• Despite the fact that the Department of Environmental Supervision found several violations in the fish processing facilities, these problems still have not been solved yet;
• The fish processing facilities receive funding from the state subsidy programmes;
• The circle of the persons who, on the one hand, own the shares in fish processing facilities and on the second hand, make donations to the ruling party, has expanded;
• Additional connections have been identified between the fish processing facilities and former/current public officials and persons related to the Georgian Dream, that is likely to hinder the resolution of the problem.

The companies with fishing licenses

The National Environmental Agency issued 9 licenses for fishing in Black Sea water area, which was divided up for 5 companies. These companies are related to each other, as well.

The fishing licenses were issued for these companies in 2006 through an auction. The terms of these licenses were extended in 2019, after the expiry dates, that substantially limited the possibility of new participants appearing in the fishing industry and put the existing companies in the monopoly position.

It is noteworthy that the companies holding the fishing licenses own the mutual company as well - A G S Group LTD. The Director of this company is Kakhaber Lataria, who at the same time, owns 25% of shares in ICEBERG 2 LTD. The shares are distributed the following way:

According to the National Statistics Office of Georgia, all five companies holding the fishing licenses are medium-sized enterprises. According to the National Statistics Office data, a company is considered to be the medium-sized enterprise, when the number of employees lies between 50 to 250 and an average annual turnover falls between GEL 12 to 60 million.

Subsidies received from the state programmes

The government assists the companies that operate in fishing and fish refining business in two ways - on the one hand, it provides funds through the Enterprise Georgia program, and on the second hand, issues the credit guarantees within the Credit-Guarantee Scheme for the companies that are unable to obtain finances from banks and the state transfers the funds in specific bank accounts for ensuring the debts of beneficiaries.

The state assisted two companies within the framework of the Credit-Guarantee Scheme - GEL 472,500 was transferred to the bank account to secure the loan of Georgian Marine Group Ltd, and GEL 945,000 was secured for the loan of Paliastomi 2004 Ltd. The aforementioned amounts must be repaid to the state budget gradually, in parallel with repayment of the company’s financial liabilities with the bank.

These companies will receive a co-funding of GEL 7,814,262 through the Enterprise Georgia program, from which they have received a funding of GEL 14,685 so far.

Connections of current and former officials, political party donors and people related to the Georgian Dream with fishing and fish processing companies

Georgian Marine Group LTD

Georgian Marine Group LTD is a company registered on December 3, 2020. The Director of the company is Davit Tsitsilashvili, while Paliastomi 2004 LTD owns 100% of shares.

Davit Tsitsilashvili donated GEL 120,000 in total to the Georgian Dream party in 2016 and 2020. His late father, Guram Tsitsilashvili, is a political donor, too. He donated GEL 50,000 to the National Movement in 2012 and GEL 60,000 to the Georgian Dream in 2016. Guram Tsitsilashvili is a business-partner  of Gocha Kurdgelia, the current mayor of Poti, while he owned the shares together with Irakli Khakhubia - the current MP of Georgia, in the company that held the fishing license. - Iceberg 2 LTD.

Paliastomi 2004 LTD

The Director of Paliastomi 2004 LTD - Paata Zhgenti is a former deputy head of MIA Tbilisi Police Department. The company’s shares are apportioned as follows: Sulkhan Papashvili - 6.67%; Giorgi Kukhaleishvili - 60%; Sea Products LTD - 33.33%. Sulkhan Papashvili is a former head of the State Protection Special Service. He is the brother of a businessman Lasha Papashvili and is engaged in business as well.

The main shareholder of Paliastomi 2004 LTD - Giorgi Kukhaleishvili, is Paata Zhgenti and Sulkhan Papashvili’s business partner in several other companies, including Elgreen Holdings Incorporated, which was initially registered in Cyprus and later in the United Arab Emirates. According to the research published by Freedom Monitor in August 2020, the electricity from Azerbaijan is imported with participation of Elgreen Holdings Incorporated LTD, as an intermediary company. Before that, electricity was supplied from Azerbaijan without the intermediary company. Along with Sulkhan Papashvili, Ex-Prime-Minister of Georgia - Zurab Noghaideli is also a member of the Supervisory Board of Elgreen Holdings Incorporated. Freedom Monitor’s journalistic investigation assumes that Ucha Mamatsashvili - the cousin of Ex-Prime-Minister of Georgia - Bidzina Ivanishvili, also has business interests in Elgreen Holdings Incorporated.

Sea Products LTD

Davit Tsitsilashvili, who is the Director of Georgian Marine Group LTD is the sole owner and the Director of Sea Products LTD at the same time.

Sea Products LTD owns shares in several companies, including, Black Sea Aquaculture Company LTD, whose 10% of shares is owned by Sea Products LTD and 90% of shares is owned by Sulkhan Papashvili. Kapiton Babilua is the Director of the Company. Babilua is the Director of Marine Fishing Group LTD as well, whose 50% of shares is owned by Paata Zhgenti and the other 50% is owned by Giorgi Lemonjava.

It should be noted that Sea Products LTD donated GEL 100,000 to Georgian Dream in 2017.

