancy between here and Krasnoyarsk I don't know. We should look at the structure.

Remark: Before this, we had a 100% increase in our region.

Vladimir Putin: We must look into it. The governor is here, please review the structure.

Lev Kuznetsov: We will provide the information.

Vladimir Putin: Yes, please do so by all means. Indeed, if we talk about moving the people of Norilsk to places with a better climate and think that the south of the Krasnoyarsk Territory is more comfortable, it is unclear why they pay less for their apartments. We should look into it.

Question: Denis Zaitsev, the Arctic Building Company. My question is this: when I started my career in 2000 I was sure that when I began the job my employer would pay me an Arctic hardship fee according to the article in the law on the northern areas. If I am not mistaken, that article was repealed in January 2005. It is now at the discretion of the employer. Who can guarantee that a change of administration or employer will not lead to these benefits being dropped? My friends from Krasnoyarsk and Petersburg who want to come here have no guarantee that they will be paid these northern bonuses.

Vladimir Putin: I understand. Yes, some amendments have been made to the law, and the northern bonuses used to be paid to young people under 30 if they had lived in the Far North or similar areas for at least 5 years, but from the first day of employment. If you have lived in the North for five years and you find a job, you are entitled to the northern bonus from the first day you report for work. But having lived in the North for five years was the precondition.

Under the law, northern bonuses may be paid under collective employment contracts. The bodies represented by the colleague who sits opposite you, the trade unions, conclude collective contracts with the employer and include this provision. The law provides for that. As I understand it, you are paid northern bonuses, aren't you?

Answer: Yes.

Vladimir Putin: They have made this decision at Norilsk Nickel - by the way, I am not sure that one has to have lived in the North for five years - to pay the bonus from the first day of work regardless of whether or not you have lived in the North for five years. Under the previous law, one had to have lived there five years, if my memory serves me. We should check, but I think I am right.

Remark: Absolutely right.

Vladimir Putin: The rules introduced now will improve the workers' position. For example, your friends from Petersburg have not lived a single day in the North, and they will come here and get a job and will immediately start receiving northern bonuses, whereas under the previous law they would still have to live some time in the North to be eligible.

Question: Is there a guarantee that it will not fall through the cracks?

Vladimir Putin: Has it been fixed in any document?

Answer: We have an order.

Vladimir Putin: An order is good. But actually, the colleague is right, there must be some stability and it could be put in the employment contract with the trade unions. If it is established in the contract the trade unions will not give it up.

Remark: When there was the law it was a guarantee: the law must be complied with.

Vladimir Putin: Yes. But I assure you - and I have extensive experience working with the trade unions - if it is established in an employment contract it may be even stronger than the law. Because you see, the trade unions depend on the work collectives and it will be impossible to explain to them why they have withdrawn these demands once they have been established in a collective employment contract. Do that. And besides the administration does not object. Do you object?

Answer: No.

Vladimir Putin: That settles it. Next question.

Question: I am Lyudmila Kuznetsova, chair of the Norilsk Nickel trade union federation. We do have a collective employment contract and we have a commission to oversee it, and I am the chair of that commission. There are many social programmes that seek to ensure that benefits, payments and compensation to workers and members of their families are paid. Unfortunately, the media sometimes unfairly criticise our company and its management and everything about the social and labour conditions. What do you think of our company's performance regarding social and labour relations? How do you assess the social aspects of our company's work?

Vladimir Putin: There is still work to be done.

Question: What exactly?

Vladimir Putin: There are still problems. First, we agreed with the company's management today - we did not just agree verbally, we signed a document (your colleagues signed it and I think it is good news for you) to the effect that the permanent part of the wage must be close to 70% - this is what we did in Kuzbas. I don't see much difference: why do miners in Kuzbas enjoy a guaranteed 70% of pay while workers in Norilsk, who work underground, are not entitled to such pay? This may not be such a big deal, but it is still good news. I hope it will be implemented in practice and not only on paper.

As for other social issues, I think more attention could be paid to health care. We agreed today that we will disburse funds from the federal budget to help equip your medical facilities, but the company could also be more forthcoming on this. That's number two.

Number three. I spoke about this several times during our meeting. In my opinion, there are not enough sports facilities in Norilsk. I understand that in principle enterprises cannot be expected to provide all social infrastructure. Everywhere in the country we are trying to relieve enterprises of the burden of maintaining social infrastructure and make it the responsibility of the municipality because social spending is a brake on the enterprises' growth. I admit that this is not a very civilised way of handling social issues. But then Norilsk is a special place. First, it is in the Far North and second, it depends on a single industry. The municipality cannot cope alone, this is obvious. Having said that, there are some other areas in which the municipality could have worked more actively, for example, relocating people.

