Comment on the Rejection of Nord Stream Survey Application

The Estonian government decided on September 20, 2007 not to permit Nord Stream AG to conduct seabed surveys in Estonian waters for a Russia-Germany gas pipeline. The decision was unanimous and was based on the facts that the survey would include drilling on the continental shelf, the survey area extends into the territorial waters of Estonia and the survey would have provided information about Estonia’s natural resources.

Estonia’s decision is supported by the legal bases set forth by the UN Convention on the Law of the Sea (10. December 1982) and the Economic Zone Act. Also, the public opinion supports and explains Estonia’s stance towards the pipeline project.

Estonia is deeply concerned about the current project as a whole. The Baltic Sea has been declared particularly sensitive sea area by the International Maritime Organization, and such projects would only worsen environmental conditions of the sea. Oil-tanker traffic in the Baltic has increased consistently, including in the narrow Gulf of Finland, which is primarily due to growing oil trade through Russian ports along the Gulf of Finland. Construction projects and a restricted gas pipeline area in the Baltic’s navigation area would further restrict the already narrow routes, leading to an increased risk of collisions.

The desire to research various pipeline routes in the Baltic Sea that differ from each other by only a few kilometres is unjustified, as none of these alternatives would help to completely avoid endangering the Baltic Sea. Estonia has consistently emphasized, that prior to the decision to build a pipeline, alternatives on land must be studied as well.

Utilising the existing land pipeline routes for projects Amber or Jamal 2 would avoid environmental risks for the Baltic Sea and cut construction costs. This would also be in the best interest of Europe. For this reason, Estonia, Latvia, Lithuania and Poland recommend studying the feasibility of the Amber pipeline.

Estonia will continue to take part in the assessment of cross-border environmental impacts of the Nord Stream gas pipeline, in accordance with the Espoo Convention. As a state affected by the environmental impact, Estonia asks the countries of origin (Russia, Finland, Sweden, Denmark and Germany) to thoroughly weigh the environmental issues.

Source: Ministry of Foreign Affairs

The best company in Estonia is Tallink Grupp

Tonight, on the evening of 25 September, the entrepreneurship prize winners for this year were festively announced at the Estonia Concert Hall. It was the first time that one and the same company – Tallink Group – was declared the best in the Enterprise Award 2007 competition, organised by Enterprise Estonia, as well as in the Most Competitive Estonian Companies Ranking 2007 contest, organised jointly by the Estonian Chamber of Commerce and Industry and the Estonian Employers’ Confederation.

In addition to the two main prizes, the winners in seven prize categories were announced in the competitions held in the framework of a joint project between Enterprise Estonia, the Estonian Chamber of Commerce and Industry, and the Estonian Employers’ Confederation, and the most competitive enterprises were determined by areas of activity in 12 categories.

According to Viljar Jaamu, Chairman of the Board of Enterprise Estonia, the winner of the Entrepreneurship Award 2007, Tallink Group, was unanimously selected by a representative jury. “Tallink Group is a good example of an Estonian company that is capable of being successful in international competition. The purchasing of Silja Line, bringing of new ships to the line, and opening of the Tallink Hotel – all of this demonstrates the fast development of Tallink. I believe that its important role as a developer of the Estonian economy, and notably the tourism sector, will also continue in the future,” Jaamu said. In addition to the main prize, Tallink Group was declared the winner in the prize category Tourism Innovator 2007.

The aim of carrying out the Entrepreneurship Award competition is to give state recognition to successful enterprises in Estonia and to increase entrepreneurship awareness.

The winner of the Exporter 2007 category prize, granted by Enterprise Estonia, was Krimelte. The manufacturer of joint sealants and building foams successfully sells its products under its trademarks, both to the east and west of Estonia. The export turnover of the company was MEEK 684, it increased by 28% in 2006 in comparison with the previous year.

The Foreign Investor 2007 prize was given to ABB. As of today, the industrial company belonging to the international group already employs over 650 people in Estonia, and has factories in Keila and Jüri. One-third of the wind park generators in the world are produced in the factory in Jüri. The turnover of the company is BEEK 1.37 and the total amount of investments MEEK 500; more than 90% of its output is exported.

