In July this year, Russia’s Prison Service, the FSIN, set up its own trading company to deal with orders for products made in its prison workshops. Its aim was to cut out the middleman – to put an end to contractors creaming off a significant chunk of its profits – but also to improve, at least to some extent, the prospects of prisoners’ employment. At present, the inmates of many prison camps have no work and, as a result, cannot earn the money they need to compensate the victims of their crimes.
At the same time, the service hopes that by setting up a central body and ending the right of individual prisons to deal with client companies directly, it will avoid further scandals of the kind that arose at the camp where former Pussy Riot member Nadezhda Tolokonnikova served her sentence; she complained to human rights organisations about, among other things, the infringement of prisoners’ rights, overwork, and chronic lack of sleep.
A moneymaking system
The Gulag system, with its many political prisoners, was officially closed in 1960, although the last such camp, Perm-36, did not close until 1987. The current Russian penal system still continues many of the practices endemic to the Gulags – forced labour, inmates policing inmates, and prisoner intimidation.
The FSIN system includes more than a thousand penal establishments and 24 state agencies that may use the productive capacity of other state institutions for profit. In total, these combined organisations manufacture around 100,000 different products, including uniforms for the armed services (the Ministries of Internal Affairs, Emergency Situations and Defence), manhole covers, kerbstones and cast-iron ware, as well as timber felling and coal mining operations. But there is not enough work for all prisoners: FSIN puts the number of productive inmates at only 200,000 out of a total of 600,000.
In total, these combined organisations manufacture around 100,000 different products.
One reason for the shortfall in prison employment is geographical. In regions near Russia’s frontier with China, articles produced in prison workshops cannot compete with the cheap imports from the other side of the border, and so they go out of business. In remote northern areas, prison administrators see their potential profits eaten up by high transport costs. However, FSIN still makes a good income from prisoners’ work: in 2013 its various establishments produced goods to the value of 32 billion roubles (£428 million).
Since July, under new regulations, FSIN institutions cannot individually tender for production contracts, which had led to a growth in the market for private business agents, who could win government contracts and then farm them out to prison camps. These private firms often have close links with prison governors or regional departments of the FSIN. Now, with the help of the FSIN’s own central trading company, prison governors are now able to negotiate prices with client firms directly and keep part of the profit for their establishments – the price achieved may be several times higher than their production cost. But those profits come at a price.
Prison administrators can force inmates to work overtime or night shifts to maximise production. Indeed, the freedom of action enjoyed by prison governors can sometimes lead to serious scandals. In September 2013, Nadezhda Tolokonnikova, sentenced to two years behind bars for her part in Pussy Riot’s ‘sacrilegious’ performance in Moscow’s Cathedral of Christ the Saviour, announced a hunger strike in protest at the systematic infringement of her rights and the rights of all prisoners at her prison camp. In a letter published on the independent Lenta.ru news website she explained that her team in the camp’s sewing workshop had to work for 16-17 hours a day, from 07:30 to 00:30. ‘We had four hours sleep a night – if we were lucky’, she wrote. ‘We had to work most Sundays, and had a day off only once in six weeks. Inmates have to apply in writing to work on Sundays and days off ‘by choice.’ In fact, of course, they have no choice. But you are forced to write these applications by the prison officers and the trusted inmates who pass on their orders.’
Prisoners had to work in the camp’s sewing workshop for 16-17 hours a day, including most Sundays, from 7:30am to 12:30am.
Tolokonnikova, who has since been freed, detailed the pressure exerted. ‘Nobody dares refuse to write a request asking to work until 12.30am on a Sunday. One woman of 50 asked if she could stop work early, at 8.00pm, so that she could go to bed at 10.00pm and at least have a decent seven hours sleep one night a week. She wasn’t feeling well; she has high blood pressure. The prison officers’ response was to call a section meeting where the woman was lectured, insulted, humiliated and called a lazybones. “You want more sleep than everybody else? You need to sweat your guts out a bit more!” And when someone is let off work by a doctor because of illness, they also get it in the neck from the authorities: “So what if you go to work with a temperature of 40 degrees, it’s no big deal. Did you even think about who would do your sewing for you?”’ Tolokonnikova’s assertions were confirmed by Aleksander Korshunov, deputy head of FSIN (whose idea it was to set up the trading company); he said that prison managers do sometimes force inmates to work overtime, to increase production.
