Environmental Due Diligence (EDD) is designed to evaluate potential liability costs associated with environmental issues and is an important part of most merger and acquisition (M&A) procedures. 

Environmental Due Diligence is a relatively new discipline. Although prior to 1980s it was virtually unheard of, today it is an integral part of the transaction process undertaken predominantly by purchasers, but increasingly by vendors as well. The process has evolved over the past twenty years and may now include analysis of health and safety (H&S), employees’ exposure to toxic materials, product liability, etc.

Property owners, developers, sellers and buyers understand the need to protect themselves from future liabilities.  Environmental Due Diligence simply assures that the land being purchased does not pose potential risks or environmental hazards which may affect the area’s development or its future inhabitants.

Corporate business decisions with regards to environmental requirements should be based on reliable information taken from the actual state of affairs of a company. Environmental Due Diligence, performed by GRATA Law Firm's experienced staff, is an instrument for detecting any violations of environmental law in company's activities, providing recommendations for their solution, and preventing any such violations in the future.

Environmental Due Diligence includes due diligence performed by our lawyers with regard to companies’ activities in connection with observance of environmental requirements, and, as a result of such due diligence, provision of legal opinions and advice. We would like to bring to your attention just a few experience examples of GRATA’s Environmental Law Department in performance of environmental due diligences:

  • performance of environmental due diligence for several  mining companies (including gold-mining ones)  to identify risks associated with possible environmental offences;
  • performance of environmental due diligence for international companies rendering services on oil extraction with regard to fulfillment of legal obligations and identification of business risks;
  • performance of environmental due diligence in favour of a potential buyer (a large European bank) under a large acquisition of shares transaction of a leading bank of the Republic of Kazakhstan;
  • performance of environmental due diligence of activities of a large energy corporation with regard to acquisition of the corporation’s shares by one of the European banks;
  • performance of environmental due diligence of activities of a large Russian bank with regard to compliance with environmental protection legislation;
  • performance of analysis of compliance with environmental legislation by one of the largest Kazakhstani oil companies;
  • performance of environmental due diligence of activities of uranium-mining companies in favour of a foreign global investor;
  • performance of environmental due diligence of an oil company in order to identify risks associated with possible environmental offences;
  • performance of an audit of activities of an oil company in order to reveal absence of required licenses, approvals, permits of governmental bodies in the area of environmental protection;
  • performance of environmental due diligence of a ship-owner companies group in order to identify risks associated with possible environmental offences;
  • performance of due diligence of an oil company in order to assess its compliance with subsoil use permits and approvals requirements;
  • performance of environmental due diligence of a metallurgical company in order to identify risks associated with possible environmental offences;
  • performance of environmental due diligence of activities of a Kazakhstani oil company with regard to compliance with the legislation on environmental protection;
  • performance of analysis of compliance with environmental legislation by a group of Kazakhstani copper companies.

In the course of Environmental Due Diligence lawyers study and analyze all important documents of a company regarding subsoil use and environmental protection as well as information obtained in course of negotiations. Based on due diligence, lawyers prepare accurate information on the actual state of affairs of any business (mainly companies which are subsoil users) regarding their observance of environmental requirements and norms, and provide practical advice in connection with their findings.

Environmental Disputes and Liability for Environmental Violations

We were asked to assist in protecting the legitimate interests of many large trading companies, oil and gas companies, as well as large exporters of non-ferrous metals in environmental disputes.

In the recent past, we have successfully completed the following projects:   