Elion was selected as the winner of the Innovator 2007 award, owing to the development of its Digi-TV video rental system. It is a system which all Digi-TV clients can use to rent films and broadcasts via their TV sets by using their remote control, 24 hours a day, seven days a week.

The winner of the Industrial Enterprise 2007 prize was VKG Oil, whose main products are various fuel oils, oil shale phenols, antiseptic wood impregnation oils, and oil shale bitumen. The turnover of the company in 2006 was over BEEK 1, and nearly 400 people were employed. In 2006, VKG Oil earned MEEK 345 in profit.

The winner of the Area Developer 2007 prize was Viking Window, which in addition to a good financial performance also plays an outstanding role in the development of Järva County. The company employs 190 people, and its sales revenue in 2006 was over MEEK 230. The company supports several athletes and sports clubs in Järva County and engages in active cooperation with local vocational schools.

The winner in the Developer of the Year 2007 category was Nova Haus, a company from Viljandi that engages in the production and assembly of wall modules for wooden framework houses, and also provides designing services. The turnover of the company increased in 2006 by almost five times, reaching MEEK 52.

The aim of compiling the competitiveness ranking is to give entrepreneurs the possibility to compare themselves with competitors and to assess the success, cost-effectiveness and sustainability of Estonian companies, on the basis of specific methods. The competitiveness ranking is compiled as a general ranking and by areas of activity.

As already mentioned above, the Most Competitive Enterprise 2007 title was awarded to Tallink Group (consolidated), which was also declared the most competitive tourist company.

This year, in addition to the overall winner, the most competitive small and medium-sized company was also selected – Betoonimeister AS, a company founded three years ago. The competitiveness ranking of small and medium-sized companies included companies with no more than 49 employees (on average in a year), whose annual net turnover did not exceed MEEK 150 and whose parent company or subsidiary is not a large enterprise.

According to areas of activity, the following enterprises were announced as the most competitive:

Catwees AS (consolidated) – the most competitive retailer
Mazeikiu Nafta Trading House OÜ – the most competitive wholesaler
BLRT Grupp AS (consolidated) –the most competitive industrial and energy enterprise
A. Le Coq AS – the most competitive food industry enterprise
Merko Ehitus AS (consolidated) – the most competitive construction enterprise
EMT AS (consolidated) – the most competitive communication and IT company
Ekseko AS (consolidated) – the most competitive agricultural and forest management enterprise
Artig KV OÜ – the most competitive business service and real property enterprise
Hansapank AS (consolidated) – the most competitive financial intermediation enterprise
Tallinna Vesi AS – the most competitive service enterprise
Tallinna Sadam AS (consolidated) – the most competitive transport and logistics enterprise

Nearly half of last year’s winners were also able to maintain their place and a high competitive level this year. We are pleased to acknowledge that the winners include many new successful companies.

For the second successive year Mazeikiu Nafta Trading House OÜ, and for the third successive year A. Le Coq, were the best in their respective categories. And for the fourth consecutive year these three enterprises maintained their positions: Hansapank, Merko Ehitus and BLRT Group.

“Competitiveness is a long-term ability and several Estonian companies have also proven this over the last five years in which we have been preparing this ranking. Those who have invested in innovations are certainly also competitive under more stable conditions,” Siim Raie, Director General of the Chamber and Commerce and Industry said, when commenting on the results.

The average age of the enterprises in the Most Competitive Estonian Companies Ranking 2007 is 11 years, excluding A. Le Coq Tartu Õlletehas, which was founded in 1826. The youngest winner is Betoonimeister AS. When we view how the equity capital of the best enterprises in the ranking is distributed, nearly 75% of all winning enterprises are Estonian private capital-owned and 25% – foreign capital.

Altogether 455 Estonian companies participated in the Most Competitive Estonian Companies Ranking 2007 contest and 426 of these were included in the final ranking after qualifying in accordance with the methodology used. Participation was voluntary.

The complete Most Competitive Estonian Companies ranking can be found at:

Source: Enterprise Estonia

Government approves 2008 budget

At its meeting today the government approved the draft versions of the state budget for 2008 and the additional budget for 2007. The volume of revenue in the budget for the coming year is approximately 96.3 billion kroons, with expenditure running to 93.6 billion kroons.The state budget surplus is planned to be 2.7 billion kroons, with the draft having been developed providing for a government sector surplus of 1.3 percent of GDP or 3.6 billion kroons in 2008. This will significantly exceed the surplus goal approved in the state budget strategy in the spring.

