KAZAKHSTAN ENVIRONMENT UPDATE, FEBRUARY-MARCH 2008

UNCLAS SECTION 01 OF 02 ASTANA 000703 SIPDIS SIPDIS E.O. 12958: N/A TAGS: SENV ECON ENRG EPET KZ SUBJECT: KAZAKHSTAN ENVIRONMENT UPDATE, FEBRUARY-MARCH 2008 ASTANA 00000703 001.2 OF 002 ¶1. Summary: This information is drawn primarily from the Kazakhstani press and has not been verified. -- Koksaray Water Reservoir To Be Built in South Kazakhstan -- Ecological Tax To Replace Pollution Fees -- Kazakhstan Expects Russia To Cut Toxic Rocket Fuel Use -- Science Funding To Soar By 2015 -- Environment Minister Discusses Cooperation with EU -- Kazakhstani Government To Introduce Sturgeon Monopoly -- Health, Environment Issues at ArcelorMittal -------------- -------------- Koksaray Water Reservoir To Be Built in South Kazakhstan -------------- -------------- ¶2. Prime Minister Masimov announced plans on March 18 to move forward in building the Koksaray water reservoir in South Kazakhstan. This reservoir will be aimed at controlling water flow from the Syrdarya River. Every spring, South Kazakhstan suffers from flooding because excessive water comes from the Syrdarya River, which the Shardaryinskoye water reservoir cannot store. In summer, the situation is the opposite, with South Kazakhstan suffering from drought. The new water reservoir will address both of these problems. Alongside construction of the Koksaray reservoir, Kazakhstan plans to press ahead with the Central Asian Water and Energy Consortium initiative to regulate water distribution in the Central Asia region. On April 4, Express-K newspaper reported that Kazakhstani environmental protection experts were expressing discontent with constructing the Koksaray reservoir. They fear that this project might hamper their efforts to restore the Aral Sea. On April 8, President Nazarbayev effectively ended the debate by announcing that the Koksaray reservoir will, in fact, be built. He noted that by protecting Southern Kazakhstan and Kyzylorda Oblasts from spring floods, the reservoir will save the government $100 million annually in rescue and reconstruction costs. -------------- -------------- Ecological Tax To Replace Pollution Fees -------------- -------------- ¶3. Environmental Protection Minister Iskakov on February 5 reaffirmed Kazakhstani government plans to introduce an ecological tax to replace pollution fees in accordance with the German experience. This tax would aim to promote renewable sources of energy (wind, hydropower, solar energy, biofuels) and stimulate production of environmentally-friendly products. On February 22, Iskakov said that the new ecological tax would be included in Kazakhstan's new tax code, which is being developed this year in accordance with President Nazarbayev's February state of the nation address. Iskakov also announced that the government is developing a draft law on supporting alternative sources of energy, which he expects parliament will adopt this Fall. In an April 1 interview given to Business and Vlast business weekly, Iskakov focused on the advantages of an ecological tax over existing pollution fees. He noted that pollution fees currently bring in annual revenues of 30 billion tenge (approximately $250 million),but only a small part of these revenues are used to fund environmental protection programs. -------------- -------------- Kazakhstan Expects Russia To Cut Toxic Rocket Fuel Use -------------- -------------- ¶4. Interfax reported on February 18 that the Kazakhstani government will approve a plan for Russian Proton rocket launches from the Baikonur space center for the second half of 2008 only after the Russian Space Agency (Roskosmos) offers proposals on gradually reducing rocket launches that use unsymmetrical dimethylhydrazine (UDMH) as a propellant. Kazakhstani National Space Agency chief Talgat Musabayev said that Kazakhstan had not yet received the proposals promised by Roskosmos. Russia and Kazakhstan signed an intergovernmental agreement in 2004, one of the provisions of which implies a gradual reduction in the number of rocket launches from Baikonur using the highly-toxic UDMH propellant. -------------- Science Funding To Soar By 2015 -------------- ¶5. On March 17, Interfax reported that the Ministry of Education and Science plans a 10-fold increase in science funding by 2015, from 0.26 percent of GDP at present to 2.5 percent of GDP. Education and Science Minister Tuimebayev told the Majilis (i.e., the lower house of parliament) that current science funding was inadequate and well below the levels of developed countries. Quoting data from independent experts, Tuymebaev argued that if a country's research and development expenditures do not exceed 1 percent of GDP for 5-7 years, an irreversible decline in scientific potential may occur. -------------- -------------- Environment Minister Discusses Cooperation with EU -------------- -------------- ASTANA 00000703 002.2 OF 002 ¶6. On February 26, Environmental Protection Minister Iskakov met EC Head of Delegation to Kazakhstan Adriaan van der Meer and a European Commission delegation to discuss cooperation in environmental protection. Iskakov asked for EU assistance in developing renewable energy sources in accordance with EU standards, establishing a solar center, and introducing ecological taxes based on German experience. Van der Meer informed Iskakov about the intention of the German, Norwegian, and Dutch governments to act as co-founders of a regional ecological center in Central Asia, and expressed hope for Kazakhstan's support for the initiative. -------------- -------------- Kazakhstani Government To Introduce Sturgeon Monopoly -------------- -------------- ¶7. Interfax reported on March 13 that the Kazakhstani government had presented parliament a draft law on the fishing industry, which includes provisions for establishing a state monopoly on purchase of sturgeon, as well as processing and sale of caviar. Implementation of the law will require 6.3 billion tenge (approximately $52.5 million) in budget funding. According to Deputy Agriculture Minister Kurishbaev, a state monopoly will enhance control over sturgeon reproduction, sturgeon farm operations, and sturgeon resources. It will also ensure supply of the domestic market with fish products in line with world standards. ¶8. It was reported on March 7 that a new sturgeon plant will be built in west Kazakhstan to preserve sturgeon in the Ural-Caspian basin and organize commercial sturgeon breeding. According to Kanat Suleimenov, the chairman of the Agricultural Ministry's Fisheries Committee, the plant will also breed and preserve young sturgeon. Its capacity will be 15-20 million young sturgeon a year. Today there is only one sturgeon plant in west Kazakhstan. -------------- -------------- Health, Environment Issues at ArcelorMittal -------------- -------------- ¶9. Interfax reported on February 22 that the Karaganda sanitary control department had revealed violations of labor health standards at eight coal mines operated by ArcelorMittal Temirtau. Arcelor-Mittal was fined 78,624 tenge (approx $650) for failure to meet workplace health standards. Environmental Protection Minister Iskakov met on February 26 with ArcelorMittal senior management to discuss the company's pollution permit for 2008. The company was notified about the time period within which it must improve its environmental protection efforts. ORDWAY