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Cases / Oil, gas and coal operations · Kazakhstan · 2013–2014

Ozenmunaigas environmental claims of KZT 59.3, 212.6 and 327.9 billion annulled by courts (2013–2014)

Nature's voice · report
No measurement of the harm done to me here is on record.
Did nature suffer? Not measured. Disputed
What the record lacks: 5 none on record · 1 not measured · 1 disputed See the gaps
Accounts of the harm differ
Who caused the oil-contaminated soil
  • Government and regulators Mangystau ecology department: Alleged environmental damage from the disposal of oil-contaminated soil by Ozenmunaigas; no public statement from the department on the dismissals is on record. Rogtec
  • Company or project Ozenmunaigas and KMG EP: The contamination resulted from past activities on the site (Soviet-era, per Lada.kz), not from OMG or KMG EP. Lada.kz
  • Courts Specialised Interdistrict Economic Court, Mangystau region: Declared the inspection act and the KZT 327.9 billion claim illegal on 19 March 2014. Lada.kz

The Mangystau ecology department brought successive claims and a fine against Ozenmunaigas, the Uzen field operator and a KMG EP subsidiary, over disposal of oil-contaminated soil. A KZT 59.3 billion claim was successfully appealed in 2013, a KZT 212.6 billion fine was dismissed in February–March 2014, and on 19 March 2014 a court declared the inspection act and the KZT 327.9 billion claim illegal.

KZT 327.9bnEnvironmental damage claim against Ozenmunaigas, annulled at first instance, 19 March 2014
Reported as US$1.8 billion; Tengrinews put it at 2.3 times KMG EP's 2013 net profit of US$777 million.

Status As of March 2014: the KZT 212.6 billion fine was dismissed and the KZT 327.9 billion claim was annulled at first instance; the outcome of any appeal is not on record.

What?
Successive environmental claims against Ozenmunaigas for disposal of oil-contaminated soil — KZT 59.3 billion, a KZT 212.6 billion fine and a KZT 327.9 billion damage claim — were successfully appealed, dismissed or annulled by courts in 2013–2014. Rogtec
Where?
Uzen (Ozen) field near Zhanaozen, Mangystau region, Kazakhstan. Lada.kz
When?
2013 for the first claim; KMG EP disclosed the KZT 327.9 billion claim in late February 2014; the fine was dismissed in February–March 2014; the economic court ruled on 19 March 2014. Lada.kz
Who?
Gained
  • Ozenmunaigas and KMG EP — Avoided payment of KZT 59.3 billion, KZT 212.6 billion and KZT 327.9 billion in claims and fines Lada.kz
Lost
  • Mangystau ecology department — Claims and fine annulled or dismissed by courts Lada.kz
Harmed
  • Soil at the Uzen field — Oil-contaminated soil; volume, area and contaminants not stated Rogtec
Why?
The ecology department alleged damage from disposal of oil-contaminated soil; OMG and KMG EP said the contamination came from past activities on the site. Rogtec
How?
A damage claim and an administrative fine were pursued by the ecology department and annulled or dismissed by an economic court and an administrative court. Rogtec
In proportion Tengrinews reported the KZT 327.9 billion claim (about US$1.8 billion) as 2.3 times KMG EP's 2013 net profit of US$777 million. Tengrinews
6 of 6 questions answered from the record

What happened

The record, in order.

The Mangystau ecology department alleged environmental damage from the disposal of oil-contaminated soil by Ozenmunaigas JSC (OMG), operator of the Uzen field near Zhanaozen and a subsidiary of KMG EP. Three amounts were claimed in succession: KZT 59.3 billion, which KMG EP reported as successfully appealed in 2013; an administrative fine of KZT 212.6 billion; and an environmental damage claim of KZT 327.9 billion (about US$1.8 billion), which KMG EP disclosed in late February 2014.

In February–March 2014 the Specialised Administrative Court in Aktau dismissed the KZT 212.6 billion fine; KMG EP said the case had been dismissed and there was no avenue for appeal, although the prosecutor could theoretically revisit it. On 19 March 2014 the Specialised Interdistrict Economic Court of Mangystau region declared the inspection act and the KZT 327.9 billion claim illegal; the decision could be appealed by the parties and protested by the prosecutor.

OMG and KMG EP said the contamination came from past activities on the site, which Lada.kz described as Soviet-era, and not from OMG or KMG EP. No ecology department statement and no measured contamination data are on record.

  1. 2013KZT 59.3bn claim successfully appealed
  2. 2014KMG EP discloses the KZT 327.9bn claim (late Feb); Aktau Specialised Administrative Court dismisses the KZT 212.6bn fine (Feb/Mar); Mangystau economic court declares the inspection act and the claim illegal (19 Mar)

What was said

Claims, in the words of those who made them.

“The first-instance court decision may be appealed by the parties and protested by the prosecutor.”

KMG EP press service (translated) · March 2014 · translated from Russian · Lada.kz

“the case has been dismissed and there is no avenue for appeal”

KMG EP, on the KZT 212.6 billion fine · March 2014 · Rogtec

Where accounts differ

Each party's account, side by side, with its source. The record does not settle these points; it shows them.

