Problems of Enforcement of the
Requirements on Local Content
Dina Pak
Law Firm GRATA
Almaty, March 27, 2009 г.
Content
1. Policy of the State on increase of the local content
in the activity of the subsoil users.
2. Work of MEMR on changing of the subsoil use
contracts in part of determination of the local
content.
3. Possible actions of the subsoil users during
negotiations with MEMR on changing of the
subsoil use contracts in part of the local content.
1. Policy of the State on increase of the local
content in the activity of the subsoil users
• Problems preventing to increase of the local content.
• Aims of the Government on working out of the
normative base related to the issues of the local content:
Development of unified method for estimation of
the local content;
Draft Law on Subsoil and Subsurface Use;
Development of draft law on the local content
issues.
2. MEMR’s efforts aimed to change subsoil use
contracts in part of the local content
Two MEMR’S approaches for changing the
existing subsoil use contracts in part of the local
content:
applying by subsoil users to MEMR for asking
any questions concerning the issues on
changing certain amendments into the subsoil
use contracts;
sending by MEMR notifications to the subsoil
users on changing of subsoil use contracts in
part of the local content.
3. Possible actions of the subsoil users during
negotiations with MEMR on changing of the
subsoil use contracts in part of the local
content
3.1. Deficiency of legal basis for introduction of the
local content provisions in existing subsoil use
contracts.
3.2. Deficiency of MEMR’s rights to terminate of the
subsoil use contracts in accordance with Article
45-2 of Subsoil Law in case of non execution of
instructions of MEMR by subsoil users.
3. Possible actions of the subsoil users during
negotiations with MEMR on changing of the
subsoil use contracts in part of the local content.
3.3.Negotiation positions recommended for
subsoil users in respect of determination of the
local content in the subsoil use contracts:
to take into consideration a specific of
subsoil use operations conducted under
particular subsoil use contract, stage of the
conducting
operations
and
planning
procurements;
to introduce specific methods determining
basic principles for estimation of the local
content in each particular subsoil use
contract;
 procedure of reporting, enabling reflect objective
causes of non execution of the provisions on local
content;
 development of stepwise plan of achievement of
high rates of local content in each contract;
 grounding upon the inclusion of local content in
respect to Kazakhstani personnel;
 consequences, potential risks of non execution of
obligations on local content;
 procedure of determination of the objectiveness of
causes, leaded to such non execution;
 possibility of subsoil user to appeal an
acknowledgement of non execution of obligations in
part of local content.
THANK YOU!
QUESTIONS?
Dina Pak
Partner, Law Firm GRATA
Mobile: +7-701-7615042
Email: [email protected]