  • advising a large oil company regarding an appeal against a Decree in an administrative offence case connected with sewage disposal;
  • successful protected the interests of a large uranium-mining company in the Economical Court in connection with an appeal against the suspension of operations for violations of industrial safety legislation;
  • successfully protecting the interests of a large oil company in the first, appellate, and cassational courts and the Ministry of Environmental Protection of RK. Our lawyers achieved a dismissal of a claim for damages and cancelation of all fines imposed for environmental violations;
  • successfully protecting the interests of an oil company in the Ministry of Environmental Protection of the Republic of Kazakhstan. As a result of our participation fines imposed for environmental violations were annulled;
  • successfully representing the interests of a company in the chemical sector in the Supreme Court of the Republic of Kazakhstan with regard to settling  a dispute over ownership of production wastes;
  • successfully representing a large mining and processing enterprise in the first, appellate and supervisory courts in connection with a claim of a territorial environmental administration for compensation for damages caused by pollution of land and water resources;
  • representing the interests of a number of large foreign oil companies during audits performed by environmental prosecution bodies, territorial environmental administration and an authorised body for subsoil use. Our participation in the audits helped prevent several unreasonable claims against the company;
  • successfully protecting the interests of an oil company in connection with a claim of the regional prosecutor’s office against excessive disposal of production wastes; 
  • successfully protecting the interests of a uranium-mining company in court and in the prosecution bodies in connection with an appeal against a fine for excessive emissions. As a result the amount of the fine was reduced tenfold;
  • representing in court a major oil company appealing against fines for polluting land, waste storage, and the breach of requirements for environmental monitoring of production. Our lawyers achieved the cancelation of all fines;
  • representing in court a metallurgical company in the settlement of a dispute over payment rates for disposal of production waste; 
  • protecting the interests of an oil company during land inspections regarding administrative violations. As a result of our participation the fines were significantly reduced;
  • advising an oil company regarding the legality of fines imposed for not possessing  environmental permits and for exceeding the maximum allowable discharge levels;
  • protecting the interests of uranium mining companies in court in connection with claims against them for compensation for damages caused by waste disposal;
  • protecting the interests of a landfill owner in the court of cassation in connection with the unjustified accrual of fees for waste disposal;
  • successfully protected the interests of an oil company with regard to environmental emissions of hydrogen sulfide and sulfur dioxide as a result of associated gas flaring in courts of first instance, appeal and cassation, and the administrative court; 
  • advising a mining company in connection with the claim for compensation for damages caused by accidental pollution of water bodies;
  • advising an agricultural organisation in connection with the requirements of the tax authority to charge additional fees for waste disposal in the environment;
  • drafting a complaint to the Tax Committee with respect to the notice of the tax audit results, under which the waste recycling company was additionally charged amounts of emissions fee;
  • successfully protected the interests of an oil company with regard to an accidental oil spill into a water body in courts of first instance, appeal and cassation, and the administrative court.

Legal Advice on Environmental Issues

In the course of their careers GRATA lawyers have provided services to many large companies in oil and gas, petrochemical, gold, uranium, and other areas, as well as trade, transport and agricultural organisations.  Please find below a brief description of the most relevant work done during the last two years:

