The rise of prison labor in the Russian economy, 23 October 2023

Moscow’s war against Ukraine has resulted in serious military and economic losses for the Russian Federation. The Kremlin has tried to mitigate the effect of stringent Western sanctions through a combination of non-compliance with the oil price ceiling, evading sanctions via third parties, and high commodity prices. The Russian economy is facing harsh structural challenges, including the lack of a qualified workforce....

The Kremlin has sought to integrate prison labor with certain sectors of the domestic economy to solve this issue. Moscow has tried to veil these efforts by silencing experts and activists who have been vocal about the re-emergence of prison labor in the economy...

Despite assurances from the Kremlin that prison labor would be “just and fair,” Russian human rights activists have expressed their doubts and concerns. Dinar Idrisov, a member of the human rights initiative Observers of Saint Petersburg, stated that the FSIN’s idea would result in “another Gulag and the abuse of human rights.” Idrisov also pointed out that major state corporations (goskorporatsii), including Rosatom, Rostec, Rosnano, and Roscosmos, are behind the initiative. These entities hope to capitalize on a cheap and easily accessible labor force...

The use of prison labor in Russia for other matters acquired a new meaning after the invasion of Ukraine began in February last year. In August 2022, the All-Russia Public Organization’s Business Russia began testing Russian businesses for their readiness to increase the use of prison labor in their work. According to the project’s findings, some businesses could increase participation by between 100,000 and 180,000 convicts. Business Russia concluded that prison labor could be more effectively used in the areas of construction, agriculture, forestry, mining, and clothing manufacturing...

Two large Russian enterprises began integrating prison labor into their business operations in 2023. First, AvtoVAZ asked the FSIN in June to provide “more than a thousand convicts” to fill personnel gaps in its workforce...Second, Ozon and Russian Railways have increasingly relied on prison labor during the construction of the Vostochny Polygon initiative...

As of August 2023, more than 26,000 convicts have been reportedly employed by Russian businesses. The reported total for all of 2022 was 9,300...That said, the Kremlin and the central management of the largest state corporations, including Rostec, have claimed that convicts are not being used in the production of weapons and military equipment...Other sources, however, challenge these claims. According to some reports from November 2022, more than 200 convicts were involved in the operations at Uralvagonzavod, a Russian machine-building company located in Nizhny Tagil and the world’s largest producer of main battle tanks...Similarly, British intelligence reported that forced prison labor in Russia is being actively used in producing arms for the war against Ukraine...There is also considerable evidence that convicts have been used on the Ukrainian battlefield as early as summer of last year...