The Legal Regulation of the State Geological Studies of Subsoil Use in KazakhstanSvetlana Shtopol, Partner of International Law Firm Integrites, Kazakhstan
This piece of information is formed only as a general guide and should not be used as a specialized legal conclusion.
As stated by the government, geological study is one of the priorities of industrial development of Kazakhstan.Despite the rich mineralresources, replenishing the mineral resource base remains as an urgent and serious problem for the state.According to various programs, the ministry in this field is trying to develop geological survey within its capabilities. However, in practice, the money allocated by the state, as well as the available technology and knowledge, are insufficient for the organization of due and sufficient work to the discovery and study of mineral deposits and estimating of mineral reserves.
One of the institutions considered by the state as a way out of the situation is a state study of subsoil by the use of money of large subsoil users and investors. Despite the existence of a mutual interest among potential participants of such cooperation, these relations leave a lot of questions and gaps at the level of legislative regulation. According to the geological survey of subsoilcontracts, investor companies are not guaranteed to obtain benefits from their activities and the law regulating this area does not provide additional opportunities for investor companies to obtain rights for the development of the discovered fields.
In this regard, in this article we have decided to examine the substantive provisions of the existing legislation, as well as some of discussed and proposed innovations by us to the regulations relating to the state geological survey.
Provisions of existing legislation
At present, the relations in the sphere of state geological study of subsoil (hereinafter - SGSS) are regulated by the following main documents:
- Law of the Republic of Kazakhstan dated June 24, 2010, №291-IV, «On Subsoil and Subsoil Use" (hereinafter - the “Subsoil Law”);
- Rules of the contract (agreement) on the state geological studies of subsoil, approved by the Government Resolution of January 18, 2012, №99 (hereinafter – “the Rules”);
- Rules of economic expertise of design and estimate documentation facilities associated with work on state geological research and monitoring of mineral resources, conservation, elimination of oil and water wells, approved by order of the Deputy Prime Minister of the Republic of Kazakhstan - Minister of Industry and New Technologies of Kazakhstan from June 14, 2011, №184 (hereinafter - the “Rules of examination PSD”).
According to the Subsoil Law, SGSS - it is a works (operations) related to monitoring the condition of the subsoil, the study of the geological structure of subsoil, as well as individual parts and the whole territory of the Republic of Kazakhstan as a whole, the determination of their prospects for the presence of mineral resources through exploration and prospecting and evaluation work, the creation of state geological maps that make up the information base for subsoil use. SGSS relates to subsoil use operations.
The authorized body for the study and use of mineral resources provides right for SGSS by the SGSS contract.
State geological studies of subsoil may be financed from the budget or other sources that are not prohibited by the laws of RK. Those conducting the work associated with geological study of mineral resources from the state budget, the geological information is provided free of charge.
The contract for SGSS is not subject to the requirements on the content of the contract defined by the subsoil use law and model contracts in respect of subsoil use contracts. Geological or mining leases and operating program applications are not required to contract for SGSS.
Rules determine the order of execution of the contract (agreement) for the state geological studies (hereinafter - the “Contract”) between the authorized body for the study and use of mineral resources (hereinafter - the “Authorized body”) and an individual or legal entity (hereinafter – “Applicant”).
The following key provisions are enshrined by the Rule:
- SGSS may be financed from the budget or other sources that are not prohibited by the laws of RK.
- The order of the Contract conclusion on SGSS financed from the budget, in accordance with the legislation on public procurement.
- For Contract conclusion, an Applicant apply to the Authorized body with the application, which contains, among other things, the object and purpose of the Contract, the duration of the work, the spatial boundaries of the requested area, information about the applicant, its leaders and members, and others.
- The application shall be returned in the event of, among other things, if the declared area belongs to the contract territory or the declared area belongs to the specially protected areas.
- In case, the receipt of two or more applications to the requested territory at the same time, the decision will be made taking into account the technical and financial capabilities of the applicants.
- The Authorized body shall notify the Applicant about the possibility of concluding the Contract, by identifying the period of provision of design and estimate documentations for works in the field of SGSS (hereinafter – “PSD”).
- For the Contract conclusion, an Applicant has to provide PSD within three months from the date of receipt of notice of contracting opportunities. PSD developed by the Applicant in accordance with the instructions on drawing up design and estimate documentation to conduct geological study of subsoil. The period of PSD provision can be extended upon written request of the applicant, but not more than six months.
- The Authorized body organizes and conducts economic expertise of PSD in accordance with the Rules of examination of PSD. In a negative result of economic expertise, the authorized body returns to the Applicant PSD in a written form for revision, with the result of the economic expertise.
- The Contract concludes within the ten business days after receipt of the positive result of economic expertise on the PSD by the applicant and the Contract signs by the head of the Authorized body and the Applicant.