  • comprehensive legal opinion on issues relating to obtaining all necessary documents for drilling works prepared for a Kazakhstani mining company;
  • advising a major oil company regarding damage compensation caused by gas flaring without a permit from the Ministry of Oil and Gas;
  • advising a major power generation company on issues regarding reduction of rate for emissions into the environment;
  • advising a local company, which owns a large internet-marketplace, on issues regarding activities within the territory of Kazakhstan, and recognition of possible risks;
  • comprehensive legal opinion on legal liability in connection with the treatment, transportation and storage of radioactive materials for a large foreign uranium company;
  • advising a large foreign oil-and-gas company on legal liability in connection with treatment, transportation and storage of oil products;
  • advising a large oil company on issues regarding a change of environmental requirements for gas flaring as a result of the adoption of the Law of RK 'On Subsoil and Subsoil Use', and issues of liability for environmental violations;
  • legal monitoring and advising on the process of collecting documents and submitting requests to the Ministry of Environmental Protection to obtain environmental permits, performed on behalf of many large oil-and-gas companies. As a result of our actions all declared environmental emissions limits have been accepted and approved by the Ministry, as reflected in the issued permits;
  • upon the request of one of the largest oil-and-gas consortia, we analysed environmental legislation regarding production and consumption of waste, prepared systematised reference material which was used by the consortium in its day-to-day production activities;
  • comprehensive legal opinion on legal liability in connection with treatment of radioactive materials for one of the largest Kazakhstani uranium producers and exporters;
  • performed a legal risks assessment regarding certain chapters of the Environmental Code of RK and prepared a plan of corrective actions for a group of subsoil users;
  • prepared a legal opinion for a large oil company regarding issues of disposal of waste waters originating from oil production;
  • prepared legal opinions on issues of economic assessment of environmental damage and  gave other explanations to a number of large foreign companies regarding payment for environmental emissions;
  • advised subsoil users on legality of audits of state environmental bodies;
  • advised an oil company on drafting a contracting agreement and the need to obtain a permit for environmental emissions;
  • advised a phosphoric company on legal regulation of production wastes;
  • advised an oil company on drafting an agreement for disposal of strata waters in view of requirements of environmental legislation of the Republic of Kazakhstan;
  • advised a foreign investment company on alternative energy business in Kazakhstan;
  • exhaustive legal opinion on issues of obtaining all necessary documents for drilling works prepared for a Kazakhstani mining company;
  • consulting a major oil company regarding damage compensation caused by gas flaring without the permit of the Ministry of Oil and Gas;
  • advising a major power generation company on issues regarding reduction of rate for emissions into the environment;
  • advising a local company, which owns a large internet-marketplace, on issues regarding activities within the territory of Kazakhstan, and recognition of possible risks;
  • prepared a comprehensive legal opinion on legal liability in connection with the treatment, transportation and storage of radioactive materials for a large foreign uranium company;
  • advised a large foreign oil-and-gas company on legal liability in connection with treatment, transportation and storage of oil products;
  • advised a large oil company on issues of change of environmental requirements to gas flaring as a result of adoption of the Law of RK 'On Subsoil and Subsoil Use', and issues of liability for environmental violations;
  • prepared a legal opinion for a large oil company regarding issues of disposal of waste waters originating from oil production;
  • prepared legal opinions on issues of economic assessment of environmental damage and gave other explanations to a number of large foreign companies regarding payment for environmental emissions;
  • advising a Kazakhstani energy company on obtaining quotas for emissions of greenhouse gas, drafting a memorandum for the Kazakhstani mining company on permissive documents required for drilling;
  • advising a Kazakhstani transport company on issues related to environmental emissions;
  • drafting a memorandum for a Kazakhstani oil company on the legal consequences of an accident at a well.

Environmental Requirements in Contractual Practice

  • analysis of provisions of the EPC Contract for compliance with requirements of environmental legislation of the Republic of Kazakhstan.
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16.08.2018

Renewable energy projects – next destination for investments in Kazakhstan

Renewable energy development has recently become hot topic in Kazakhstan that is actively being discussed among market existing and potential participants, relevant state bodies including the Ministry of Energy of the Republic of Kazakhstan (the “MoE”), international development institutions and other stakeholders.

 

15.08.2018

On the Court and Arbitration at the Astana International Financial Center: A Practical Perspective on What They Can Offer to Kazakhstani businesses

In early July this year we witnessed the opening of the Astana International Financial Center (AIFC). We have seen a large number of reports in the media on the Court and Arbitration at the AIFC, but little has been said specifically on what exactly they can offer to Kazakhstani businesses.

 

15.08.2018

China’s Belt and Road initiative in Kazakhstan and opportunities for Islamic finance

Kazakhstan has high ambitions in China’s Belt and Road initiative (BRI) as it is geographically an ideal junction between China and the west.

15.08.2018

GRATA International - leading author of Mondaq of Russian Federation in July

During the Month of July 2018 GRATA International (Russian Federation) generated the most usage from Mondaq users for the  category of commercial law.

15.08.2018

GRATA International - ведущий автор Mondaq Российской Федерации в июле

В июле 2018 года наибольшее количество обращений пользователей Mondaq по вопросам коммерческого права получила GRATA International (Россия).

03.08.2018

Что изменилось для застройщиков с 1 июля 2018 года (РФ)

С 01 июля 2018 г. вступили в силу изменения в 214-ФЗ (Федеральный закон «Об участии в долевом строительстве многоквартирных домов и иных объектов недвижимости» от 30 декабря 2004 года), которые значительно усилили требования к Застройщикам.

02.08.2018

Competition Regulation in Mongolia

The competition law regulates matters related to the creation of conditions for fair competition in the market for business entities, identification and implementation of legal and organisational grounds for prohibition, restriction and prevention of any activities impeding competition.

