Commentary to article 25. Territories restricted for conducting subsurface use operations by the Code of the Republic of Kazakhstan “On Subsurface Resources and Subsurface Use”  

1. Unless otherwise provided by this article, it is prohibited to conduct subsurface use operations.:

1) on the territory of lands for the needs of defense and national security;

2) on the territory of the lands of settlements and adjacent territories at a distance of one thousand meters;

3) on the territory of a land plot occupied by an operating hydraulic engineering structure that is not an object of man-made mineral formations of mining and processing industries, and the territory adjacent to it at a distance of four hundred meters;

4) on the territory of the lands of the water fund;

5) in the contours of deposits and sections of groundwater that are used or can be used for drinking water supply;

6) at a distance of one hundred meters from burial grounds, graves and cemeteries, as well as from land plots allocated for burial grounds and cemeteries;

7) on the territory of land plots owned by third parties and occupied by buildings and structures, perennial plantings, and adjacent territories at a distance of one hundred meters - without the consent of such persons;

8) on the territory of lands occupied by roads and railways, airports, airfields, air navigation facilities and aviation technical centers, railway transport facilities, bridges, subways, tunnels, energy systems and power transmission lines, communication lines, facilities providing space activities, main pipelines;

9) on the territories of subsurface areas allocated to state legal entities for state needs;

10) in other territories where it is prohibited to conduct subsurface use operations in accordance with other laws of the Republic of Kazakhstan.

2. The provision of a subsurface area for use, the external territorial boundaries of which are completely located within the territories specified in paragraph 1 of this Article, is prohibited.

3. Prohibition established by subparagraph 2) paragraph 1 of this article does not apply:

1) to conduct operations for the exploration of solid minerals or operations for the extraction of solid minerals by underground means, agreed with the local executive and representative bodies by concluding an agreement providing for socio-economic support for the local population living in the relevant territory. In this case, the existence of this agreement is a condition for issuing the appropriate license.;

2) for conducting subsurface use operations on the territory of the former Semipalatinsk nuclear test site;

3) to carry out operations for the geological study of the subsurface in terms of prospecting and evaluation work on groundwater.

Prohibition established by subparagraph 4) paragraph 1 of this article does not apply to prospecting and operations for the exploration or production of hydrocarbons.

The prohibitions established by paragraph 1 of this article do not apply to subsurface use operations conducted through aerogeophysical research or research using space-based methods of remote sensing of the Earth.

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(Odilov T.A.)

1. The article under review contains public law provisions prohibiting the conduct of any or certain subsurface use operations within certain areas and aimed at eliminating or reducing the risk of negative socio-economic, legal and environmental consequences.

These norms are an innovation of the Subsoil Code, since the previously existing legislation on subsoil did not establish restrictions on conducting subsurface use operations in relation to specific categories of lands, land plots and other territories. Article 14 of the 2010 Law on Subsoil provided for the establishment of a ban or restriction on the granting of the right of subsurface use in respect of certain areas of the subsoil by decision of the Government. Nevertheless, this law did not contain any signs, criteria and rules for the Government to make such an important decision.

The establishment of a list of spaces (territories, underground sites and contours) prohibited for conducting subsurface use operations is borrowed from the mining law of Western Australia and is dictated by the introduction in the Subsoil Code of the declarative procedure for granting rights to geological exploration of subsurface, exploration of mineral deposits and prospecting (the principle of the first application), exploration of UVS for a national company and the declarative procedure for initiating auctions for the granting of rights to explore and extract hydrocarbons, in which environmental assessment, legal and socio-economic risks in conditions of very short procedural terms for granting subsurface use rights (for example, a license for exploration of mineral resources is issued in 15 working days – paragraph 1 of Article 188), unpredictability and vastness of the claimed subsurface areas in terms of length and boundaries of their territories are primarily assigned to the potential subsurface user, and in the case provided for in paragraph 2 – including the state.

In this regard, in order to avoid negative socio-economic, environmental and legal consequences, the legislator has identified the most key spaces, the boundaries of which the potential

The subsurface user needs to find out on their own and in advance before applying for a particular territory to grant subsurface use rights by a government agency.

