The boiler inside the Mother Teresa maternity hospital in Skopje.
Dirty Oil Deals
Late one evening in April 2018, when Angjusev was serving as North Macedonia’s deputy prime minister for economic affairs, two men walked into his office for a meeting.
One was Srezoski, who had set up Evrotim three years earlier through his son-in-law after being banned from oil trading by North Macedonian authorities for failing to meet safety standards for storing oil. The other was Izudin Ahmetlić, the owner of HIFA Oil and one of the wealthiest and most powerful people in Bosnia and Herzegovina.
It’s unclear exactly what the three men discussed that night. But at some point in early 2018, Evrotim won two contracts to supply the residual it was buying from HIFA Oil to companies with ties to Angjusev: Brako, a machinery manufacturer he owns, and Euronickel Industries, which had been a major client of his electricity company.
Angjusev confirmed he met with Srezoski and Ahmetlić, but said they had not discussed anything to do with fuel oil. His company, Brako, admitted that about 15 percent of its fuel oil is supplied by Evrotim, but blamed regulators for not ensuring the quality of the imports.
“Once the fuel oil in question is allowed and put on the market by competent authorities, ‘Brako’ does not have its own laboratory to check the quality,” the company said in a statement.
Evrotim also started winning public contracts from the Ministry of Defense and Skopje’s public transport authority. Business boomed as the company imported thousands of tons of Unipetrol’s residual every month, driving up its turnover from 484,000 euros in 2017 to 13 million euros in 2019.
It was not until December 2018 that Evrotim’s imports first came to the attention of North Macedonia’s State Market Inspectorate, which is tasked with inspecting oil and oil derivatives before they enter the market.
A worker takes a sample of oil at a storage facility in North Macedonia.
Stojko Paunovski, who was the agency’s director until April, said his work was hampered by weak regulations and limited funding. This time, however, he had been tipped off that a trainload of Unipetrol’s oil destined for North Macedonia had been stopped in Serbia, where it didn’t meet quality standards. But because North Macedonia has looser regulations, this oil was able to cross the border. “Unipetrol oil in the European Union is considered garbage. … It is allowed in our country and it is sold. The Serbs did not accept that oil,” Paunovski said.
A Unipetrol spokesperson said the quality of their oil was assured by a quality certificate and safety sheet, in line with European laws and Czech technical standards, adding: “It is up to the buyer what he does with the purchased certified product. However, they must follow the instructions given in the safety data sheet.”
Then, in December 2019, Paunovski was tipped off by Serbian authorities about other shipments of oil bought by Evrotim from HIFA and bound for North Macedonia, including some oil that was declared produced in Bosnia, but whose true origin was unclear.
Paunovski sent four samples off to be tested. They were found to contain high concentrations of ash, water, and sediment. Then in February, the private lab that carried out the tests wrote to both the Inspectorate and the Ministry of Economy warning it was seeing increasing amounts of such low-quality oils.
“This type of fuel oil … normally contains a high concentration of heavy metals, usually cadmium and lead, which are harmful and dangerous to human health and the environment,” the letter said. “Such samples of fuel oil reach our laboratory more and more often, and in a quality very similar to the sample above.”
Paunovski decided he had to act. He wrote to the minister of economy and other senior government officials, warning that the legal requirements for testing and controlling oil imports were not sufficient and urging them to change legislation. But nothing happened.
Weathered oil pipes outside an oil storage facility in North Macedonia.
A senior official in Skopje’s public transport authority, which bought Evrotim’s oil, said he also contacted the government to complain it was making the boiler in one of their buildings break down. “The smell was irritating. The employees complained,” said the official, who declined to be named for fear of imperiling their job.
At least two regional oil companies have also written to customs raising concerns. In a joint email in January 2019, they said that they had analyzed a certificate of quality accompanying a shipment of Evrotim’s oil and found that it showed an “illegal deviation” from the specification for fuel oil in eight out of 10 parameters.