31.07.2018

Common market of medicines in the Eurasian Economic Union: clinical trials

On 17 July 2018, the Board of the Eurasian Economic Commission (EEС) adopted the following acts aimed at regulation of the general market of medicines in the Eurasian Economic Union (EAEU):

31.07.2018

Cancellation of duties for state registration of legal entities and individual entrepreneurs

Federal Law No. 234-FZ of July 29, 2013 amended the Tax Code of the Russian Federation providing for the cancellation of the state duties for state registration of:

27.07.2018

Statute of Limitation under Kazakh law: A Practitioner’s Perspective

Rules relating to statute of limitation contained in the Civil Code of the Republic of Kazakhstan (the “Civil Code”) may seem relatively straightforward. However, in our practice we frequently encounter situations where rules relating to the calculation of the statute of limitation are erroneously applied or where their applications to relevant facts create disputes. In this article, the author has attempted to provide a practical perspective on some of the most frequently encountered questions relating to the statute of limitation under Kazakh law and express views on the interpretation of certain rules.

27.07.2018

GRATA International held a Business Breakfast with Members of the CCI France- Kazakhstan

Yesterday, 26 July 2018, GRATA International and the CCIFK held a breakfast meeting with the Chamber members.

23.07.2018

Shaimerden Chikanayev was a speaker at the International PPP Finance Summit in London

On 3-4 July 2018, an International PPP Finance Summit 2018 took place in London, UK.

20.07.2018

Multilateral convention to implement tax treaty related measures to prevent base erosion and profit shifting

By the end of June of this year Kazakhstan signed the Multilateral convention to implement tax treaty related measures to prevent base erosion and profit shifting (MLI).

20.07.2018

Astana International Financial Centre's Law - what is it about?

Modeled on the Dubai International Financial Centre, the Astana International Financial Centre (AIFC) was officially launched on the 5th July this year, established with the aim of bridging the gap between the world’s major fi nancial centers and a regional gateway for capital and investments.

11.07.2018

GRATA International and IQanat Education Fund

On June 20, 2018, GRATA International Law Firm signed a memorandum on cooperation in the area of education with IQanat Public Education Fund.

04.07.2018

GRATA International приняла участие в Kazakhstan Global Investment Roundtable 2018

3 июля 2018 года, в отеле Ritz Carlton Astana под председательством Премьер-министра Республики Казахстан Бакытжана Сагинтаева прошел круглый стол по глобальным инвестициям.

04.07.2018

Yerbolat Yerkebulanov was a speaker at the Astana Legal Forum

On 29 June 2018 Yerbolat Yerkebulanov, Partner of GRATA International (subsoil use practice (Almaty)) was a speaker at the Astana Legal Forum 2018. 

21.06.2018

Yerbolat Yerkebulanov gave a speech at the 25th World Mining Congress

Yerbolat Yerkebulanov, Partner, Head of Subsoil Use department (Almaty) of GRATA International was a speaker at the 25th World Mining Congress (WMC).

20.06.2018

Shaimerden Chikanayev will speak at the PPP seminar

On 19-20 July 2018 a seminar on "Practical aspects of the application of public-private partnership mechanisms for infrastructure development" will be held in Astana.

Why Islamic finance fits well in Kazakhstan’s PPP projects

Since 1991, Kazakhstan, Central Asia’s largest economy and oil producer, has had to rely on the deteriorating infrastructure it inherited from the Soviet Union.

07.06.2018

Yerbolat Yerkebulanov will speak at the 25th World Mining Congress

On 19-22 June 2018 the 25th World Mining Congress (WMC) will be held in Astana.

14.06.2018

Compensation is not limited with the damage amount, according to the Turkish competition rules

In Civil Law and Common Law System, the fundamental of the compensation are separated from each other. In Civil Law System, the punishment of person or persons who cause harm and the prevention of similar behaviour are the adopted remark in determining the compensation of competition law. Meanwhile in Common Law, the logic of compensation for damage, adopted comment in the determination of compensation. 

29.03.2018

Yerbolat Yerkebulanov translated Subsoil Code 2018 into English

Yerbolat Yerkebulanov translated the New Code on Subsoil and Subsoil Use for mining companies into English..


12.06.2018

Shaimerden Chikanayev gave a speech at the Renewable Energy Summit

On 8 June 2018 a Renewable Energy Summit was held in Astana.