“We’ve done a lot of hard work on this and we’re starting to see the results,” said Minister of Finance Ivari Padar. “I would personally like to thank everyone who has had a hand in developing this budget. I believe it’s exactly the kind of budget Estonia needs right now. We’ll be handing over to Parliament a very balanced and responsible draft.”

The minister says that the budget was put together with today and tomorrow in mind. “We’ll be continuing what we started last year – the budget has been planned with a surplus, and a much bigger one this year than last. This will help rein in rising prices and domestic consumption, but everything that needs to be done will get done. The reserves will see the addition of around 10 billion kroons this year and next, too.”

Minister Padar added that the main goals of next year’s budget can be summarised quite simply: “We want Estonians to feel good and feel safe in their country, wherever they are. We want them to be able to get a decent education, medical help when they need it and a good salary. And we want them to know that the state won’t leave them to fend for themselves. To ensure that professionals are working in positions that are vital to the people of the country, the budget will provide a notable amount of extra money for the likes of police officers, rescue workers, teachers and prison workers. And we’ll be helping local governments pay kindergarten teachers the salary they deserve as well.”

The biggest budget increase in 2008 – 9.7 billion kroons – will be that of the Ministry of Social Affairs. “This will bring with it an extended period of parental benefits, pensions and other allowances will increase, there will be better opportunities to promote the hospital network, more HIV and AIDS treatment, higher salaries for orphanage staff, more effective drug prevention and a lot of other things that Estonian society really needs,” Minister Padar explained. “The Social Ministry’s budget alone makes up more than 40% of the 2008 budget.”

The greatest expenditure in the coming year will be on pensions, which will cost the state 17.7 billion kroons. “The government decided to change the way pensions are calculated so that the average old-age pension doubles over four years,” Padar said. “In 2008 the average will go up by 22 percent to 4581 kroons.”

The minister says that apart from more appropriate salaries and pensions, the budget also focuses on developing infrastructure: “One area that will see significant budget growth in 2008 will be the Ministry of Economic Affairs and Communications. The majority of the extra 2.4 billion kroons it receives is designed for roads, so that driving in Estonia is safer.”

The volume of revenue for the 2007 additional budget is 6.2 billion kroons. Expenditure is 2.7 billion kroons, with 3.5 billion kroons planned to be directed to the reserves.

“With the additional budget we have been very disciplined in terms of costs and made sure not to endanger domestic consumption with the decisions we’ve made,” the minister explained. “The majority of these expenses are actually ones for next year that we have decided to deal with now, as they are things we should get started on as soon as we can. The biggest projects including in the budget are buying buildings for embassies; international tenders for the Ministry of Defence; hospital investments; purchasing equipment for the chemical building of the University of Tartu; and acquiring rescue equipment, an ice breaker and a Border Guard helicopter.”

The draft budgets approved today will be handed over to Parliament on Wednesday 26 September.

See also: Press briefing outlining the state’s 2008 budget and 2007 additional budget in more detail
Source: Ministry of Finance

Minister for the Environment approves radiation practice licence for AS Steri

Today, 18 September 2007, the Minister for the Environment, Jaanus Tamkivi, put his signature to the radiation practice licence to be issued to AS Steri, giving the sterilisation factory the right to work with sources of radiation. The minister has also taken the decision to appeal the court ruling against the Ministry of the Environment of 31 August for having open proceedings in the course of processing the permit and having launched an environmental impact assessment.

“In the Steri case there are two sides with very specific and intractable points of views – local residents and the owners of the radiation factory,” Minister Tamkivi explained. “And from their points of view their expectations are justified. For my own part I sympathise with both parties, which is why it was not easy to come to a decision. But I weighed up all of the arguments and took the two related court rulings into account, and as such I decided to issue the radiation practice licence to AS Steri.”

The Ministry of the Environment has decided to appeal the ruling of the Tallinn Administrative Court in which the ministry’s actions in processing the amendments to AS Steri’s radiation practice licence were declared unlawful. The decision to appeal stems primarily from the fact that the court has taken the ministry to task over the open proceedings used to amend the licence.

