Four men once operated a complex machine forging molten steel into industrial parts at a sprawling factory in Dnipro in central Ukraine.
One has since been conscripted to the Ukrainian army and killed. The second is missing in action. The third is due to retire.
The factory’s owner, Interpipe, is desperate to retain the fourth: a young specialist of military age who could be conscripted at any moment.
Faced with many similar cases and more than 1,000 vacancies, Interpipe has joined a chorus of Ukrainian companies calling for mass exemptions from military service that they argue are essential for the country’s economic survival.
“We are working at the limit,” said Interpipe’s human resources director Vitalii Pakhomov, sitting in an office above one of the five steel mills the company owns across Ukraine.
Though Interpipe has been designated a strategic enterprise, meaning half its workforce can be exempt from military service, around 1,000 men remain at risk of being mobilised. “Without them, it’s hard to imagine how we’d operate,” Pakhomov said.
Workers have been drafted while on their morning bus commute and unauthorised conscription vans have been spotted outside the factory gate.
“Every shop floor manager, supervisor and plant director is like a chess player. He comes to work, finds a new piece is missing from the board. What to do?” said Pakhomonov.
The company maintains output thanks to “colossal” efforts by workers pulling extra shifts and other measures, he said. But if mobilisation intensifies, “we will inevitably have to start reducing our volumes . . . which means a decrease in the taxes we pay”.
The answer proposed by Ukraine’s biggest businesses and submitted as a bill to parliament would allow companies to pay a military fee of 20,000 hryvnia ($487) per worker per month to shield them from conscription. A second bill proposes to exempt all Ukrainian men that earn a salary above 36,500 hryvnia.
But the planned legislation has sparked intense debate over what should come first — factory or front line, the economy or the war — and has split society on how to shape a fair conscription system.
Businesses stress changing the system is essential to protect the economy and allow Ukraine to fund its armed forces.
“You can mobilise 1mn people but if you don’t have the resources to equip them, there’s no war,” said Dmytro Natalukha, head of the parliament’s economic affairs committee and author of one of the bills. “The army will be left naked and helpless if the economy fails.”
Companies had already lost on average 10-20 per cent of their workforces to conscription or emigration since Russia’s full-scale invasion in 2022, he said. A renewed Russian offensive this year, which has resulted in more deaths and destruction, as well as power cuts, could drive even more people to leave.
“More and more businesses will shut down simply because they don’t have enough resources to keep going,” meaning a major knock-on effect for the economy, Natalukha argued. “I don’t want to be apocalyptic, but I would say the deadline is late September.”
If passed, the bill allowing companies to pay for workers not to be drafted would exempt around 895,000 men from military service and raise roughly 200bn hryvnia for the army, he said.
“That’s money that doesn’t depend on which mood Viktor Orbán wakes up in, or who becomes the next president of the US,” Natalukha said, in reference to repeated delays in EU aid caused by Hungary’s prime minister.
But with an already evident deficit in frontline troops, many in the military remain unconvinced.
“The logic doesn’t work. We don’t have enough people who want to go to war . . . and then we [reduce] their numbers even [more],” said Masi Nayyem, a prominent lawyer-turned-soldier who runs an organisation for military veterans.
Many also argue a conscription system based on financial resources, whether those of a company or individual, would be unfair.
The proposals would create a situation where “if you have money, then you get to be exempt. It’s not correct,” said Nayyem, who was injured in battle in 2022. “Where is the justice? Why did I need to lose my eye, while someone can just pay and not go?”
“It’s a fucking stupid idea,” said a junior lieutenant in the army, who chose to sign up in the first month of the full-scale war. “It’s unfair to those who voluntarily mobilised in 2022.”
Pavlo Derhachov, a Kyiv nightclub owner, said he feared the impact of the economic exemptions on the country’s social fabric.
“It’s some kind of VIP bullshit. It creates a caste system,” he said, speaking while waiting in a queue to update his information on a military database.
In a bid to facilitate conscription and locate more potential recruits, the army ordered all men to refresh their contact details and other information by mid-July. Earlier this year, the conscription age was cut by two years to 25.
However, many business leaders argue the conscription system is already unjust because of widespread corruption, with Ukrainians believed to be spending anywhere between 700mn and 2bn hryvnia a year buying exemption documents, Natalukha said.
Anna Derevyanko, executive director of the European Business Association, a Ukrainian business lobby group, said: “People who have means are simply buying their way out. So we end up back at square one: those who are poor go to the army, while those who have the means do not.” Moreover, she added, the funds “go not to the state budget but directly into the pockets” of corrupt officials.
Natalukha believes that if the government chooses one of the economic exemption proposals, it will more likely be the second, in which men earning over a certain salary are exempt. This is because it would incentivise people to leave the shadow economy, declare their income and start paying taxes.
Some 800,000 men are believed to have gone “underground” to avoid conscription by changing their address and taking jobs paid in cash, Natalukha said. This has left conscription officers targeting companies such as Interpipe, where workers are on the books and physically present on the factory floor.
Business leaders fear the government will drag its feet on the proposed solutions because of their unpopularity.
“You have to explain to people,” said Oleg Gorokhovskyi, co-founder and CEO of Monobank. The digital-first bank employs a large number of IT workers and is keen to exempt them from military service. “In conditions of war [and] economic crisis . . . you cannot help but make difficult, unpopular decisions.”
In a war of attrition, in which Russia’s resources far outstrip Ukraine’s, “it’s not about fairness, it’s about efficiency”, Gorokhovskyi said. A highly skilled programmer at a bank or online marketplace may be more useful for Ukraine than if he were deployed on the front line.
But, as Natalukha points out, “you cannot win the war with mere fairness. War is unfair per se.”
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