Thus, this design represents a kind of consensus between the state and the investment community, in which the state provided investors with access to the subsurface for exploration on a wide territorial scale, drastically reducing the time frame for granting subsurface use rights, but at the same time placing on the potential investor the burden of identifying the risks that arise.

The approach provided for by the legislator, however, does not exclude the obligation of the state (the competent authority), when preparing for auctions on the basis of which subsurface use rights are granted (part 1 of Chapter 15, paragraph 4 of Article 278), to designate the boundaries of spatial categories prohibited for subsurface use, falling within the potential territory of a subsurface area, the subsurface use rights for which are the subject of auctions, thereby notifying the potential investor in advance about the presence of environmental, legal and socio-economic risks.

In addition, in order to reduce these risks, which contribute to increasing the investment attractiveness of the subsurface use sector, in accordance with paragraphs 3) and 4) of paragraph 3 of Article 70, the legislator assigned to the competent authority, when approving the Federal Tax Service, the obligation to designate the most extensive and prohibited for subsurface use territories or territories bearing high legal, social and environmental risks.: 1) specially protected natural territories, territories of lands for recreational, recreational, historical and cultural purposes; 2) territories of lands for the needs of defense and state security, territories of settlements, territories of lands of the water fund. In practice, such a designation should also be provided on a publicly accessible interactive map.

2. Paragraph 1 provides a list of the main spatial categories within which the conduct of subsurface use operations is prohibited.

According to the above list, spatial categories prohibited for subsurface use are divided into two groups: 1) territorial in two-dimensional space, characterized by length; 2) geometrized in three-dimensional space, characterized by length and volume. This division is not accidental, suggesting a prohibition that applies either exclusively in two-dimensional space, i.e.

relative to the earth's surface, or in three dimensions, i.e. underground in the subsurface within a three–dimensional space defined by the territory, the lower and upper spatial boundaries according to the same principle as the subsurface area (see commentary to art. 19).

The critical importance of establishing a ban on the earth's surface in these territories lies in the incompatibility of conducting subsurface use operations, which mostly destroy the earth's surface, firstly, with the essential purpose and basic function of the earth as a means of placing objects and living space (especially in populated areas), and secondly, with the content of land rights, the main purpose of which is the full use of the basic function of the earth, thirdly, with the socio-economic importance of critical infrastructure facilities, and, Fourth, with the social, sanitary and environmental safety of facilities, for which in practice appropriate land plots are not always allocated (for example, detached graves, cemeteries).

In most cases of the commented paragraph 1, the prohibition on conducting subsurface use operations is applied in a territorial sense in a two-dimensional space: paragraphs. 1), 2), 3), 4), 5), 6), 7), 8) and 10), i.e. for carrying out work on the Earth's surface. The perimeter of these territories is defined by: 1) the boundaries of the lands, based on their categorization according to paragraph 1 of art. 1 of the Land Code, (pp. 1), 4), 8), the first part of the turnover in paragraphs 2)); 2) the distance in any direction from: a) a specific object (burial ground, detached grave and cemetery (clause 6)); b) the boundaries of a land plot occupied by a certain object(s), or not occupied by such, but allocated to a certain object and owned by third parties (the second part of the turnover in paragraphs 3) and 7)); c) the boundaries of land (the second part of the turnover in paragraphs 2)) 3) the boundaries of a specific land plot (the first part of the turnover in paragraphs 3) and 7)).

For example, according to the purpose of distinguishing the lands of settlements from other lands of the land fund of the Republic of Kazakhstan, even taking into account zoning for functional purposes (paragraph 3 of Article 107 of the Land Code), in one way or another they assume the use of the spatial basis of the earth/ the earth's surface to accommodate buildings, structures or other objects, including industrial ones, the possibility of vital activity of the population. However, since subsurface use operations in most cases are characterized by open-pit mining or other significant violation of the integrity of the land cover, which in practice imply an irrevocable loss of the basic properties of the land, even taking into account the implementation of measures to eliminate the consequences, the legislator provides for a ban.

for operations involving the use of subsurface space or mining in an open-pit manner, except in cases that do not involve such a loss (see paragraphs 5-7 in this commentary).