Iceberg 2 LTD

25% of the shares of Iceberg 2 LTD is owned by the MP of Georgia (Khobi and Senaki Majoritarian) Irakli Khakhubia. The shares of the company are also owned by: Kakhaber Lataria - 25%; Tengiz Sarishvili - 25% and a company registered in Turkey - Koptur Balikcilik Gida Sanai Nakliat Ve Ticaret Limited Shirket - 25%. Irakli Vekua is the Director of the company, who is the manager of Irakli Khakhubia’s shares at the same time.

It is noteworthy that Irakli Khakhubia, other shareholders and the director of the company have donated GEL 438,100 to the political parties in the past. GEL 131,000 to National Movement, GEL 187,000 to the Georgian Dream and GEL 120,000 to Salome Zourabichvili.

Geofish Company LTD

64% of the shares of Geofish Company LTD is owned by Iceberg 2 LTD, whose Director is Irakli Vekua. Aleksandre Tavadze owns 10% shares of the company, while the remaining 26% is owned by Gugolplex LTD.

Gugolplex LTD was registered in September 2020. Its sole owner is Maria Kokhia, who has dual citizenship of Georgia and the Russian Federation, while Tamar Gakharia is the Director.

Hereby, Tamar Gakharia is the Director of Best Energy Group LTD, which is solely owned by businessman Khvicha Makatsaria. It was Best Energy Group LTD that bought 24% of JSC TELASI for GEL 32,380,383 at the auction that took place in September 2019.

Davit Tsitsilashvili, the Director of Georgian Marine Group LTD and Black Sea Products LTD is a business partner of Khvicha Makatsaria. Each of them owns 50% of Aquamarine LTD’s shares. Aleksandre Tavadze, the owner of 10% shares of Geofish Company LTD, is Khvicha Makatsaria’s business partner in Geofish Group LTD and Chateau Akhasheni LTD.

It is noteworthy that Davit Tsitsilashvili is the sole owner of Gugolplex LTD - Maria Kokhia’s Business partner in Tbilisi Parking LTD. She owns 20% of shares in Tbilisi Parking LTD, while 50% is owned by Davit Tsitsilashvili.

MBM LTD

36% of MBM LTD is owned by a company - Meis Su Urunleri Avciligi Ve Ietishtiriciligi, which is registered in Turkey, while the remaining 64% of shares are equally divided among Besik and Merab Kharabadzes. Merab Kharabadze is also a political donor. He donated GEL 15,000 to Presidential Candidate - Salome Zourabichvili.

Political Donations

The owners, directors and other persons related to the companies mentioned above have donated GEL 783,100 to various political parties at various times.

Violations identified during the fish processing process

The Environmental Supervision Department has examined activities of the fish and sea products processing facilities several times since 2017 and identified the following violations during the inspection:

• Contaminated water from the production process is directly discharged into Rioni river (surface water object);
• The facilities operate without the technical reports of atmospheric air pollution sources and the inventories of the harmful particles spread by them;
• The environment is being polluted by contaminated and municipal waste;
• The environment is being polluted by the sea waste during the unload of fish from sea to land vehicles;
• The water is discharged in the surface water object at a temperature higher than it is allowed;
• Hydrogen indicator (Ph) exceeds the determined standard (6.5 - 8.5) in water pouring from every facility.

According to Poti City Hall, water purification plants have been installed in the above mentioned facilities - Evaporator, which cleanses the pouring water and controls the fish odor at the same time. This equipment cools down the water and reduces the PH indicator (6.5 - 8.5) to the standards defined by the legislation of Georgia. According to the information provided by the Ministry of Environmental Protection and Agriculture of Georgia, the above-mentioned structures are ineffective and do not ensure the purification of water, in addition, the fish processing facilities still have not fulfilled their obligations and do not meet the requirements determined by the legislation of the environmental protection.

According to the evaluation conducted by the Ministry of Environmental protection and Agriculture, the value of damage caused to the environment by the facilities equals to GEL 125,742. The facilities were fined by  GEL 6,550 and they were ordered to compensate for the damage to the environment.

The companies with the fishing licenses were fined for the violation of the license terms and requirements in 2019-2020. The sum of these fines accumulated to GEL 15,000:

• Sea Products LTD was fined with GEL 6,000 in total three times in 2019;
• MBM LTD was fined with GEL 7,000 two times in 2020, while Geofish Company LTD and Iceberg 2 LTD were given a notice two times;
• Geofish Company LTD was fined once with GEL 2,000. There is an ongoing case in court regarding 12 violations committed by Sea Products LTD, Iceberg 2 LTD and MBM LTD.

According to Transparency International Georgia, the actions carried out by the government may be considered to be ineffective as they do not ensure protection of the environment and ecological security. Although companies are occasionally subject to financial sanctions, environmental problems remain unresolved until now.

Therefore, the Ministry of Environmental Protection and Agriculture should conduct a detailed inspection of the facilities and determine specific actions required to avoid pollution of the environment and to reduce the spread of foul odor down to minimum. It is important for the state to take all the measures defined by the law to ensure that the facilities fulfill their obligations and comply with environmental  regulations.

On the other hand, a conflict of interest emerges between the current/former public officials, political party donors and existing problems: The political connections of the company owners may be an impediment to solving the problem.