“We can put special emphasis on the harmful impact on the environment and the enormous pollution during the combustion of such an inadequate resource,” the email said, arguing that the waste was being sold off cheaply as fuel, creating “unfair competition.”
A senior customs official, who asked not to be named out of fear of losing his job, told IRL that “powerful people” facilitated the trade in dirty oil, though he declined to name names.
“We are talking about people who have been financing elections and political parties for decades, plotting, blackmailing. They are all linked to organized crime groups, corrupt government officials,” he said. “These things are not proven, because there are simply no good laws to leave any traces of their work.”
In late April, as OCCRP was finalizing this story, Paunovski was dismissed from his job. In a press conference the day before it was officially announced, Prime Minister Zaev said he was fired for “defiance against the authorities” because he had refused to hire 35 civil servants. More than 100 inspectors reportedly signed a petition against the move, but Paunovski has not been reinstated. He declined to comment.
Srezoski, Evrotim’s ultimate owner, at first denied in an interview with OCCRP that he knew Angjusev. But he then admitted that he had briefly met both him and HIFA Oil’s owner, Ahmetlić, in Angjusev’s government office. He also insisted the fuel oil met European standards. Any accusation to the contrary “is a lie, perhaps out of jealousy,” he said.
An aerial shot of smoke rising from chimneys above Skopje.
‘Like Dead Cats’
Drawing on documents and interviews, reporters pieced together the supply chain of the oil Evrotim brought into North Macedonia.
Evrotim’s paperwork shows much of it was produced in the Czech Republic at Unipetrol’s Kralupy refinery. A certificate of quality issued by Unipetrol describes the product as a low-sulfur “residual” fuel oil, which the EU’s chemicals agency warns can cause cancer.
The oil was transported via HIFA Oil by train to North Macedonia, often through Serbia. Several different bodies have questioned its quality. Skopje’s Public Transport Company even returned Unipetrol fuel oil it bought from Evrotim after analysis showed it contained high levels of water and sediment. (Evrotim’s owner, Srezoski, conceded the oil had been returned for being poor quality, but blamed the boiler and its operators for the problems.)
On other occasions, like in December 2019, shipments destined for North Macedonia also contained oils not from Unipetrol that appeared to be impure, according to Petković, the Serbian official.
“It means that this is poison, it might be real smuggled waste, it might be a mixture of waste motor oils. There was certainly no fuel oil,” he said.
🔗A History of HIFA
HIFA Oil is one of the largest and most influential companies in Bosnia and Herzegovina.
Founded in 2002 by Izudin Ahmetlić, HIFA has grown to become one of the largest companies in the federation. It has supplied fuel to NATO and airlines at Sarajevo’s airport, as well as to state agencies. In 2019, Izudin Ahmetlić was reportedly worth close to $400 million, making him one of the richest people in Bosnia and Herzegovina.
Over the years, HIFA Oil has expanded its operations internationally. In 2017 and 2018, just as Evrotim’s business was taking off in North Macedonia, HIFA opened gas stations in Serbia and Kosovo and a subsidiary in Montenegro. Public records show that in 2018 and 2019, HIFA Oil won three contracts to supply the University of Montenegro with heavy fuel, in total worth 330,000 euros.
In 2018, HIFA Oil claimed it also exported record amounts to EU countries Austria, Slovenia, and Croatia.
“Our future business will be more oriented towards the development and strengthening of our position on the EU market,”
Kenan Ahmetlić said in an article from that year.
Izudin Ahmetlić has also held several influential positions in the country’s Party of Democratic Action, including as a member of the party’s main board.
IRL compared four lab analyses of separate samples of these other oils obtained from North Macedonia’s State Market Inspectorate. They were all below one percent sulfur, but contained high levels of other pollutants such as ash, water, and sediment — in some cases more than 10 times what is allowed for fuel oil.
Julijana Dimoska Isajlovska, assistant head of the Natural Gas, Liquid Fuels and Heat Energy Department in North Macedonia’s Energy Regulatory Commission, said the growth of renewable energy in the EU has led to more heavy oils being exported from the bloc, sometimes with chemicals added to reduce the sulfur content.