Russian prisoners can work up to 17-hour days, with no time off. (c) RIA Novosti/Ilya Pitalev
Prisoners don’t as a rule make more than the so-called minimum living wage, which in Russia is set at 5554 roubles (£75) a month. FSIN’s own figures put a prisoner’s average daily earnings at 196 roubles (£2.60). One exception is timber felling in the Krasnoyarsky Krai in Siberia [much of which lies in the permafrost zone]. Prisoners there can earn 20,000-25,000 roubles a month (£270-330), but that is rare. Similar amounts can be earned in the iron-casting industry – the extra pay is down to the heavy and dangerous working conditions.
The FSIN trading company
The idea behind the setting up of the FSIN trading company was to take on all the contracting for prison production operations, relieving prison administrators of the need to deal with client companies, and so removing the middleman between producer and customer. The trading company signs an agreement with a client and then allocates the order to whatever prison camp is best placed to fulfil it. The camp, however, receives little profit from the deal – 10% of the contracted sum to cover its overheads; the rest of the profit goes back into FSIN’s coffers.
The camp receives 10% of the contracted sum to cover its overheads: the rest of the profit goes back into FSIN’s coffers.
Korshunov told the Kommersant business daily that the trading company would be based in Moscow, with five branches situated around the regions. ‘It will have a strictly vertical structure: the branches will be subject to the centre and will have to agree all their activities with Moscow. Production at prison camps will be managed by civil servants; their salaries will be based on their success in fulfilling orders. At the same time, the prison camps can all tender for contracts and place orders with whomever they like in their region without referring to Moscow, which, however, still needs to be kept informed of all financial decisions.
Economist Olga Kostenko thinks that there is room for a company of this type that will concentrate on attracting and servicing orders for FSIN, but thinks it is difficult to say how effective it will be. ‘In the first place, it’s not clear how the actual work done by the prisoners is regulated – by reference to criminal law or labour law. If it’s the first, then we are effectively legalising slavery, which doesn’t provide any motivation to increase productivity, and so on; if the second, then we’re talking about the possibility of the inmates themselves choosing, say, whether to work on a farm or sew uniforms. If FSIN allowed prisoners to develop their skills and motivation, the company would be a very effective business’. But Kostenko also points out another important factor for the company’s prospects – its management: ‘If the people in charge are not up to the job, then it doesn’t have any future.’
‘If the people in charge are not up to the job, then it doesn’t have any future.’
Vladimir Osechkin, founder of the Gulagu.net human rights social network believes, however, that the whole idea is utopian and fundamentally unworkable: ‘It is naive to expect that a system, 80% of which is made up of elements of the Gulag and which is a legacy of the Soviet planned economy and the exploitation of slave labour, can suddenly learn how to make money,' he says. ‘It’s stupid to imagine that FSIN functionaries who have been taught their trade from out-of-date textbooks can be turned into financial wizards’.
According to Osechkin, the whole concept of developing production and trade within FSIN is a mistake, as it doesn’t give enough attention to how the partnership between public bodies and private business should be developed. ‘Over the years it would have been possible to create a coherent, fair and transparent system to regulate relations with business people, to develop and promote clear rules of engagement with the business community, recruit business ombudsmen into regional FSIN community councils, liberalise the conditions in which the working prison population is held, stop paying inmates the minimum wage, and construct a fair pay system. This is the only possible way forward, but none of it has happened.’
Standfirst image: Russian female prisoners. (c) RIA Novosti/Ilya Pitalev