Sometimes PR merely helps. It can reinforce a message or craft an image. In some cases, though, PR literally can make or break a situation. This has been the case with Ilim
Pulp, a little-known, privately held pulp and paper company based in Russia.
In early 2002, Ilim Pulp was under attack, the target of a hostile acquisition effort by Oleg Deripaska, one of the richest businessmen in Russia and a member of a class known
as "the oligarchs." These so-called oligarchs have reportedly proven themselves adept at corrupting courts and government officials in their efforts to achieve their own
commercial ends, and now one of them was after Ilum Pulp. So the company's management called in Fleishman-Hillard.
PR is vital in a situation like this, since the oligarch's effort was in part comprised of a media smear campaign that would have to be addressed head-on. "The Russian media
are highly susceptible to corruption," says Andrew Kattel, senior vice president of international business communications at Fleishman. "The Russians call it 'black PR' or
zakazukha (stories to order). It involved things like a falsified, fictitious newspaper being published in one of the localities where Ilim was under threat. It was a smear
campaign to discredit Ilim's management and its practices."
The PR team wanted the international press to expose these tactics and at the same time to shed light on the oligarch's efforts to corrupt the Russian courts. At the time
Fleishman got involved, Deripaska had already been handed a court ruling saying that Ilim had authorized his agents to take ownership of the company. The thrust of the PR effort
was to expose these sorts of shenanigans.
When Fleishman went to work in July 2002 the situation was already at a crisis: The oligarch's representatives were poised to take over one of Ilim's production facilities -
with Kalashnikov rifles in hand. Kattel and a colleague immediately hopped on a plane to Russia to meet with top management, huddle with the company's legal team and formulate
campaign ideas.
It helps that Kattel had spent time in Moscow as a former AP reporter and editor. He knew the workings of the foreign press corps in Moscow and so he made this group the first
line of attack. "We determined [the press corps] to be a potentially potent counter-weapon, because those Western institutions had a much greater degree of credibility and
authority not only here in the West but also in Russia" where the local audience has learned to distrust the media, he says. But the foreign press wasn't very interested in what
it perceived as yet-one-more instance of corruption in a largely corrupt economy.
To generate media interest, the PR team first set the story in its larger context, promoting the fact that the U.S. and other nations had a solid stake in the future of the
Russian economy. The Ilim story therefore took on international dimensions as a case study in the fragile nature of commercial enterprise in this former Soviet state. "The
manipulation of the court system by our opponent clearly was going to be part of the story," Kattel says. "It would resonate well with the Western media and with the U.S.
government, which has a great interest in seeing the rule of law applied in Russia."
In taking this approach, the PR team was able to cast the Ilim Pulp saga as something more than just a run-of-the-mill incident. "It became something more, something
independent and very strong," says Svyatoslav Bytchkov, PR director at Ilim Pulp.
To drive home the point, the PR team chartered a plane from Moscow and organized a one-day visit out to one of Ilim's hotly disputed facilities, which at the time was being
protected by armed guards from an expected 'hostile' takeover, in the literal sense of the word. Men wearing ski masks and toting Kalashnikov rifles were apparently preparing to
take over the site.
This proved enough to spark interest from AP, Dow Jones and The New York Times, among other media outlets. "We made it easy for them: A one-day trip, a chartered airplane, so
it was not a huge investment of time," says Kattel. "However much a journalist may feel jaded, there still is an innate curiosity, and they will come just to take a look-see, if
it is not going to take a whole lot of time. And once they were there, they saw a story."
While the situation is not yet resolved, the oligarch appears to have backed off in response to the international press generated by the Fleishman effort. The opponent had some
concerns about his international reputation from the start (due to his need for Western business partners), so the public scrutiny has forced him to ease off on his less than
savory tactics.
Media placements have included an above-the-fold, front-page piece in The New York Times, as well as coverage in The Wall Street Journal Europe, The Associated Press, Dow Jones
News Service, Frankfurter Allgemeine Zeitung, St. Petersburg Times (Russia), The Moscow Times, EUWID Papier und Zellstoff (leading German trade publication), ForestWeb (a top
trade Web site) and Paperloop.
"I don't want to feel overconfident," Kattel says, "but I do have a much more positive appreciation of the power of public relations in these situations."
Raising a red flag
Fleishman Hillard took a multi-pronged PR approach in its efforts to help a Russian-based client stave off a hostile takeover by one of Russia so-called "oligarchs."
- The PR team worked with the client's legal team to create jargon-free explanations of key legal developments, then wrote and distributed press releases describing these
developments. - The Fleishman team creating background materials in English, including a company fact sheet and executive bios.
- They painted the big picture, tying this dispute to larger international themes including Russia's commitment to a rule of law.
- They backed up these efforts by discussing the dispute in such forums as the U.S.-Russia Business Council in Washington, D.C. and the Annual Russian Investment
Symposium.
Contacts: Andy Katell, 212.453.2217, [email protected]; Svyatoslav Bytchkov, 011.7812.118.6046,[email protected]