The Western consortium developing the enormous Karachaganak natural gas field in Kazakhstan was fined $21 million yesterday for excessive dumping waste. British BG, Italian Eni and American Chevron, the companies developing the field on the the border with Russia, were convicted of environmental violations in 2008 by a regional court.
Analysts and reporters believe that the penalty is part of a pressure drive by the Kazakh state aiming to renegotiate or change contracts with private foreign oil companies. Kazakhstan is currently scrutinizing seventeen landmark oil deals it signed in the early 1990s when it had a much weaker negotiating position, many of which are now seen as being unfairly skewed towards the international oil companies by locking in favourable tax regimes.
While the Kazakh state has only recently begun to raise these issues, villagers from Berezovka, a small village located within a kilometre of Karachaganak’s sanitary protection zone have been fighting back for years. According to Crude Accountability, the gas field is spewing toxins into their community, causing serious environmental and health damage among the residents. To stop this damage, a committed group of villagers created the public organization Zhasil Dala (Green Steppe) to fight for compensation and relocation to a safe and environmentally clean location of their choosing.
Earlier in February, the first ever lawsuit filed by NGOs against the Kazakh government received a continuance. In 2004, the Kazakh government illegally reduced the Sanitary Zone around Karachaganak from five to three kilometres, exposing the villagers to highly toxic levels of pollutants. The 1,500 residents of Berezovka believe that as a result, they live in a zone that is dangerous to life. The case taken by the Ecological Society “Green Salvation” and local villagers accused the federal government of “failing to undertake measures to protect and defend the rights and freedoms of citizens”. Five other villages, consisting of nearly nine thousand people, are situated on the perimeter of the Karachaganak Field’s sanitary protection zone and experience significant negative health impacts.
If the new legal process ends positively and the lawsuit demands are satisfied, the villagers of Berezovka will be relocated. As a rule, the expenses in such cases are incurred by the company that is operating the field. However, according to a recent article in a Kazakh paper, the Karachaganak PSA ensures that all charges on foreign investors are compensated for by the Kazakhstani government – another reason to renegotiate!