Some Legal Aspects of Sulfur Production, Storage and Transportation in Kazakhstan and CIS Countries (Zh.S.Yelyubayev, Address to the Ist Kazakhstan Sulphur Conference. July 9, 2008, Astana)

Zh.S.Yelyubayev

Ж.С.Елюбаев

Address to the Ist Kazakhstan

Sulphur Conference (July 9, 2008, Astana)

Some Legal Aspects of Sulfur Production, Storage and Transportation in Kazakhstan and CIS Countries[1]

In Kazakhstan, with the participation of foreign investors, including renowned international companies like Chevron, ExxonMobil, British Gas, Agip and others, a number of promising oil-and-gas-bearing fields have been developed in the North Caspian Region over the past decade. Among those are the Tengiz and Korolev Oilfields successfully developed by Tengizchevroil LLP (hereinafter «TCO» having as its founders the Kazakh National Company KazMunaiGaz JSC and the international companies ChevronTexaco, ExxonMobil and LUKARCO) and the developing Kashagan Project with its first oil production expected in the next few years.

One of the important characteristics of oil produced in the North Caspian Region and, in particular, of the oil produced at Tengiz Oilfield, is its high content of hydrogen sulfide in the associated gas. Consequently, to make the produced crude oil merchantable, it has to be subjected to treatment with the resulting production of another valuable product, namely, elemental sulfur[2].

Sulfur is one of the most common and important elements of the Earth’s geographical envelope. From the earliest times, it has been used in medical practice, agriculture and other human activities. The production of sulfuric acid proved a strong incentive for the development of sulfur-producing industry in the 19^th and 20^th centuries. Besides, beginning in the 1930’s and in connection with intensifying development of subsoil hydrocarbon resources, the need arose for the extraction of sulfur from associated gas, crude oil, and bituminous sands[3].

The continuous tightening of environmental legislation and of the corresponding standards, on the one hand, and the need to reduce to the minimum the presence of sulfur in petroleum products, on the other hand, all have resulted in the growing volumes of production of elemental sulfur, given that the more environmentally-hazardous substances like sulfuric anhydride[4], sulfur dioxide[5], hydrogen sulfide[6] and mercaptans[7] have to be transformed into less hazardous forms of sulfur, in any event.

Today, the oil and gas processing companies around the world produce an annual total of over 50 million tons of sulfur, with Tengiz Gas Processing Plant in Kazakhstan alone producing more than one million tons of sulfur per year as a result of primary purification of crude oil of its associated components. Due to that fact, on-the-ground placement of solid elemental sulfur blocks is the only available method today of elemental sulfur storage not only in Kazakhstan but also in Canada, Mexico, the Netherlands, Poland, the United States, Russia and in other countries generating that type of product.

The world’s leading producers of sulfur are pinning their hopes on China as the world’s fastest developing sulfur market. It is China that is rapidly increasing its consumption of sulfur for the production of fertilizers, crop protecting agents and sulfuric acid. On the other hand, in most other countries the consumption of sulfur is not growing, something that determines a general stagnation and, possibly, a decline in the demand for sulfur on the world markets. At the same time, an increase in the world production of elemental sulfur is forecast over the next five years. From the above, it follows that the international sulfur-producing industry is facing the need to resolve the problem of temporary storage of surplus sulfur volumes that can be sold in future periods when market conditions become more beneficial. Now this gives rise to numerous problems concerning the need to observe the environmental requirements, something that, in its own turn, requires regulatory management of such relations, which is precisely the topic I would like to address at greater length.

So then, either as a mineral deposit[8] or when produced by various production methods, elemental sulfur is a marketable product demanded on the world market. Whether selling sulfur on the domestic market to meet the needs of industry and agriculture or exporting it as commodity (product) to international markets, the producer’s primary aim is to earn profits from its activities. Given that sulfur is a product, the relations concerning its production, storage and transportation should be governed by legal enactments that should, first, help secure the respective interests of producers and buyers and, second, help protect the interests of the State and of the general public. I believe that, in doing so, written legislation and law enforcement practice should seek to maintain a balance of interests of all the parties to relations involved in the production, storage, transportation and marketing of that type of product. What we see happen in reality is something quite different, however.

