Workshop by the OECD-Kazakhstan Working Group on the Mining Competitiveness, 21 June 2016, Astana
The meeting of the OECD-Kazakhstan Working Group on the Mining Competitiveness Project focused on environmental payments by the mining operators. It gathered around 30 participants from the Kazakh government, including the Deputy Minister of Investment and Development and his staff and officials from the Ministry of Energy, the representatives of the mining companies and invited experts, including from GIZ and USAID.
This was the second event under the Working Group devoted to environmental impacts of mining. The Working Group supports the development of the Kazakh Mining Code which aims to boost the competitiveness of the mining sector, improve the business climate for mining, attract foreign direct investment and reduce the sector environmental impacts.
This time the discussion focused on the effectiveness of the existing payments (charges, taxes, non-compliance administrative and judicial penalties) that the mining operators make for pollution and waste generation, the use of land, water as well as funds that the companies set aside for mine sites closure and post mining rehabilitation.
The discussion reinforced the findings we presented at the meeting that the environmental payments by companies are used as a pure revenue raising tools for the local budgets, not reflecting the real costs of environment damage and not providing incentives for pollution or resource use reduction measures. The participants appreciated the recommendations for the necessary reform of administrative payments that can promote and award good performance, and of the judicial procedures in order to remove administrative discretion and to link the payments to the costs of damage. They highlighted the need for an increased transparency and elimination of discrimination between foreign and local operators.
The participants requested further analysis of the relations between the general taxation of the mining rents and environmental taxes and calls for more examples of instruments that are used in the OECD countries that ensure the adequate funding of post mining restauration and liability. Emphasis was also placed on devising mechanisms for reducing negative impacts of hazardous mining waste and promoting minerals recovery from tailings.