Licensing of the Oil Operations Resulting in Environmental Oil Pollution
Almat Daumov, Lawyer, GRATA Law Firm
One of the fundamental kinds of state control over enterprise activity is licensing. The law which regulates licensing in the Republic of Kazakhstan is the Licensing Act adopted on April 17, 1995. It provides a list of activities for which a state license is required. From the beginning of 2004 there have been a number of additions to this list, among which are oil operations resulting in environmental pollution.
Licensing of oil operations resulting in environmental oil pollution in the Republic of Kazakhstan is subject to the following main statutory legal acts: Licensing Act adopted on April 17, 1995 in the Republic of Kazakhstan; Environmental Protection Act adopted on July 15, 1997 in the Republic of Kazakhstan; Resolution #1894 dated December 29, 1995 “On implementation of the RK President’s Decree #2201 dated April 17, 1995”, issued by the Government of the Republic of Kazakhstan.
Resolution #19 “On approval of the List of environmentally dangerous economic activities and the Rules for their compulsory governmental licensing”, issued by the Government of the Republic of Kazakhstan, has been in effect since January 8, 2004.
The Resolution above:
· Has adopted a List of “environmentally dangerous economic activities”, including oil operations (other than drilling oil operations) resulting in environmental oil pollution;
· Has adopted Rules for compulsory governmental licensing of environmentally dangerous economic activities;
· Has made amendments to the RK Government’s Resolution No. 1894 dated December 29, 1995 “On implementation of the RK President’s Decree #2201 dated April 17, 1995”, pursuant to which the Ministry of Environmental Protection has been authorized to issue licenses to carry out environmentally dangerous economic activities. Also pursuant to the changes in the Resolution activities connected with oil operations and minerals processing has been included in the List of work and services to be licensed and requiring the opinion of sanitary and mining engineering supervision authorities.
Environmentally dangerous economic activities include the following:
· Land use (technical reclamation of lands polluted with toxic, radioactive and other hazardous substances);
· Water resources use (including construction and placement in drainage areas of enterprises and facilities used for industrial purposes, potentially dangerous chemicals, biologicals and radioactive materials which can pollute water bodies; construction and placement of facilities and constructions within the boundaries of water protection zones and water bodies zones);
· Conducting oil operations and the use of the man-caused mineral formations (including conducting oil operations (other than drilling oil operations) which pollute the environment; placement, storage and use of the man-caused mineral formations adversely affecting the environment; burning of associated natural gas in torches or otherwise);
· Impact on the earth’s atmosphere, climate and ozone layer (including atmospheric emission of pollutants adversely affecting the environment and exceeding the specific rates established for fixed emission sources, production processes and equipment; work involving substances which could damage the ozone layer and repair, installation and maintenance of the equipment containing such substances);
· Production waste disposal, storage and removal (burning, chemical treatment, storage and burial of the dangerous production wastes and their transboundary carriage);
· Other environmentally hazardous economic activities (including placement, construction and reconstruction of enterprises, facilities and other amenities in the littoral area of the northern part of the Caspian Sea, navigation and dredging, oil operations, shell rock production, reed procurement, fishery and use of especially protected native zones in the marine territory of the northern part of Caspian Sea; production and application of potentially dangerous biological substances adversely affecting the environment, biological species breeding and dispersal in the environment.
The main innovation introduced by the above resolution is that now a person who carries out oil operations (other than drilling oil operations) resulting in environmental oil pollution is obliged to obtain a license for such activity.
Procedure for obtaining a license
To obtain a license an applicant should submit to a licensor (the Ministry of Environmental Protection) the following documents:
1.Application in the form approved by the Government of the Republic of Kazakhstan;
2.A copy of the State Incorporation Certificate;
3.Documents showing that a legal entity’s head (or his/her substitute) has the appropriate background for the job;
4.Documents evidencing the availability of appropriate material and production resources to place, transport, purify and decontaminate hazardous substances (pollutants), and special facilities to restore the natural resources;
5.Document evidencing payment of the license fee to the state budget.
The License is issued within a period of not more than one month, and to small-sized entrepreneurship entities-within a period of not more than ten days from the date, when the application together with all the required documents has been submitted.
The RK Government’s Resolution #19 date January 8, 2004 “On approval of the List of environmentally dangerous economic activities and the Rules for their compulsory governmental licensing” has not addressed the matter concerning its retroactive effect, i.e. whether they are applicable or not to relations arising before its Effective date. It is not clear whether persons engaged in the activity regulated by this Resolution are obliged to obtain a license to carry out such activity. Also, there is no prescribed period within which the persons engaged in the environmentally dangerous economic activity are obliged to obtain the license. Pursuant to Article 37 of the RK Statutory Legal Acts Law of March 24, 1998 the statutory legal act may be applied to relations arising before its effective date only in the case, where the retroactive effect of such act or its part has been provided for by it itself or its enactment act, and if the latter exempts from or mitigates the liability previously provided for. Pursuant to Clause 3 of the same Article “….statutory legal acts establishing or toughening the liability or imposing new duties on persons or aggravating their state shall have no retroactive effect”.
Thus, the persons engaged in environmentally dangerous economic activity before 8.01.20004 are not required to obtain a license to carry out such activity.
However in practice things seem to be different. During checks by representatives of the Nature Protection Office of the Public Prosecutor, demands are made of the presence of the above-stated license and its absence qualify as an administrative offence provided by p.1 article 137 Codes of Republic of Kazakhstan on administrative offences, namely enterprise occupation or other activity without the license in cases when the license is obligatory.
PetroKazakhstan: Transforming Subsoil Energy Terrance J. Powell
Legal Environment for Service Companies Saule Akhmetova
DRESSTA in Kazakhstan: proved over time! Wieslaw Jakobik
Black Gold of Bogatyr Dennis Price
The Kazakh Upstream Tax Regime: Comparative Analysis Gerard Anderson
A Public Shell, or How to Enter the US Stock Market Oleg Batratchenko