Turning to the sulfur situation in Kazakhstan, now, it should be stressed that there are numerous problems that need to be properly addressed in order to improve and regulate the production, storage, transportation and marketing of that valuable product for the benefit of both the State and the producers.

For all practical purposes, Tengizchevroil LLP is today the sole producer of sulfur in Kazakhstan. The Company produces an annual of just over one million tons of elemental sulfur that is mostly exported, in the form of liquids, granules or flakes, to China, North Africa, Middle East, Turkey, Russia, Ukraine and other countries. Some volumes have been exported from the storage pads of block sulfur produced in previous years. However, TCO’s storage pads today hold some 9 million tons of elemental sulfur in blocks, something that is causing concern with the general public and with the government environmental protection agencies.

In the past few years, TCO succeeded in marketing all its newly produced sulfur: liquid sulfur in rail tank cars; granulated or flaked sulfur in plastic bags; and crushed block sulfur in specialist railcars using various methods preventing the formation or wind-blowing of sulfur dust, which presents some hazard to human health.

wever, during the 1990’s, following some insistent demands from the Kazakh and Russian government environmental protection agencies, the carriage by rail of bulk sulfur in open railcars was completely banned citing environmental requirements prohibiting that type of sulfur transportation. Bulk sulfur shipments did not resume until 2002 when TCO experts developed safer methods of sulfur transportation with the film-forming foam covering the entire mass of the sulfur load. Subsequently, in open railcars, the top of the sulfur load came to be covered, additionally, with special material totally excluding sulfur dust formation or escape.

Moreover, the Kazakh government environmental protection bodies and law enforcement agencies raised further objections in connection with the bulk sulfur storage method used by TCO. They argued that the ground-surface storage of elemental sulfur in blocks, in their view, produced a significant impact on the environment. On the basis of that position, which was not supported by any scientific research, by special Decree of the ROK Government[9], elemental sulfur being one of the products manufactured by TCO and much demanded on both domestic and international markets, was assigned by analogy to the category of «production wastes» where it was placed in open storage for more than three months. With TCO’s sulfur being assigned, with a stroke of the pen, to the category of «production wastes, TCO was obligated to make compulsory payments for sulfur storage in the amount of tens of millions of U.S. Dollars. At present sulfur was assigned to the category of «wastes» based on the «Waste classifier», approved by the Order of the Minister of environmental protection of RK No.169-p of May 31, 2007.

I would like to say a few words now on how substantiated or otherwise were those requirements made by the respective government agencies and to what extent that government decree was in correspondence or otherwise with the respective provisions of Kazakh national laws and of the international instruments acceded to by Kazakhstan.

First of all, let us turn to the special Intergovernmental Standard (GOST 127.1-93) adopted by the CIS Member Countries Intergovernmental Council for Standardization, Metrology and Certification on 21 October 1993, which provides for the production of sulfur in liquid or bulk form classified as product of Class 4 Hazard. According to the «Transportation and Storage» section of the Intergovernmental Standard, bulk sulfur may be stored in open sheds or in open sulfur pads, and it further provides that crushed sulfur may be transported in bulk in drop-bottom railcars or by road or water transport. The Intergovernmental Standard further provides for an additional special requirement that the exported bulk sulfur pieces should not exceed 200 mm in size.

The above intergovernmental instrument, therefore, considers sulfur as standardized product rather than waste, moreover, as a product that may be stored at open-air storage sites and may be carried by different modes of transport. Significantly, the document made just a single exception from the general rules applying to the carriage of sulfur, that exception applying only to the exported bulk sulfur in terms of its size. Given that the instrument was signed by eight CIS member countries[10], it was only natural to expect that the signatories should observe its provisions.

A conclusion to be made from the above is that Tengizchevroil had acted correctly and in accordance with the existing standards when it placed its manufactured product - bulk sulfur - in specially built open-air sulfur storage pads and when it transported that product to its marketing destinations while observing the requirements of the above International Standard.

