Commentary to article 52. Environmental safety in conducting subsurface use operations to the Code of the Republic of Kazakhstan “On Subsurface and Subsurface Use”  

1. Subsurface use operations, including forecasting, planning and designing of production and other facilities, must comply with the requirements of the environmental legislation of the Republic of Kazakhstan.

2. The ecological condition of the subsurface is ensured by rationing maximum permissible emissions, limiting or prohibiting subsurface use activities or certain types of them.

3. In cases stipulated by the environmental legislation of the Republic of Kazakhstan, conducting subsurface use operations without

An appropriate environmental permit or a positive conclusion of the state environmental assessment is prohibited.

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(Nogaibai Z.M.)

1. In accordance with paragraph 2 of Article 6 of the EC of the Republic of Kazakhstan, the subsoil is a component of the natural environment, as well as an integral part of the Unified System of State Cadastres of Natural Resources of the Republic of Kazakhstan (paragraph 3 of Article 170 of the EC of the Republic of Kazakhstan).

2. Subsurface use is inevitably associated with pollution of the natural environment, including not only the subsurface itself, but also other components of the natural environment (atmospheric air, surface and groundwater, the earth's surface and soil layer) (Clause 2, clause 3, Article 22 of the EC RK).

3. The state monitoring of subsurface resources, conducted in accordance with the legislation on subsurface resources and subsurface use, is an integral part of the monitoring of natural resources (clause 3, clause 2, Article 160 of the EC RK).

4. Environmental requirements for conducting subsurface use operations and related operations in the northern part of the Caspian Sea are established by Chapter 19 of the EC RK. General environmental requirements for conducting subsurface use operations are provided for in Articles 397-400 and other provisions of the EC of the Republic of Kazakhstan.

5. Based on the above, due to the high risks of environmental pollution, the commented article establishes the basic provisions on the need for compliance of subsurface use operations with the requirements of environmental legislation.

6. The important practical significance of the norm of paragraph 1 of Article 52 of the Subsoil Code lies in the fact that in matters of environmental regulation it establishes a clear priority over the norms of environmental legislation. This approach is further emphasized in clause 3, clause 1, Article 122, as well as in a number of other provisions of the Code on Subsoil.

7. Paragraph 1 of the commented article contains some terminological inaccuracy related to the attribution of terms such as "forecasting, planning and design of production and other facilities" to the concept of "subsurface use operations", since the content of the concept of "subsurface use operations" is exhaustively defined in art.22 of the Subsoil Code (see also para.4 – 8 art.121 of the Subsoil Code).

8. In comparison with the 2010 Law on Subsoil, the Code on Subsoil has generally reduced the scope of regulation of environmental issues, based on the fact that they relate to the subject of environmental legislation.

9. The norm in paragraph 3 of the commented article underwent changes in 2021 related to the adoption of the new Environmental Code.

According to the EC of the Republic of Kazakhstan, hydrocarbon exploration and production activities are the basis for classifying relevant enterprises (facilities) into the first category, for which it is mandatory to have a comprehensive environmental permit (paragraph 1 of Article 111 of the EC of the Republic of Kazakhstan), as part of the issuance procedure, a state environmental assessment is conducted and separate conclusions of the state environmental assessment are not issued (Article 87 EC RK).

In relation to oil and gas enterprises, this approach is also reflected in the (amended) wording of paragraph 3 of Article 139 of the Subsoil Code, where the relevant types of project documents (amendments to them) are now required to obtain an environmental permit in advance, which creates difficulties in complying with this requirement in practice.

10. Violation of the requirements of the legislation on mandatory state environmental expertise constitutes an administrative offense provided for in art.332 of the Administrative Code of the Republic of Kazakhstan.

11. Liability for violation of environmental requirements is provided for by the provisions of legislative acts (EC RK, Administrative Code RK, Criminal Code RK).

12. The commented article is "retroactive" and applies to relations under subsurface use contracts concluded before the entry into force of the Subsoil Code (paragraph 3 of Article 277 of the Subsoil Code).

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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