Environmental Issues in Other Branches of Law: Administrative, Criminal and Tax September 19, Almaty Forum EcoTech-2012 Zhumageldy Sakenovich Yelyubayev,

Environmental Issues in Other Branches of Law: Administrative, Criminal and Tax

September 19, Almaty

Forum EcoTech-2012

Zhumageldy Sakenovich Yelyubayev, Doctor of Law

President of the Kazakhstan Petroleum Lawyers Association (KPLA)

Chevron EBU Managing Legal Counsel

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Types of Liability_____________________________________

Civil Law Liability;

Mining Law Liability;

Financial Liability;

Disciplinary Liability;

Environmental Liability;

Fiscal Liability;

Administrative Liability;

Criminal Liability.

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Administrative Offences in the Sphere of Environmental Protection and Use of Natural Resources _____________________________________

Chapter 19 of the RoK CAO contains 79 rules (articles) that stipulate administrative liability for offences in the sphere of environmental protection and use of natural resources

Including: 5 rules are relatively new in law enforcement practice:

Article 240-1. Violation of the Requirements to Industrial Environmental Monitoring (RoK Law of December 3 , 2011 No. 505-IV);

Article 240-2. Incompliance with the Terms of Subsoil Use Specified in the Environmental Permit (RoK Law of December 3 , 2011 No. 505-IV);

Article 243-1. Exceeding the Established Quota for Greenhouse Gas Emissions (RoK Law of December 3 , 2011 No. 505-IV, effective from January 1,2013 );

Article 275-1. Registration of Illegal Nature Use Transactions (RoK Law of January 18 , 2011 No. 393-IV);

Article 306-2. Trading caviar labeled in violation of the label procedure or unlabeled sturgeon caviar (RoK Law of October 21, 2010 No. 242-IV);

Article 306-3. Provision by individuals and legal entities performing work and services in the sphere of environmental protection of unreliable information (RoK Law of December 3 , 2011 No. 505-IV).

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Most Frequent RoK CAO Rules Stipulating Liability for Offences in the Sphere of Use of Natural Resources and Subsoil

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Article 240-2. Incompliance with the Terms of Use of Natural Resources Specified in an Environmental Permit.

Article 242. Failure to Advise of Excessive Emissions and Discharges of Pollutants and Disposal of Wastes.

Article 243. Exceeding of Standards of Maximum Admissible Discharge into Atmosphere, Established in Environmental Permits or Absence of Environmental Permits.

Article 261. Violation of Requirements to the Disposal of Production and Consumption Wastes and Discharge of Waste Water.

Article 265. Violation of Environmental Regulations and Rules in Subsoil Use and Processing of Raw Minerals.

Article 270. Violation of the Rules for Accounting, Disposal and Deactivation of Wastes of Production and Consumption

Article 272. Violation of the Rules for Abandonment and Conservation of Subsoil Use Property.

Article 275. Violation of the Rules for Conducting Subsoil Use Operations.

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Review of Novels Incorporated into RoK CAO (1)______________________________________

Article 240-1. Violation of the Requirements to Industrial Environmental Monitoring *

Relations pertaining to “industrial environmental monitoring” are regulated by Chapter 14 of the RoK EC;

Industrial environmental monitoring shall be carried out in conjunction with a subsoil user on the basis of the “Industrial Environmental Monitoring Program”, designed by the subsoil user and approved by the environmental competent authority (clause 1 of Article 129, Article 131 of the RoK EC);

The competent environmental authority (RoK MEP) shall approve a “procedure for approving industrial environmental monitoring programs” and establishes requirements to industrial environmental monitoring reporting (clause 29 of Article 17 of the RoK EC);

“The industrial environmental monitoring program establishes a mandatory list of parameters controlled in the course of industrial environmental monitoring, criteria for determining its regularity, duration and frequency of measurements; instrumental and calculation methods (clause 2 of Article 129 of the RoK EC);

In case of imputing this violation as a fault the provisions of Article 130 of the RoK EC establishing the rights and obligations of a subsoil user as well as other rules of Chapter 14 of the RoK EC shall be complied with.

* The article was incorporated into the RoK EC under the RoK Law of December 3 , 2011 No. 505-IV.