The same applies to the lands of the water fund intended for the occupation of water and other related objects, as well as allocated for the maintenance of water bodies in a condition that meets sanitary, hygienic and environmental requirements, prevention of pollution, clogging and depletion of surface waters, as well as the conservation of flora and fauna (paragraph 1 of art. 116 of the Water Code, 132 of the Land Code). Accordingly, any work carried out within the framework of subsurface use operations involving the destruction of the Earth's surface on these lands, in essence, contradicts the functional purpose of these lands.

The legislative emphasis on preserving the basic properties of the earth's surface and the objects located on them in the context of protecting the rights of landowners (owners and land users) to land plots from the negative effects of subsurface use operations is also reflected in subclause 7) paragraph 1. Despite the norms of the Land Code, which allow geological exploration of the subsoil and exploration of minerals without consent (by court decision) of the owner of the land plot or land user (paragraphs 3 and 4 of art. 71-1 of the Land Code), commented in paragraphs. 7) the norm, however, prohibits their holding without obtaining such consent, if a building, structure or perennial plantation is located on such a land plot.

In this case, the norm of the Subsoil Code does not conflict with the norms of the Land Code, but rather competes with them, regulating the same range of kinship relations, only with varying degrees of scope and specification. For other types of subsurface use operations, the commented clause (7), clause (1) supplements the provision on the protection of property rights and land use rights provided for in Article 164 of the Land Code.

The prohibition on conducting subsurface use operations applies not only to the land plot itself, on which the building, structure or perennial plantation is located, but also to the territory adjacent to it along the entire perimeter at a distance of 100 meters from the boundaries of such a land plot. At the same time, this prohibition regarding operations for the geological study of subsurface and exploration of minerals cannot be overcome by a court decision in the absence of the consent of the owner of the land plot. This design is provided by the legislator in order to provide additional protection from the negative impact of security operations.

subsurface use, which in its meaning reflects the essence of the well-established concept of "not in my back yard" in the Anglo-Saxon countries (translated from English. "just not in my backyard").

The list of territories prohibited for conducting subsurface use operations is not exhaustive. 10) paragraph 1 provides for a blank rule referring to other legislative acts regulating other areas of public relations, which may also include prohibitions on carrying out any economic activity, certain works specific to subsurface use operations, or conducting specific or any subsurface use operations. The purpose of establishing a blank rule is to exclude legislative conflicts, taking into account that the list provided for in paragraphs 1)-9) cannot take into account all the circumstances and specifics of carrying out activities in a particular territory that falls under the scope of regulation by other legislative acts. For example, in accordance with paragraphs 3) and 4) of paragraph 1 of art. 40 of the Law of the Republic of Kazakhstan dated July 7, 2006 No. 175 "On specially protected natural territories" on the entire territory of the state nature Reserve, among other things, prohibits not only geological exploration and mining, but also the violation of the soil cover, essentially excluding the conduct of prospecting and operations for the use of subsurface space.

Noting that the established prohibition applies to operations on the earth's surface, conducting subsurface use operations under the specified objects at a depth in the subsurface is nevertheless permissible if they do not involve and do not carry risks of destruction of the basic properties and functions of the earth relative to its initial state, as well as objects located on it. For example, it is not prohibited to carry out operations by underground mining under burial grounds, cemeteries, burials, roads and railways, lands of the water fund and settlements at an acceptable depth, excluding the loss of basic properties of the earth's surface or damage to objects located on it, if this does not contradict industrial and environmental safety according to the results of examinations of design documents, stipulated by the Subsoil Code.

