In the last Earth Report programme we went to Angola to investigate just how realistic it is to create a fair and open business environment as outlined in Tony Blair’s Transparency Initiative launched at the Johannesburg sustainable development summit. This week we turn our attention to the extractive industry in western Kazakhstan in Central Asia.
For thousands of years Kazakhstan was inhabited by nomadic tribes. In 1991 it reluctantly declared independence from the USSR. The doors were opened to foreign investment and billions of dollars flooded in to a country rich in oil and mineral reserves. But there is scant evidence that the majority of people have benefited from the billions generated by foreign investment.
According to the World Bank, most Kazakhs are worse off now than before independence. The main aim of the British Government’s initiative is to get international agreement to create an environment where ordinary people will benefit from foreign investment in their country’s oil and mineral wealth.
The Fields of Karachaganak
Karachaganak in north-western Kazakhstan is one of the word’s largest oil and gas fields. Discovered in 1979 it was run locally until a production sharing agreement signed five years ago brought in international partners – this was the birth of the Karachaganak Integrated Organization – KIO. Italy’s Agip, British Gas, USA’s Chevron Texaco and Russia’s LUKoil have pumped nearly four billion dollars into the region.
According to the International Finance Corporation – an arm of the World Bank – this oilfield is a “Category A” project meaning that under its environmental procedures the plant’s activities may result in ‘significant adverse environmental and social impacts’ Five kilometres from the plant is the village of Berezovka, a community of around 400 homes.
Svetlana Anosova, a 42 year old mother of three, has lived here her whole life. A music teacher at the local school, Svetlana lives on a small-holding in the village with her husband Pavel.
In 1997 Svetlana says she began to notice a dramatic increase in childhood illness in the village. Her observations are in part borne out by a survey the consortium commissioned from a Kazakh consulting company. It found that there has been a “reduction in the birth rate and increase in the death rate” in the village. But the same report also states that this trend is “comparable” with the rest of Western Kazakhstan. So is the ill-health part of an overall pattern or is it due it due to pollution from the plant?
Svetlana Anosova says repeated calls to local politicians and doctors went unanswered. Frustrated by an apparent wall of silence she contacted a US based organization, Crude Accountability – an NGO with a self appointed watchdog role on the oil industry throughout the world. The group says it trained her to carry out a scientific house to house survey in the village to find out the state of everyone’s health.
Svetlana says: “At first we didn’t pay much attention to the changes because we were going through perestroika here. Our local economy had been re-organized. People had lost their jobs and were more pre-occupied with their own problems. But in the last three to five years, and in particular the last two years when we were doing a survey around the village asking people to fill in questionnaires, many people had noticed a deterioration in their sight and hearing in recent months. There was a noticeable loss of hair, particularly among young people. Young schoolgirls were saying they were too scared to comb their hair or wash it in case they lost it all.”
Changing Times for Berezovka
The village of 1,300 residents is situated in the middle of the vast steppes of western Kazakhstan, an area bigger than France. A former collective farm, it dates back to the very beginnings of the Soviet dream to industrialise agriculture. As in most former republics, economic decline set in as Moscow’s subsidies ended in 1991. Farming equipment lies abandoned and unused.
Villagers were confident that foreign investment would lead not only to an economic upturn but also the application of Western environmental standards. But Earth Report found that some villagers believe the nearby plant is poisoning their water supplies and releasing potentially harmful pollutants such as hydrogen sulphide, carbon monoxide and other processing by-products into the air.
KIO is just about the only source of employment for the men of Berezovka. Svetlana’s investigations have therefore not been welcomed by everyone in the village. Svetlana has invited Sergey Solyanik to Berezovka to see the villager’s symptoms for himself. A seasoned environmental campaigner, Sergey understands more than most the difficulties of operating under a regime that has remained largely unchanged since the Soviet era. As word spreads that Sergey is in the village mothers arrive bringing their sick children. All talk of headaches, nosebleeds, memory loss and skin rashes.
One baby has developed a rash that doctors have been unable to treat. Nobody has been able to say what it is, or how to cure it but the mother is in no doubt as to the cause of the infection. She believes it is from smoke in the air produced by KIO. And to make matters worse, other family members suffer the similar illnesses.