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Article 240-2. Failure of the subsoil user to comply with the terms specified in the environmental permit*

“Environmental Permit” means a document confirming the right of individuals and legal entities to conduct “emissions into the environment” (sub-clause 98 of clause 1 of Article 1 of the RoK EC);

“Emissions into the environment” means emissions, discharges of pollutants, disposal of wastes of production and consumption, hazardous physical impact, disposal and open storage of sulphur in the environment (sub-clause 43 of clause 1 of Article 1 of the RoK EC);

“Terms of Use of Natural Resources” shall be included into environmental permits by the competent environmental authority subject to the requirements of Article 73 of the RoK EC. ТThus:

“special environmental requirements and regulations” adopted with respect to emissions into the environment shall be complied with;

It is prohibited to include into a permit for emissions “terms of use of natural resources” which are not stipulated by environmental requirements and regulations established by the RoK environmental legislation;

a procedure for including the “terms of use of natural resources” into a permit for emissions into the environment shall be approved by the environmental competent authority.

* The article was incorporated into the RoK EC under the RoK Law of December 3 , 2011 No. 505-IV.

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Article 241. Evasion from Implementation of Measures for Liquidation of Consequences of Environmental Pollution

This provision stipulates an additional violator, an “official” who can be subjected to administrative fine in the amount of 100 monthly calculation indexes (from January 1, 2012 the MCI comprises 1618 tenge).

Article 243-1. Exceeding Established Quota for Greenhouse Gas Emissions

Effective only from January 1, 2013.

“Quotas for Greenhouse Gas Emissions” shall be established by the competent environmental authority (clause 30 of Article 17 of the RoK EC).

Article sanction – a fine imposed on legal entities in the amount of ten MCI per each

“quota unit”* in excess of the established volume which is not covered by quota units acquired

from other subsoil users, and/or “hydrocarbon items”**, acquired as the result of implementing

projects under the RoK legislation.”

* “Quota Unit” means a hydrocarbon unit applied for the calculation of quota volume (sub-clause 14 of clause 1 of Article of the

RoK EC).

** “Hydrocarbon Unit” means an accounting unit which is equivalent to one ton of carbon dioxide *** (sub-clause 17 of clause

1 of Article of the RoK EC).

*** “Carbon dioxide” means a combination of carbon and oxygen (СО2).

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Article 243-2. Submission by independent accredited organizations of unreliable data on greenhouse gas inventory, verification and validation (determination)

The rule was introduced by the RoK Law of December 3, 2011 No. 505-IV.

A proper application needs the interpretation of terms in accordance with the environmental legislation:

“greenhouse gas inventory” means determination of the scope of greenhouse gas emission and absorption (sub-clause 64 of clause 1 of Article 1 of the RoK EC); “greenhouse gases” means gaseous components of the atmospheric air of natural and/or anthropogenic origin, absorbing heat radiation and/or constituting its source (sub-clause 62 of clause 1 of Article 1 of the RoK EC); “verification” means a process of confirming data by an independent accredited organization with regard to the reduction of the volumes of greenhouse gas emissions under respective approved national and international standards of reduction of greenhouse gas emissions (sub-clause 9 of clause 1 of Article 1 of the RoK EC); “validation (determination)” means audit by an independent accredited organization of the use of methods and procedure for design solutions and documentation within the framework of development of projects for reduction of greenhouse gas emission and absorption with regard to compliance with the requirements established by international agreements of the Republic of Kazakhstan (sub-clause 8 of clause 1 of Article 1 of the RoK EC); “independent accredited organization” - the accreditation of independent organizations that carry out verification, validation (determination) and confirmation of the greenhouse gas inventory report, shall be made by the competent environmental authority in the procedure approved by the Government of the Republic of Kazakhstan (Article 158-4 of the RoK EC).

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Article 245. Failure to perform legislative requirements regarding obligatory state environmental expertise

Rule disposition:

failure to comply with legislative requirements regarding obligatory state environmental expertise; failure to comply with requirements contained in the state environmental expertise opinion; financing projects and programs rejected by the state environmental expertise.

The RoK Law of December 3, 2011 No. 505-IV amended the rule sanction providing for hardening administrative punishment imposed on major businesses:

former language – fine from 50 to 200 MCI’s;

new language – fine from 350 to 500 MCI’s.

Requirements regarding obligatory state expertise are contained in the environmental legislation, specifically in chapter7 of the RoK EC.

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Article 248. Violation of the legislation on the protection of atmospheric air

Rule disposition :

commission into operation of new and reconstructed enterprises, structures and other facilities which do not meet environmental requirements;

operation of new and reconstructed enterprises, structures and other facilities which do not meet environmental requirements.

