Liability For Irrational Subsoil Use

Export of crude oil and other natural resources is the basic income of our country. Active development of oil and gas industry is related to increased risk for the environment. Alongside with this industry development special legislation is actively developing, new tendencies of the recent years include resolving actual issues of preservation and rational use of subsoil resources. In pursuance of preservation, rational and multiple use of subsoil resources the legislator pays close attention to responsibility issues as the major "tool" and legal remedy to support rule of law in the subsoil use area.

Responsibility in the subsoil use area just as any other responsibility in the environment preservation area and responsibility in general may arise in the cases and according to the procedure established by the legislation.

Law on Subsoil and Subsoil use dated 24 June 2010 (further - "Subsoil Use Law") foresees that any infringement of the legislation of the Republic of Kazakhstan on mineral resources and subsoil use involves liability prescribed by the laws of the Republic of Kazakhstan (Article 126). Further the Article 127 provides that persons causing damage through violating provisions of ecological legislation of the Republic of Kazakhstan shall reimburse the caused damage unless proven that the damage arose due to insuperable force circumstances or willful intent of the aggrieved to the extent and in the manner established by the legislation of the Republic of Kazakhstan. Herewith, the extent of damage caused through breaching requirements in the area of rational use of subsoil resources shall be defined by the authorized agency for studying and using subsoil resources.

Thus Subsoil Use Law contains reference rule to special legislation. Moreover the last developments implemented by the Laws "On introducing changes and additions to certain statutory acts of the Republic of Kazakhstan regarding issues of cardinal improvement of favorable conditions for entrepreneurial activity in the Republic of Kazakhstan" of 29 December 2014, Criminal Code of the Republic of Kazakhstan of 3 July 2014, Administrative Violations Code of the Republic of Kazakhstan of 5 July 2014 are specification and division of responsibility for certain breaches of law, introduction of new elements of legal offence, specification of elements of legal offence and breaches of law as well as authorities ensuring control over particular issues.

Within limits of this article we would like briefly touch upon issues of corporate, administrative, criminal and civil responsibility for breaching rules in the area of rational use of subsoil resources, consider few practical examples of compensation for damage due to irrational use of subsoil resources and certain other violations in the area of use of subsoil resources.

Corporate responsibility

Talking about corporate responsibility we'd like to group such responsibility types among companies-subsoil users as financial (material) and disciplinary responsibility of the employees and responsible managers. This responsibility by its legal nature is based on employment and labor regulations. As a rule responsibility extent is regulated by internal corporative documents, acts of the employer (policies, procedures) and financial liability contracts. At present principles of Corporate Social Responsibility are increasing, internal control services are enforced and company standards for ensuring safety, environment preservation and health care are increasing on a voluntary basis. These principles become the ground for honest business and increasing trust to subsoil users on the part of community and the state authorities. Within the framework of analyzing voluntary responsibility for damage it's also required to use insurance institution to a wider range.

Administrative liability

Administrative liability plays important role in ensuring rational use of subsoil resources.

Administrative Violations Code of 05 July 2014 (Administrative Code) regulates 13 elements of administrative offenses in the area of rational use of subsoil resources. New legal developments provide for inclusion of administrative liability for "non-compliance with the rules for rational and multiple use of subsoil resources", "performing production without State appraisal of reserves of commercial minerals" as well as correction of the Article "Infringement of rules for petroleum operations and works for subsoil resources management". 12(!) parts detailing description of legal offence such as flaring associated and (or) natural gas, divergence from design documentation, operations of wells in violation of requirements established by the legislation and etc are additionally included in the Article 365 "Infringement of rules for petroleum operations and works for subsoil resources management". Also sizes of administrative charges are specified and reduced in a majority of cases.

Criminal liability

In pursuance of ensuring rational management of subsoil resources the Criminal Code of the Republic of Kazakhstan of 16 July 1997 provided for one element of crime with regard to issues of rational management of subsoil resources - Article 286 (infringement of rules for protection and use of subsoil resources).

A new element - unauthorized subsoil use (Article 334) is introduced along with liability for infringing rules for protection and use of subsoil resources (Article 333) in the existing Criminal Code of 3 July 2014 and also additional and alternative sanctions are established. Also the Criminal Code contains articles, which may likewise be related to the issues under question, e.g. Article 330 (offshore pollution) and Article 329 (atmosphere contamination).

In addition in the existing Criminal Code definitions for damage types are reviewed: a definition of considerable damage was used before and used to be punished with a fine, disqualification to hold certain positions or to practice certain professions or corrective labor for a period up to two years; the new Code provides only liability for large scale and very heavy damage. Also punishment for committing acts is reviewed in the form of changing the size of penalties and terms of deprivation of freedom.

As to the criminal liability for crimes in the area of rational management of subsoil resources we'd like to highlight major issues arisen in law enforcement practice:

complications in qualifying a legal offence and identifying the dividing line between administrative and criminal liability; considering specificity and demand for highly qualified specialists nowadays who could have done criminal - legal evaluation of infringements in the area of rational management of subsoil resources; bringing a certain party to criminal liability is problematic since it's often impossible to identify the subject and the subjective aspect due to continuous nature of business processes and team involvement...