The local doctor refuses to appear on camera to talk about the villager’s symptoms. Increasingly desperate villagers are now travelling for over an hour to seek medical help.
An Ailing Village
Svetlana says her research has revealed that over 45 percent of the village is now chronically ill. Two years ago, in response to her claims, the local government and KIO sent medical teams to carry out a number of environmental assessments. Earth Report contacted the government of Western Kazakhstan asking for information about these assessments. Unlike Svetlana, our programme experienced no difficulty in gaining a full and comprehensive response. We were issued with a detailed statement addressing the claims made by the villages of Berezovka.
The Western Kazakh authorities quote from a survey conducted by the National State Medical University: “The comparative analysis of sickness rates of Berezovka for the period of 1990-2000 shows an increase in the last ten years. During this period it increased in Berezovka by 1,3 times. However, the identified level of sickness rate in Berezovka is 1,2-1,5 times lower than that of the whole area of Western Kazakhstan region where former soviet military test sites are situated”
Meanwhile, one child’s wound has not stopped seeping for over eight weeks. Svetlana says: “KIO’s argument is that they say they are fulfilling all their obligations, they do everything to the highest standard possible. They say they do not pollute the environment. They say they have advanced technology and clean equipment so there cannot possibly be any claims made against them. They say they do everything as it should be done.”
In recent years industry records show Kazakhstan has doubled its oil production to almost one million barrels a day in 2002, and plans to reach more than two million by 2010. Karachaganak is a key element in this growth. KIO insists they will realise the field’s full potential while maintaining a firm commitment to the environment and the people of the region. They say that their transparency procedures have greatly improved and that they engage with stakeholders.
KIO Brings Wealth
Since 1997 KIO has been committed to an annual grant of ten million dollars invested in social projects in the region. One of the main recipients of this grant is the nearby town of Uralsk. KIO’s dollars have turned around the fortunes of this town and there is now a prosperous and educated middle class here. Many residents have been trained or are employed by KIO.
Over ten million dollars alone has been spent on developing the Kazakh Drama Theatre, currently rehearsing a play about the life and struggles of a national hero – Mokhambet. This was a man who led a popular uprising against the Russian czar who governed this region in the 1830’s. Beheaded for his efforts, he has come to symbolize the strength and courage of the Kazakhs in the face of marauding foreign invaders.
Nassim Mamedov, Theatre Director, says: “During the 90’s a process of investment was started by our president where he encouraged widespread foreign investment into our country. Throughout our history we have never had such a policy, and so we didn’t understand what was being done. We didn’t know what these investments would mean for us, for our republic. We think KIO have invested significantly into our heritage, into the traditions of the people. It is in this way that KIO have touched ordinary people I think.”
With so much money being invested by KIO into the regeneration of this region, Svetlana fails to understand why some of the money hasn’t been used in moving the village of Berezovka.
But KIO and the Western Kazakh authorities say that Berezkova is not suffering any more than other settlements. In a detailed statement to this programme KIO outlined the results of an integrated health and environment inspection carried out in the village in March 2002. In it they say the health problems are typical of the region and attribute them to “poor infrastructure as a result of socio-economic decline witnessed over the years, following the collapse of the Soviet Union.”
However, Tungush a smaller village located closer to the plant in this Category A project area has been moved which some feel might appear to indicate there is a significant threat.
The Push for Transparency
This year saw the first meeting in London of the Extractive Industry Transparency Initiative. The initiative was launched by British Prime Minister Tony Blair at the Johannesburg Summit, and sets out to give hope to people like Svetlana who believe they are not benefiting from the vast natural resources of their country.
Hosted by Valerie Amos, the then UK International Development Minister, the meeting looked at ways of promoting long-term sustainable development in the extractive industries. One of its most enthusiastic supporters is Norway, which like the UK has big investments in the oil and gas industry around the world. Hilde Frafjord Johnson, Norwegian Minister of International Development, says Norway consciously tries to avoid the underhanded dealings that are so entrenched in the industry.
Kazakhstan insists it is using its new-found wealth wisely, and in 2000 a national fund was set up with the aim of accumulating oil revenues for to be spent of improving the welfare of future generations. According to the authorities 1.3 million US dollars has been allocated to improve the living conditions in Berezkova.