The court ruled that carrying out open proceedings must be considered unlawful. “It is important to the Ministry of the Environment what the people think, which is why we cannot agree with the court in this case,” Minister Tamkivi said. “In a procedure such as this one that affects a lot of people, we feel that we must operate according to the principles of open proceedings – involving local residents in the decision-making process.”

The minister had postponed making any decision with regard to issuing the radiation practice licence to AS Steri in order to await the rulings of the court in the two cases in which Steri is involved. In one, local residents took the Minister to court as they were dissatisfied with his approval of the environmental impact assessment statement. They were not happy that they had failed to receive answers to all of their questions during public discussions of the assessment. In the other case, the owners of AS Steri took the minister of the environment to court in order to have the ministry’s actions in processing the application for the amendment of the radiation practice licence declared unlawful.

The radiation practice licence has been issued to AS Steri for a period of five years.

Source: Estonian Ministry of the Environment

Small Estonia a big leader in global IT

Estonia may be the original home of the revolutionary internet communication company Skype, but it’s hard to find a completely Estonian business among the numerous information technology (IT) companies in the Baltic state.

With Skype being its hottest calling card, tiny Estonia has transformed itself into a something of a Silicon Valley of Eastern Europe.

However, the company’s two founders are not even Estonian. Niklas Zennstrom is a Swede, and Janus Friis is a Dane. Skype’s legal headquarters are now in Luxembourg; its sales and marketing office is in London.

Part of the problem for Estonia’s entrepreneurs is the nation’s inexperience in capital markets and marketing. The Baltic nation of 1.3 million people regained its independence in 1991, after the collapse of the Soviet Union and joined the European Union in 2004.

Estonia’s software development industry employs roughly 3,500 people.

IT entrepreneurs tend to focus on niche products or on business models that, like Skype, can expand from a small base by word of mouth.

Oliver Wihler, 36, a Swiss software developer, moved to Tallinn from London 8 years ago, drawn by the heady professional atmosphere and the aggressive use of Internet technology even in the last years of the previous century.

Local entrepreneurs working in various companies grow out of an energetic, youthful society, which has embraced technology as the fastest way to catch up with the West. This is one of the reasons why Wihler decided to move to Estonia in 1999.

Now he and a business partner, Sander Magi, 31, run a company called Aqris, which offers software development and consulting services on Java technology.

“The demand is huge for IT professionals,” Wihler told Deutsche Presse-Agentur dpa. “We don’t have enough human resources, good resources.” Aqris is employs about 30 people.

Ironically, Estonia owes its internet success to its former occupiers, the Soviet Union. The Soviets constructed and developed several scientific institutes in the Baltic countries in the 1950s. Estonia ended up with the Institute of Cybernetics, a computer sciences centre.

That scientific legacy remains embedded in society, people say. It’s probably not surprising that the telecommunication industry estimates internet penetration at 57 per cent of the population.

Eight out of 10 Estonians carry cellphones and even gas stations in Tallinn are equipped with Wi-Fi connections, allowing motorists to check their email after they fill up.

Estonians use mobile phones to pay for parking, among other things. Most conduct their banking online, and more than 70 per cent file their taxes on the Internet.

The state issues a digital identification card, which allows citizens to vote from their laptops.

Members of parliament suggest implementing m-voting, allowing a citizen to vote using mobile phones in combination with a unique SIM card and national ID card. The offer is on the table though it’s unlikely to happen before the 2009 elections.

The government considers putting more and more services online. Recently, it announced it would open a virtual embassy in the virtual reality website Second Life.

It pursues innovative technologies with projects like e-health, which would put all personal health histories on a single database, Juhan Parts, minister of economy told Deutsche Presse-Agentur.

Other projects include e-justice that would not only contain a person’s criminal record but would be a single source for all law enforcement agencies – from the state police to code inspectors.

“The basic idea is to improve the quality of the function of the government,” he said.

Competition for talented recruits is driving up salaries. While Estonia remains cheaper than neighbours Finland or Sweden, the gap is narrowing rapidly.

In the past, Finnish companies were looking for cheaper labour across the Finnish Gulf in Estonia. But soon, Estonian companies will be looking for skilled workers in Finland, according to Oliver Wihler.

Source: DPA