Ecology agencies see subsoil users as money bags - Chevron adviser

By Laura Suleimenova

The Presidium of the 11th International Legal Conference (KPLA) held in AtyrauThe annual 11th International Atyrau Legal Conference (KPLA) was held on April 19 in Atyrau in TCO office building. It was titled “Topical issues and analysis of practice of application of the legislation in oil and gas industry in Kazakhstan”. The lawyers representing the interests of different oil companies are, most of all, concerned by imperfection of Kazakhstan legislative and even political systems allowing, in their opinion, to violate the rights of subsoil users.

“DUE DILIGENCE” FIRST 

The president of the Kazakhstan Association of Lawyers of oil and gas industry, the legal adviser of the Eurasian division of Chevron corporation Zhoumageldy Yelyubayev believes that because practically all subsoil use operations are ecologically dangerous, the companies wishing to get access to subsoil use, should perform the procedure called “Ecological Due Diligence”. In other words, prior to signing of a contract they need to establish a true picture about the object of investment, including investment risks, in this case – the risks of ecological character.

Yelyubayev gave an example of the situation that took place 2 years ago when the Russian ecologists together with the World Wildlife Fund opposed to plans of British Petroleum and Rosneft for oil production in the Kara Sea, in the “Russian Arctic” nature reserve. It appeared that the Russian government agencies issued license to these companies without considering the special status of this area. And the companies have not performed the ecological Due Diligence.

Yelyubayev compared this situation to the history of Kashagan field development where partner companies, as in the case with the Russian Arctic, have not considered mandatory severe ecological constraints and requirements, which eventually led to high financial costs.

… Here we should admit that it was also our government that made a mistake and allowed oil activities in a nature reserve zone of the North Caspian Sea.

GIVE PEACE TO THE LAWYER

Yelyubayev in his report gave a dig to the officials who deal with environmental protection issues. In his opinion, they focus their attention only on nature pollution, viewing a subsoil user as a “money bag” that can be used to fill up the state budget.

The nature protection legislation and the practice of its application in Kazakhstan, according to Yelyubayev, are aimed “to punish the subsoil user, but not to restore and save the environment.”

According to the adviser of Chevron, one of the problems of public hearings on company projects is participation of “unskilled”, virtually “common people from the streets”, playing a high role in decision-making process on environmental issues.

Sure, “the common people from the street”, probably, do represent a serious problem for the legal personnel that serve the owners. Probably, this remark is targeted at the owner, to whom the highly qualified and faithful lawyer has a difficulty in explaining with what kind of public he has to deal with. But is Yelyubayev right when he estimates the role of the public as “high”? If he is right, then we should congratulate our NGO folks “from the street” and stubborn “unskilled” academicians: your opinions, after all, is considered “during decision-making process on environmental issues.”

EVIL WITCH BABA-YAGA

Dmitri Seletski, TCO Contracts and Legal Department Deputy General ManagerThe western businessmen’s point of view in Kazakhstan was, probably for the first time, very openly stated by Dmitri Seletski, Deputy General Manager, TCO Contracts and Legal Department: “While local environmental protection bodies and local courts are trying to immortalize the myth that TCO and similar companies are a kind of evil witch Baba-Yaga when it comes to ecology, and at the same time continue to ignore many real ecological problems that many other industrial countries face, until then Kazakhstan will not be able to realize its potential to the full.”

Seletski also touched the subject of the rule of law in RoK and citing the poet and philosopher Abai from his Book of Words about unfair trials of honest people in steppe suburbs of imperial Russia.

Then Seletski asked a rhetorical question, whether the law is ruling in Kazakhstan since the times of Abai?

And answered to the question himself, stating that a lot has been achieved, but still a lot needs to be done.

He referred to the second research on investment climate of Kazakhstan, conducted by the British auditor company “Ernst&Young” in 2012 at the request of the Council of Foreign Investors under the presidency of Nazarbayev.

The respondents among the disturbing factors for foreign investors stated “inconsistent interpretation of legislation and its selective application, the excessive regulation, the overestimated requirements for local content, corruption and insufficient independence of judicial system.”

And it’s interesting to know what actually concerns more Dmitrii Seletski and Chevron company: “insufficient independence of judicial system” and democratic institutes or the “overestimated requirements for local content.”