Transcript of the beginning of the meeting:

Vladimir Putin: Good afternoon, colleagues.

I would like to begin by thanking the members of the Federation Council for their constructive cooperation with the government, which has been focused on addressing our most pressing socio-economic problems. This year, the Federation Council considered a total of 300 bills; I would especially like to praise those that are aimed at strengthening guarantees of people’s rights and those that provide for high quality affordable healthcare. A new system of pay for military service is another important move. I would also like to cite a whole package of economic amendments affecting investment and industrial policies, such as a bill that gives special preferences to the domestic shipbuilding and shipping industries. We discussed these issues recently at a Transport Conference in Novosibirsk. The Federation Council has recently supported amendments that provide for a simplified out-of-court write-off of the so-called “delinquent taxes” that were accumulated before January 1, 2009.

I would like to take this opportunity to ask you, in conjunction with the State Duma, to increase the pace of your work on these important initiatives: affordable housing and the development of cooperative construction projects for all Russians employed in the public sector, including doctors, teachers and cultural workers. A decision needs to be made to assign federally-owned plots of land for projects such as these through a simplified procedure. Government experts believe that this would significantly reduce the final price of new property. To achieve this, some amendments need to be made to the laws currently in effect as soon as possible, and the respective regulatory acts need to be adopted.

I'd like to emphasise that we are setting ourselves new and important goals, putting together a comprehensive, long-term agenda that covers essentially all spheres of life. We need fast-paced progress in increasing people’s social guarantees in this country; Russia needs to make a breakthrough in technology and investment, and to promote the development of all its regions using the potential of federalism and strengthening local government. This will require a major legislative effort, involving the adoption of legal acts and adjusting the existing legislation. It is our common goal to improve coordination between the different parties involved in lawmaking: the government, the Federal Assembly and regional parliaments. The very lawmaking process needs to become more open and transparent.

Moreover, all government decisions and key bills should pass public scrutiny. We are trying to introduce this practice for all major draft laws. The Federation Council is a regional parliamentary house, a chamber capable of consolidating the position of Federation member states and upholding the interests of people living in specific regions and republics, and as such I believe its role should be enhanced.

I’d now like to say a few words about the significance of regional legislative initiatives. It’s no secret that very few of them ever become laws. This is not because someone at the federal level is deliberately trying to hold up the process, though. The problem often lies in the low quality of technical work. And through the hard work of the Federation Council, it could really improve the situation.

We should help to polish regional legislative initiatives, to unify proposals that may come from different provinces but that all have to do with some systemic problems of the nation as a whole. And we could group similar initiatives together into packages.

In fact, it is regional legislative initiatives that will be able to bring us closer to a resolution of some of our most acute issues. Because issues raised by regions come from the grassroots. Because regional lawmakers are closer to the people, and they probably therefore have a better understanding of problems that people face on the ground.

Government experts, [Duma] deputies and members of the Federation Council should work more proactively with, and provide assistance to, regional legislators. All rational ideas and proposals should be translated into reality. For our part, we expect regional authorities and Federation Council members to conduct in-depth analyses of law-enforcement practices, taking an active part in the preparation of legislative proposals and comprehensive regional development programmes.

In this regard, I’d like to highlight the active efforts that are being made by an ad hoc group formed in order to redistribute powers among the various levels of government. We are well aware of just how important that work truly is. Redistribution is not a bureaucratic formality, you know. Our next step should involve the redistribution of sources and [the creation of conditions for] effective problem solving. Here we should combine responsibility and financial capabilities. 

I would ask you to pay special attention to socially important projects such as the modernisation of regional healthcare, general and pre-school education and the housing and utilities sector. In addition, projects that deal with the transfer of government agencies – federal, regional and, subsequently, municipal – to online servicing. Let me remind you that this has to be done by July 1 of next year.

