Review of Judicial Practice on Environmental Disputes Involving Subsoil Users

Review of Judicial Practice on Environmental Disputes Involving Subsoil Users

In Kazakhstani practice, environmental disputes arise quite often and their number is steadily increasing. The majority of disputes are initiated by territorial departments on environmental safety or environmental attorneys’ offices who claim damages inflicted on the environment. There have been several disputes involving a failure to obtain state expertise, permits for flaring gas, wilful use of water resources, disputes on ownership right to waste, etc.

Lawyers representing the interests of subsoil users during environmental disputes shall carefully analyse the law applicable to a specific situation under dispute. This prevents incorrect application by the courts of the norms of material law and protects companies from being unjustifiably subject to civil liability.

For instance, in accordance with the Environmental Code of the Republic of Kazakhstan, damage to the environment is calculated by a direct or indirect method.  The direct method, which is a means of calculating the inflicted damage on the basis of the cost of remedial actions, shall be the priority method. This allows for remedying the aftermath of pollution by the company taking immediate action. The indirect method, which is a means of calculating the inflicted damage using special formulas, is applied in cases where remedial action is impossible (for example, where air is polluted). Environmental inspectors do not, as a rule, consider whether remedial actions are possible and claim damages using the indirect method. As a consequence, when companies raise this question in court, inspectors usually give reasons that can hardly be described as reasonable. For example, one company was faced with a claim for damages to the environment inflicted by the allocation of waste without an environmental permit. The total sum of the inflicted damage was calculated using the indirect method. The inspector justified the application of the method in the following way. In accordance with the Tax Code of the Republic of Kazakhstan, the company made a payment to the budget for allocating waste in 10-fold quantity, thus the company itself accepted the indirect method of calculating the inflicted damage. We consider this approach to be illegitimate and unfounded: the company made a payment for emissions – a mandatory payment to the budget, not the damages. This payment was made under tax relations in accordance with the requirements of tax law. In comparison with the payment for emissions, the quantity of damage to the environment is calculated within the framework of civil relations in accordance with environmental and civil laws. This is why payments made in relation to emissions do not carry any legal consequences for the calculation of damage to the environment.

Let us take another example. Many industrial objects are considered by the courts to be objects of high risk. According to the environmental and civil laws of Kazakhstan, damage inflicted by an object of high risk is compensated by its owner, irrespective of fault. The owner may be discharged of his liability if he proves that the damage was inflicted as a result of force majeure or the intention of the victim. In practice, there was a situation where the attorney argued that the deterioration (i.e. depletion) of natural resources was the result of a specific company’s acts. He argued that since the objects were sources of high risk, he was relieved from proving causation. We believe this approach is unfounded because whilst the claimant is relieved from proving the fault of the owner of the object of high risk, he is still required to prove the link between the actions of the objects and the infliction of damage. In other words, inspectors shall prove whether or not the damage was inflicted by this object belonging to the company.

Many claims arise as a result of analytic control (i.e. control of air polluting emissions, selection and laboratory analysis of water in reservoirs, sewage water, and soil tests). Information obtained in the course of an analytic control may be later used by inspectors as evidence in claiming damages inflicted to the environment. Abusing the requirements of the law and in some cases, the state standards, may however invalidate the evidential importance of such information.

Evidence submitted to the court or body hearing the case on administrative wrongdoing shall therefore be:

1.   related i.e. confirming the facts related to the case;

2.   admissible i.e. obtained in accordance with the Civil Procedural Code (CPC) or the Code of the Republic of Kazakhstan on Administrative Wrongdoings (CoAW);

3.   true i.e. be valid.

Our experience has shown that sometimes information obtained through analytic control is considered to be evidence inconsistent with these requirements.

One of the subsoil use companies exploited an enriching factory, as a result of which a pulp was formed. This pulp, through a pipe, reached a tailing pond where it sedimented. As a result of the sediment a hard part subsided to the tailing pond, whereas the developed sewage water reached bio-ponds and after it cleaned there it reached the reservoir. Environmental permits for the allocation of waste and emission of sewage water were not obtained by the company.

In the course of analytic control, inspectors tested the pulp in sump located in the way to the tailing pond and on the basis of this test, the inspector calculated the damage to the environment from wilful emission of sewage water. Separately, the inspectors calculated the damage to the environment inflicted by the allocation of waste without an environmental permission (therefore, the pulp was classified twice – as sewage water and pulp-type waste).

