Features of Land Legislation of Republic of Kazakhstan with Regard to Subsoil Users

RusEnergyLaw JOURNAL • 2'2003/Table of Contents • Article

Features of Land Legislation of Republic
of Kazakhstan with Regard to Subsoil Users

The subject of this present information for clients, is the practice of obtaining the land use rights by subsoil users. Please note that the new Law "On land" was adopted June 20 2003. Many subsoil users are interested in how it influenced upon the order of obtaining the land use right, or whether there are features of new land legislation pertinent to the subsoil users.

First, we would like to state that the new Law "On land" did not change severely the order of obtaining land use right by subsoil users. The most essential changes took place in the legal regulations of relationships concerning allotments of agricultural purpose.

Comprehension of the subsoil user right

Comprehension of the subsoil use right is considered a right of possession and subsoil right within the limits of Contract territory rendered to subsoil user, in accordance with the order established by legislation of Republic of Kazakhstan. Subsoil right provides to its owner, the power to execute the works related to geological research of subsoil, prospecting and mining, including the works connected with prospecting and mining of groundwater, medical filth, prospecting of the subsoil for fault of soil water, as well as the works for construction and exploitation of underground building not connected with the mining.

The owner of subsoil right is obliged to obtain the permission for use of their allotment on which they have plans to execute subsoil operations.

Order of obtaining the land use permission

Legislation provides the oblast executive body (city of republican purpose) – the Akim, decides the issue on submitting and requisition of allotments for purpose of subsoil use. The rendering of allotments for execution of activity related to the subsoil, is performed only after obtaining and registration of a subsoil right. At the same time, the subsoil contract is the basis for immediate legalization of allotments.

Legislation provides separately for the subsoil right for mining of generally used minerals for ones own necessities, to be transferred with land use right simultaneously.

Granting the right for use of state allotment to subsoil users is performed in following consecution:

1) abapplication to local executive body on submitting the land use right;

Subsoil users are obliged to join the copy of the subsoil contract to application. The application is considered during three months.

2) abpreparing and approving the project of organization for the use of land;

3) abdecision of oblast executive body (city of republican purpose), on submitting the land use right to subsoil user;

The decision on submitting of the allotment, or refusal of submitting the allotment, is adopted on the basis of the conclusion of a commission being made up by a local executive body from the members of local representative bodies, representatives of territory land resources authorities, architecture and town-planning bodies, and local self-government bodies.

4) abestablishment of the scope of allotment on-site;

5) abpreparation and issue the documents confirmed the right on an allotment;

The oblast executive body (city of republican purpose), decides on granting the land use right and is entrusted with preparing the lease agreement with owner of subsoil right, for term of validity of subsoil contract, with the Land resources authority (hereinafter referred to as "Land Committee").

6) state registration of the land use right.

If the contract territory is in private property or belongs to private persons, the local executive body, in case of need, is entitled to withdraw the allotments submitted, and submit other equal allotments instead.

Order of registration of land use right

On the basis of the decision of the local executive body (city of republican purpose), the Land Committee prepares the lease agreement with the local executive body (city of republican body), from one side, and owner of subsoil right, from another side. The registration is performed during the five working days from the moment of submission of the application by the owner of the subsoil right.

Lease payment for land use right

The amount of annual lease payment is established within the limits of 100%-120% of basis rate of payment for land use right, approved by Government of Republic of Kazakhstan:

The basic rate of payment for allotments in case of state rent or state land users rent, is equaled to the amount of the land tax calculated per allotment in accordance with tax legislation of Republic of Kazakhstan. The growth class number is taking into account in calculation land tax dependant on which the basic rate of payment is changed. The amount of lease payment is established calculated upon one hectare.

Order of restitution of the allotment to the state

The conditions and order of restitution of an allotment used for subsoil purposes, is determined by subsoil contract.

After termination of validity of subsoil contract, or on stepwise restitution of Contract territory, the Contractor shall transfer the contract territory in a state which is suitable for further use upon direct purpose in accordance with legislation of Republic of Kazakhstan. Any transgressions (deteriorations) against the environment within the contract territory during the validity of Contract, shall be restored at the expense of the Contractor, until matching the conditions suitable for further use for direct purpose. Until termination of validity of Contract, or at the latest of two years from the moment of beginning of validity of a mining contract, the subsoil user shall submit the program of liquidation of consequences of their activity according to the contract, to the Geology and Subsoil Protection Committee for approval, including the expenses estimation for liquidation. The liquidation program shall include the cancellation and liquidation of constructions and equipments used during the procedure of activity of Contractor upon the contract territory. For the complete financial provision of the execution of the liquidation program, the Contractor shall establish a liquidation fund. The Subsoil user is obliged to pay periodically to the liquidation fund, on deposit to an account in any banks of Republic of Kazakhstan. After liquidation of all consequences of execution of operations for subsoil purposes, the Geology and Subsoil Protection Committee shall decide on the transfer of the allotment to oblast executive body (city of republican purpose).

Thus, we would like to conclude that the new land legislation did not resolve the problems of subsoil users. We note that in accordance with the Land Code, the subsoil contract is the basis for immediate legalization of land use right upon the Contract territory. However, as practice shows, the procedure of consideration of an application of subsoil user, from submitting the land use right upon the Contract territory lasts approximately three months. That is why, we currently think that there is the requirement to elaborate the submission procedure for subsoil users.

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