COMMENTARY TO ARTICLE 10. SUBSOIL AND ITS RESOURCES TO THE CODE OF THE REPUBLIC OF KAZAKHSTAN "ON SUBSOIL AND SUBSOIL USE"

1. The part of the earth's crust located below the soil layer, and in its absence - below the earth's surface, the bottom of reservoirs and watercourses, is recognized as subsoil.

2. This Code regulates the use of subsurface resources in relation to the following resources:

1) minerals;

2) man-made mineral formations;

3) the space of the subsurface.

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(Telemtaev M.B., Ibragimov M.A., Kraybekov Ch.E.)

1. Paragraph 1 of the commented article reveals the content of the concept of "subsoil", which is one of the main ones for the legal regulation of subsurface use operations.

The commented article establishes that the subsoil is a part of the earth's crust immediately after the soil layer, and in its absence – immediately after the earth's surface. If there is no land surface (for example, the bottom of a water body is not the earth's surface), then the subsoil is located below the bottom of reservoirs and watercourses. The definition of subsurface contained in the Subsurface Code is not new to the legislation. In a similar way, subsurface resources were defined in previous legislative acts, namely the 1996 Law on Subsurface Resources. and the 2010 Law on Subsurface Resources, with the only difference being that they specified that the subsurface extends to depths accessible for subsurface use operations, taking into account scientific and technological progress. There is no such specification about the depth of the subsoil in the Code on Subsoil. The lower spatial boundary is established by the Subsurface Code only for a subsurface area as an object of subsurface use rights and, by analogy with the approach used in the 1996 Law on Subsurface and the 2010 Law on Subsurface when characterizing subsurface, is determined by the depths available for geological study and development. Such study and development also ultimately depend on the level and achievements of scientific and technological progress, however, this criterion is used in the Subsoil Code to determine the spatial boundary in depth only in relation to subsurface areas, but not to characterize the subsurface as a whole.

This approach should be recognized as fair, if only because the subsoil within its depth, as an object of state ownership, to which its sovereignty extends, cannot depend on whether they are accessible at this stage of scientific and technical development. Thus, the sovereignty of the state in relation to the subsoil cannot and should not be determined.

the boundaries of the technical possibilities of penetration into them for the purpose of study or development, because in this case, the layers of the earth's crust, currently inaccessible for scientific research and development, lose their characteristics as an object of state ownership and are excluded from state jurisdiction.

Omission of the boundaries of the subsurface itself in depth means that the subsurface extends to the end of the earth's crust (being part of it) and ends with the beginning of the earth's mantle.

As for determining the upper boundary of the subsurface, the Subsurface Code does not specify when and at what depth the Earth's surface ends and the subsurface begins. In each specific case, depending on the geological structures determined using soil science, geology and other Earth sciences, the soil layer or the bottom of surface water bodies may have different depths and, accordingly, the subsoil will begin at different depths.

2. Geographically, the subsoil is limited by the limits to which the sovereignty of the Republic of Kazakhstan extends. And just as, for example, the earth is understood as a territorial space within which the sovereignty of the Republic of Kazakhstan is established, as stated in paragraph 7 of Article 12 of the CC RK, so the subsoil can also be considered as an underground three-dimensional part of the earth's crust, which is subject to the sovereignty (jurisdiction) of the Republic of Kazakhstan. It is this quality of the subsoil that underlies the fact that the Constitution of the Republic of Kazakhstan assigns them the status of state property.

For the sake of objectivity, we note that the above approach to determining the spatial boundaries of the subsurface in depth has been consistently criticized by some researchers, who conventionally call this approach "geometric" and note that its use to define the concept of "subsurface" is not sufficiently justified, does not allow to correlate the rights to the subsurface and the rights to land plots". In this regard, it is not without reason emphasized that the use of a part of the earth's crust below the soil layer in accordance with the intended purpose of the land plot should not be considered as subsurface use, since such use is not subsurface use and refers to the rights to land plots. For example, the construction of building foundations, the construction of underground parking lots for business centers, etc., as well as other ways to use the underground space located below the soil layer, in accordance with the intended purpose of the land plot, "the right to

which is primary, and the right to use the space below the soil layer is derived from the rights to the surface of the earth and secondary, ... it must be excluded from the concept of "subsoil use".

