How Rostekhnadzor 'for made-up reasons' delays the launch of Kazanorgsintez's object important for Tatarstan

Delayed launch

Kazanorgsintez ethylene plant has not been able to launch fully new pyrolysis furnaces for ten months. Four modern furnaces were built to replace ten outdated ones in order to increase production efficiency and reduce the impact on the environment. The object was fully ready in July 2019, Rostekhnadzor went to check it on August 30 and did not make any comments on that day, which was indicated in the report.

In early September, the plant submitted an application for statement of compliance and received a response only in November. This was the order of the head of Rostekhnadzor to cancel the first inspection act of August 30 and a new act of October 25, although there was no re-inspection. The second act was signed by the same employees, but this time they found reasons for comments and issued an order to eliminate violations. The company considered that the actions of the inspectors go beyond their powers and on November 11 filed a lawsuit in arbitration for the failure of the supervisory authority to issue the statement of compliance, and on November 25 sent another application for invalidation of the results of the audit set out in the act of October 25, 2019.

During the trial, it turned out that Rostekhnadzor has claims not to the built furnaces themselves, but to the content of the project documentation. Allegedly, it does not specify the calculations of adjacent pipelines. At the same time, for 3 years of construction, the inspectors, regularly checking the object under construction, were not interested in them. The plaintiff's assurances that the calculations are in the project documentation, which itself received a positive conclusion of the Glavgosexpertiza of the Russian Federation, did not have any effect. As well as the reminder that the verification of project documentation is not within the competence of Rostechnadzor.

“No one requested these calculations!”

In June, the trial continued, and the parties again outlined their positions. The third party was a project organisation — Lenniihimmash group of companies (Saint Petersburg). The violations indicated by the Volga Region Department of Rostekhnadzor for the Republic of Tatarstan were reduced to the lack of calculations of the wall thickness and strength of the supply pipelines. The representatives of the third party stated that all calculations were made and some of them were reflected in the project documentation. The rest are not part of the project documentation — they are performed, but not included in the documentation.

“We believe that all the violations specified in the order do not take place, since the project documentation is executed in accordance with the norms and requirements that the legislation imposes. Accordingly, it is impossible to eliminate the violations identified by Rostechnadzor due to their absence," said Ksenia Bochareva, the representative of Lenniihimmash Group.

The defendant, in support of its position, stated that these calculations had not been submitted to Glavgosexpertiza together with the project documentation, and therefore they were not the subject of evaluation. However, Glavgosexpertiza of Russia, having considered the appeal of Lenniihimmash Group, reported the following: “The project documentation was reviewed for compliance with the requirements of technical regulations and other established requirements in accordance with Part 5 of Article 49 of the Urban Development Code of the Russian Federation. In this context, we also point out that according to paragraph 4.1.9 of GOST R 21.1101-2013 'System of project documentation for construction (SPDS). Basic requirements for design and working documentation', the calculations of design and technological solutions are not included in the design documentation. The calculations are stored in the archive of the project organisation and submitted to the customer or expert bodies at their request.”

“It hinders the operation of the facility and the development of the republic's economy”

The representative of Rostechnadzor referred to Article 48 of the Urban Developemnt Code, which states that the project documentation must contain technological and engineering solutions. But she was reminded that the scope and content of the project documentation are regulated by the Russian government decree No. 87 'On composition of design documentation sections and requirements to their contents', and the documents transmitted in accordance with the decree, and the state expertise confirmed that it has all necessary decisions.

During the debate, Rostechnadzor was told that it is necessary to inspect objects in accordance with the federal law 294-FZ, the provisions of which are aimed at protecting legal entities from arbitrariness of state bodies conducting inspections. The provisions of the law do not allow the possibility to cancel the previously issued inspection report, therefore, the only legal one is the inspection report of August 30, 2019. The same law requires that the inspection report be issued immediately upon completion, and not two months later. Besides, the object of inspection of the supervisory authority is the compliance of the constructed object with the project documentation, and not the documentation itself. These actions are not within the competence of Rostekhnadzor, which means that the state agency, by issuing such an order, exceeded its authority.

“In the proceedings, Rostechnadzor still did not have the opportunity to provide clarification of any of the five experts who conducted the test, the result of which was cancelled for spurious reasons, because violations were “found” without visiting the object, 'sitting in a chair'," lawyer of Kazanorgsintez Olga Cherenkova said.

There is no evidence that the inspectors were punished. After all, if they found violations two months later, “it means that their actions may contain signs of negligence," says the lawyer of Kazanorgsintez. In general, according to her, there are many depressing things in the actions of the inspectors: both continuous mistakes and the desire to impute even more violations. Thus, the state agency “only for reasons known to it hinders the functioning of the huge constructed object, and therefore hinders the development of the economy of the republic as a whole”.

“Unfounded and inconsistent with the requirements of the current legislation”

In response, the representative of Rostechnadzor called the second act of verification a non-normative legal act. In such acts, according to her, inspectors can make changes by orders of the director. Besides, the inspectors did not violate the law on the protection of legal entities, she believes:“In 294-FZ, there is no such circumstance where our case would fall under a gross violation.

We sent the act on time, and then we started to finalise it for various reasons, so it is our responsibility. If we didn't do anything, it would be much worse, and the situation would be negative in our direction. And the fact that there are errors, that not all pipelines were specified, means that such documentation, not the entire volume, was provided, the volume is large.

As a result, the court found that the contested order of Rostekhnadzor does not contain information about the deviation of construction from the requirements of the project documentation, but indicates the presence of shortcomings in the project documentation itself.

By its decision, the court invalidated the repeated inspection report and the order of Rostekhnadzor dated October 25, as unfounded and inconsistent with the requirements of current legislation. However, Kazanorgsintez considered that it is necessary to recognize illegal not only the second act of verification, but also the actions of the supervisory authority to cancel the first act of verification. The decision of the court of first instance did not satisfy Rostekhnadzor. Both the company and the agency filed an appeal and met again in the courtroom. The process went on for two hours, the positions of the parties did not change.

“Rostekhnadzor again proved that the object was actually built, but it was not reflected in the project documentation — in the part of technological pipelines. On the part of Kazanorgsintez PJSC, the appeal concerned the recognition of actions regarding the cancellation of the first act of Rostechnadzor as illegal. The act is the result of the inspection, meaning it should only be imposed within the validation period and not subsequently. Moreover, it cannot be cancelled by an organisational and administrative document," explained Olga Cherenkova, the lawyer at Kazanorgsintez.

The legislation of the Russian Federation does not provide for the possibility of reviewing the results of the audit at the initiative of the state control body. Only a legal entity or sole proprietor can initiate a review of the audit results as part of an administrative or judicial appeal against the actions (inaction) of officials of the state control body and the results of the audit. The company's position was that it is unacceptable to cancel the results of the audit and “within the framework of self-control”, as stated by the representative of the Volga Region Department of Rostekhnadzor, since this possibility is not provided for by current legislation. Nevertheless, the court left the decision of the first instance unchanged.

Thus, the violations identified by the results of the federal state construction supervision agency during the reconstruction of the pyrolysis and gas treatment plant and that subsequently became the basis for the decision of Rostechnadzor to refuse to issue the statement of conformity were recognised as illegal by the arbitration court.

At the moment, the commercial court is considering the application of Kazanorgsintez PJSC to declare illegal the decision of the administrative body to refuse to issue the statement of conformity.

The company is seeking to issue the statement of conformity with building standards — what Rostekhnadzor should have provided after the first inspection. Without this document, it is impossible to launch new pyrolysis furnaces that continue to be idle for more than a year.