Turning now to the International Convention on the Harmonized Commodity Description and Coding System, to which the Republic of Kazakhstan acceded on 3 February 2004[11], in Chapter 25 of Section V «Mineral Products», elemental sulfur is assigned the commodity heading 25.03 and the special code 2503.00 under the Harmonized Commodity Description and Coding System. For instance, according to that international instrument ratified by the Republic of Kazakhstan, elemental sulfur is regarded as marketable product that, under no circumstances, without altering its physical and chemical condition, can be classified as production waste, even less so to be classified as such by analogy.

Under paragraph 1, Article 3 of that International Convention, each Contracting Party undertakes that, from the date on which the Convention enters into force in respect of it, its Customs tariff and statistical nomenclatures shall be in conformity with the Harmonized System. In respect of Kazakhstan, the Convention entered into force on the date of the passage, on 3 February 2004, of the ROK Law No. 525 which ratified that Convention. In doing so, Kazakhstan undertook that:

Ø It shall use all the headings and subheadings of the Harmonized System without addition or modification, together with their related numerical codes; and

Ø It shall follow the numerical sequence of the Harmonized System.

The above shows that the Republic of Kazakhstan Government Decree, whereby elemental sulfur by analogy is assigned to the category of «production wastes» when sulfur is placed in open storage for more than three months, as well as Waste Classifier in this respect are in conflict with the above two international instruments ratified by Kazakhstan.

It is appropriate, at this point, to recall the position expressed by the distinguished Kazakh legal scholar Prof. Yu.G. Basin, Doctor of Laws, concerning that government decree[12]. In his analysis of that government act, he noted that Article 4 of the Regulations approved by the ROK Government Decree 1154 dated 6 September 2001 was unjustified in assigning temporary-storage products and materials (including sulfur) to the category of wastes by analogy and argued that «analogy is applied in law enforcement but is not applied in law-making». He also felt that it was «entirely inadmissible to apply analogy in public relations if such application deteriorates the position of individuals or entities or establishes or amplifies liability for any offense or determines or additionally increases monetary payments or any other penalties or introduces additional duties not provided for by law and so forth».

In principle, that position is also rooted in the relevant provisions of Kazakh national laws. For instance, Article 1 of the ROK Law No.160 «On Environmental Protection» dated 15 July 1997 defines «production wastes» as «remains of raw products, materials, or chemical compounds generated in the process of producing products or performing other production works and having lost, fully or in part, their original consumer properties that are necessary for application in corresponding production, including technogenic mineral formations[13] and agricultural production wastes».

Earlier in 2002 when Kazakhstan witnessed its first lawsuits over sulfur, the above Law was even briefer in its definition of the concept of «production and consumption wastes» which were then defined as «substances and materials in any aggregate state formed as a result of human activities and not subject to further use».

At present, according to sub-paragraph 39 of the paragraph 1 of the Article 1 of the RK Environmental Code, «production and consumption wastes» mean - «remnants of raw products, materials, other items and products which were formed in the process of production and consumption, as well as goods (produce), which lost its consumer properties».

Reading carefully the legislative definitions of the terms «production wastes» and «production and consumption wastes», it is difficult, even with great desire, to assign elemental sulfur to the waste category. In the meantime, despite the above circumstances, in Kazakhstan, today, sulfur stored on the Company sulfur pads for more than three months is considered as being analogous to «production wastes» with all of the resulting obligations on the producer.

For instance, Article 461 of the ROK Code «On Taxes and Other Compulsory Payments to the Budget» provides that the «object of taxation (author’s note: compulsory payment) is the actual volume of emissions to the environment within and/or in excess of the established limits or of discharges (including emergency discharges) of pollutants, placement of production and consumption wastes «.

Article 29 of the previously applicable ROK Law No. 160 «On Environmental Protection» dated 15 July 1997, too, provides for payments for the «placement of production and consumption wastes». This responsibility of the subsoil user is memorialized in the Article 101 of the RK Environmental Code as well.