At the same time, it is noted with regret that the problem of establishing the legal nature of the use of subsurface resources for the placement of facilities for the construction of which obtaining the right of subsurface use is not required has not yet been definitively resolved, since there are contradictions in the geometric approach to defining the concept of "subsurface" and the legal regime of use. the bowels of the earth in a number of cases indicated by the Subsoil Code have not been eliminated.

In this regard, it seems that such criticism and the arguments formulated in its justification should serve as the basis for further improvement of the relevant provisions of the Subsoil Code, which will draw an even clearer watershed between subsurface use operations, which are a form of implementation of the right of subsurface use and are subject to regulation by the Subsoil Code, and the right to use the subsoil., which is unrelated to these operations and is carried out in a wide variety of construction and other economic activities (digging foundation pits and parking lots for large structures, laying subway tunnels and cable communications, etc.) on the basis of and in connection with the rights to the relevant land.

3. It is necessary to distinguish "subsoil" from "subsoil area". The relationship between these terms is similar to the relationship between "land" and "land plot". If the subsurface is a part of the Earth's crust within the territorial limits of the entire Republic of Kazakhstan, then a subsurface area is only a certain geometrized part of the subsurface with certain spatial boundaries provided for conducting subsurface use operations.

Certain features of the legal status of subsurface resources are determined by some international legal treaties to which Kazakhstan is a party. Thus, Article 6 of the Convention on the Legal Status of the Caspian Sea (Aktau, 2018) establishes that the sovereignty of each of the parties to the Convention extends beyond its land territory and internal waters to the adjacent sea belt, called territorial waters, as well as to its bottom and subsoil, as well as to the airspace above it. At the same time, it is indicated that the delimitation of the bottom and subsoil of the Caspian Sea is carried out by agreement of neighboring and opposing states, taking into account generally recognized

principles and norms of international law in order to realize their sovereign rights to subsurface use.

One of such agreements is the Agreement on the Delimitation of the Bottom of the northern part of the Caspian Sea in order to exercise sovereign rights to subsurface use between the Republic of Kazakhstan and the Russian Federation (Moscow, 1998), where the subsoil is divided into those for which each party to the agreement has the sovereign right to develop independently and also independently manage them (subsoil up to the dividing line), and those for which the parties have the exclusive right to jointly explore and develop promising structures and deposits (if a dividing line runs through the subsoil).

In other words, with regard to the subsurface of the Caspian Sea area between Russia and Kazakhstan, it has been established that in addition to their sovereign rights to the subsurface (rights to independent subsurface use), there are also exclusive rights of these states, which belong to each of them and are implemented within the framework of joint subsurface use in certain promising structures and deposits.

On the contrary, in similar Agreements between the Republic of Kazakhstan and Turkmenistan and Azerbaijan, this issue is not regulated in any way. It only defines that the issues of exploration and development of deposits in the event of a boundary line passing through them will be the subject of separate agreements between the parties.

4. Paragraph 2 of the commented article introduces into legislative circulation a new concept of "resources", which in this form has not yet been known to the domestic legislation on the subsoil. From the content of the item being commented on, as well as from the very title of the article on the subsoil and its resources, it can be seen that the resources listed in the article are an integral part of the subsoil. Thus, the legislator establishes by the content of the commented article that the Code on Subsoil does not regulate all use of subsoil, but only that which represents operations in relation to the resources defined by the Code on Subsoil. Taking into account the provision on subsurface resources formulated in the first paragraph of the commented article, the use of the term "resources" by the legislator makes it possible to clearly distinguish the use of subsurface resources, which is regulated by the Subsurface Code, from any other actions that are somehow related to the impact on the subsurface, but are not subject to regulation by the Subsurface Code. Thus, not every use of mineral resources (for example, the construction of tunnels, subways, underground parking lots, etc.) should be regarded as subsurface use, but only such operations that are carried out only in relation to the subsurface resources indicated in the commented article. It is precisely such operations that constitute subsurface use, regulated by the provisions of the Subsoil Code and other regulatory legal acts adopted on its basis.

