The situation in the genre of the tragicomedy

By Kim Stern

According to its provisions of the 1978 UN Vienna Convention "On the continuity of states with respect to treaties". as applied to the situation with long-term legal proceedings against Kazakhstan by the Canadian mining company World Wide Minerals (WWM), the Central Asian Republic is not obliged to fulfill the obligations of the USSR.

It would seem that in this story the final point should have been set for a long time already. And most of all in this should be interested in the Canadian government. Not even the company that played the whole theater of the absurd, namely the official Ottawa, for some reason incomprehensible to the world, continues to take the side even if it's native, Canadian, but unscrupulous WWM.

In 1995, after the collapse of the Soviet Union, the Canadian company World Wide Minerals appealed to the government of Kazakhstan with a business proposal. The republic was to give it in development uranium deposits together with the uranium mining complex and the mining and chemical combine. In response, WWM promised to invest in the development of the industry at least $ 100 million over several years. She also announced readiness to attract strategic financial and industrial partners and investors, and in parallel, which is important, to keep in proper form all the social infrastructure around the complex - these are kindergartens, heating systems of the neighboring city and so on. At the same time, WWM managers assured that they would not be dismissed by Kazakh workers, on the contrary - they were promised to retrain by Western patterns and even send them to Canada for advanced training. A year later the contract was signed by the sides.

Moreover, Kazakhstan has given guarantees that the Canadian company will receive a license for exporting uranium on the international market. With only one condition - this should happen within the framework of Kazakhstan legislation. A completely understandable and ordinary condition. But this very moment will later become a landmark for the whole story.

Canadians, knowing full well that the quota for the sale of Kazakh uranium in the US belongs to the American Nukeminc, they nevertheless demanded that the government of the country issue this quota to the Canadians themselves. In response, they were refused, due to the fact that the exclusive right was granted to the American company. But investors from Canada did not want to surrender and went virtually to blackmail, stopping production at the enterprises that they received in management. It is now completely clear that the Canadians initially did not intend to follow their promises and did not intend to invest in the development of the Kazakhstani uranium sector. Already six months later, this absurd, horrific cynical policy of the Tselinniy Mining and Chemical Combine was at a loss, and the level of production fell by almost 60%. A promising uranium combine has fallen into decay.

Stop production WWM argued that there are allegedly no opportunities for marketing products, hinting at the US, although the world market was not limited to the States alone. But the Canadian company was spitting on the truth in this matter. Incidentally, the Kazakh government, which accused World Wide Minerals of violating Kazakh law and damaging the enterprise and the environment, broke the contract with the Canadians. Those in turn, solely because of their stupid actions and financial insolvency, went bankrupt. The property of WWM was sold out.

Then came a series of lawsuits. World Wide Minerals has repeatedly sued the government of Kazakhstan and Kazatomprom in international arbitration in Stockholm and American courts. But all attempts to return assets or receive compensation invariably ended in a loss. In particular, as the Court of Appeal of the District of Columbia indicated, "the decision whether to issue or not to issue an export license is a sovereign act of Kazakhstan based on internal laws and decrees of the republic." Another important detail in favor of the republic - Canada did not have an agreement on the promotion and mutual protection of investments from the ROK, while the US had one. The corresponding document came into force in 1994. And on its basis, the promotion of the American company Nukeminc from the side of Kazakhstan was originally initiated.

But World Wide Minerals has not calmed down. And there was another round of confrontation. At the beginning of last year, the Arbitration Tribunal of Canada considered and granted the claim of the Canadian mining company to Kazakhstan. At the same time, the amount of claims has increased from a loss of $ 1 billion to the current 3 billion. What do Canadians hope for? This will sound strange, and this is what this material began with, but the Canadian side refers to the bilateral agreement on investment between Canada and the USSR, which guarantees the protection of Canadian investments. This absurd position was supported not only by the Arbitration Tribunal, but also by the Government of Canada, which stated that Kazakhstan is the legal successor of all investment obligations of the USSR. As they say, without comments. Lawyers of World Wide Minerals went further and stated the following: "This is a historic decision in the field of international law. For the first time, some other country, except for Russia, will be considered as a legal successor to the international investment treaty concluded by the USSR. "

Obviously, the situation has completely gone into the genre of the tragicomedy. In Kazakhstan they refuse to understand why the agreement signed by the chairman of the Council of Ministers of the USSR should prevail over the national interests of a sovereign republic? Who is this chairman for an independent state? In fact, an outsider official. Besides, how can Kazakhstan be considered the legal successor of the USSR, if Russia took this role long ago? Questions from the Canadian side, unanswered.

December 21, 1991, when Russia was nominated and the decision of the Council of Heads of State of the CIS supported the idea of ​​a successor state so that Russia "continued membership of the USSR in the UN, including permanent membership in the Security Council and other international organizations." In the language of international law, this means one thing: unlike the other former Soviet republics that proclaimed themselves to be new states, the Russian Federation remained the same state that continued the rights and duties of the former USSR and the RSFSR and the Russian Empire that existed before it.

The international community recognized Russia's new position almost immediately after the collapse of the Soviet Union. In exchange for the former republics' refusal to share in the foreign assets of the Soviet Union, Moscow assumed all the financial obligations of the USSR to foreign creditors. The lion's share of the debt, about 64%, arose in the last years of the country's existence when the dying power was searching in vain for the "gold of the party", and the government tried to solve all internal problems by borrowing on the foreign market. In 2006, the Russian Federation paid off debts to the Paris Club and all the countries of the world included in it, consider this country the only legal successor to both debts and assets of the former USSR.

International experts say: "If, after the collapse of the country, the national statehood changes in the international legal sense, then the international legal personality is interrupted." And this fully applies to Kazakhstan. One more fact. The company WWM has never worked in the USSR and for this reason alone cannot appeal to an outdated, inoperative contract. The policy of Canada is also interesting. Unlike many other Western countries, after the collapse of the Union, who hastened to renegotiate treaties on the promotion and mutual protection of investments already with independent republics, Ottawa did not do so. Apparently, considering the recognition of the illegitimacy of the legal framework of the USSR as a matter of unimportance and unnecessary. Therefore, she continues to insist that Astana return to the Soviet past and act contrary to its own national interests. Of course, this will never happen and cannot be, analysts say. No country in the world will do this, and there are no grounds for this.

Experts, meanwhile, are building forecasts. And for Ottawa, they are disappointing. First of all, by supporting WWM, the Canadian government can significantly complicate bilateral relations between the two states. Secondly, getting involved in a knowingly losing affair, Canada involuntarily damages itself and its image. And it is fraught with a counterclaim from Kazakhstan itself, whose patience is also not infinite. So, it is quite possible that an ordinary Canadian taxpayer will pay for incompetent decisions. After all, the legal costs in such cases, as a rule, reach considerable sums. There is another notorious explanation for the not quite adequate position of official Ottawa - the possible presence of a corruption component in all this. A powerful lobby in the government of WWM interests, which does not want to lose and inflict damage to itself, although the reputation of the initiator of the conflict has already come, most obviously, the fair end.
 
 
06.12.2017
 
 
 

Bookmark/Search this post with
ARTICLE CATEGORIES