Based on the above legislative provisions, the Company has to make compulsory payments for the placement of sulfur at its own production sites at the rates established by the local representative body. With the current storage payment rate per physical ton of sulfur set at 2,397 Kazakh Tenges (20.5 U.S. Dollars at the exchange rate of $1.00 = KZT 117)[14], the Company has to bear serious financial burden.

Can such compulsory payments be accepted as lawful and justified? In my view, that is hardly the case and here are the reasons why. Let us examine the language of Paragraph 21 of the ROK Supreme Court’s Normative Resolution No. 16 «Concerning the Practice of Application by the Courts of the Environmental Protection Legislation» dated 22 December 2000, in which the supreme Kazakh judiciary authority explains that «it should not be admissible to collect additional payments for the use of natural resources, environmental pollution, placement of production wastes, or other types of harmful impact not provided for in the ROK Environmental Protection Law or in the existing legislative acts[15]«. In view of this and because the ROK Government Decree does not enjoy the status of «legislative act», the provisions of the government enactment cannot serve as a basis for the establishment of payments for the placement of sulfur even if sulfur were to be regarded as production wastes by analogy.

Naturally, it cannot be maintained that, as a chemical product placed in storage at an open industrial site, elemental sulfur does not affect the environment. The placement and storage of sulfur at an open production site as well as its transportation does indeed present a certain hazard to the environment and to the industrial safety and public health just as any human activity does in the field of subsoil use.

For instance, from the studies conducted by a group of scientists from Moscow State University[16], it follows that open-air ground-surface sulfur storage facilities are, to varying degrees, affected by external destructive factors such as variations of temperature and humidity, winds, precipitation, dust, aerosols, and other phenomena. In the process of block sulfur crushing and during the natural disintegration of sulfur storage pads, sulfur tends to break down into fragments of varying size and to generate sulfur dust. Nevertheless, compared with its other forms, the solid elemental sulfur (in blocks, granules or flakes) presents the lowest degree of hazard to the environment. While elemental sulfur displays low toxicity in respect of humans and animals, it can, nonetheless, produce a certain degree of harmful effect on them. For instance, sulfur dust is fire and explosion hazardous and can cause eye or mucous membrane irritation or skin lesions as a result of formation of acids upon contact with moist body surfaces. Upon entering the gastrointestinal system, sulfur dust can produce a laxative effect. Inhalation of larger quantities of sulfur dust can cause catarrhal inflammatory processes with symptoms of rhinitis, tracheobronchitis or other respiratory diseases. However, no elevated risk of oncological, teratogenic or reproductive effects has been identified in humans under the impact of elemental sulfur. No mutative changes have been discovered either as a result of experiments involving microorganisms.

The above findings of scientists from Moscow University, one of the world’s foremost scientific and educational institutions, show that, in its solid form, elemental sulfur does not present any particular hazard to the environment or industrial safety when stored in open sulfur pads or transported to the market.

Nevertheless, in connection with the increasing environmental requirements on the storage of large volumes of solid elemental sulfur and its large-scale processing, loading and transportation operations, it is necessary to address a number of essential issues important in terms of the protection of personnel, public health and the environment, including:

Ø minimize the formation, and prevent the spreading, of sulfur dust;

Ø entrap and treat (neutralize) all effluents from sulfur storage pads;

Ø on-going monitoring of the presence of hazardous gases in the atmosphere;

Ø monitor groundwater conditions in the area of large open-air sulfur storage facilities; and

Ø prevent fires.

In the meantime, in performing sulfur production, storage and transportation operations, the producer should not be required to make compulsory payments for the placement of sulfur in open storage pads, given that such payments are not provided for in the existing Kazakh legislation. The previously applicable 6 September 2001 ROK Government Decree 1154 and current requirements of our country’s tax and environmental agencies are at variance with the existing laws of the Republic of Kazakhstan. It is worth noting here that, in no other sulfur-producing country, including Russia, is elemental sulfur assigned to the production wastes category and in no other country is payment required for its placement and storage in open sulfur pads.