But on the whole wages are always too low for those who receive them and too high for those who pay them. We must find middle ground: the wage rates must not undermine the enterprises' performance, but they should be commensurate with the effort that the worker puts in, and the effort here is great. Wages must be raised gradually. I have already said that the permanent guaranteed component of the wage will be 70%, but it has to grow in real terms. 

Remark: This year we had a 10% wage rise in spite of the crisis.

Vladimir Putin: I know. As far as I understand - I have looked at the documents - a 6th category excavator driver is paid more than 60,000, 66,000 roubles. But some are paid 35,000. There is room for improvement. On the whole, I cannot say that this issue is being neglected. It would be unfair of me. They do pay attention and work, and they have good investment programmes. And they do invest in the social sphere. They have launched a programme called Our Home. That is good. They have already bought several homes somewhere in the south. On the whole I repeat: I cannot say that nothing is being done, things are getting done and money is being invested, but still more needs to be done.

Remark: Thank you very much on behalf of the company employees and the city residents for coming here. You are our guarantor and we have high hopes.

Remark: Sergei Gradyushko, copper plant, smelting shop. The situation is that the content of valuable components in our ores is going down.

Vladimir Putin: That is correct.

Remark: So our enterprise is not operating at full capacity. The number of employees is less than it could be. The company is investing in the development of the ore producing assets, but the effect from these investments will take some time to kick in. At the same time the areas where our enterprises ...

Vladimir Putin: 75 billion. What you are hinting at costs 75 billion, according to government estimates. The company's management says 15 billion.

Question: Perhaps some other schemes could be used in this situation.

Vladimir Putin: It's hard to imagine any other schemes. You are talking about the government reserve, am I right?

Answer: Yes, about the ores that contain copper.

Vladimir Putin: The reserves are large. A good stock. It is a reserve that can last your enterprise for many years. We are ready to address this problem and help your plant. The question is how to assess the cost of this government reserve.

Forgive me for interrupting you, I was trying to make a joke.

The government agencies assess the cost of the property at 75 billion roubles. When they announced it today, Vladimir Strzhalkovsky (Director General of Norilsk Nickel) buried his head in his hands and threw up his arms and said: 15 billion. I said: "Is it an oriental bazaar or something? Isn't it possible for experts to determine the value?" We will attend to this now. It can be done only in winter because these reserves are underwater, I am told. Measurements will have to be made, samples recovered and assessed unless of course the company management and the relevant government agencies in the meantime come to an agreement without any samples and measurements, which is also an option. But in any case we will of course help Norilsk Nickel, that goes without saying.

Another option is to put all these reserves up for auction, if we want to sell them. The question is who will buy them? One may imagine, in theory, that other copper producers may buy them. But that involves logistical effort, copper will have to be transported and that costs money.

Remark: I have great doubts.

Vladimir Putin: Yes. But on the other hand, that is a lot (addressing Vladimir Strzhalkovsky). How many years of work will it ensure?

Vladimir Strzhalkovsky: Five or six.

Vladimir Putin: Five or six years of additional work. In short, we are thinking about it.

Question: Mr Putin, one more question. The question of health came up several times during the conversation today. It is a question that worries many of our workers. The maximum sick-leave pay in Russia - whether in Norilsk or Moscow - is 34,500 plus. You know what our average wage is, you have mentioned it yourself. Very often our workers hold out as long as they can and do not report sick because it is impossible to feed a family with that amount of money. Formerly there were upward coefficients (though the sum was not great anyway), but now our standard of living is unfortunately not improving.

Vladimir Putin: I understand. What is your question? 

Question: As prime minister, what is your take? Nothing coming our way? I understand that it is all paid out of insurance premiums, which are also limited, but people tend to get sick.

Vladimir Putin: I understand your question. It is not only the case that the amounts available are limited. I'll try to explain. Formerly when we charged the Single Social Tax, sick leave pay was a flat 18,700 roubles for everyone, this was actually the upper limit. Now, as part of the pension reform, we have switched from the Single Social Tax to insurance premiums. These insurance premiums go in three directions: to the Pension Fund, the Mandatory Medical Insurance Fund, the medical fund, and the Social Fund.