Returning to the interaction between the Federation Council and the government, there are a few related issues I’d like to touch upon. The abundant quantity of bills and motions does not always reflect a high degree of efficiency, especially if it does not go beyond eloquent rhetoric and unsubstantiated intentions, however noble. Every decision that is to become a law or a by-law should be worked through in-depth and thoroughly calculated, and all the possible implications of such decisions, including for regional and municipal public finances, should be taken into account.

High quality is required of everyone involved in the lawmaking process, everyone who has the privilege of putting forward a motion. So I applaud your decision to carry out an internal structural reform. We also spoke about this with Ms Matviyenko just now. She told me about your decision to consolidate certain sectors by unifying several related commissions into one. I believe this is a step in the right direction, and I hope that the new Duma will follow suit and carry out similar transformations.

Highly important for the development of a common stance are our discussions within the government commission on lawmaking, as well as the work we do during the so-called Cabinet Hour at Federation Council plenary sessions. I can tell you that decisions made by MPs following such hearings are unfailingly reflected in the prime minister’s subsequent executive orders for ministers and the heads of relevant government agencies.

In conclusion, I’d like to bring up one more highly important issue, which was also among those that came up during our conversation with Ms Matviyenko. As you know, in the past two years, we’ve implemented a large-scale project to repair inner city roads and improve housing in all the regional capitals of Russia. From the federal level, this may not appear to be such an ambitious project, but to the public, this is an important and sensitive issue. We’ve released some 50 billion roubles in budget allocations for this purpose, even though this isn’t our mandate, as they say. We’ve done this to support regions and municipalities. And according to the feedback that we are receiving from the public, these programmes have produced some noticeable positive results already.

Wherever I go, the people I meet wonder whether this practice could be expanded. I believe that this can and should be done. But I’ll need your advice and support for this. We’ve decided to set up federal and regional road funds, but the use of the ample resources that will accumulate in those funds is limited. Moreover, some governors have approached me and Cabinet ministers requesting that they be given the right to redistribute some of the money from their regional road funds towards other purposes.

We should contemplate bringing these programmes to rural areas where the problem of low-quality roads is most acute.  This issue is typically raised during each of my meetings with rural communities across the country. There are some 46,000 villages in Russia in which there are still no all-year paved road and which can only be accessed through lanes that become impassable during the spring flooding season.

Our decision to set up federal and regional road funds came as a result of your initiative. I propose, therefore, to identify three spending priorities and consolidate them in legislation. This falls under the regions’ jurisdiction, of course. But if we consolidate our priorities in a federal law, regions will have to take them into consideration somehow.

Why am I discussing this with you here? Because, working alongside the regions, I want you to lay the groundwork for this. What exactly is on the table? Well, first of all, I propose focusing our attention on rural roads.

Second, on improving neighbourhoods in cities and towns. Third, on repairing urban and village roads to prevent a situation in which a road reaches a village but there is no way through the village.

I propose that we implement this project to improve all Russian cities, towns and villages and all rural roads within two years and see how it works; later we will be able to adjust our decisions.

It is proposed to set the following requirements: to allocate no less than 5% of regional road funds for rural road construction; to allocate no less than 5% for improving courtyards in residential areas; to allocate no less than 5% for repairing urban and village roads.

It is noteworthy that the consolidated regional road fund will amount to some 391 billion roubles in 2012 alone. In the past, our regions had no such funds. This is an increase of 112-115 billion roubles over this year, 2011 – we calculated it in the government yesterday.

So next year we can allocate up to 60 billion roubles for this project, for the aforementioned areas – or 58.7 billion, to be precise. In 2013, this figure will grow: the consolidated regional road fund will amount to 471 billion roubles, and we will be able to allocate an additional 70 billion roubles, or 15% of the total, for the project we are discussing. So within two years, we can allocate at least 130 billion roubles to fund these three priority areas. Never before has this amount of funding been provided for these objectives.  

To make this idea a reality, the law will have to be amended. Please start working intensively on this issue and work out the details together with the regions, as I said earlier. That’s what I wanted to say at the outset. Please, Ms Matviyenko.

Valentina Matvienko (Chairperson of the Federation Council): Mr Putin, I would like to thank you for this meeting and for the opportunity to discuss priority issues facing the Federation Council.