11.06.2018

Shaimerden Chikanayev will speak at the International PPP Finance Summit in London

On 3-4 July 2018 an International PPP Summit 2018 will take place in London, UK.

08.06.2018

Gulnur Nurkeyeva took part at the 5th meeting of the Kazakhstan-China Business Council

On 8 June 2018, Gulnur Nurkeyeva, Head of GRATA International's China Desk, took part at the 5th meeting of the Kazakhstan China Business Council in Beijing.

06.06.2018

Implementation of Foreign Court Decisions In Turkey

Recognition and enforcement, which is one of the legal terms, is regulated in International Private and Civil Procedure Law. The point of this regulation is how the decision given by the Foreign Court will be valid in the Turkish Courts.

06.06.2018

Ancillary restraints in the mergers and acquisitions within the scope of Turkish law

Ancillary restraint is frequently one of competition restricting agreements in case of accepted as illegal it can damage market. Because mergers and acquisitions sometimes lose its importance without ancillary restraints.

30.05.2018

Gulnur Nurkeyeva took part at the 100th Anniversary of Azerbaijan's Republic Day

The event was held by the Embassy of Azerbaijan to China to mark the National Independence Day.
The event brought together Azerbaijanis living in China, representatives of various state organisations and companies from Azerbaijan and foreign states.


30.05.2018

Mining Law: 2018 Kazakhstan

The well-known and free-accessed ICLG (International Comparative Legal Guide) series provides current and practical comparative legal information on a range of practice areas, including Mining Law.

The Mining Law 2018 – Kazakhstan with 43 specific issues addressed by GRATA International in view of the then-acting subsoil use legislation was initially published on September 2017.

As the mining legal environment will substantially change after the new Code on Subsoil and Subsoil Use dated 27 December 2017 comes into force on 29 June 2018, GRATA has updated the Kazakhstan chapter accordingly.


29.05.2018

GRATA International on the 5th Caspian Energy Forum in Tbilisi

The 5th Caspian Energy Forum Tbilisi-2018 (www.caspianenergyforum.com) has been held on May 8th, 2018.

24.05.2018

New stage of cooperation between business circles of Uzbekistan and Germany: the proposal to create a German industrial zone in Tashkent

During an IV meeting of the German-Uzbek Business Council which was held in Tashkent, Prime Minister of Uzbekistan Abdulla Aripov invited the largest German companies to open their business in the Republic of Uzbekistan.

24.05.2018

In Uzbekistan small tourist zones will be created

The authorities of Uzbekistan are planning to create three small tourist zones in the Surkhandarya region. Relying to the Resolution of the Cabinet of Ministers, the Basnoi, Sariasiy and Sherabad zones will be established for the development of tourism in the region.

24.05.2018

Incentives for leather and footwear industry in Uzbekistan

In Uzbekistan, it was adopted Presidential Decree, "On measures to further stimulate the development and growth of export potential of leather and footwear and fur industries”.

24.05.2018

SkyPower Global invests US$1.3 billion in solar energy in Uzbekistan

SkyPower Global (Cayman Islands) will invest US$1.3 billion in a project to build photovoltaic solar energy facilities.

24.05.2018

The procedure and rules for the operation of non-governmental non-profit organisations will be significantly simplified

On May 4, 2018, it was signed the Presidential Decree, "On measures to radically increase the role of civil society institutions in the process of democratic renewal of the country", which will amend current regulating system of NGOs, specifically:

 

24.05.2018

World Bank Group President pledges $940 million financing for Uzbekistan’s reforms

World Bank Group President Jim Yong Kim met with Uzbek President Shavkat Mirziyoyev to discuss Uzbekistan’s social and economic transformation and to reaffirm the World Bank Group’s support for reforms to accelerate economic growth and boost shared prosperity, the World Bank reported.

24.05.2018

The companies of Uzbekistan and the US signed a number of agreements in the oil and gas sector and energy

The companies of Uzbekistan and the US signed a number of agreements in the oil and gas sector and energy within the framework of the visit of the President of Uzbekistan Shavkat Mirziyoyev to Washington.
Uzbekistan and leading US companies signed agreements worth about US$5 billion.


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Leila Makhmetova

Counsel, Director of Environmental Law Department

Almaty

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