Kazakhstan: Environmental Dispute Raises Questions about Judicial Authority

Are Kazakh residents living near the oil and gas fields getting just and fair treatment? (Photo: David Trilling)

At the northern edge of the vast Karachaganak gas condensate field sits a small village named Berezovka. Since 2002, residents have sought to be relocated, claiming that emissions from the field’s operations pose a health hazard.

The 1,400 residents of Berezovka won a significant legal victory in June 2010, when a Kazakhstani court partially upheld their demand for relocation. But nearly two years later, no action has been taken to implement the judicial decision. After 10 years of campaigning, the community remains in limbo.

Some environmental activists say the Berezovka case shows how justice can be subordinated to big business interests in Kazakhstan. Sergei Kuratov, chairman of the environmental group Green Salvation, said that when it comes to abiding by court rulings, the state has a spotty record. “The bigger the defendant, and the more [a case] concerns state organs, the harder it becomes to have a court decision fulfilled,” he said. Authorities, meanwhile, contend the settlement is dragging on because some residents are holding out for higher compensation.

The Karachaganak oil and gas condensate field was discovered in 1979, and in 1997 came under the control of Karachaganak Petroleum Operating (KPO), an international consortium led by Britain’s BG Group and Italy’s ENI. Berezovka’s legal saga began in 2002, when new legislation mandated the creation of a Sanitary Protection Zone (SPZ) of five kilometers around fields like Karachaganak. Given that Berezovka sat within the specified zone, villagers filed for relocation as permitted under the law. But it 2003, officials told villagers that the SPZ around Karachaganak had been reduced to three kilometers because of superior technology at the field. The shift left the village just outside the buffer area.

The SPZ’s seemingly arbitrary revision sparked a series of protests and legal complaints that drew international attention, including from Green Salvation and the American environmental group Crude Accountability.
In June 2008, on behalf of residents, Green Salvation filed a lawsuit against the government to protest the reduction in the SPZ and request relocation. After a court rejection and a review, in June 2010 the Special Interregional Economic Court in Astana confirmed the five-kilometer zone and partially confirmed the petitioners’ requests, ruling that local authorities must “resolve the question of the relocation of villagers.” It mentioned by name two property owners, as well as several other plots of property that fell within the zone. Since then, there's been no movement on the ruling.

Some observers believe that the case is enmeshed in a high-stakes business deal between the Kazakhstani government and the KPO consortium over the Karachaganak field. For years Kazakhstani authorities had been trying to acquire a part of the KPO project, the only major oil & gas operation in the country in which the state-owned entity KazMunaiGaz did not have a share. BG Group and ENI each have a 32.5 percent share in KPO, American energy giant Chevron holds a 20 percent stake, and Russia’s Lukoil holds 15 percent.

Beginning in 2007, Astana filed claims worth billions of dollars against KPO relating to customs duties, taxes, reporting of profits and environmental issues. The court decision on Berezovka relocation may have been connected to a broad effort to put pressure on KPO by drawing attention to environmental violations, some local observers contend.

In December 2011, the consortium relented in negotiations, agreeing to sell the government a 10 percent share in KPO for approximately $2 billion, with half paid for in cash, and the other half used to write off debts.

Local observers remain pessimistic that the court ruling concerning Berezovka will be implemented, alleging that the lack of resolution provides the state with leverage against KPO. “[The government] will keep it [Berezovka] in place as an instrument,” said Artur Shakhnazaryan, a local reporter for the opposition paper Respublika who has covered the Berezovka case from its inception. “It was a threatening element in the negotiations, and it will continue to be one.”

Local authorities insist that relocation applies to only the two residents specifically named in the decision, and that they are the ones slowing down the process by demanding more compensation. “Let’s be honest, if the situation was that bad, a normal person would get up and leave for the sake of their family. But they want to get more money,” said the deputy governor of the region, Serik Adlyaliev. He emphasized that a new $200,000 water system had been promised for the village, paid for by KPO.

While waiting for resolution, conditions in the village continue to deteriorate. In January 2011, villagers said sinkholes had begun to appear under their houses, presumably due to gas extraction operations. People have stopped maintaining their properties because of the uncertainty, said Svetlana Anosova, a local music teacher who became an activist during the campaign.

“The general state of the village is not very good because people are tired even of hoping,” Anosova told EurasiaNet.org. “Every time we start to do something, we say, ‘Why are we doing this? Maybe it’s all going to change.’ People lose hope.”

Nate Schenkkan is a Bishkek-based journalist.

Kazakhstan: Environmental Dispute Raises Questions about Judicial Authority

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