In your speech, you emphasised the priorities of the Federation Council and brought up a series of very important social issues that require legal support. The Federation Council is certainly prepared to join in the process of drafting these laws.

This session is fairly saturated, not only in terms of the number of laws that we need to consider but also in terms of the social importance of many of these laws. We are aware of our responsibility to consider these laws in a timely manner, while also bearing in mind that this is the end of the political season. We have scheduled an additional session of the Federation Council to make sure that we conduct our work in a timely, thorough and careful manner, and pass only quality laws. We will work as much as we need to in order to make sure there are no glitches and all laws are adopted in a timely manner.

I would also like to note (and all the Federation Council members are of this opinion) that we have established very constructive relations with ministries, departments and governmental commissions. Vyacheslav Volodin (Chief of Staff of the Government Executive Office) and representative of the Government in the Federation Council Andrei Yatskin are extremely helpful in coordinating this work. Given that most of the laws are submitted by the Government of the Russian Federation, we believe it to be very important to establish a constructive relationship between specific committees and members of the Federation Council during the initial phase of the preparation and development of laws, so as to take into account the opinions, positions and proposals of Federation Council members in advance and not once the law is already being considered.

Together with Mr Volodin we have held a meeting with state secretaries from all ministries and departments, we discussed existing work methods and outlined ways in which to improve our cooperation. Our joint work can definitely be improved. There is an issue that I would like to raise today. The Federation Council members believe that draft laws that have been submitted should be accompanied by drafts of subordinate legal acts. We realise that it’s not possible to put everything into law. However, related regulations give us a better overall idea of the law at hand, and fewer questions come up about it. On the other hand, it often takes a lot of time to draft proper regulations after laws have been adopted. It is difficult to meet deadlines and to ensure that laws are properly enacted. There have been instances (we have specific examples) in which respective legal acts that have not been coordinated while laws were being adopted end up distorting the concept and the spirit of the law. We would like to ask you to support this approach, which we believe will significantly improve the quality of adopted laws.

We fully support your idea about the need for public discussion of all essential laws. This is being done already. In particular, the healthcare bill was widely discussed in the regions and the Duma. The Federation Council has effectively joined in this work. We are holding online parliamentary hearings that are broadcast live over the internet. Anyone can watch them, pose a question and receive an answer. We are actively working to build an electronic parliament. There are ongoing online discussions of all important laws so that we can know what people in the regions think.

We realise that we need to increase the Council’s authority and the efficiency of its work while preserving the values that have been created by the Federation Council during the years of its existence. Primarily, as you mentioned in your speech, we should play a greater role as a chamber representing the regions. We have started to analyse laws more carefully to make sure they reflect the interests of the Russian regions. We were forced to dismiss a law submitted by the State Duma during this session, because senators were virtually unanimous in their opinion that it did not take into account the interests of the regions. We have found common ground with the State Duma through the conciliatory commission, and plan to re-submit this law for consideration during the current session of the State Duma, but this time in a revised form that takes into account the views of the Federation Council members. This is the regular working process, and it involves no drama whatsoever, but ignoring the viewpoints of the senators who support regional interests during the lawmaking process is wrong.

We have set ourselves the task of becoming the main platform on which to consider and support regional legislative initiatives. You have mentioned this as well, so I will not go over it again; they are really very useful. Perhaps they may not be of a global nature, but they reflect the interests of the people on one hand, and existing regional problems at the federal level on the other hand. We have already taken steps in this direction and are establishing a special organisational unit that will address such legislative initiatives specifically. You are right, they are often crudely put together from a legal standpoint, and the coordination process is complicated to the point where regions are unable to do anything on their own. Therefore we, the Council of Lawmakers under the Federation Council, take up the mission to ensure that all meaningful regional initiatives make their way to legal formalisation.

