Parliament instructs Cabinet of Ministers to introduce external management at Kumtor

AKIPRESS.COM - Kyrgyz Parliament approved a draft decree, one of the points of which is the introduction of temporary management at Kumtor, on May 17 at its extraordinary session.
The Parliament instructed the Cabinet of Ministers to introduce temporary external management at Kumtor Gold Company JSC and appoint an interim external manager due to irresponsible actions of Centerra Gold Inc. that disabled the glacier tracking and safety control system putting the lives and health of people working near the mine at direct risk, environmental violations revealed as a result of the inspection in Kumtor Gold Company JSC posing a threat to the safety of workers and population.
The report of the state commission looking into Kumtor was taken into account by the parliament. The work of the state commission was extended for 3 months.
91 MPs voted for, no one voted against with 114 MPs attending the session. 23 of the showed up MPs did not vote.
Last week, president Sadyr Japarov signed into amendments to law on joint-stock companies and Criminal Code that would enable the Kyrgyz government to impose external management on Kumtor in case of environmental breach posing direct threat to the lives of people. Parliament approved the bill on May 6.
On May 7, a court in Bishkek ruled to fine the Kumtor Gold Company JSC for 261.719 billion soms (ovev $3 billion) in favor of the state and pay a duty of 1.308 billion soms for violation of environmental legislation of the Kyrgyz Republic: the company dumped mining waste on the Davydov and Lysyi glaciers for many years. The company dumped 1.2 billion tons of waste rock in total for the period of its operation, according to court's ruling.
On May 8, Centerra Gold Inc. said in a statement that it understands that this newly adopted law on external management would apply in circumstances where Kumtor Gold Company (KGC) violates certain Kyrgyz laws relating to safety and thereby creates an immediate threat to the life or health of people: (i) prohibits KGC's managers from managing the mine (or else face criminal sanctions); and (ii) enables the Prime Minister of the Kyrgyz Republic to appoint an external manager to take control of all management activities of KGC, including its bank accounts.
It also stated that Company is aware of other draft laws and decrees in the Kyrgyz Republic which seek to undermine the 2009 restated Kumtor project agreements and the tax and fiscal regime under which the Kumtor Mine has operated since 2009. It is unclear whether such drafts have progressed past the proposal stage.