KAZAKHSTAN Law and Practice Contributed by: Arman Bigazin, Mikhail Abdulov, Olzhas Abubakirov and Lidiya Sayenko, Haller Lomax LLP
17. Transactions 17.1 Environmental Due Diligence
• government institutions that are not government bodies and whose activities or services are related to the environment (eg, the Information and Analyti- cal Centre for Environmental Protection); and • entities of the quasi-public sector that take part in activities or services related to the environment (eg, government-owned Zhasyl Damu JSC). 16.3 Corporate Disclosure Requirement Kazakhstan ratified the Kyiv Protocol on Pollutant Release and Transfer Registers, which requires certain corporations to publicly disclose information on their emissions and waste on an annual basis. 16.4 Green Finance Kazakhstan has been working with international organisations, including the United Nations Develop- ment Programme (UNDP) and the European Bank for Reconstruction and Development (EBRD), to develop green finance initiatives and access expertise and funding. Kazakhstan is also focused on aligning its financial sector with the United Nations Sustainable Development Goals. This includes promoting invest- ments that contribute to these goals, such as reducing poverty, protecting the environment, and supporting clean energy. The Environmental Code includes a taxonomy of green projects, as well as providing a legislative definition for green financing and specific instruments. Green bonds and green loans are used in Kazakhstan. Cur- rently, some green bonds (including ESG bonds) are listed at Astana International Exchange and Kazakh- stan Stock Exchange. The government of Kazakhstan approves the clas- sification (taxonomy) of green projects, as well as the rules for the recognition of technologies as green technologies.
Environmental due diligence is a common practice in M&A, finance and property transactions in Kazakh- stan. Often, such due diligence is carried out in rela- tion to the conclusions of environmental expertise, compliance with the conditions of environmental per- mits, analysis of waste management programmes, verification of environmental insurance and so on. In rare cases, environmental due diligence includes site visits. 17.2 Disclosure of Environmental Information In Kazakhstan, the principle applies that a person who has environmental information is obliged to provide it at the request of the interested person, except in cases where the provision of information should be refused (eg, if it may violate IP rights). Therefore, a company seller may potentially be required to disclose any environmental information it has about the com- pany to a purchaser. 17.3 Key Issues in Environmental Due Diligence Today, representatives of the business community who have a negative impact on the environment are increasingly willing to take on responsibilities in the field of environmental protection. However, there are still instances where large companies fail to meet their obligations, either in pursuit of profit or due to over- sight. Environmental due diligence for Kazakhstan-based assets must include a review of the following aspects: • availability and validity of mandatory permits; • reports on permitted and actual emissions into the environment; • compliance with obligations related to industrial environmental control; • adherence to waste management obligations and compliance with the waste management pro- gramme; • compliance with industrial safety regulations; and • adherence to carbon administration and quota requirements.
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