We are actively working on a decentralisation of power. The Federation Council has conducted an in-depth analysis of all proposals submitted by the regions (we received over 1,000 such proposals). They varied in nature, ranging from unacceptable to inaccurate. We have formed these proposals into groups and have substantiated each one. We proposed changes to legislative acts and submitted them to the government commission led by Dmitry Kozak. We believe this to be the first phase, and we were operating on the assumption that all powers should be redistributed among those levels of government that will be able to deal with them most effectively. We are still discussing this, since the issue is important, as is the reform. There are disagreements, different points of view, which need to be weighed and balanced. We want to find the right concept.

The stance that has been adopted by the Federation Council is for different levels of government to have as much authority as possible. We are opposed to delegating most of the authority, because this will not promote responsibility among the executives and the bodies of authority who will be responsible for this. We are continuing to work actively with the government commission, with the awareness that as soon as the concept and the philosophy have been approved and powers distributed across various levels of government, we will need to make changes in the inter-budgetary relations and the Tax Code in order to make sure, as you mentioned in your speech, that these powers are supported by permanent sources of financing, not some fleeting subventions or subsidies that no one can be sure whether they will be around next year. This is the only way to ensure the effective operation of this system.

We have submitted a proposal to the government commission suggesting that they prepare the amendments to all regulations, legal acts, and the financial grounding before beginning the reform process, in order to avoid the kinds of mistakes that frequently occur. Senators are hard at work in the regions, and are bringing back information about the present concerns of the people, which we can discuss in the Federation Council.

Mr Putin, I would very quickly like to run through these concerns with you. Firstly, this has to do with the uneven level of economic development across the regions. The Federation Council is prepared to join in working on comprehensive development plans. The issue primarily concerns accountability on the part of the local authorities. Each region, absolutely every one, I’m sure of it, has the potential and room for economic growth, for expanding its taxation base and promoting small- and medium-sized businesses. At the same time, there are areas of focus and regions that need federal support, without which they cannot cope. We no longer have the State Planning Committee, but the regional development policy must be in place (Strategy 2020 is all about it) and it must be coordinated with regional programmes.

Inter-budget relations are a constant bone of contention. Everyone is always displeased and always will be displeased about them. However, we think that this system should be not only unbiased but also open – it should motivate the regions to increase taxable income. There should be no dependents and this policy must be open, just like the redistribution of funds or windfall profits among the regions. What makes everyone unhappy is the absence of a common objective and fair approach.

Vladimir Putin: But haven’t you said that it is necessary to help those regions that need money? Redistribution is the only means of helping them.

Valentina Matviyenko: Mr Putin, I confirm the need for this but there should also be incentives for the regions to broaden their tax base and perhaps thereby reduce support over the years.

Vladimir Putin: This is why the Finance Ministry took the decision to leave additional revenues that the regions receive during two or three years in their budgets rather than withdraw them. If you think this is not enough, let’s discuss other mechanisms.

Valentina Matviyenko: Sure. We would like to submit a number of proposals to make this process absolutely objective.

Vladimir Putin: But we must have the resources to help the regions that require support.

Valentina Matviyenko: Of course, nobody is debating this.

Vladimir Putin: Every region has different start-up conditions.

Valentina Matviyenko: Absolutely. Mr Putin, I’d like to say a few words about another issue that worries the senators – abandoned military garrisons. Reform is essential in this context. While preparing it we found out that there are 1,400 problem former military garrisons. People there live in dilapidated housing. They should either be relocated to decent housing or this decrepit housing must be repaired. Hence, we must also create new jobs there… But the issue has not been settled. The Defence Ministry does not have the funds to repair this housing. Their transfer to municipal and regional authorities is being delayed because they don’t have the funds for restoration, either. Please instruct your subordinates to review every garrison because there are abandoned families in many of them.

