Is it possible to receive compensation for the damage caused by the war? Global experience shows that yes, it is possible. But not without fixing the losses. How to record and where to start? These questions prompted experts of the Ukrainian Agri Council (UAC) to join the development of recommendations for documenting losses in the first weeks of the full-scale invasion. We also launched free legal advisory support for farmers throughout the process of documenting losses. These projects were made possible thanks to the support of the USAID Agriculture Growing Rural Opportunities Activity in Ukraine (AGRO) and the fruitful cooperation of UAC experts and the Ministry of Agrarian Policy and Food of Ukraine. Over the past two years, more than 300 representatives of war-affected farms have contacted the UAC's consultation line.

Fixing for the sake of compensation

On February 24, 2022, it became clear that the losses in the agricultural sector due to the war would amount to billions of dollars. Crops burned and farms destroyed, equipment and crops stolen, fields mined. According to updated estimates by the World Bank, by the end of 2023, the damage and losses suffered by Ukraine's agricultural sector amounted to USD80.1 billion, of which direct losses amounted to USD10.3 billion in destruction of agricultural infrastructure, perennial crops, livestock, agricultural machinery and equipment, and USD69.8 billion in lost revenues of agricultural enterprises as a result of the war. These figures also include losses and damages associated with the destruction of the Kakhovka hydroelectric power plant. Unfortunately, this figure is not final. The war is not yet over and the losses of the agricultural sector of the occupied territories have not been calculated.

There are hundreds of farms that have not started to work fully even more than two years after the de-occupation. Their property has been completely destroyed or looted, and their fields are mined. Those who have the opportunity are trying to launch their agricultural enterprises away from the front, using loans and their own savings, sometimes with grants and international support.

No one expects any reparations from russia in the near future. However, it is wrong to think that there will be no reparations or that the rules for compensation for war-related damages from other financial sources will not work. It is assumed that compensation will be available after applying to international bodies or through domestic programs and initiatives. Therefore, farmers should be prepared to go through the compensation procedure in the future, when the relevant mechanisms are in place.

Global experience

There are examples in world history of countries paying reparations. After the First World War, Germany paid the invoices for the damage caused to it. The process itself took about 90 years, but the legal instrument worked. After the Second World War, Germany paid more in terms of territories, technology, and property, but legal mechanisms were also used to settle disputes and claims. There are also precedents in modern history when one country paid another for a military invasion. Thus, Iraq paid reparations for the occupation of Kuwait in 1900-1991. The reason was a UN Security Council resolution.

Before the full-scale invasion, Ukraine sued Russia for damages caused by the occupation since 2014 and the use of oil fields in the Black Sea. Initially, the aggressor country did not want to participate in the proceedings, but later recognized the legitimacy of the hearings. This trial is not yet complete.

In November 2022, the UN General Assembly adopted a resolution by a majority vote on "Providing a Remedy and Reparations for the Aggression against Ukraine". According to the document, Russia must be called to account for its aggression against Ukraine. Among the legal consequences is that Russia must pay damages.

In recent weeks, we have heard more and more calls from world leaders for the transfer of seized Russian assets and accounts to Ukraine. It is already known that the European Union will send us the profits from the Russian securities seized during the arrest. For the first time, Ukraine has also transferred confiscated funds of sanctioned persons to the state budget. In addition, the United States has recently started negotiations on the use of Russian assets in favor of Ukraine.

In addition to reparations, there are many other mechanisms and financial instruments for obtaining compensation for damages. For example, after the Balkan War, Croatia raised domestic resources to pay compensation to citizens affected by the war, and international donors also contributed funds. In addition, money for damages came from the sale of property nationalized after the downfall of Yugoslavia.

So, there will be payments for the damage caused, it remains to create mechanisms for this with those countries that agree to send the arrested Russian money to support Ukraine.  It is important to develop a clear legal instrument for compensation for damages within the country.

Why do we need to document damages?

What will be impossible to do is to receive money for the damage caused by the Russians without proper documentation of the damage. Although it is not yet known what the internal mechanism for compensation and evidence requirements will be, the applicant will still be required to prove that the damage was caused by the war. At the same time, it is a bad option to postpone the documentation, as lots of evidences will be destroyed, for example, due to the destruction of buildings, weather, or witnesses will forget important details. Therefore, the UAC experts strongly recommend to carry out damage recording work as soon as you have access to the farm.

The main steps

Experts of the Ukrainian Agri Council (UAC) together with the USAID Agriculture Growing Rural Opportunities Activity in Ukraine (AGRO) have developed guidelines, sample applications, protocols and orders that will help to record the damage properly. All the necessary information is available here. There is also a free consultation line for additional questions - +38 067 503 19 08.

There, the process of documenting losses can be divided into several main stages.

First of all, you need to document the damage itself. This may include photo and video evidence, witness testimony, and inspection of the scene by commissions consisting of representatives of local authorities. At this stage, it is necessary to ensure that criminal proceedings are opened to investigate the damage. For the convenience of farmers, we have created a training video "Algorithm of actions for field recording of an agricultural enterprise destructions". The video shows practical recommendations for proper photo and video recording of destruction.

The second step: evidence of actual losses. This stage requires farmers to collect documents confirming all their expenses during the construction of the facility, sowing season, purchase of destroyed equipment, etc. Efforts should also be made to find/restore documents certifying the ownership/use of certain facilities.

The third step: collect evidence of lost profits. These are documents confirming lost income, for example: futures and other contracts for the sale of products; data on non-fulfillment of other contractual obligations that provided for income due to aggression; documents confirming income for previous years.

We also recommend to add relevant photo/video evidence to the Interactive Map of the Ukrainian Agricultural Sector Destructions. This portal was created to highlight the real losses of the Ukrainian agricultural sector and to help agricultural producers to document war crimes committed against their enterprises. The data from the map of destruction will also be useful for international partners to understand the problems faced by the Ukrainian agricultural sector in the context of the war.

The multibillion-dollar losses of Ukrainian farmers will definitely not be ignored in the formation of the post-war recovery budget for Ukraine. However, claimants should remember that documenting of loses is burden of a harmed farmer. The number of questions from the authorities that will process the evidence and calculate compensation in the future will depend on how well, comprehensively, and, most importantly, as soon as possible, the documentation of Russian crimes is carried out.

Column by Dmytro Kokhan, the UAC Deputy Chairman, in Interfax-Ukraine

Tuesday, 20 February 2024


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