Court upheld a ruling about 134bn environmental fine for Agip and NCOC

By Saule Tasboulatova

On June 6, the Board of Appeals of Atyrau Oblast Court reported that the specialized inter-district economic court of Atyrau Oblast reviewed the appeal petition filed by Agip KCO and NCOC against the decision of the 1st instance court about compensation of environmental damage in the amount of 134 billion tenge. The appeal petition was not satisfied and the decision of the 1st instance court was upheld.

To recall, in March, 2014, the department of ecology of Atyrau Oblast conducted several unscheduled audits during process failures resulting in gas leaks on gas pipeline running from D Island at Kashagan field to Bolashak processing unit when about 3 mln cubic meters of sour gas had been flared.

Both Kashagan project operators (“North Caspian Operating Company” (NCOC) and the company-agent “Agip KCO”) disagreed with the results of the audits and appealed to the Specialized inter-regional economic court. On April 29 the court has not satisfied their appeal and the Audit statements generated by the Department of Ecology of Atyrau Oblast retained force.

On June 6 the interests of Agip and NCOC were represented by the international legal company Dentos and reps of various department of the project operations were present at the court session.

The defendant party was represented by Erbol Kuanov, the Head of the Ecology Department of Atyrau Oblast and the chief specialist Gulmira Madirova.

According to claimants the audit statements are illegal, since the calculations that form the basis were made with the use of data that don't conform to legislation requirements. In particular, they referred to use of maximum permissible concentration value (MPC) for sulfur dioxide. They claimed the department of ecology used the value of 0,05 milligrams per metric cube, when the norm for maximum concentration limit approved by the law is 0,125: 

- The amount of damage is astronomical, it is highly overestimated,-said the reps of the operator company.

In his turn, Kuanov explained that in 2012 the RoK Ministry of Health made a mistake in their resolution about the maximum-permissible concentration of sulfur dioxide. Instead of  0,125, they specified 0,05 mg/cubic meter. And clarified that the department of ecology used the correct figure in their calculations, although the claimants state the revese.

By the way, it was Academician Muftakh Diarov, who was the first to point to the mistake made by the Ministry of Health. After that the Ministry accepted that they made a technical mistake. The resolution with the wrong figure for the maximum concentration limit was issued in 2012, right before the Kashagan start-up.

The applicant also had claims to the ecologists about the composition of flared gas and the presence of soot. To what Kuanov answered that during flaring of such huge amount of gas, soot is envisaged according to the approved method.

The judge Marina Chernyakhovskaya announced that the court ruling is enforced from the moment of its announcement.

-The decision came into force, but the defeated party has the right to appeal against it in a cassation order within 6 months, - said she.

When court hearings ended NCOC press service released a statement on the same day: “The court ruling is a great distress to us”,-  it reads. - We will appeal the decision in higher judicial instances, using all available legal means”.

Meanwhile, Kuanov stated that since the decision has entered into force, the department of ecology will work on its implementation.

Photos by Kanat Eleuov