Economic agreements between indigenous communities and industry in Khanty-Mansiyskiy Autonomous Okrug: a legal assessment

Aleksandr Veselov, Executive director, Ekoyuris Institute


In the framework of the project on legal protection for the indigenous territories of the Khanty in the Surgut region, Khanty-Mansiyskiy Autonomous Okrug (KhMAO), the indigenous communities, the owners of indigenous lands, and the local authority in the Surgut region provided lawyers of the Ekoyuris Institute with copies of economic agreements. The indigenous communities and the Khanty families enter into the agreements with oil companies and other industrial companies of various forms of ownership. Sometimes the local authorities enter into these agreements on behalf of the local population.

The subject of the agreements is the right for industrial development of the lands attributed to the indigenous population.

I will assess one of these economic agreements here. The parties to the agreement are the head of the indigenous community and the Director General of Tomskneftegasgeologiya Ltd. The following gaps were observed in the text of the agreement:

- The place where the agreement was done is not specified;

- The signatures have different dates;

- The general part of the document does not specify the basis for the agreement of the indigenous community (indications to relevant parts of the Charter of the indigenous community);

- The document does not express specifically the subject of the agreement, obligations and responsibilities of the parties, conditions for implementation, amendments and denunciation of the agreement. Legal addresses and bank details of the parties are not specified. The term of the agreement is not specified.

- The document does not specify witnesses to the signatories. There is a signature, though of an unknown person, likely to be an official of the local authority;

- An additional clause states that Tomskneftegasgeologiya Ltd. will transfer 200 million roubles to the account of the indigenous community. However no term of transfer is specified; a copy of a budget for this amount and a protocol of the agreement on the contractual price are not attached;

- The style of the text is colloquial, it is not legal. The document contains stylistic and spelling errors.

The subject of this agreement is the consent to temporary use of the land (28 ha) for industrial development, limited by the term of the license. Registration numbers and the date of issue for the license are not specified. The license has been issued by the Regional Geological Office to drill a test borehole type R-3 in Yuzhno-Makhninsk. Further, the agreement provides the consent of the parties to the plan of transportation of the industrial equipment, as well as the layout of the selected site.

The responsibilities of the geologists are mentioned. However, they are formulated in general terms only. No exact definitions are provided. For example, the company agrees to provide transport should members of the indigenous community need medical treatment. However, the types of transport, its availability, and the passenger capacity are not specified. It is not explicitly stated that the transport is granted free of charge.

Article 6 of the agreement defines "the transfer of the dwelling on the site to be used permanently free of charge". If the agreement defines the transfer free of charge, the term 'transfer of ownership' should be used. Then the word 'permanent use' makes no sense. The process of transfer should be specified.

Article 7 is formulated absolutely illiterately and contains such unclear phrases as, "... allocates... the goods..." and "... for delivery of native plants...".

Article 8 provides the leader of the indigenous community with the right to address the officials of the Surgutski local authority or a court if the agreement is violated. The local authority does not have the legal powers to resolve disputes and may not apply any sanctions in this case, since local authorities are not mentioned in the list of dispute-resolving governmental agencies in Article 11 of the Civil Code. Thus the Russian legislation does not provide the rights to appeal to local authorities in such disputes. A court cannot consider a dispute of this nature since according to Article 25 of the Civil Code and Article 22 of the Arbitration Code such disputes fall into the field of an arbitration court.

Article 9 provides for a reconsideration of the Agreement (but not its parts) by "a demand of the parties".

This formulation makes no sense, words 'as agreed by the parties' have to be applied.

The requirement of the local administration to present a report on the use of the amount of 200 million roubles given to the community is in a contradiction with Article 154 of the Civil Code, as the Agreement is considered to be a two-party transaction, as so stated in the General Part of the Agreement. Hence, a third party – the local administration – has no right to make any conditions on this transaction.

The will of the parties to achieve juridical results may be expressed in any form.

The form of the transaction has legal significance for the underlying activity, for the definition of its content, and for proof of rights and duties of the parties should a dispute arise (Civil Code, Article 158). Here, the transaction between two parties was made in writing. It concerns land use rights. According to Articles 164 and 131 of the Civil Code, such transaction requires registration by the relevant governmental agencies.

The form of this transaction defines it as an 'economic agreement'. The existing legislation does not recognise it as a legal transaction.

The agreement does not specify conditions for implementation of most responsibilities of the company. According to Article 309 of the Civil Code, the responsibilities should be implemented according to the conditions of the Agreement and the requirements of the law. The comment to the Article specifies that in case of insufficiency or ambiguity of conditions of the responsibilities, the implementation has to follow requirements of the law. However the Russian federal and regional legislations do not regulate the affairs related to industrial development of tribal lands.

The rights and the responsibilities of the parties arise from the contracts or other transactions permits by the legislation or not contradicting the legislation (Articles 8 and 307 of the Civil Code). An 'economic agreement' as a transaction is not stipulated by the law or by any other legal standard.

Article 422 of the Civil Code states that a contract should meet the imperative norms of the legislation valid at the moment of the contract’s conclusion. The examined document does not meet the requirements of the Act on the status of indigenous territories in KhMAO (in force from April the 5th, 1992 by the KhMAO Local Parliament). This Act (Articles 20-22) defines the following with respect to the use of tribal lands for industrial research:

- A contract with the owner of the tribal land that specifies the methods and the temporal terms of the work, as well as reconstruction of the land to a state suitable for its original use, the number and sitings of temporary constructions on the land, the responsibilities for indemnification of losses incurred by the owner of the tribal land, special rules on conduct of research that take into account the features of natural resources on the land in question etc. These are the important conditions in a contract;

- Terms and amounts of payments for the use of the land, responsibilities on recultivation and indemnification are determined by the local authority with the consent of the owner of the tribal land;

- The contract with the owner of the tribal land is registered by the local authority that issues a permit to conduct works on the tribal land.