Money to pay for sick leaves and temporary disability comes from the Social Fund. But it has been decided that these insurance premiums are to be deduced from a certain sum and if the sum is higher, no dues are paid. The sum for this year is 415,000 roubles. This means that the monthly wage of a worker who is paid 415,000 roubles a year is 34,500 roubles.

What is the difficulty? Because your average wage is 52,000 at present, they deduce only from the sum of 34,500 and they deduce nothing from the rest of the wage. This is the crux of the problem. If your sick leave pay is based on the entire wage, that would be at the expense of other workers in other areas. In other words, people may earn less than you, and you will take some of their money in the form of sick leave pay.

There is a problem there. We should think about it. But what was our thinking when we made that decision? Yes, sick leave pay will be smaller but at least it will be above board and it will not be at the expense of others. But because your pay is higher and this is your responsibility, then this money could be used in some other way. But there is food for thought there. We can increase that component, one can proceed not from 415,000 a year but, for example, 500,000 or 600,000 to bring it in line with your wage. But then they will charge more tax.

Remark: I understand.

Vladimir Putin: Not tax, but insurance premiums. When we thought about it we decided not to bother you with all this, and to charge only part of your wage and not encumber the balance with these social deductions. It can be done but then you will pay more in insurance premiums. We can do this and it would be fair for everyone: everyone pays deductions and above 34,500 a month there are no deductions... If you want we can make it not 34,000 but 50,000-60,000 roubles a month and deduct from that sum. But we must think about it and you should think about it.

Remark: It is better to build sports facilities and improve health.

Vladimir Putin: I see that you are with me.

Remark: Yes, thank you.

Vladimir Putin: You're welcome.

Remark: My name is Yevgeny Vagner. I would like to raise the issue of the shortage of kindergartens...

Vladimir Putin: That is an acute problem for the whole country.

Question: Both in our city and across the country. What does the government do to address this problem?

Vladimir Putin: It may be an odd thing to say - and I don't want to absolve anyone of responsibility - but kindergartens are the responsibility of the municipalities and regions. Rather, of municipalities, of the city in your case. Why am I making this reservation? I don't want to shirk responsibility.

You know where the problem lies? As soon as the government assumes responsibility for everything the local authorities stop doing anything. They all say: "Why should we, they are supposed to do everything." It is necessary that everyone work and bear his responsibility. As St Francis said, everyone must plough his furrow.

But the problem is acute for the whole country and especially, I think, for Norilsk. I cited these figures at the conference: in 1992, Norilsk had 100 kindergartens, now it has only 39. They have been converted into something else and sold... I don't know what happened to them. They haven't built a single kindergarten in the last five years. True, some have been repaired and refurbished (two or five, I think), but not a single new one has been built.

We have agreed that such construction will start in the near future. The company will build two kindergartens and the Territory will build one, for starters.

Remark: Three is not enough of course.

Vladimir Putin: It is too little, but let them at least do that for starters.

Question: Perhaps those who occupy them now should be evicted?

Vladimir Putin: I am all for it, but if we think that we live in a country with the rule of law ... Mistakes were made in the past. I don't think more mistakes should be made to rectify past mistakes. If they bought these kindergartens honestly - how do you go about proving that there were any irregularities ten years ago and getting them to move out. They have changed the function of the facility and it has changed hands three times... Imagine that you bought property on the secondary market and I come to you and say: "Come on, get out of here. It will be a kindergarten." You would tell me: "You must be mad. I have bought it. I bought it on the market. I am the third owner. Why should I be punished?" It is not all that simple, too much time has passed, it is easier to build new ones.

Question: What about the mothers whose maternity leave has come to an end and who have to resume work?

Vladimir Putin: In Norilsk - and I hate to have to talk about the plant footing the social bill again - these facilities must be built by the plant and by the Territory. The plant paid the families on the waiting list for a kindergarten and they are still unable to place their children in a kindergarten. It was paying 3,500 roubles, I think.

Remark: The Territory paid.

Vladimir Putin: The Territory paid 3,500 roubles. Then, because of the crisis, as the governor told me, they stopped paying and have only been paying the so-called low-income families. But there are perhaps not as many low-income families in Norilsk as in some other Russian regions. The governor promised me that payment will be resumed now that the crisis is over. Let us at least keep that promise.

Lev Kuznetsov: Yes, we have made this promise.

Vladimir Putin: Very good.

Remark: Thank you.

Vladimir Putin: You have to thank your governor.

Lev Kuznetsov: We have too many schools, and some groups for six-year olds operate at schools so that they can adapt themselves to the education system and be ready to go on to year one at school.