Mr Putin, there is another important issue. You know about it and the government took a decision on it in 2009. I’m referring to measures to encourage the reduction of air pollution with associated gas. The task was to increase the rational use of associated gas to 95% by 2012. I won’t quote any figures but there is no improvement in this field. We, our commission on natural monopolies, have prepared a draft law. We think that this issue can only be settled through legislation. We submitted the draft law to the State Duma but, regrettably, the government is preparing a negative decision or has already made it. Some ministries and departments believe the issue can be resolved by adopting separate departmental regulatory acts, but we are convinced that this won’t work. We consider this attitude an instance of lobbying. Moreover, according to expert estimates, apart from huge environmental damage, Russia loses about 140 billion roubles a year by burning this gas instead of putting it to use. We have written a letter to you and I would like to ask you to instruct your subordinates to hold a meeting, perhaps under your guidance, to persuade the government to change its position and support the adoption of this law.

Vladimir Putin: What investment will be required to implement this law?

Valentina Matviyenko: Mr Putin, we don’t have figures on investment, but it is possible to create incentives for investment companies with a view to achieving a much bigger cumulative environmental and financial effect in the future.

Vladimir Putin: I have a reciprocal request for you, too. I’d like you to involve experts from the Federation Council and calculate the scope of investment and the costs of incentives from the government. We may end up supporting these companies with budget funds – either by giving them tax breaks or subsidising their work.

We must know how much the budget will have to pay for this.

Valentina Matviyenko: Mr Putin, we’ll do this by all means. The law that is being adopted creates the conditions for resolving this issue. No doubt, we must do financial calculations and we are ready to submit them to substantiate the law.

Vladimir Putin: I agree we must step up the efforts to utilise associated gas. This is absolutely clear. This is one of the tasks facing the relevant departments – the Economic Development Ministry, the Energy Ministry and a number of other government departments. The question is how we will reach this goal and how much it will cost depending on the methods we use. There are not so many options here and they are all expensive. We must see how much this will cost and how we can reach this goal stage by stage.

I would still ask you to involve experts and to count...

Valentina Matviyenko: We will prepare our proposals and set forth our position.

Vladimir Putin: I will give the relevant instructions to the government agencies.

Valentina Matviyenko: Thank you.

Mr Putin, I’d briefly like to bring up one more issue. You are paying much attention to the improvement of amenities in cities and villages, and rightfully so. It’s time to set things right in Russia. People need to live in a comfortable environment. But there is one problem: we are still lacking a civilised system of waste management, be it household, industrial or medical waste. Every year Russia accumulates about three billion tonnes of waste. There is no legislation on waste management. There are no laws on waste packing or scrapping of old cars. We have modern domestic methods of waste management and there is also global experience.

The absence of legal regulation of waste management leads to the criminalisation of this sphere. There is huge money involved in it. Carriers collect rubbish and bring it to unauthorised waste deposits. Russia is being covered with waste. By the most optimistic estimates, less than 30% of waste is being recycled, not to mention dangerous industrial waste that is causing huge amounts of damage to the environment. I would like to ask you to instruct ministries and departments to address this issue. On our part, we will... We have some know-how and draft proposals on this score but there is absolutely no… We need a new law on processing industrial and domestic waste, otherwise…

Vladimir Putin: It shouldn’t be part of the law on nature protection, should it? Do you think we need a separate law?

Vladimir Putin: No, it shouldn’t, Mr Putin. We need a separate law. With domestic waste, for instance – who should be in charge of it? People pay for the removal of their refuse but not for the recycling or utilisation of it. It is for this reason that carriers are growing fat with the huge amounts of money they are making. Nobody controls where they take the waste. Millions of hectares are being used as waste deposits – we see enormous trash piles when touring regions and there is no hope that they will be ever recycled or utilised.

Vladimir Putin: Have you prepared a draft concerning this?

Valentina Matviyenko: We have prepared a new draft on dealing with industrial and domestic waste. We are ready to amend it with the government commission and the ministries involved. It is extremely important that we adopt this law.

Vladimir Putin: Okay, it's settled. Please submit it to us as soon as possible.

Valentina Matviyenko: Of course.

