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Belt and Road: Taking advantage of Central Asian resources?

This image was taken from the Living Asia website where this article was originally published

One of the most controversial examples of bilateral cooperation between our region and its neighbors over the past decade is the Belt and Road Initiative, proclaimed by the President of the People’s Republic of China, Xi Jinping, in 2013. Would the promises about the solid economic development of China through the resource development of Central Asia yield any results for us? What are the conditions and benefits of this mysterious and incomprehensible cooperation for us? Let’s reveal the mystery and consider the benefits and risks of the Belt and Road initiative based on some specific examples.

Agriculture is one of the primary directions of economic cooperation between Kazakhstan and China

Initially, agriculture was supposed to become one of the main directions of the cooperation between Kazakhstan and China. However, the governments of Kazakhstan demonstrated their inability to ensure proper control over the compliance with the requirements of national legislation by foreign enterprises. As a result, it provoked a wave of protests from the local population.

Even though one of the leading environmental requirements of the national legislation of the Republic of Kazakhstan is the principle of information availability, the list of Chinese projects implemented in Kazakhstan has been confidential for many years. As a result, the lack of access to information on ongoing projects has become a severe obstacle to the initiative’s implementation.

Since 2001, foreigners in Kazakhstan have been leased agricultural land for ten years. At the end of 2015, the lease was to be extended to 25 years. The possibility of such an amendment to the Land Code caused a wide public outcry and a wave of protests. The citizens of Kazakhstan were especially concerned about the transfer of land to Chinese agricultural producers.

There is only one example of a Chinese company that obtained Kazakhstan’s agricultural land for lease. On October 19, 2015, land plots with a total area of 14,754 hectares were allocated to the Chinese company “Long Xin” for ten years. Unfortunately, the requirements of national legislation on the illegal import of pesticides were violated by the foreign company. In May 2016, during an unscheduled inspection of the State Inspection Committee in the agro-industrial complex of the Ministry of Agriculture, 97 barrels of the pesticide trifluralin 480 were found without mandatory labeling. Their total volume was 19,400l, and 4,400l of that had already been used by the inspection time.

Obviously, this situation concerns the local population. Indeed, it is evident that the Chinese company ignored the requirements established at the national level; it endangers the independence of Kazakhstan.

On May 6, 2016, the President of the Republic of Kazakhstan introduced a moratorium on “providing foreigners, non-citizens, foreign legal entities, as well as the legal entities, whose share of more than 50% of the authorized capital is taken by foreigners, non-citizens, or other foreign legal entities, with temporary land use rights of agricultural land plots on the terms of the lease”. The moratorium is valid until December 31, 2021. However, on February 25, 2021, the President of the Republic of Kazakhstan, Kassym-Jomart Tokayev, assigned “to permanently prohibit the sale and lease of agricultural land to foreigners and foreign legal entities.

Cooperation with China and renewable energy development

The investments in Central Asian renewable energy sources (RES) made by China were to become another stage in developing the cooperation between our region and China. It was assumed that Kazakhstan, as the country with the most significant solar and wind energy potential among all Central Asian countries, should be especially interested in such support. However, the intervention of a third party in the development of the energy sector has led to significant changes in Kazakhstan’s politics.

For example, it was planned to build a 480 MW hydroelectric power station within the framework of the project implemented on the Tentek River in the Almaty region. Its capacity and location could provide energy for the entire city and thereby contribute to the energy independence of Almaty from the energy of Bishkek.

While the renewable energy projects implemented in China but funded by international development banks comply with international standards entirely, the situation with projects financed by Chinese banks is somewhat different. In other words, all the renewable energy sources built in Central Asia and financially supported by China will operate under Chinese standards. To illustrate, the new Moynak hydroelectric power station has become a copy of the Chinese hydroelectric power station in Kazakhstan. In addition, in 2018, China Power obtained a contract to design the first wind farm in Kyrgyzstan. However, the construction never happened; as it was supposed to be the first wind farm in Kyrgyzstan, the project had to entirely comply with China’s wind energy standards.

Thus, China’s renewable energy investments will require the Central Asian countries to acquire fundamental technologies from China and appropriate training of local personnel to carry out daily operations. It will likely increase the long-term dependence on China and cause exclusion from the Western market.

Development of former landfills – a disregarded threat for the society

Another issue associated with Chinese investments is financial support provided for environmentally hazardous projects. One of the most common examples is the investments in the construction of landfills located in the capital of Uzbekistan, Tashkent.