Dejan Mirakovski, a professor at the Goce Delchev University in Stip, said substandard fuels make their way into the Western Balkans due to unclear regulations and weak enforcement.
“The gray zone and the unclear regulations, but also the weak institutions that have no capacity to defend themselves, leave constant doubts about the quality of fuel oil and fuels in general,” he said.
“There are cleaner types of fuel oil that can be used as fuel for industrial plants or ocean-going ships. It is strictly regulated in the EU. But other, dirty types of heavy oils, the burnt hard oil residue of fuel oil, are considered toxic waste.”
Evrotim’s owner, Srezoski, disputed the lab analyses, saying the company’s fuel oil meets North Macedonia’s legal standards. “The Czech fuel oil met all parameters, even the content of ash, water, and sediment and viscosity,” he told OCCRP.
HIFA Oil’s director, Kenan Ahmetlić, also shrugged off questions about the fuel oil, known as “mazut” in the Balkans, arguing it can be used as fuel if it is low in sulfur. “Mazut that contains one percent sulfur… is acceptable in Macedonia and mostly everywhere in Europe,” he said.
Once in North Macedonia, Evrotim’s oil was distributed to public and private buyers around the country. A former driver who transported it many times, Stojance Angelevski, still remembers the smell of the fumes.
“It smelled disgusting sometimes, like dead cats.”
Discover how Evrotim's oil made its way from a Czech refinery to buildings across North Macedonia.
Contracts Across North Macedonia
In October 2019, the North Macedonian city of Kumanovo made local headlines because of its pollution. A measuring station found levels of PM10 particles had surged to 1,850 micrograms per cubic meter,
Radio Free Europe reported. This was 37 times higher than the maximum 24-hour average recommended by the World Health Organization.
The municipality identified a surprising culprit behind the surge in pollution: the city’s hospital. “The biggest peaks of pollution are due to the ignition of fossil fuels and they are in a period when the hospital heating boiler is lit,”
they said in a report.
A contract obtained by IRL shows that Kumanovo’s hospital bought over 51,000 euros’ worth of oil from Evrotim the same month that pollution surged. Kumanovo is one of at least seven North Macedonian hospitals that, together, bought more than 900,000 euros’ worth of Evrotim’s residual between May 2018 and January 2020.
There have been complaints about pollution in other areas where Evrotim has won contracts to supply fuel.
In 2019, Skopje’s railway authority bought close to 650,000 euros’ worth of fuel from Evrotim, a contract shows. That year, inspectors were reportedly sent to probe complaints about black smoke coming from one of the authority’s buildings. Pictures published in February 2020
showed pillars of black smoke were still pouring from its chimney.
In total, Evrotim has earned over 2.6 million euros from public contracts since 2018. Its largest public sector customer was the Ministry of Defense, which signed contracts worth over one million euros in 2018 and 2019.
But Evrotim’s accounts show the company earned most of its money from selling to private companies, chief among them metals producer Euronickel.
Euronickel Industry’s factory sits in the heart of Macedonia’s wine country.
Srezoski said Evrotim was able to source the oil cheaply because it is not used in the EU. “Because European countries completely remove the fuel oil from use, Unipetrol has no one to sell it to, and that is why they give it to us at such a low price,” he said.
Euronickel said it measures its emissions around the clock and independent monitors also submit data to the Ministry of Environment and Physical Planning. “For the past three years, measurements have shown that air quality is excellent,” the company was
quoted saying in local media in response to IRL’s documentary.
Euronickel’s savings appear to have come at a high price for Kavadarci, where the company is based. In 2019, residents held protests complaining that the smog was so bad it burned their eyes and made it hard to breathe. Local media branded it a “cocktail of death.”
“There is nothing else around. There are no big industries here. Apart from Feni [Euronickel], there is no other source from where the air can be polluted,” said Veljana Mitrevska, who works for a local wine producer.