Rule sanction:

officials, individual entrepreneurs, legal entities – small and medium size businesses or non-profit organizations – fine in the amount from 50 to 60 MCI’s (the former language – fine in the amount from 20 to 40 MCI’s), hardening of the sanction is also stipulated;

legal entities which are not major businesses are subject to – fine in the amount from 70 to 100 MCI’s (the former language – fine in the amount from 60 to 100 MCI’s), there seems to be the hardening of the sanction since the lower limit of the fine has been increased.

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Article 275-1. Registration of illegal transactions on the use of natural resources

the rules was introduced into the RoK CAO by the RoK Law of January 18, 2011 No. 393-IV.

Rule disposition:

Registration of a priori illegal transactions on the use of natural resources;

Misrepresentation of state records data and national resources inventory;

Deliberate understatement of payments for the use of natural resources, environmental pollution and restoration of natural resources.

there should be proven the motive of these offences – “mercenary or other interests”.

Person – an official who commits an offence by appropriation of his/her corporate opportunities «использованием своего служебного положения».

Rule sanction: - fine in the amount from 300 to 500 MCI’s, or

- administrative arrest for 45 days.

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Article 306-3. Submission by an individual and a legal entity performing work and services in the sphere of environmental protection of unreliable data

the rule contains three parts and was introduced by the RoK Law of December 3, 2011 No. 505-IV.

Rule disposition: Submission by an individual and a legal entity performing work and services in the sphere of environmental protection of unreliable data when designing (part 1 of the article):

emission limit values; environmental protection measures; industrial environmental monitoring program; reports on the above activities.

Rule disposition, part 2:

actions specified in part 1 of the article repeated during one year after the imposition of administrative punishment.

Rule disposition, part 3:

actions specified in parts one and three of the article that result in major environmental damages or committed more than three times, given that they do not contain the elements of crime.

Rule sanction: in the first part – fine; in the second part – fine with/without the cancellation of a license; in the third part – fine with the cancellation of a license.

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Environmental Crimes (Chapter 11 of the RoK Criminal Code):

Legislative Novels

In 2011 the RoK Criminal Code was amended, specifically the rules stipulating the hardening of liability for certain environmental crimes (see chapter 11 of the RoK Criminal Code):

Article 280. Violation of the Veterinary Rules and the Rules Establishing for Combating Plants’ Diseases and Agricultural Pests

Article 281. Contamination, littering and depletion of water

Article 282. Pollution of the atmosphere

Article 283. Pollution of the sea environment

Article 284. Violation of legislation concerning the continental shelf of the Republic of Kazakhstan and the exclusive economic zone of the Republic of Kazakhstan

Article 293. Violation of the regime of specially protected natural territories.

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Nature of amendments and additions to the rules of the RoK Criminal Code (chapter 11) stipulating

liability for environmental crimes

Such type of criminal punishment as “fine in an amount of wages or other income of a given convict in a certain period as of commitment of crime” was excluded from the sanctions of Articles 278 – 289, 291 – 293 of the RoK Criminal Code (see part 1 of Article 40 of the RoK Criminal Code).

Actions stipulated in part 1 of Article 282 of the RoK Criminal Code (violation of the rules for emissions of pollutants into the atmosphere or the rules for operation of plants, installations and other facilities, if such actions resulted in the pollution or other change of the natural properties of the atmospheric air) are subject to criminal liability, if said actions are “associated with major damages” in an amount exceeding MCI by 50.000 and more times (see Note to Article 288 of the RoK Criminal Code).

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Socially Dangerous Consequences as Mandatory Elements of Crime under Article 277 of the RoK

Criminal Code____________________________________

Significant pollution of the environment;

Causing harm to human’s health;

Mass destruction or perishing of fauna or flora;

Other serious consequences.

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What is the meaning of violation of the environmental requirements as provided in

Article 277 of the RoK Criminal Code?______________________________________

А) incompliance with the established environmental safety rules (standards, limits, written requirements and rules etc.);

Б) failure to take measures related to repair, monitoring and ensuring proper operation of treatment and other facilities;

В) violation of the requirements expressly stated in the RoK Environmental Code (hereinafter the RoK EC) and other regulatory legal acts (e.g. disregarding permissible limits for anthropogenic impact on the environment, absence in the project of measures to prevent and eliminate environmental pollution, incompliance with the requirements to the restoration of the environment, construction and commissioning of industrial facilities without an approved design or in case of negative assessment by the state environmental expertise, changes to the approved standards or drafts prejudicing environmental and other requirements).