Vladimir Putin: You see, until Norilsk has 100 kindergartens, like in 1992, what you have been doing - paying 3,500 - enabled the families to pool their resources and solve their problem privately. When there is no money that is problematic.

Lev Kuznetsov: We will build more kindergartens, Mr Putin.

Vladimir Putin: Give the money back (laughs) and then build the kindergarten. He is going to stash away that money.

Lev Kuznetsov: No.

Question: I am Valentin Poleshchuk, a worker at the copper plant. We have waited for you so long and wanted to see you. So I have a question not about us, but about you. Do you have a photograph of your family? Where do you keep it, in your telephone or in your wallet?

Vladimir Putin: A photograph?

Remark: A photograph of your wife and children... your dog.

Vladimir Putin: Ah, a photograph?

Question: Where do you keep it?

Vladimir Putin: In my wallet.

Remark: Can you boast your...

Vladimir Putin: What?

Remark: Your cell phone if you have one.

Vladimir Putin: I don't have one.

Remark: I see, you don't need it.

Vladimir Putin: I don't use it.

Remark: I understand.

Remark: You are a lucky man.

Vladimir Putin: I don't use it. If I had a mobile phone it would be ringing all the time, it makes no sense for me to have one. Even at home when my landline rings I never answer it, never, I made a point of not answering.

Question: Pyotr Sapelnikov, copper plant worker. A personal question. Our trade union leader likes to say: "Yes, we have done this, we have done that." My wife has been working at the Taimyrskoye mine for 25 years. They always retired under the second scheme. Now the Pension Fund says: "Paying you according to the second scheme was a mistake. You are not entitled to the second scheme."

Vladimir Putin: I don't follow you. They included her by mistake?

Remark: They were paying by mistake. We are suing now. We won a lawsuit, they ordered an expert investigation and we won the case. We were given a new judge, and a new investigation was carried out and now for three years we have been bashing our heads against a wall. They say we are not entitled to it. Why is that? For 25 years we were entitled to it and now we are not. 

Vladimir Putin: I will look into it by all means.

Remark: And the occupation is the same.

Vladimir Putin: What is her job title?

Answer: Concrete mix component worker.

Remark: Dosage worker.

Vladimir Putin: What court case did you win?

Answer: We filed the lawsuit here.

Vladimir Putin: In Norilsk?

Answer: Yes. And then they replaced the judge...

Vladimir Putin: Right here?

Answer: Yes. We appealed and they replaced the judge. And that's when it all started.

Vladimir Putin: What is your wife's name?

Answer: Olga Sapelnikova.

Vladimir Putin: We will look into it. I promise.

Remark: Thank you.

Question: Nikolai Levshin, Oktyabrsky mine. You were recently in Khabarovsk, they built a wonderful motorway there, we have seen you driving in a Lada Kalina. We have a federal motorway linking Norilsk and Dudinka. We would like you to drive on that motorway. Not only me, all of us would like you to see that motorway. 

Vladimir Putin: You want me to drive in a tank?

Remark: It is impossible to drive on anything there.

Remark: The tank will get stuck. We would like to know if perhaps it can be repaired somehow?

Vladimir Putin: I want to be frank with you: I don't remember what the plans are with regard to that motorway. Is it a federal motorway?

Answer: Yes, a federal motorway, Alykel-Dudinka.

Vladimir Putin: I should look up the plans for that road.

Remark: The plan is to hand it over to the Territory. A good idea.

Vladimir Putin: A good idea. Who proposed it? Levitin (Igor Levitin, Transport Minister of the Russian Federation)?

Remark: This is in line with the law. But what we want is to have it put in order before to hand it over...

Vladimir Putin: How many kilometers?

Answer: About 50, but it is a very rough road.

Vladimir Putin: Not 2,500 km like the Amur motorway that I drove on. We'll see. I will think about it and talk with the transport minister. If it has to be handed over to the Territory by law it should first be brought up to code. I don't think 50 km is such a huge amount.

Remark: But it is a difficult stretch of the road.

Vladimir Putin: Yes, I understand and it may be still more difficult because it is on permafrost.

Remark: Much more expensive.

Vladimir Putin: More expensive. But we will look into it. Anyway, 50 km is important for you here...

Remark: And people like to go fishing on the Yenisei in winter, and it takes forever to get there...

Vladimir Putin: In winter you don't even need a paved road; you can drive on ice roads.

Remark: We have a road there and it is cleaned.

Vladimir Putin: Seriously, I will instruct the minister to look into this issue.

Remark: Thank you.