Meanwhile in sump located on a pulp pipe in the way to the tailing pond there was no sewage water yet. It appeared only in the tailing pond as a result of the sediment of the pulp. In such waters, there were no polluting materials which were present in the pulp in sump. These materials did not reach the environment (bio-ponds and reservoir), thus, the data on the concentration of the materials in the pulp prior to its sediment could not confirm the scope of damage to the environment from the emission of sewage water. This data did not confirm the fact important to the case, and thus did not satisfy the requirements for the evidence.

In many cases, the validity of analytic control remains unconfirmed. Point 11 of the Instructions on Control of the Work of Cleaning Facilities and Testing Sewage Water approved by the Decree of the Ministry of Environmental Protection of the Republic of Kazakhstan dated 14 April 2005 No. 129-p (including amendments and additions as of 27 May 2005) requires the testing of sewage water to be done in the presence of a representative of the controlled company. If such requirement is breached, the company has an opportunity to prove the invalidity of the tests. For instance, if the tests were done without a representative being present, then the question relating to the observance of the requirements on testing remains open (for example, the place and location of the tests, type of tests, method of testing, etc). These requirements are directly relevant to guaranteeing the validity of the tests.

The results of the analytic control may be regarded as invalid in many other cases, such as in a case where a tank filled with testing water was not identified. In one of the court judgments, this argument was advanced by a company but was rejected with reference to the fact that one tank had been used for testing, in the presence of the company’s representative who did not object as to the identification of the tank. Meanwhile, point 6.1 of the standard ST RK GOST R 51592-2003 “Water - Common Requirements as to Testing” requires information on the location of tests and conditions of testing to be included on the label attached to the tank used for testing.

In accordance with the aforementioned standard, the act on testing shall include: the place of testing and its location; the date of testing; the method of testing and other information necessary for the purposes of the testing. The absence of these requisites (in combination with other evidence) is a ground for proving the invalidity of the testing results.

Consequently, in one of the cases, a company allowed an oil spill, as a result of which the soil was polluted. The inspectors however attributed the damage inflicted not only to the soil but to a water object on the surface to the sum of the claim submitting to the court an act of testing water in reservoir and testing results. Meanwhile, this act did not contain any information on the place of the testing. Further, the company submitted to the court an expert’s opinion confirming that the oil spill in the given case could not have reached the reservoir. As a result the claim was satisfied, but limited to the extent of subsoil pollution.

It should be noted that in resolving environmental disputes involving subsoil user, the courts often breach procedural laws.

For instance, in practice, as a rule the bodies on environmental protection impose administrative liability on companies and later initiate proceedings claiming damages to the environment.

Whilst delivering judgments, the courts often consider the facts of wrongful emissions and their quantities to be proven referring to the fact that these circumstances established by decrees on administrative wrongdoing were not appealed as of the day of the judgment. The courts rarely explain what importance they pay to the decree on administrative wrongdoing that was not appealed by the company: do they consider this as an acceptance by the company of the facts, or on the other hand, do they think that these facts being established by the decrees on administrative wrongdoing might be refuted by other evidence.

We think it is impossible to answer this question conclusively.

A refusal to appeal the decree does not in itself constitute an acceptance of the facts stipulated under the decree. It is up to the entity made subject to administrative wrongdoing to decide whether to appeal the decree thus, such an entity may or may not use its right. A company may decide not to appeal the decree due to many reasons, not necessarily because it accepts the facts stipulated in the decree.

Information stipulated by the decree on administrative wrongdoing of course may constitute evidence in hearing the case on damages to the environment and the court whilst assessing them shall ascertain whether the decree entered into force and was not at some point repealed. Such information is not however binding on the court because according to Article 71.2 of the CC RK, the court is bound by information stipulated in a court judgment that entered into force on a previously heard civil case involving the same parties. If the facts are stipulated in the decree on administrative wrongdoing, then they are not binding on the court. Such information is subject to assessment as any other evidence and may be refuted by other evidence.

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The examples given in this article certify that in the course of state environmental control, as well as when resolving environmental disputes, subsoil users’ rights are often infringed in courts. This is why it is important to carefully analyse the legality of the actions taken by environmental inspectors and courts in every situation.

An active defence of legitimate interests results in enforcing legal protection of the subsoil users and decreases the number of cases involving unfounded claims initiated by the state bodies.

Best Regards,

Environmental Law Department

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