KAZAKHSTAN Law and Practice Contributed by: Timur Odilov, Mikhail Abdulov, Olzhas Abubakirov and Alnur Dauylbay, Haller Lomax LLP
If the subsoil user declines to extend the contract under the above terms, the corresponding deposit will be put up for auction upon the contract’s expiration. The contract area is exclusive under either the explo - ration, mining, or combined exploration and mining contract. Grandfather clause Subsoil use contracts also include a provision known as a “grandfather clause”, commonly expressed as follows: “The subsoil user is guaranteed protection of its rights in accordance with the legislation of the RoK. Chang - es and additions to the legislation that adversely affect the results of a subsoil user’s business activities under contracts do not apply to contracts concluded before these changes and additions were made. The above-mentioned guarantees do not apply to changes in the legislation of the RoK related to nation - al security, defence capability, environmental safety, healthcare, taxation and customs regulation.” Transition from contractual to licensing regime Subsoil users under a subsoil use contract are entitled to apply for the transition of their contracts to the rele - vant subsoil use licence, subject to the decision of the MIC’s commission. However, the transitioning rules are not well drafted. Most issues are at the discretion of the MIC’s commission, for example, inclusion of the additional obligations, grounds for rejection, etc. 2. Impact of Environmental Protection and Community Relations on Mining Projects 2.1 Environmental Protection and Licensing of Mining Projects The main legal act regulating environmental protection is the Environmental Code. It covers a wide range of environmental issues, including air and water quality, waste management, biodiversity conservation and environmental impact assessment.
Some of the key distinguishing new features of the Environmental Code are the best available technolo - gies for environmental management, environmental monitoring and control, and the “polluter pays” prin - ciple. According to the interpretation of this principle in Kazakhstan, a polluter is financially responsible for the environmental damage it causes and is required to take measures to mitigate the damage. Certain activities with potential environmental impacts, such as mining activities, require an environmental permit. The Environmental Code contains the lists of activities and quantitative criteria, according to which a facility is allocated to Category I, II or III (ie, facilities that have either a significant, or moderate, or insig - nificant negative impact on the environment, respec - tively). Obtaining an environmental permit is manda - tory for construction and/or operating Category I or II facilities. In contrast, Category III facilities can be constructed and operated by submitting a notification to the relevant permitting authority. Generally, exploration activities under the exploration licences fall under Category IV (objects that have a minimal negative impact on the environment) and do not require obtaining an environmental permit. There are two types of environmental permits: • integrated environmental permit; and • environmental impact permit. The environmental permits for Category I facilities are issued by the Committee for Environmental Regula - tion and Control, the subordinate entity of the Ministry of Environment and Natural Resources or its territo - rial departments (for Category II – by local executive authorities) in electronic form through the e-govern - ment web portal. In order to secure a permit, a legal entity needs to apply to the relevant permitting authority along with supporting documents. These documents should include project documentation for the construction and/or operation of facilities, draft emission limits, a draft waste management programme, a draft pro - gramme of industrial environmental control and other documents.
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