I’d like to speak very briefly about guest workers in Russia. There has been a great deal of criticism on this issue, as well as many demands to change the law. I’ll mention only one aspect – their medical exams. This is a major problem, Mr Putin. There are no legal regulations with regard to this. Some of these guest workers have contagious diseases, such as TB or HIV. They ride the metro and interact with people, and nobody is aware of the state of their health. We must take a tough line when it comes to mandatory medical certificates. Sick people must be treated rather than being released into society. We must review issues of insurance. We are prepared to submit relevant proposals. There are cases in which the wives of guest workers arrive in maternity homes with an open form of TB. Nobody is immune to it, so… Regrettably, for the time being, our proposals have not been supported, but we are prepared to submit them to the government for consideration.

Vladimir Putin: All right.

Valentina Matviyenko: A few words about government services. As a former regional governor, I can say that this is an urgent issue. Regions are actively developing multi-functional centres of regional and municipal services. However, for the time being federal services… After all, people should not think about levels of services – they must be able to make one stop and receive everything they need in one package. Federal ministries and departments have not yet launched multi-functional centres like they have in the regions. Our request to you is for, perhaps at some working meeting….

Vladimir Putin: Okay, agreed.

Valentina Matviyenko: …please look at this again so that people will be able to receive mandatory federal services as well.

Vladimir Putin: I have visited some places and have studied the regional experience – both federal and regional bodies work together there.

Valentina Matviyenko: But not in full, and not all ministries are active yet…

Vladimir Putin: All right.

Valentina Matviyenko: It would be useful to analyse the regional experience, if possible…

Vladimir Putin: In this regard, Ms Matviyenko, I would like to ask you and everyone present here for one thing concerning the e-Government: it must be introduced at the regional level, and launched starting on July 1, 2012. This is highly important, and many regions have yet to join in this activity.  

Valentina Matviyenko: Mr Putin, for our part, we will conduct this monitoring through senators and will forward along the information.

The second to last issue that I will bring up has to do with the national strategy for support of children. We had an initial plan of action, but it ended in 2000. A working group existed under the children’s rights ombudsman, along with other working groups. Sadly, we have not made any further progress. As a rule, any civilised nation has a strategy of this kind. If you support this idea, we could engage the expert community and develop a nationwide plan for the support of children for, say, 10 years. You are well aware of the existence of this problem, and we would like to resolve it by developing a national plan of action. We are ready to draw up our proposals.

And the last thing – at Wednesday’s session of the CIS Interparliamentary Assembly, Russia retained chairmanship of the Assembly, and I was elected as the CIS Interparliamentary Assembly chairperson.

Vladimir Putin: Congratulations!

Valentina Matviyenko: Thank you. I would also like to say that we had a very engaging discussion about integration processes in the post-Soviet territory. First of all, all parliaments asked me to convey their gratitude to you for your personal involvement, for your position and your efforts, because of which the integration processes have begun to function. This concerns the Customs Union, the free trade zone and efforts to establish a common economic space. The Federation Council plans to work actively with regard to the CIS countries and these issues. We have agreed that all parliaments will analyse the execution of domestic procedures aimed at the ratification of agreements and arrangements that have been achieved. We will coordinate our actions in order to speed up these domestic procedures and to help promptly begin working on the decisions concerning the territories of member states which signed these agreements.    

Vladimir Putin: Those who didn’t sign should be involved, too.

Valentina Matviyenko: That's what I'm saying – they should all sign the agreements and speed up the process. But the commonly-held position is that only Russia can act as the actual integrator, while everything you have done in past years is highly appreciated. We are aware of the importance of these activities and will continue to work in this area.

And in conclusion, Mr Putin, I would like to invite you to address the Federation Council. It has been a long time since your last appearance.

Vladimir Putin: All right. 

Valentina Matviyenko: The Council members are eager to meet with you, and so I am happy to convey their request: we would very much appreciate it if you would make a speech at our session. 

Vladimir Putin: We will select an urgent issue that is important for Russia, for the government and the Federal Assembly, including the Federation Council. Let's choose it together and make it an efficient meeting, not a formal one, shall we?

Valentina Matviyenko: Good. Then we will introduce our proposals. Thank you very much.