The categories of land listed in paragraph 1, land plots and objects located on them do not constitute an unchangeable category, unless these objects and categories of land objectively depend on natural conditions (for example, lands of the water fund occupied by natural resources

water bodies). Therefore, if a subsurface user is interested in conducting operations at the current location of lands, land plots and facilities, they can be moved, and the boundaries of lands and plots changed in the manner and, if possible, provided for by law. For example, the lands of a locality may be transferred to another category of land, and the city line, village line, and rural settlement line may be changed accordingly in the cases and in accordance with the procedure provided for by the Land Code. The same approach applies to the relocation of roads, railways and other transport and communication infrastructure facilities. Obviously, in all these cases, these measures should be carried out at the expense of the subsurface user, respectively, assuming on his part an assessment of the economic feasibility and comparability of the costs of these measures with the real profitability of the planned subsurface use operations.

3. The prohibition applied in three-dimensional three-dimensional space is provided for in paragraphs 5) and 9). Despite the fact that the word "territory" is used in paragraph 9), due to the costs of legal technology, we are nevertheless talking about a geometrized three-dimensional space in the bowels allocated to a state-owned legal entity (state institution or state-owned enterprise according to paragraph 14) of art. 1 of the Law of the Republic of Kazakhstan dated March 1, 2011 No. 413-IV "On State Property") for state needs: for example, to place structures underground or extract OPI from the subsoil for use for construction purposes in emergency situations. Otherwise, it would contradict the very essence of the ban.

Compliance by subsurface users with clauses 5) in practice is of great complexity and legal risk, since as of the date of entry into force of the Subsoil Code (June 29, 2018) and the date of writing of these comments, subsurface areas and groundwater deposits for drinking purposes in most cases remain uncounted, that is, without boundaries determined by the authorized body for study of subsurface resources or by an authorized body in the field of use and protection of water resources, water supply, and sanitation.

It is also important to note that the ban on operations in the subsurface in paragraph 5) does not apply to the earth's surface, except in cases of allocation of lands of the water fund for deposits and groundwater areas for drinking purposes. Also, this prohibition does not apply to groundwater that is not intended for drinking water supply. According to the Water Code, such facilities include industrial groundwater and industrial and technical groundwater. Otherwise

The implementation of subsurface use operations became impossible due to the natural ubiquity and concentration of waters in the bowels of the Earth.

4. Paragraph 2 provides for a ban on the granting by a state body of the right of subsurface use to a subsurface area, the external boundaries of which (see the meaning of "territory of a subsurface area" in paragraph 2 of the commentary to Article 19) are completely located within the territories prohibited for conducting subsurface use operations.

The meaning of this prohibition lies in the futility and inexpediency of granting the right to use a subsurface area (subsurface use rights) in the absence, according to paragraph 1, of a legitimate opportunity to conduct subsurface use operations on the entire Earth's surface/territory of the subsurface area in question, since there is no other way to use a subsurface area other than through access to the earth's surface.

It is assumed that in order to avoid negative legal, socio-economic and environmental consequences, a government agency, when considering applications for licenses for subsurface use, conducting direct negotiations with national companies in the field of hydrocarbons and uranium, or planning an auction for the granting of subsurface use rights in relation to a particular territory, should have the necessary data on the boundaries of the spaces, which are independently (not on the initiative of a private entity) determined by the state and which by their nature (length relative to the earth's surface) can obviously fully "accommodate" the potential territory of a subsurface area: 1) the boundaries of the lands of settlements (borders (lines) of cities, towns and villages according to paragraph 2 of Article 104 of the Land Code); 2) the boundaries of the lands of specially protected natural territories by type and regime, excluding the conduct of operations on subsurface use on the earth's surface; 3) contours of deposits and sections of groundwater for drinking purposes relative to the earth's surface; 4) boundaries of lands for defense and national security needs; and 4) boundaries of lands of the water fund and defense lands (hereinafter referred to as the "main forbidden territories"). This approach explains the need to specify the main forbidden territories in the Federal Tax Service, which are also listed in paragraphs 3) and 4) of paragraph 3 of Article 70.