It goes without saying that, where the placement and storage of sulfur causes any damage (harm) to the environment or human health, general liability rules should apply in accordance with the relevant provisions of civil[17], environmental[18] or tax[19] legislation of the Republic of Kazakhstan. However, in any such event, the fact of damage, its size and the amount of pecuniary damages should be supported by objective and undisputed evidence. That is the appropriate, civilized and law-based way of instituting civil-law proceedings against nature-users / subsoil-users responsible for harming the environment through sulfur storage in open sulfur pads.

At the same time, the existing court practice and arbitration experience of disputes involving sulfur storage and transportation is quite different, something that proves the urgency of the problem facing the sulfur producers.

First of all, I would like to cite here the civil action[20] initiated by TCO and challenging the provisions of Paragraph 4 of the «Regulations Governing the Granting of Environmental Pollution Permits» as approved by the ROK Government Decree 1154 dated 6 September 2001. It was pursuant to that specific provision that temporary storage products and materials, including sulfur, as environmental impact sources were established as being analogous to production wastes when stored in the open environment for more than three months in any given year.

Reviewing the complaint as a court of first instance, the Republic of Kazakhstan Supreme Court rejected Tengizchevroil’s claim on the grounds that:

Ø sulfur is a source of environmental pollution;

Ø even though the ROK Law «On Environmental Protection» does provide a definition of the concept of «production and consumption wastes», the Government acted within its powers in passing a decree establishing a classification and a list of production and consumption wastes;

Ø in its simple solid form, sulfur could not be regarded as a finished marketable product as it required further granulation or flaking before that sulfur could be transported.

The arguments submitted earlier in this report show that the ROK Supreme Court essentially chose to evade addressing the main question of whether a government decree could broaden the legislative concept of «production and consumption wastes» without actually amending the law. Can analogy be used in the lawmaking process? Can the classification and list of types of «production and consumption wastes», as established by government decree, broaden the legislative interpretation of the term «production and consumption wastes»? In making its decision, the Supreme Court ignored entirely the written opinion on that matter produced by the eminent legal scholar Yu.G. Basin without so much as mentioning that opinion. In the meantime, the available answers to those questions could have helped the Court correctly and objectively to review the case and make a lawful decision on the matter.

The Claimants Tengizchevroil never denied that, under certain conditions, sulfur can be a source of environmental pollution. What was indeed challenged was the fact of assigning, by analogy, a given type of industrial product (sulfur) to the category of production wastes based purely on the length of storage, something that, in its own turn, imposed on the producer specific obligations to make compulsory payments in accordance with tax legislation.

In taking that position, the highest court in the Republic of Kazakhstan essentially upheld that government enactment supporting its lawfulness and reasonableness. That erroneous, in my view, position gave the environmental authorities the justification to demand that the sulfur producer should get a special Permit[21] for the placement and storage of sulfur and make compulsory payments at the rates established by the local representative government bodies.

Later, a second civil action[22] followed with the claimants being the Atyrau Regional Department of Environmental Protection (the «ADEP») seeking collection from Tengizchevroil of the amount of nearly 11 billion Kazakh Tenges (about 72 million U.S. Dollars at the then-effective exchange rate of $1.00 = KZT 152) for the allegedly unlawful storage of sulfur in the open without an appropriate Permit from the competent authority[23]. The demanded amount had been calculated using an adjustment factor of ten, on the grounds that TCO was not in possession of a special Sulfur Storage Permit.

Significantly, TCO was not required to possess, and could not have received, such Permit in 2001, given that, according to then-effective departmental rules and procedures, nature users were required to submit applications for a Nature Use Permit for the next year during the period beginning on the first calendar day of the 4^th quarter of 2000 (October 1) and ending on the last day of the 1^st quarter of 2001 (March 31). In accordance with those rules, the Company had in due time submitted a Permit application for such types of nature use as emissions and discharges of hazardous substances and storage of production and consumption wastes for the year 2001 and received such Permit. The Company could not have possibly received a Sulfur Storage Permit, given that the government decree referring sulfur, by analogy, to the production wastes category was not published until 6 September 2001, in other words, after the end of the period established for the submission of Permit applications to the competent authority. By the way, following the coming into effect of the said Decree, the Company did submit a Permit application, but the competent authority refused granting a Permit arguing that the deadline for Nature Use Permit applications had already passed.