Who caused the oil-contaminated soil
Government and regulators
Mangystau ecology department

Alleged environmental damage from the disposal of oil-contaminated soil by Ozenmunaigas; no public statement from the department on the dismissals is on record.

Rogtec
Company or project
Ozenmunaigas and KMG EP

The contamination resulted from past activities on the site (Soviet-era, per Lada.kz), not from OMG or KMG EP.

Lada.kz
Courts
Specialised Interdistrict Economic Court, Mangystau region

Declared the inspection act and the KZT 327.9 billion claim illegal on 19 March 2014.

Lada.kz

How it looked

What was shown, beside what was recorded.

Shown

  • Headline: “Subsidiary fined by twice the amount of KMG E&P's profit”.
    Tengrinews, 5 March 2014 · Tengrinews
  • Headline: “KMG EP's Ozenmunaigas hit with environmental damage charge”.
    Rogtec, from a KMG EP release, 27 February 2014 · Rogtec

Recorded

  • Claim of KZT 59.3 billion successfully appealed (2013); administrative fine of KZT 212.6 billion dismissed (February–March 2014); damage claim of KZT 327.9 billion annulled at first instance (19 March 2014).
  • Tengrinews: the KZT 327.9 billion claim was 2.3 times KMG EP's 2013 net profit of US$777 million.
  • The KMG EP release describes the KZT 212.6 billion fine as dismissed with no avenue for appeal.

Who gained

Money that reached nature, beside money that stayed elsewhere.

Reached nature or the ground

Not published
Remediation of the oil-contaminated soil—
None on record.

Gained elsewhere

Not totalled
Claim of the Mangystau ecology department, annulled at first instance (March 2014)327.9bn
Reported as US$1.8 billion.
Administrative fine, dismissed (February–March 2014)212.6bn
Claim successfully appealed (2013)59.3bn
KMG EP net profit, 2013—
US$777 million (Tengrinews).
Currency: KZT · Window: 2013–2014. All figures cover the same period. * Estimate built from cited figures.

Responses on record

  • KMG EP (February–March 2014): The contamination resulted from past activities on the site, not from OMG or KMG EP; the first-instance decision may be appealed by the parties and protested by the prosecutor. · Lada.kz

In court and with insurers

Every proceeding and every insurer decision on record.

Lawsuits and rulings

  1. 2013–2013Defendant wonKZT 59.3bn claim, successfully appealed by the company
    Mangystau ecology department v. Ozenmunaigas (KZT 59.3bn claim)
    Court not named · Civil · Mangystau ecology department → Ozenmunaigas JSC

    KMG EP reported that the KZT 59.3 billion environmental damage claim was successfully appealed in 2013. Rogtec

  2. 2014–2014DismissedKZT 212.6bn fine dismissed
    Mangystau ecology department v. Ozenmunaigas (administrative fine)
    Specialised Administrative Court, Aktau · Administrative · Mangystau ecology department → Ozenmunaigas JSC

    KMG EP said the case had been dismissed and there was no avenue for appeal, although the prosecutor could theoretically revisit it. Rogtec

  3. 2014–2014Defendant wonKZT 327.9bn claim annulled at first instance; reported as US$1.8bn
    Mangystau ecology department claim of KZT 327.9bn against Ozenmunaigas
    Specialised Interdistrict Economic Court, Mangystau region · Civil · Mangystau ecology department → Ozenmunaigas JSC

    On 19 March 2014 the court declared the inspection act and the claim illegal; the decision could be appealed by the parties and protested by the prosecutor. Lada.kz

Insurers

No insurer decision on record.

What nature saw

Outcomes measured on the ground, and nature's note.

Nature's report opens this page. Below: further outcomes measured on the ground.

Largest claim, annulled at first instance
KZT 327.9bn
19 March 2014; about US$1.8 billion as reported
Fine dismissed
KZT 212.6bn
Aktau Specialised Administrative Court, early 2014
Earlier claim appealed successfully
KZT 59.3bn
2013

What we don't know

Undisclosed, unproven, untried: recorded as data.

Nature

  • Not measured Harm to nature: No independent ecological evaluation is on record.
  • Disputed Who caused the oil-contaminated soil

Money

  • None on record Remediation of the oil-contaminated soil — None on record.
  • None on record KMG EP net profit, 2013 — US$777 million (Tengrinews).

Record

  • None on record None on record: measured contamination data (volume, area or contaminants of the oil-contaminated soil) in the coverage of the claims.
  • None on record None on record: payment of any of the three amounts; all three were dismissed, annulled or successfully appealed.
  • None on record None on record: insurance cover or payments.

Did the harm stop?

None on record.

Who paid?

None on record: payment of any of the three amounts, or funding of remediation of the contaminated soil.

Sources

Voices on record: ✓ Company or project— Government and regulators— Courts✓ Press and investigations— Communities and civil society— Researchers

Connected cases

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