The described idea was also reflected in a Special Part and predetermined the legal structure of the following provisions on the granting of subsurface use rights: 1) paragraph 3 of clause 2) paragraph 3 of Article 70 – when forming and specifying territories in the PUGFN, within which the right of subsurface use under the UVF is granted on the basis of an auction; 2) part 2

paragraphs 3 of art. 70, paragraphs 1 and 2 of art. 104, paragraphs 2 and 3 of art. 105 – during direct negotiations on the conclusion of contracts for ATC; 3) paragraphs 1) paragraph 2 of art. 186, paragraph 2 of art. 188 and paragraph 4) paragraph 1 of art. 190 – when issuing an exploration license TPI; 4) paragraphs 1) paragraph 2 of art. 203, paragraph 2) paragraph 3 of art. 203, paragraph 8) paragraph 1 of art. 207 – when issuing a license for the extraction of TPI / OPI; paragraphs 1) paragraph 2 of art. 250, paragraphs 2) paragraphs 2 and 3) paragraph 2 of art. 251, paragraphs 7) and 5) paragraph 1 of art. 254 – when issuing a license for the use of subsurface space.

Possession by state bodies granting subsurface use rights (the competent authority, the Ministry of Economic Development and the authorized body for the study of subsurface resources) of spatial data on the boundaries of the remaining territories provided for in paragraph 1, from a practical point of view, it is impossible and impractical due to the functions and competencies of these government agencies, as well as the extent of these territories that are not comparable to typical territories of subsurface areas (for example, the width of a highway cannot be wider than any side of the territory of a mining or exploration site, or the territory of a burial ground is usually no larger than the territory of a subsurface area).

An exception to this statement is the territories of mining sites or the use of subsurface space, which in their length may potentially be smaller and fully covered, for example, by the territory of lands occupied by roads and railways, airports, airfields, air navigation facilities and aviation technical centers, railway facilities. Therefore, in order to avoid the risks of determining the territories of mining sites and using the subsurface space entirely in territories where the conduct of relevant operations is prohibited, provisions are provided in a Special part designed to exclude these situations. Thus, in accordance with paragraphs 1) paragraph 2 of Article 250, when issuing a license for the use of subsurface space, the authorized body for the study of subsurface resources, based on the application for the issuance of this license and the documents attached to it in accordance with Article 251, verifies the submitted data, including for compliance with the commented paragraph. Regarding prospecting, the verification of these risks in accordance with paragraph 1 of Article 264 is carried out by the Ministry of Economic Development in cooperation with the territorial bodies of the authorized body in the field of environmental protection and the territorial divisions of the authorized body for the study of mineral resources at the stage of determining the territories within which licenses for prospecting can be issued.

As of the date of these comments, clause 2 applies in terms of granting the right of subsurface use for exploration or production of TPI and OPI (issuing licenses

The right to explore for TPI, TPI production and OPI production) was suspended until January 1, 2023 by the Law of the Republic of Kazakhstan dated December 26, 2019 No. 284-VI SAM "On Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on Housing and Communal Services". Accordingly, the same law suspended the operation of paragraphs 1) paragraph 2 of Article 186 and paragraphs 1) paragraph 2 of Article 203 for the same period.

The rationale for these changes was the lack of availability of permanent and consolidated data on the main forbidden territories by the competent authority (MIIR RK) and the MIO.: 1) on the boundaries of lands of settlements; 2) on the boundaries of lands of specially protected natural territories; 3) on the contours of deposits and sections of groundwater for drinking purposes relative to the earth's surface; 4) on the boundaries of lands for defense and national security; and 4) on the boundaries of lands of the water fund; which, obviously, as described above, can fully cover ("contain") the potential territory of the subsurface area according to TPI and OPI. The absence of such data could have led or led to the issuance of licenses for subsurface use by the IIR and MIO, when such issuance would have been prohibited by the provisions of the Subsoil Code under consideration.

The period of suspension of the commented item is determined with the expectation that by January 1, 2023, as part of the creation of the National Bank of Mineral Resources information system, the authorized body for the study of subsurface resources will put into operation an interactive map indicating the main prohibited areas, which will be used by the competent authority and the Ministry of Economic Development when issuing licenses for subsurface use.