To begin with, landfills are prohibited by the Law of the Republic of Uzbekistan. Buildings are not permitted even in reclaimed landfills. “The use of the territories of reclaimed solid waste landfills is not allowed for construction” (SanPiN RUz No. 0157-04, clause 7.5). Despite the ban, the fact of the landfills’ presence in the city is obvious; it causes severe damage to the environment and, as a result, the health of people living nearby. However, those landfills are not registered. Hence, is it considered that they do not exist at all?

One of the most striking examples is the landfill territory given to foreign investors to develop the Yunusobod Business City multifunctional complex. In total, ten lots have been identified for “Yunusobod Business City”. Three of those were purchased by the Chinese investment company FE LLC “TSC-NK-INVESTMENT”. The company pledged to clear the area from construction waste and excess soil. The recipient signed an agreement with OOO Techno logistic construction for 9.5 billion soms (about $ 1 million) for export. According to the agreement, the construction site was to be cleared by the end of 2019. However, it did not happen – in 2020, Techno Logistic Construction LLC magically disappeared from the State Register. Moreover, the data of soil analysis performed at the Center for Specialized Analytical Control showed an excess compared to the background point: for lead – 2.95 times, for cadmium – 7.65 times, for copper – 19.22 times, chromium – 1.45 times, the maximum excess for zinc – 9.12 times, for sulfates – 33.33 times.

Meanwhile, the construction continues. Moreover, after the active intervention in the process, the media is being accused of impeding foreign investments. It is also important to note that the attitude of the citizens of Uzbekistan towards foreign investments is generally favorable. However, non-compliance with all the requirements of the legislation of the Republic of Uzbekistan regarding landfills and the possible threat to the public’s health is undeniable. The example of this project once again demonstrates the reluctance of Chinese investors to comply with the environmental requirements prescribed in the framework of national legislation. For this reason, the public in the region is highly concerned about the health and well-being of the population.

Litigation in the case of access to environmental information

Another example of the cooperation between Kazakhstan and China is Chinese investments in constructing two plants in the Kyzylorda region; one for the production of cement and the second one for tomato paste.

The plant’s construction for the production of oil well cement was initiated by the Kazakh “DANAKE Corporation” project and the Chinese “Gezhuba Shieli Cement Company.” The investors chose the Shieli district of the Kyzylorda region as the construction site. Public hearings were held on the construction of the plant. During the public hearings, the citizens expressed their positive attitude toward the project.

The public was attracted by the improvements of social conditions: new jobs and increased employment of the local population, provision of funds for the local budget from tax deductions, and the strictest control over the enterprise’s activities. Despite those promises from the government, the concerned public, represented by eco-activists, decided to study the project documentation in more detail. What has emerged?

According to Article 164 of the “Environmental Code” of the Republic of Kazakhstan, individuals and legal entities have the right to free access to publicly available state electronic information resources containing environmental information. In addition, according to the Aarhus Convention “On Access to Information, Public Participation in Decision-Making and Access to Justice in Environmental Matters,” the right of individuals and legal entities to have access to environmental information is enshrined, as well as the right not to indicate the reasons to obtain the information in their requests. However, the Ministry of Industry and Infrastructure Development of the Republic of Kazakhstan and the Ministry of Ecology, Geology, and Natural Resources of Kazakhstan refused to provide the requested environmental information. The state authorities explained their refusal by the confidentiality and commercial secrets of the project.

As a result, from December 2020 to February 8, 2021, an online trial was held on this issue. The claim was dismissed. From May to June 2021, an appeal hearing took place. Even after reconsideration of the case, the court refused to meet the appeal. The court’s decision has not been received officially yet. Therefore, it is not known on what grounds the court refused to satisfy the plaintiffs. Thus, this case demonstrated the need for educational and informational work on access to environmental information with state bodies, judges in all regions of the Republic of Kazakhstan.

Lack of transparency and access to information on projects implemented under the Belt and Road Initiative might be the primary problem of the cooperation between Central Asia and China. The incomprehensible “confidentiality of information” creates obstacles to ensure compliance with international and national environmental standards. However, there should be constant monitoring over the project implementation process by the public, non-governmental organizations, and the media when it comes to such significant cooperation.

This article originally appeared on Living Asia in Russian.