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Interpretation of socially dangerous consequences as provided in Article 277 of the RoK Criminal Code

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Pollution of the Environment

“Environmental emission of pollutants, radioactive

materials, production and consumption wastes, as well as the environmental impact of noise, vibration, magnetic fields and other adverse physical impacts

(sub-clause 48 of clause1 of Article1 of the RoK EC”*.

*when defining “significant environmental pollution” (the term used in the disposition of Article

277 of the RoK Criminal Code), specific circumstances need to be taken into account. Both qualitative and quantitative characteristics of pollutants, areas of their distribution, exposure of people, flora and fauna etc. are to be assessed.

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Interpretation of socially dangerous consequences as provided in Article 277 of the RoK Criminal Code

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Harm to Human Health

Criminal theory and practice refers to this mandatory element of crime – causing any harm to

human health, including minor harm, regardless of whether it resulted in the loss of ability to work or not or other adverse impact. Inflicting harm to human health should be confirmed by a medical certificate.

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Interpretation of socially dangerous consequences as provided in Article 277 of the

RoK Criminal Code _________________________________

Mass Destruction or Perishing of Fauna and Flora*

• Destruction or perishing of birds and animals within a certain area of location of the source of environmental impact. Moreover their mortality rate should exceed significantly average statistical data. Some forensic researchers assume that such rate should exceed the average statistical mortality level by more than three times, however they do not provide grounds for such a conclusion.

• Destruction of any kinds of vegetation in large quantity within the large area.

*In addition, “mass destruction of fauna and flora” should be characterized as significant

difficulties of the restoration of flora and fauna or impossibility thereof.

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Interpretation of socially dangerous consequences as provided in Article 277 of the

RoK Criminal Code _________________________________

Other Severe Consequences

Significant deterioration of the radiation background of the environment causing a threat of ecocide; possible epidemics, accidents which might require significant resources for restoration and

other significant adverse consequences.

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Review of the Disposition of Part 1 of Article 278 of the RoK Criminal Code

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А) Part 1 of Article 278 of the RoK Criminal Code consists of the following elements:*

• Violation of environmental requirements to the manufacture of potentially hazardous chemical, radioactive and biological substances;

• Violation of environmental requirements to the transportation of potentially hazardous chemical, radioactive and biological substances;

• Violation of environmental requirements to the storage of potentially hazardous chemical, radioactive and biological substances;

• Violation of environmental requirements to the burial of potentially hazardous chemical, radioactive and biological substances;

• Violation of environmental requirements to the use of potentially hazardous chemical, radioactive and biological substances;

• Violation of environmental requirements to other handling of potentially hazardous chemical, radioactive and biological substances.

* committing of these actions jointly or separately can be classified as a crime only if it has been proven that these actions create “a threat of significant harm to human health or environment”. The legislator did not provide an official construction (interpretation) of what is to be understood as creation of “a threat of significant harm to human health or environment”, therefore this assessment category is defined in each specific case by a person initiating litigation or by the court.

In theory and practice “a threat of significant harm to human health or environment” is understood as the existence of a real threat of harm to human health or environment, or the arising of a situation or such circumstances which could result in adverse consequences, if they have not been prevented by timely measures or other circumstances beyond the will of a guilty person.

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What is the meaning of the violation of environmental requirements as provided in Article

278 of the RoK Criminal Code? ____________________________________

Law enforcement practice and theoretical findings in this area allow defining “environmental requirements” as restrictions and prohibitions of business and other activities which have an adverse impact upon the environment and human health, which are contained in the RoK EC, other regulatory legal acts and regulatory technical documents of the Republic of Kazakhstan (e.g. legislative prohibit of emissions into the environment without Environmental

Permit).

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_____________________________________

Б) Part 2 of Article 278 of the RoK Criminal Code stipulates the same disposition as part 1 of this rule and it differs only by types of consequences*, that might result in case of “the violation of environmental requirements”. These consequences are as follows:

• pollution of the environment;

• poisoning of the environment;

• contamination of the environment;

• causing harm to human health;

• mass destruction of fauna and flora; as well as

• committing actions in the territory of environmental emergency.