Nevertheless, the lack of the ability of the competent authority and the Ministry of Economic Development to rely on consolidated information about the boundaries of the main prohibited territories led to the application in practice of the declarative principle of granting subsurface use rights for exploration and production of TPI /OPI in a limited mode, i.e. not in the entire territory of the Republic of Kazakhstan, as was assumed when adopting the Code on Subsoil, but only on a territory strictly defined in the Federal Tax Service, which does not include, contrary to paragraphs 3) and 4) of paragraph 3 of Article 70, the specified information. Thus, in the current conditions, the PUGFN is used in practice as a mechanism that geographically defines the limited effect of the introduced declarative principle of granting subsurface use rights in the field of mineral extraction/OPIE.

5. The reverse logical conclusion, which follows from the content of paragraph 2, does not prohibit the provision of a subsurface area, the outer boundaries of which will not be completely located in territories prohibited for conducting subsurface use operations. In other words, it is acceptable to provide

a subsurface area, if the territory defining its boundaries is located on (combined with) a territory prohibited for subsurface use only partially.

The occurrence of such a situation is inevitable, since the formation of the territory of a subsurface area is subject to strictly defined rules in art. 19, whereas the boundaries of the territories prohibited for subsurface use depend on natural conditions and other factors that do not obey a strictly defined geometric pattern.

The meaning of this logic is reflected in a Special part. Thus, Part 4 of paragraph 3 of Article 186 explicitly provides for the permissibility of including in the territory of exploration a TPI block, which only partially accounts for the territories listed in paragraph 1 of the commented article. Naturally, in this situation, it should be about the block as an "assembly unit" of the exploration territory, and not as a whole about the exploration territory formed as a result of a set of blocks according to the rules of the block system (see paragraph 4 in the comments to art. 19).

In turn, the provisions of art. 203, 205, 207, 210, 250, 252 and 254, which address the issue of the formation and consideration by the state body of the declared boundaries of the TPI/OPI production site and the subsurface use area when issuing the appropriate license, do not prohibit the partial alignment of the territory of such a site with the territories in paragraph 1 of the commented article..

In all these cases, a ban is applied on conducting subsurface use operations in that part of the territory of the subsurface area in which these territories affect (combine) the territories and facilities listed in paragraph 1. Identification, definition, breakdown and designation of the affected prohibited territories in such cases, as well as responsibility and all adverse consequences are assumed to be assigned to the subsurface user..

Figuratively acceptable options and examples are shown in the following figure.

6. Paragraph 3 provides for a list of exceptions to the prohibition set out in paragraph 1 of the commented article. These exceptions are provided only for certain subsurface use operations, certain works within the framework of subsurface use operations, or for certain spaces. The application of an exception for conducting subsurface use operations in the same case also applies to the prohibition provided for in paragraph 2 of the commented article.

The stipulated exceptions for a single space or for a single subsurface use operation/work are not predominant. Therefore, if a particular area of potential subsurface use operations is subject to an exception for one restricted space, but no exception is provided for for another restricted space in the same case, then in general, conducting subsurface use operations within the latter is prohibited.

For example, in paragraph 1) of paragraph 1 of the commented paragraph, an exception is provided for exploration operations on the territory of the lands of the settlement, subject to the conclusion of an agreement on socio-economic support for the local population. However, if exploration operations are supposed to be carried out on a land plot located within a locality, occupied by a structure, structure or perennial plantation, without the consent of the owner of the land plot, operations in this case are prohibited within such a land plot and at a distance of 100 m along its perimeter.

7. In Part 1, an exception is provided for in relation to the lands of settlements, assuming the permissibility of impacts on the earth's surface by limited subsurface use operations, which exclude by their nature the destruction of the basic properties of lands functionally intended for the development of cities, towns, villages and other settlements, regardless of the zonal delineation.