Question: My name is Aigyul Garifullina and I work at the Taimyrsky mine. Some people are joining the programme of government co-financing for pension savings. Will the government have enough money later to pay these funds within ten years?

Vladimir Putin: To pay what? Will the government have enough money to pay pensions after the pension increase?

Answer: Yes.

Vladimir Putin: Certainly it will. You know, you talk like you're from the Ministry of Finance. They keep trying to prevent us from increasing pensions saying that it is not the right time and that it will cost too much money. This will naturally require a lot of funds from the federal budget. But you can always say this and use it as an excuse to never increase social benefits or pensions. I believe that we had to do this because the pensions are currently very low and pensioners are paid very little money.

We have increased pensions by 46%, which is a huge increase especially amid the financial downturn. But these numbers are not so huge in absolute numbers. Anyway, pensioners will not become millionaires at our expense. And we can afford providing the funds for this. We have set aside money from the federal budget to subsidise the Pension Fund deficit. If the federal budget is in the red, we can take the money from our reserves made in previous years hoping that the country will gradually recover from the crisis and that budget revenues will grow. I believe that we have to and will achieve this. If so, we must increase pensions.

Our reserves, including the National Welfare Fund, are meant for this purpose - for financing pension savings programmes. We have created this reserve to be prepared for unfavourable conditions that could effect the world's and Russia's economy. These conditions are here and we are using these funds. Otherwise, what have we been saving for? I'm sure that we have enough funds to meet all our commitments.

Question: Mr Putin, my name is Vladimir Dzyadzin and I am a maintenance technician at the Nadezhdinsky Metallurgical Plant. Before you came I had already asked the governor and the general director about Zapolyarnik Stadium, which they took from us four years ago and then neglected...

Vladimir Putin: Have they promised to...?

Answer: Yes, they have, but I also want to hear you say it briefly and clearly...

Vladimir Putin: They have promised to finish the stadium by late 2011 or early 2012.

Question: Is this for sure? I mean, will I still be able to play football there?

Vladimir Putin: Yes, and the football pitch will be completed earlier. As far as I remember, they have promised to build two playing fields. We will do this, the ministry will.

Remark: Thank you.

Vladimir Putin: This will be done ahead of schedule so do not hurry to leave this place, stay to play football.

Remark: It would be great to play some football on fourth- or even fifth-generation football grass.

Vladimir Putin: This should be a good field.

Remark: We will finally be able to play on grass. Before we played on cinder and then on rubber. Earlier many people came to the stadium in summer but they have promised to build a roofed stadium for four years now...

Vladimir Putin: Do you play football professionally?

Answer: I have played for the Nadezhda club for 27 years now. I have received the first-class sportsman rank, but I'm not a professional footballer, I work as a technician. I play football in my free time.

Vladimir Putin: Good. Just great! Should we bid for the FIFA World Cup?

Answer: Naturally! I'm 100% sure of it. We need homegrown replacements, but how can we do this without a stadium?

Vladimir Putin: Yes, exactly. I agree with you. We will do our best. I mean, I'm sure that you will get the playing fields in the nearest future and we will do our best to win the bid for the World Cup.

I'm convinced it will be to our benefit to win this bid because the matches would be held in ten different cities and towns unlike the Olympic Games which will take place only in Sochi. All of these ten cities and towns will have to meet the high requirements in terms of infrastructure, the stadiums, hotels, and airports and we will have to be able to receive tourists and the media. This means that we will simply have to whip it all into shape - we, the Russian people, have always needed an external stimulus like this.

We will do it all if we win this bid, and we stand a good chance of success, but not an absolute chance because our competitors, including Spain, Portugal and the U.K., are strong, so we will live and see. But in any case, even if we don't prevail, we will eventually do it all anyway.

Remark: Then, on behalf of Norilsk, I invite you to play football with us on fifth-generation grass, if you have the opportunity. Finally we will get a stadium soon. So, please, visit us in 2011. Hopefully, we will meet on the football pitch, although I know you are more used to tatami mats.

Vladimir Putin: Then I have a counter-offer for you.

Remark: I agree.

Vladimir Putin: You have already mentioned the tatami mats.

Remark: I have done some sambo for six months.

Vladimir Putin: All the more so. As for me, I have never played football.

Thank you.

Question: Mr Putin, you have just mentioned sports, the Olympic Games and the World Cup. Do you believe that we need federal financing or a government programme for children and youth sports? The way it was before. So many children attended child and youth sport classes when this was financed. I can't say whether it was financed from the municipal or federal budget, but there was a government programme.