It should be borne in mind that this approach is new for the legal regulation of the sphere of subsurface use and differs from the regime that was established by the previously existing legislation on subsurface resources. Thus, the Law on the Subsoil of 2010 and by-laws adopted on its basis, along with the geological study of the subsurface, exploration and extraction of minerals, the construction and (or) operation of underground structures unrelated to exploration and (or) production, including the construction and (or) operation of tunnels, subways, underground overpasses and engineering structures were also recognized as subsurface use operations. with a depth of more than three meters and the like. In contrast, the Subsoil Code, clearly defining in paragraph 2 of the commented article, the list of subsurface resources, operations in respect of which are subsurface use, thereby strictly outlines the framework of relations that are the subject of its regulation. In other words, all actions in relation to subsurface resources that are not directed at and do not affect the resources listed in the commented article are not subsurface use within the meaning of the Subsurface Code and are not regulated by it.

5. The commented article identifies three types of resources, the use of which is regulated by the Subsoil Code. First of all, these are minerals, i.e. natural mineral formations and organic substances containing useful components, the chemical composition and physical properties of which allow them to be used in the field of material production and consumption. Another resource of the subsurface is man-made mineral formations, which are accumulations of waste from mining, mining processing and energy industries containing useful components and (or) minerals. Finally, the last of the subsurface resources allocated by the article is such a resource as the subsurface space in the form of a three-dimensional spatial property of the subsurface, which, taking into account geotechnical, geological, economic and environmental factors, can be used as an environment for the placement of industrial, scientific or other activities.

In general, the ratio of the basic concepts, including those fixed by the commented article and defining the subject of regulation of the Code on Subsoil, can be schematically presented in the following form: Natural resources (other natural resources: land, water, air, flora and fauna) > Subsurface (other subsurface components: groundwater, geothermal resources, therapeutic mud, etc.) > Resources > Minerals/TMOS/The space of the subsurface.

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  Kazakh Association of Organizations of the Oil and Gas and Energy Complex KAZENERGY

Nur Sultan 2022

The Kazenergy Association expresses its sincere gratitude for the support in preparing the commentary to the following companies: North Caspian Operating Company NV, NC KazMunayGas JSC, Mangistaumunaygas JSC, Karachaganak Petroleum Operating BV, White & Case Kazakhstan LLP, Haller Lomax LLP)", "Erlicon CG" LLP, "Signum Law Firm" LLP. © Kazenergy Association, 2022 © team of authors, 2022 © authors, 2022

Dear readers!

We offer you a scientific and practical commentary prepared by a group of Russian specialists with extensive practical experience in legislation on subsoil and subsoil use and who participated in the preparation of the Code on Subsoil and Subsoil Use.

Subsurface use is a very complex and specific area of public relations, the regulation of which has its own historical background and takes into account the technological specifics of the process of subsurface development, as well as environmental, commercial, legal and other features of exploration and development of deposits.

Kazakhstan's legislation on subsoil and subsurface use has passed through several stages in its development, and has always been based on a balance of interests between the state and subsurface users, transparency, striving for the maximum possible degree of protection of the rights and legitimate interests of investors, ensuring sustainable social, economic and environmental development of the country.

The Code "On Subsoil and Subsoil Use", adopted at the end of 2017, was developed taking into account many years of accumulated experience and law enforcement practice, as well as the results of extensive discussions with experts working in the industry.

It reflects specific, important measures on the part of the state to increase the investment attractiveness of exploration and further reduce administrative barriers.

Nevertheless, practice and legislation do not stand still, constantly evolving, taking into account new challenges facing both the subsurface use industry and the economy as a whole.

In this regard, this commentary is intended to serve as an aid for a wide range of interested persons – specialists working in the industry, in

understanding the meaning of the norms, their historical context, the interrelationship and mutual influence of the various provisions of the Code.

We also hope that studying the commentary will serve as an incentive for new generations of young domestic specialists to work scientifically and practically in this important industry, for the benefit of the development of our country, current and future generations of Kazakhstanis.

Sincerely, U. Karabalin, Deputy Chairman of the Kazenergy Association, Hero of Labor of Kazakhstan