Kazakhstan dispatch: Kazakhstan government brings landmark environmental lawsuit against Caspian Sea oil field developer Dispatches
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Kazakhstan dispatch: Kazakhstan government brings landmark environmental lawsuit against Caspian Sea oil field developer

Aidana Tastanova is a Kazakhstan national and a 3rd year law student attending the Moscow State Institute of International Relations under a Kazakh government scholarship. 

Last week Kazakhstan brought an action for violation of environmental protection against North Caspian Operating Company (NCOC), the consortium leading development of the country’s massive Kashagan oil field, in the amount of about $5.14 billion USD.

According to the Kazakh Ministry of Ecology and Natural Resources, pursuant to an examination conducted in early March, violations such as excessive placement of sulfur on sites, burning of crude gas on flares without an environmental permit, discharge of wastewater into an evaporator pond and many others were detected at the field.

Administrative proceedings have been initiated against NCOC under at least six articles of the Code of Administrative Offences of the Republic of Kazakhstan: violation of sanitary-epidemiological and environmental requirements for environmental protection, requirements for industrial environmental control, requirements for the protection of atmospheric air and protection of water bodies from pollution and clogging, as well as violation of standards of permissible anthropogenic impact on the environment and other. The company filed a petition. Currently, the case materials are under consideration in the administrative court of Atyrau.

Kashagan is one of the largest oil fields in the world discovered over the past 40 years, whose recoverable reserves are estimated to be from 9 to 13 billion barrels of oil. It is located in the northern part of the Caspian Sea. In 1997, a Production Sharing Agreement was signed between the Government of the Republic of Kazakhstan and the international consortium OKIOC (Offshore Kazakhstan International Operating Company N.V.), which included representatives of the world’s largest companies with extensive experience in the development of similar oil and gas fields. The consortium includes the following participants: Italian Eni, French Total, American ExxonMobil, Anglo-Dutch Shell, Chinese CNPC, Japanese Inpex and KazMunayGas, the national operator of the oil industry.

Meanwhile, it is not the very first time that legal claims have been made against this oil deposit. Back in 2014, a specialized interdistrict economic court recognized as lawful a fine for the accident at the Kashagan field, which was imposed on the NCOC in connection with damage caused in the form of atmospheric air pollution by emissions of pollutants as a result of an accident at one of its installations. Other incidents of this nature are also known, for example, when last year the Department of Ecology of one of the regions imposed a fine on the above-mentioned CNPC company for environmental pollution at the same production. There are other events that were ignored by the staff of the environmental prosecutor’s office: for instance, last summer, more than 2.5 thousand dead rare birds were found on the territory of two artificial islands at the Kashagan field. Unfortunately, the perpetrators of these and a number of other incidents at this oil field often remain without legal responsibility.

It is worth emphasizing that Kashagan is one of the largest oil fields in the world, which implies the transformation of Kazakhstan into a world leader in oil supplies over the next decades. Since the projects are managed by foreign companies, they are also part of the political game of many parties, each of which seeks to extract its own benefits. The pursuit of profit can lead to serious environmental consequences for the vast area around the field.

Nevertheless, in fairness, it should be mentioned that Kazakhstan is on the list of world leaders in oil exports as provided by CEIC Data. And it is not surprising that every year the oil industry makes a significant contribution to the development of the national economy. Especially now, in the light of the aggravated geopolitical situation, when the world is experiencing a global crisis in the energy sector, the diversification of oil exports is one of the main tasks for Kazakhstan. So according to Reuters, today, due to the EU embargo on Russian oil, producers in Kazakhstan are making great efforts to increase supplies to European countries. Moreover, by order of the President, in 2023, together with foreign partners, a Comprehensive Plan for the development of major oil and gas projects will be developed. Consequently, the goals for the development of the oil industry will remain on the current agenda of the state for a long time.

However, given such ambitious plans, it is necessary to pay attention to the harsh reality – in the form of environmental consequences. Kazakhstan produces oil mainly on the territory of its western regions, both on land and in the depths of the bottom of the Caspian Sea. And it is very important that this production does not lead to oil contamination of land and sea territories during its extraction and transportation. The Republic is planning the construction of nuclear power plants and at the same time is making innovative, scientific, organizational efforts to prevent accidents at such power plants that occurred at the Chernobyl nuclear power plant, which led to radiation contamination of vast territories not only of Ukraine, but also of a number of other countries.

No doubt, there is still a lot of room for improving domestic legislation in the field of environmental protection. To do this, it seems necessary to study the experience of countries that manage to clearly implement the provisions of the Kyoto Protocol against emissions of harmful substances and greenhouse gases into the air. One of the solutions could potentially be the initiative to form an information and analytical system at the EAEU level, on the basis of which the analysis of the energy-ecological situation, sustainable energy markets, and the development of economically and environmentally efficient data banks would take place. Over the years of independent development, the Republic of Kazakhstan has established itself as a reliable and responsible partner of the European Union on energy issues and is the largest supplier of oil. Therefore, taking into account the successful steps of the EU to gradually implement the acts on the transition to green energy, it would be a pragmatic decision for Kazakhstan to create a legal basis for a strategic energy dialogue between the two subjects of international law. Thus, the creation of legal and technological foundations for closed energy-ecological production would help to avoid similar situations in the future, as is happening now with the Kashagan oil field.