In paragraphs 1) of part 1 of paragraph 3, the legislator referred to such operations as exploration of TPI, extraction of TPI/OPI by an underground method (that is, under the ground of a settlement), as well as in paragraphs 2) of part 1 of paragraph 3 – prospecting and evaluation work for groundwater as part of operations for the geological study of subsurface. It is assumed that in all these cases, these operations should exclude the irretrievable loss of the basic properties of the earth. Otherwise, it would contradict the functional purpose of this category of land and its location within the boundaries of a settlement, and would reintroduce underground mining of mineral resources into the practice that arose and existed according to open sources in Soviet times, leading to land subsidence and the destruction of buildings and structures located on them in the cities of Karaganda, Abai, Shakhtinsk, Shahan., Saran, Ridder.

The exception in subclause 1) of Part 1 of clause 3 for exploration and production of TPI/OPI by underground method is applied only if there is an agreement on socio-economic support for the local population, which the subsurface user must conclude with the local executive and representative body prior to submitting an application for an appropriate subsurface use license and submit to the state body issuing the appropriate type licenses (competent authority or M&E) among other documents attached to the application: paragraphs 6) paragraph 4 of art. 187, paragraph 11) paragraph 3 of art. 204.

The subject of this agreement is the material socio-economic support of the local population living in the immediate vicinity of or on the territory of the planned subsurface use operations or in another part of the settlement, if the territory

The planned operations are carried out in a different area, except for housing and social. This support, of course, is material and can be expressed, for example, in the form of obligations for targeted compensation payments, the construction of social and/or infrastructure facilities designed to meet the needs of the local population, obligations to compensate for the costs of relocating the local population, the costs of a possible change in the boundaries of the settlement and the corresponding transfer of land to the settlement in other categories of lands in the future, etc. In accordance with paragraph 384 of the Civil Code, based on the substance of the agreement, it is assumed to be reimbursable.

In accordance with the current version of the Law of the Republic of Kazakhstan dated January 23, 2001 No. 148 "On Local Public Administration and Self-Government", local representative bodies and their secretaries are not directly assigned the competence to conclude this agreement. Therefore, the expression of consent (will) to conclude it, most likely, in practice should be carried out within the competence provided for in paragraphs 15), paragraph 1, Article 6 of the said law, by reviewing and approving a draft agreement providing for specific obligations for socio-economic support to the local population. In addition to the consent of the maslikhat, the conclusion of an agreement also implies the expression of the consent (will) of the local executive body to conclude it. Accordingly, after the Maslikhat approves the draft agreement, this agreement can be directly concluded (signed) between the local executive body and the person applying to conduct subsurface use operations on the lands of the relevant locality.

This design, content and conditions of application of the exception in subclause 1) of Part 1 of clause 3 are provided by the legislator in such a way as to exclude socio-economic risks or reduce them as much as possible in cases of investor's interest in conducting subsurface use operations on the lands of settlements.

The exception in paragraph 3) of Part 1 of paragraph 3 is provided for in order to provide the population and industrial facilities with water of various purposes and quality. At the same time, exploration and evaluation work on groundwater (drilling wells) by its nature, as a rule, also does not involve the destruction and loss of the basic properties of the earth's surface.

The exception in paragraph 2) of part 1 of paragraph 3 generally does not correspond to the previously described logic, on which almost the entire commented article is based. This subparagraph was introduced during the consideration of the draft Code on Subsoil in the Parliament of the Republic of Kazakhstan and is justified by the practical situation related to the fact that the territory

The Semipalatinsk Nuclear Test Site (SIYAP) is administratively located within the boundaries of the city of Semey, and by the time the Code on Subsoil was adopted, separate plots of land had already been allocated on the territory of the SIYAP for the equipment of waste disposal facilities, that is, activities that, under current legislation, are considered to be the use of subsurface space. Since this norm regulates relations that arose before the entry into force of the Subsoil Code, according to the general logic, the legislator should include it in the chapter of transitional provisions. However, during the discussion of the draft Code on Subsurface Resources in the Parliament of the Republic of Kazakhstan, this provision was included in the content of the commented article, extending the exception to the ban on all types of subsurface use operations in the territory of the NSNAP.

In general, the situation with the exception in paragraphs 2) of Part 1 of paragraph 3 has exposed a very common problem in the regions of Kazakhstan – the unnatural expansion of the boundaries of settlements in the absence of real needs and prerequisites. This practice, of course, reduces the territorial possibilities for conducting subsurface use operations in accordance with the restrictions provided for in paragraph 1.