Erlan Idrissov, Kazakhstan Ambassador to the UK says: “We do realize the importance of transparency as a tool to provide and ensure sustainable development. We want to see a multiply effect out of the development of the extractive sector, to see the multiply effect for the development of downstream and adjacent industries and sectors in our economy to make it modern, self-sustainable, and strong.”
Dissenting Voices
Nearly 2,000 kilometres away to the east of Berezovka village is Almaty. This vast, modern city nestled beneath the Zaili Alatau mountains was the country’s capital until 1997 when the government announced a controversial decision to move the capital to Astana in the north of the country, close to the Russian border. But for most Kazakhs Almaty remains the country’s economic and political heartland.
It is here that Sergey Solyanik works with the environmental campaign group ‘Green Salvation’, a rare voice of dissent. There is no credible political opposition here, and a free press is practically non-existent. Green Salvation travel throughout the country, filming and gathering evidence of what they say is the government’s irresponsible approach to the environment and its people.
Green Salvation says this waste is radioactive. It lies unprotected and unguarded in a field outside Almaty. It is part and parcel of the Soviet legacy. According to the Government of Western Kazakhstan, in these areas the incidence of sickness is higher than in Berezkova.
Green Salvation has little faith in any promises of transparency made by the government. Back in Berezovka, Svetlana’s survey has found rampant health problems – the majority of the village’s children are afflicted by a skin rash.
She describes the desperation of the situation: “We feel abandoned. Some people say on some maps our village does not even exist any more. We feel thrown away by the plans of both the local authorities and by KIO. Some people are saying that Berezovka does not need to be moved, if this situation continues people will scatter by themselves.”
Earlier this summer Svetlana set up a village meeting to explain what she was discovering. Hundreds turned out for what became a heated debate in the village hall. Repeated calls for a meeting with the village’s Akim, or chairman, have been denied. Svetlana has decided to take Sergey to confront the one man who can tell her what, if anything, is being done.
Though at first reluctant, the Akim agrees to speak to Sergey. However, he insists that the meeting should be private. Svetlana is not allowed in to his office.
The Akim’s responsibilities are to Berezovka, and include the management of the money allocated to the village from KIO’s annual grant. The Akim also has a four year old son who has recently been diagnosed with an acute respiratory illness. Sergey asks him what he thinks of Svetlana’s claims about the villager’s health. The reply is that individual’s health may be affected by personal circumstances but that a medical investigation is in order to put any problems to rest. Svetlana has not received any reply to the health survey she sent to the Akim months ago.
Svetlana says that the biggest problem is not having information about their environment or how KIO’s money is being spent. Sergey of Green Salvation says that other problems in Kazakhstan are that there isn’t a way to involve locals in the decision making process and that the people don’t have much access to justice. KIO say the information on environmental investigations of Berezovka is available to all, and insist they are constantly monitoring the village and the surrounding areas.
The Continuing Story
Since the making of “Svetlana’s Story”, the government of Western Kazakhstan has invited the programme to return to Berezovka, and assurances have been received that the complaints made by the villagers, and in particular Svetlana, will receive its full attention.
KIO was also asked whether they would be prepared to attend a meeting between the villagers and the government, filmed by this programme. The statement was: “KIO is in constant dialogue with the villagers. Debating a sensitive issue with a minority group on television is not, in our view, a constructive way to proceed.”
KIO has now installed an air warning system in the village, designed to sound an alarm should toxic levels in the air reach dangerous levels.
Svetlana was recently invited to the USA by Crude Accountability. On her return she says she received a number of threats from local government authorities and the police. To some she is a trouble-maker in the pay of a foreign NGO and a local environmental pressure group whose activities might chase the foreign investors away.
What is certain is that across the former Soviet Union there are countless thousands like Svetlana who have seen no benefit from the free market. And who have seen life expectancy decline. Despite the settlement’s proximity to the plant, Berezkova is a rule – not an exception. And there is no conclusive, independent evidence that her suspicion that emissions from the plant are the cause of ill-health among the villagers.
In the absence of any independent scientific assessment, Svetlana’s allegations are not proven. Svetlana’s views are those of a concerned citizen.