Social Responsibilities of Companies in Kazakhstan Zhanara Iskhakova GRATA Law Firm, March, 2014

SOME GENERAL INFORMATION ABOUT OIL AND GAS INDUSTRY FOR 2013

BACIS PRINCIPALS All subsoil deposits are the property of the Republic of Kazakhstan; Foreign legal entities and persons have the same rights and obligations as Kazakhstani legal entities and persons (if other are not specified by the law); Guarantees for subsoil users: Protection of the rights is guaranteed; Stability of the contract (except of changes into the laws related with national security, ecology, health protection, taxes, customs duties). Pre-emptive right of the State.

Developing the country and the regions: Through establishing: Contractual mandatory obligations Negotiations and discussions of corporate responsibilities of the investors

CONTRACTS OBLIGATIONS The RK Law “On Subsoil Use in Kazakhstan” (Article 76: Responsibilities of the Subsoil Users) Use local suppliers of Goods Services transports (railways, air transport, sea transport) Use local labours; Spend not less that 1% of total income of contractual activities for financing of research and development works provided by kazakhstani companies

CONTRACTS OBLIGATIONS (Cont’d) In the contract the State stipulates: % of Local Content in procurement procedure of goods, services For example: 2013: local content % in procurement of mining companies - 54,6% 2012 год - 47,1% Responsibility: Violation of the contractual obligations can lead to the termination of the contract

Social Responsibility support of local schools, medical organisations, kinder gardens, sport centers and most vulnerable group of society by way of Constructions of new social objects Sponsorship Educational Programs Cultural Events Foreign Investors and National Companies are involved into social responsibility programs

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