8. In Part 2, paragraph 3, an exception is provided for the lands of the water fund for prospecting and operations for exploration and production of hydrocarbons, which are typical in the Republic of Kazakhstan on these lands, taking into account the value and geological features of the occurrence of hydrocarbons and TPI extracted by the prospecting method. This exception is not accidental, since the Special Part provides for provisions explicitly allowing exploration and production of hydrocarbons and the granting of appropriate subsoil use rights within the sea and in inland bodies of water naturally occupying the lands of the water fund.

Prospecting on the lands of the water fund in accordance with paragraph 4 of Article 271 is also permissible, however, only by manual means, i.e. at the expense of human physical strength (without using means of mechanization), thereby excluding large-scale violations of this category of lands and the destruction of their functional purpose. It is important to note that prospecting, as a rule, is carried out precisely near water bodies, and therefore on the lands of the water fund, since the technology of extraction of TPI in this way necessarily involves the use of water to purify extracted rocks. Therefore, the absence in this case of an exception regarding prospecting on the lands of the water fund would actually exclude the very existence of prospecting as a type of legitimate operations for subsurface use.

9. Part 3, paragraph 3 establishes a general exception for conducting aerogeophysical research or research using

space-based methods of remote sensing of the Earth in all the spaces provided for in paragraphs 1)-10) of paragraph 1 of the commented article.

These operations are usually carried out as part of geological exploration and mineral exploration operations. The meaning of the provided exception is that these works by their nature do not imply any impact on the basic properties of the earth's surface, the integrity of the objects located on it and cannot violate the rights of land owners. Therefore, the prohibition provided for in paragraph 1, which applies also to these works, is meaningless and, from a practical point of view, impractical.

10. The commented article has no "retroactive effect", that is, it does not apply to subsurface use operations conducted under licenses and contracts for subsurface use issued and concluded before the entry into force of the Code on Subsurface Resources.

At the same time, this article applies to exploration licenses, mining licenses, and mining licenses issued in exchange for the specified subsurface use contracts, as a result of the transition to a licensing regime (renewal of the right of subsurface use) in accordance with paragraph 25 of art. 278, however, with the exception of the prohibition on conducting relevant operations on the lands of settlements and water the foundation. This exception is explained by the fact that the contract territories for subsurface plots granted under subsurface use contracts concluded before the entry into force of the Subsurface Code often accounted for settlements and lands of the water fund. Such cases are typical mainly for single-industry towns such as Rudny, Ridder, Satpayev, etc. Therefore, the application of the ban on subsurface use operations provided for in paragraphs 2) and 4) would make it impossible to switch to a licensed subsurface use regime under previously concluded subsurface use contracts.

11. Despite the fact that the commented article was intended to mitigate or even eliminate the legal, environmental, and socio-economic risks of introducing the declarative principle of granting subsurface use rights, nevertheless, compliance with the public law norms provided for in it remained unsecured by administrative liability measures. During the approval of the draft Code on Mineral Resources and the accompanying draft law in government agencies, the legal policy was based on the idea of softening the system of legislation on administrative responsibility and preventing the expansion of the number of acts involving the application of administrative penalties and administrative impact measures.

Nevertheless, due to the legal gap that has arisen, which entails high risks of widespread violations of the rights and legitimate interests of land users, the sanitary, epidemiological and socio-economic well-being of the population, the environment and the established procedure for the territorial development of the Republic of Kazakhstan when conducting subsurface use operations and granting subsurface use rights, this problem should undoubtedly be considered with further improvement of legislation.

In addition, the lack of up-to-date information on all territories prohibited for subsurface use operations by government agencies when granting subsurface use rights also exposed a practical and legal problem in more precisely delimiting the main prohibited territories from the rest of the territories provided for in paragraph 1, since, in essence, only the main prohibited territories in their length are important in forming borders. subsurface areas (see paragraph 4 in this commentary).

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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