Do you consider it necessary to resume these practices or do something in this respect? If we do this right now, we will have reaped the results by the Olympics and the World Cup. 

Vladimir Putin: This is the basis for both public and professional sports. You said it right; there were lots of sports classes in the Soviet Union. De jure, the local authorities financed these sports groups, but de facto, everything was centralised. If there were no such sports classes, I wouldn't have been able to do sports either.

I began going in for sports at the Turbostroitel sports club managed by a factory in Leningrad, now St. Petersburg. The factory exists today but the sports club is gone - it was pulled down to build an embankment. Frankly speaking, the club was equipped unpretentiously or rather poorly, but it did exist. Children had the opportunity to do sports there.

We do have a relevant programme. Your friend here just asked about football; we have a programme for the promotion of football in the regions, including for children and young people. I cannot cite now how many children are involved, but the number is on the rise. However, first of all we should motivate municipalities to make efforts on this front.

Remark: Thank you.

Vladimir Putin: As you know, the United Russia party is developing a programme called A Thousand Fitness and Health Centres. They are very persistent with this programme and have recently begun work on the construction of swimming pools. I believe that these initiatives should be supported; they are not so expensive. We have to establish a network like this across the entire country.

Question: Good afternoon. My name is Vitaly Kozlov and I work for Norilsk Nickel. Mr Putin, could you please give us an idea of how likely we are to win the bid for the 2018 FIFA World Cup? If we fail to win the bid, will the government assist in building stadiums?

Vladimir Putin: Yes, we will assist. We have a special programme for this and we are planning this. You know, someone just made a positive mention about winning the bid for the Olympic Games. We are developing Sochi not only for city residents but for the entire country, for everyone who is and will be coming there on vacation. Can you imagine, Sochi did not have a sewage system, faced regular electricity shortages and had barely driveable roads. Today a motorway by-pass is under construction there and there are plans to build a gas pipeline along the seabed of the Black Sea.

By the way, your company, Norilsk Nickel, owns the Third Generation Company of the Wholesale Electricity Market that, in turn, manages one of the crucial power stations in Sochi. This power station will produce additional electricity. The Sochi airport has been expanded, a new seaport has been built, and a lot more. 80% or even more of all funds have been invested in the region's infrastructure. And all of this will remain for future generations.

It will be the same with the World Cup if we win the bid. Would we still be doing this work in Sochi? I guess, we would be doing this but not at such a scale and so fast. As for the railway and the additional motorway from the sea coast to the sport facilities in the mountains, frankly speaking, they would have never built it without the Olympic Games. They would have begrudged spending money on it since there are many seemingly more pressing issues at all time.

Maybe, we would have never decided to set aside so much money for this region because we always have to keep in mind hospitals, education, defence issues and so on. And now we are building these venues because we have agreed with the International Olympic Committee. It will be the same with the FIFA World Cup - if we win the bid, we will do everything necessary in time; if we don't win the bid, we will be doing this work anyway but not so quickly and not at such a scale. 

Remark: Thank you.

Question: Mr Putin, my name is Sergei Kazantsev and I represent the trade union. Do you intend to run in the next elections?

Vladimir Putin: Which elections do you mean?

Remark: The presidential elections?

Vladimir Putin: You know, it is too early to speak about it. I believe that we are doing our best and are working, in my opinion, at least satisfactorily. Dmitry Medvedev is doing his job quite efficiently, I believe. It is too early to speak about this issue.

Let us all do our jobs. You, as a representative of a trade union, will be defending the workers' interests, every one will be doing his job and I will be working in my position.

I like my job. You know, I simply feel that I'm doing it right. I often hear things like: "You get personally involved too often." In fact, this is the way it should be done amid a financial downturn. I believe that it is good that Dmitry Medvedev and I have divided responsibilities in this way and that the government works independently. In fact, it is an advantage because we avoid excessive bureaucratisation. We make decisions promptly, which was especially important amid the economic downturn, when the situation demanded immediate response. So, let's see what will happen in 2012.

Remark: I believe that you are the first prime minister who has traveled so much across the country and has done so much. However, you have evaded the question anyway. Thank you and excuse me.

Vladimir Putin: Thank you very much.

Question: Would you mind being photographed with us after our conversation?

Vladimir Putin: I would be glad to.

Remark: We have a large country with a huge population. Not everyone gets the chance to talk to the prime minister.

Vladimir Putin: Good. It would be great. Thank you very much for the conversation and everything that is being done in Norilsk.