Clearly, the particular transaction assessed here does not meet the requirements of the Act. The ‘economic agreement’ does not include obligatory and essential conditions. The procedure for conclusion of a contract was not followed. The similar requirements are applied when land is allocated to industrial development, with additional essential conditions. Article 22 of the Act states that in the absence of a contract with all above conditions or in default of its registration, the industrial development may not take place and the contract is deemed void.

Further, the Act requires an enterprise to receive consent of the landlord in a separate, formless document of a free form after the contract was concluded. This requirement is virtually ignored in Surgut region.

The consent of the owner is in the 'economic agreement', and is a subject of the transaction. This contradicts requirements of the Act.

Thus, the agreement violates the requirements in Article 422, part 1, of the Civil Code (it does not meets the legal rules for the parties) and Article 434, part 1 (the form of the contract required by law is not observed).

The agreement does not state grounds for amendments and denunciation; this violates requirements of Article 450 of the Civil Code.

Further, the Act states that consent is given and the community enters into the contract. According to the charter of the community, the chairman of the community cannot give consent to industrial development of tribal land or sign any agreements that provide for such a content without appropriate decisions taken at a meeting of the members to the community. In the agreement, there is no reference to the consent by the community or representation of this question to the chairman. Thus, an non-authorised person (Civil Code, Article 183) entered into the transaction. According to the law, rights and responsibilities, including any property-related responsibilities, in the transaction belong to the third party, i.e. the enterprise.

Since the legislation requires governmental registration of land-related transactions, especially the tribal land (Civil Code, Article 164), ‘the economic agreements’, entered into by the chairman of the community and the enterprises and organisations with regard to prospecting or industrial development of the tribal land have to be deemed invalid, according to the Civil Code, Article 165, part 1. The imperative may be applied to the 'the economic agreements' of Article 168 of the Code. The Article defines a transaction as invalid if it does not follow legal requirements. The managers of the company and of the organisations who entered into the 'the economic agreements' with the chairman of the indigenous community surely knew the legal requirements on industrial development of tribal land, the transaction may be challenged, by Civil Law, Article 174, as the chairman left the community.

Another possibility is 'to deem the transaction invalid as entered into because of ignorance' (Article 178, Civil Code), since the will of the chairman expressed in the 'agreement' was not based on full knowledge regarding the real amount of damage to be incurred by the community as a result of prospecting on tribal lands. Neither the company nor the local authority presented any calculations on environmental and economic damage to the community, not even a State of the Environment Report on this or other projects.

The above remarks are applicable to other examined agreements between indigenous communities and family leaders, on one hand, and industrial structures, on the other hand.

It is necessary to note that Article 3 of the federal law "On the governmental regulation of the socio-economic development in North Russia" (June 19, 1996) specifies preservation and development of the indigenous peoples of the North and protection of traditional way of life of the indigenous minorities, as principles for governmental policy. Similar requirements are established by the federal law "On guarantees of the rights of the indigenous minorities of the North, Siberia and the Far East of the Russian Federation".

In the framework of this law, the law of KhMAO "On land" of May 28, 1998, gives the indigenous population a priority for land to be used to maintain a traditional way of life, for rational use of land as a natural resource, and as a basis for subsistence. Article 77 of this law places obligatory responsibilities for indemnification of damage incurred by the owner of the tribal land. Article 43 provides a new regulatory regime for remit of tribal land gratis in the form of inherited possession and termless use for indigenous inhabitants who maintain a traditional way of life. Article 50 places responsibility on the subsoil users to co-ordinate permit conditions with the owner of tribal land. But the new law does not state the necessity of agreements between the enterprises and indigenous community or individual owners of the tribal land for industrial development.

The law "On land" has in fact cancelled out Articles 104 and 105 of the KhMAO Law 'On use of subsoils', April 9, 1996, that gave a detailed regulation for attribution of land to industrial development, including agreement with the owners of tribal land. However these rules may be used to challenge agreements, entered into after this law went into force. Here, a very important condition is stipulated in Article 108 on determination of damage to the tribal land as a result of subsoil development and the construction of buildings, and on the establishment of expert groups to assess the damage.

The responsibility to develop a mechanism of indemnification for the use of natural resources and for the damage to the environment in indigenous traditional abodes is placed on the okrug authorities by the Charter of KhMAO of April 26, 1995 (Article 18).

CONCLUSIONS:

1.  The 'economic agreements' concluded in the Surgut region that contain agreements for attribution of tribal land to industrial development have to be deemed void on account of a series of reasons, explained above.

2.  When filing claims to courts on deeming these transactions invalid, it is feasible to raise the issue of deeming void permits for the use of subsoil within the borders of tribal lands.

3.  In the governmental acts, a form and procedures for economic agreements have to be addressed, with calculations on indemnification to the owners of tribal land.

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NB: The examination of the documents mentioned in this report was done in 1999. At present, the practice of agreements in the KhMAO meets the current legislation to a greater extent. However, in other regions of the North, Siberia and Far East, the mechanism for conclusion of such transactions is not in place.

Non-governmental structure of centres concerned with the protection of indigenous rights on traditional use of natural resources is in formation