Vlatko, a retail worker from Kavadarci who asked to be identified by only one name, said “even the birds know” the pollution comes from Euronickel’s plant. “All our children are poisoned,” he said.
After IRL’s documentary was broadcast, the mayor of Kavadarci, Mitko Jancev, said something must be done about the pollution.
“As mayor and municipality, we must not allow the interest of business to be before the health of the citizens,”
he said at a press conference. “With the import of hazardous fuel, which is banned in the European Union, and in our country it is imported as fuel oil and used, knowing that it has deadly consequences, someone must bear responsibility.”
A chimney in Skopje.
A Regional Problem
The Balkans’ bad oil problem is much bigger than HIFA Oil, Evrotim, and Euronickel.
Air pollution is the single largest environmental health risk in Europe, killing around 400,000 people a year, according to the European Environment Agency. Its latest report named Western Balkan countries as the worst offenders.
In North Macedonia, the World Bank says air pollution has now reached dangerous levels in most cities, particularly during winter months. Angelcho Andonovski, the director of Kozle Children’s Hospital in Skopje, said he is seeing increasing numbers of children with pollution-related respiratory conditions.
Isajlovska, from North Macedonia’s Energy Regulatory Commission, said the problem has worsened as Brussels has tightened its rules on what fuel can be used inside the bloc.
In November 2019, Croatian customs stopped two tank vehicles at the border between Croatia and Serbia. Documents said they were carrying low-sulfur fuel oil, but an advisor to Croatia’s ministry of environment and energy said the cargo was actually dangerous waste that would “have to be taken back to the country of dispatch.”
An analysis of a sample found it contained polychlorinated biphenyl (PCB), a chemical that environmental group O2 Initiative said can cause cancer, harm fertility, and affect children’s development if the mother has been long exposed.
The North Macedonian buyer, RKM Makedonija, denied there was any problem with the oil. “It’s untrue. You are [the] same as other journalists. Jealous, mercenaries…. Our oil is perfect,” its owner, Ratko Kapushevski, told OCCRP reporters.
The shipment was transported by a Bosnian company. Petković, from Serbia’s Sector for Market Inspection, said the country is a key facilitator of the trade in substandard fuels in the Western Balkans.
“Nobody controls anything in Bosnia. They are a source of instability in this market and a threat to the health and safety of citizens in the region. Over the last two or three years, much of this so-called fuel oil that we have caught has been coming from or through Bosnian transporters and traders,” he said.
A HIFA Oil gas station in Bosnia and Herzegovina.
Bosnia and Herzegovina’s Environment Minister, Djapo, said efforts to pass stricter air quality laws have been hindered by red tape. “The biggest difficulty for me is that our parliament is not efficient,” she said in an interview in October 2020, noting as an example the difficulty of passing a new law on air protection.
Government inaction has spurred angry protests in several Western Balkans countries In March, the
Energy Community Secretariat
launched dispute settlement procedures against North Macedonia and three other West Balkans countries for breaching air pollution limits in 2018 and 2019.
The Energy Community Secretariat oversees the pan-European energy market, including that of the EU and its eastern neighbors.
Maria Jolie Veder, a lawyer for fossil fuel infrastructure at the environmental law charity Client Earth, said environmental issues pose a challenge for West Balkans countries that are trying to join the EU.
“While some of these countries are quite advanced in aligning with the [EU] framework on paper, in practise they seem to lack the will to ensure their industries actually meet these new environmental standards,” she said.
Vivian Loonela, European Commission spokesperson for the Green Deal, said the body would use “all the possible political, financial and technical means” to closely monitor environmental issues in West Balkans countries and help accession states to align with the bloc’s standards.
Evrotim’s run selling dangerously polluting oil to hospitals may be coming to an end, however. Srezoski said Unipetrol has stopped supplying the residual it has been selling.
Now, his company has resorted to sourcing its “mazut” from an old refinery in Bulgaria.
Nataša Tomić and Nermina Kuloglija contributed reporting.