In spite of all those circumstances, the court granted the ADEP’s claim in full ordering the Company to pay some 11 billion Kazakh Tenges. Subsequently, the ROK Supreme Court did, however, revise the trial court’s decision ordering the reduction of the original amount down to one billion Kazakh Tenges recognizing that the application of the 10-fold multiplier was unfounded, given that the Company could not have possessed the Sulfur Storage Permit at the time for reasons beyond its control.

However, that later judgment by the ROK Supreme Court could hardly be recognized as a lawful and substantiated decision, given that the above-mentioned government decree was made retroactive, this, in contravention of the language of paragraph 1, Article 37 of the ROK Law No. 213 «On Normative Legal Acts» dated 24 March 1998.

The situation with respect to the law enforcement practice remains unchanged to this day. Thus, in the end of last year and in the beginning of this year alone USD $ 8.8 million and 309 million were levied on TCO under two legal cases.

In this connection, I would like to quote an example from recent international arbitration practice. In 2004, in London, under the rules of the London Maritime Arbitrators Association (LMAA), a sole arbitrator adjudicated a complaint from a company associated with an international cartel of carriers (Claimant) against the ship’s freighter (Respondent) seeking damages resulting from the presentation for carriage of supposedly hazardous freight unstipulated by the contract («dead freight»). In its own turn, the freighters (Respondents) presented the maritime carrier company (Claimant) with a counter-claim seeking damages resulting from refusal to accept the stipulated cargo for carriage[24]. Granulated sulfur was the cargo to be carried by the ship in that case.

The dispute arose out of the fact that, at the Port of Ilyichevsk, the shipping agent presented the chartered ship’s master with a Certificate concerning the cargo (granulated sulfur) issued Ukrainian Freight Office, according to which the cargo was assigned to Class 4.1 under the Cargo Code of the International Maritime Organization (IMO). The heading meant that the granulated sulfur presented for loading and carriage was «easily combustible solid substance». That description served as a basis for refusing the carriage of the cargo.

In its own turn, the ship’s freighter (Claimant) demanded that the goods (granulated sulfur) be accepted for carriage arguing that the cargo was not hazardous for carriage and was in line with the terms of the contract. In the end, granulated sulfur was not accepted for carriage and the goods’ owner had to ship the cargo using another chartered ship and paying a higher rate for the carriage suffering financial losses as a result.

Having reviewed the case, the sole international arbitrator decided to reject the shipping company’s claim and awarded the freighters’ counter-claim. The basis for making that decision was the fact that granulated sulfur is not an «easily combustible solid substance» of Class 4.1 under the IMO’s Cargo Code. On those grounds, the actions of the shipping company and the chartered ship’s master were ruled unfounded and resulting in losses suffered by the goods’ owner.

The above example from international arbitration practice shows that substantiated and lawful decisions can only be made on the basis of an objective position rooted in the existing legal instruments and standards.

Being a valuable mineral product, elemental sulfur cannot and should not be considered as production waste solely based on the length of storage time, given that sulfur does not lose any of its properties or value and remains much in demand on both domestic and international markets as a product used in manufacturing industry and agricultural production.

A formalistic approach to the classification of sulfur and assigning it, by analogy, to the category of production wastes based purely on the length of storage is, firstly, in conflict with national laws and international instruments ratified by the Republic of Kazakhstan and, secondly, infringes on the producer’s rights by imposing upon it obligations to make payments required by tax legislation for the storage of production and consumption wastes.

One would like to hope that the respective competent authorities of the Republic of Kazakhstan would revise their position concerning the issues involved in the production, storage and transportation of sulfur and would abolish subordinate legislation which, while being in conflict with effective national laws and international instruments, imposes unreasonable and unlawful administrative and financial requirements on the producer of that valuable commercial product.

In their own turn, sulfur producers are required to observe rigorously the rules and procedures governing the placement, storage and transportation of sulfur. They should make every effort to eliminate any harmful impact of sulfur on the environment or human health that could result from failure to comply with environmental requirements governing the storage and transportation of sulfur.

