Yakutia opposes the federal law bill “On geological resources”

Source: www.regnum.ru/news/524838.html
11 October 2005

The government of the Republic of Sakha (Yakutia) advise the president of Russia to not sign the federal law “On geological resources”.

The law was discussed by the government of the Republic. In the opinion of the ministries of Yakutia, ratification of the law in its current form will promote the transition of geological resources into private property. According to the conditions stipulated by the bill, only large commercial companies can obtain mineral exploration and extraction rights. These rights can be subsequently transfered by auction and the assignee will be exempt from the duties of the former owner. Thus, the bill fosters a secondary market for natural resource sites, a market not controlled by the state, but by the resource owners.

The Yakutian ministers have also called the pointed out to the Ministry of Natural Resources that the project does not stimulate development of geological prospecting, does not consider regional specificity and the interests of numerically small indigenous peoples, and excludes the federal and regional ownership of geological resources.

One of the main defects of the bill is the high potential for corruption. This was noticed not only the Yakutian experts, but also experts of federal organizations, including Russian scientific institutes. Openings for corruption can be seen in a number of clauses regulating interactions between resource owners and federal officials.

The government of the Republic points out that the principle of “two keys” would lower the risk for corruption more than creating conditions of mutual control of federal and regional authorities. In addition, the government of Yakutia listed in its conclusions a number of specific proposals concerning principles and criteria of allocation of federally, regionally, and locally owned resource sites, about the creation of a federal fund for plots of resource reserves, and so on.

The bill was developed, and subsequently modified by the Ministry of Natural Resources of the Russian Federation , approved by the federal government and brought before the State Duma of the Russian Federation in June 2005.