* It should be noted here that for the imposition of criminal liability it is not required that all these adverse consequences occurred simultaneously, it is sufficient that one adverse consequence occurred. However the legislator did not provide an official interpretation of these adverse consequences and therefore they can be deemed to have the nature of assessment category

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Socially Dangerous Consequences (part 2 of Article 278 of the RoK Criminal Code)

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А) Such adverse consequences as: “pollution of the environment”, “harm to human health” and “mass destruction of fauna and flora” are characterized in the previous comments to Article 277 of the RoK Criminal Code, they apply to this case as well.

Б) Let us discuss other adverse consequences:

• “Poisoning of the environment“ is recognized in theory and practice as a high degree of environmental pollution which resulted both in non-compliance with the hygienic and environmental standards and destruction of environmental components.

• The term “contamination of the environment” is interpreted by field staff and forensic researchers similar the term “pollution of the environment” and “poisoning of the environment”.

•“environmental emergency” is understood as environmental conditions in a specific area where as the result of business and other anthropogenic activity or natural processes stable negative changes in the environment occur threatening human health, natural ecological systems, genetic funds of flora and fauna etc. The zones with environmental emergency are defined in Kazakhstan by the legislation and their status is regulated by special regulatory legal acts of the country.

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_____________________________________

Criminal liability under this rule can be imposed if actions stipulated in parts one and two of Article 278 of the RoK Criminal Code resulted in :

•Epidemic caused by reckless behavior*, or

•Death of a person.

* It should be noted here that pursuant to the requirements of this rule “epidemic” is deemed to be diseases of a great number of people (perhaps several tens of people and more), and these consequences were not deemed to be the intent of the offender. At the same time, “death” of only one person can be the ground for imposing criminal liability, however even in this case оsuch consequences should not be deemed to be the intent of the offender.

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_____________________________________ А) Thus, as stated in Article 282 of RoK Criminal Code the meaning and sense of “pollution of the atmosphere” is:

• violation of the rules for pollutant emissions into the atmosphere; and• violation of the rules for operating plants, installations and other facilities.

Б) The above violations of the rules for pollutant emissions into the atmosphere or rules for operating plants and other industrial facilities can be qualified as crime only in cases where they result in: “pollution of the natural properties of atmospheric air” or “change of natural properties of atmospheric air”.

В) The disposition of this rule is blanket that is referred to, as the “rules for emissions into atmosphere” and “rules for operating plants, installations and other facilities” are established by other regulatory legal acts and regulatory technical documents that regulate environmental relations. Г) In addition, “pollution or other changes of natural properties of atmospheric air” can be caused, e.g.: actual pollutant emissions into the atmosphere in case of accidents or other extraordinary on-site situation; incompliance with the standards of maximum allowable emissions (hereinafter MAE) of pollutants into the atmospheric air; failure to use existing installations, equipment and devices, designed for treating and monitoring emissions into the atmosphere etc.

Д) As stated in Article 282 of the RoK Criminal Code, “pollution of the atmospheric air” means emission into or generation in atmospheric air (as a rule) of new non-characteristic physical, chemical, biological and other hazardous agents exceeding the natural background. To characterize “pollution of atmospheric air” there can be used the legislative interpretation of the term “pollution of the environment”, contained in clause 34 of part 1 of Article 1 of the RoK EC.

Е) “Other change of natural properties of atmospheric air” is understood as deterioration of qualitative and quantitative parameters and depletion of the atmosphere.

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_____________________________________

This rule is very simple and it stipulates criminal liability for actions specified in part 1 of Article 282 of the RoK Criminal Code, which resulted in “harm to human health”. The interpretation of this adverse consequences is similar to the interpretation of this element in the previous sections of this study.

Liability for Fiscal Offences Related to the Use of Natural Resources

Clause 10 of Article 495 of the RoK TC:

Rates for environmental emissions established in the said Article of the RoK TC, which exceed the established limits shall be increased by 10 times.

Note:

Emissions into the environment without a duly executed permit (EP) shall be deemed environmental emissions exceeding the established environmental emission limits, except for pollutant emissions by mobile sources.

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Discussion_____________________________________

QUESTIONS, PLEASE?

Documents

Environmental Issues in Other Branches of Law: Administrative, Criminal and Tax September 19, Almaty Forum EcoTech-2012 Zhumageldy Sakenovich Yelyubayev,