This is the only possible approach that can ensure a proper balance of the respective interests of the State, the public and the producers as well as eliminate unreasonable and unlawful requirements imposed on the producers of that valuable product demanded by the consumers.

Thank you for your attention!

[1] © All exclusive rights to this article belong to Zh.S.Yelyubayev.

[2] Sulfur - the chemical element (S) marked under the number 16 in Mendeleyev's periodic table.

[3] N.S.Kasimov, A.N.Gennadiev and M.J.Lychagin, An Ecogeochemical Evaluation of the Storage Conditions of Block Sulfur, Moscow State University, 2004.

[4] Sulfuric anhydride having the chemical formula SO₃ is, at room temperature, a colorless hazardous liquid.

[5] Sulfur dioxide having the chemical formula SO₂ is a colorless hazardous gas with aggressive odor, which is derived from the burning of sulfur.

[6] Hydrogen sulfide having the chemical formula H₂S is a colorless hazardous gas with a characteristic rotten-egg odor.

[7] Mercaptans are organic compounds having a distinct aggressive odor.

[8] Mineral deposits are nonorganic or organic mineral formations in the Earth's crust, whose chemical and/or physical properties make it possible to use them in material production.

[9] ROK Government Decree 1154 «Concerning the Approval of the Regulations Governing the Granting of Environmental Pollution Permits» dated 6 September 2001.

[10] The countries signing the Intergovernmental Standard (GOST 127.1-93) include Armenia, Belarus, Kazakhstan, Russian Federation, Turkmenistan, Uzbekistan, and Ukraine.

[11] See the ROK Law No. 525 dated 3 February 2004.

[12] Yu.G. Basin, Legal Opinion, which, in particular, offers a legal assessment of the ROK Government Decree 1154 «Concerning the Approval of the Regulations Governing the Granting of Environmental Pollution Permits» dated 6 September 2001, Transactions of the Law Firm Aequitas, 2002.

[13] According to paragraph 47, Article 1 of the ROK Law No. 2828 «On Subsoil and Subsoil Use» dated 27 January 1996, «technogenic mineral formations» are defined as «accumulations of mineral formations, mined rock, liquids or mixtures containing useful components being the wastes of mining or dressing works, metallurgical or other types of production operated by subsoil users».

[14] See Resolution No. 265-3 of Atyrau Oblast Maslikhat (regional legislative assembly) dated 30 November 2005.

[15] According to Paragraph 8, Article 1 of the ROK Law No. 213 «On Normative Legal Acts» dated 24 March 1998, «legislative acts» include the following: constitutional law; decree of the Republic of Kazakhstan President having the force of constitutional law; code; law; decree of the Republic of Kazakhstan President having the force of law; resolution of the Republic of Kazakhstan Parliament; resolutions by the ROK Senate or Majlis.

[16] N.S.Kasimov, A.N.Gennadiev and M.J.Lychagin, An Ecogeochemical Evaluation of the Storage Conditions of Block Sulfur, Moscow State University, 2004.

[17] See Chapter 47 of the ROK Civil Code.

[18] See Article 29 and Chapter 18 of the ROK Law No. 160 «On Environmental Protection» dated 15 July 1997.

[19] See Chapter 83 of the ROK Code «On Taxes and Other Compulsory Payments to the Budget».

[20] The 2002 Civil action initiated by the ROK Supreme Court following TCO’s petition against the ROK Government seeking recognition as partly invalid of the «Regulations Governing the Granting of Environmental Pollution Permits» as approved by the ROK Government Decree 1154 dated 6 September 2001.

[21] According to paragraph 3 of the Regulations Governing the Granting of Environmental Pollution Permits as approved by the ROK Government Decree 1154 dated 6 September 2001, the «Permit» is defined as a document certifying the nature user’s right to produce atmospheric emissions of pollutants from stationary or mobile sources or discharge pollutants together with wastewater or the right to place production and consumption wastes, including temporary-storage products and materials, showing the times and volumes and the standards and conditions governing the nature use.