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The Board agreed that Kazakhstan has made meaningful progress in implementing the 2016 EITI Standard.

Outcome of the Validation of Kazakhstan.

Decision number
Decision basis
2016 EITI Standard, Requirement 8.3 EITI Validation deadlines and consequences
13 February 2018

Board decision

Following the conclusion of Kazakhstan’s Validation, the EITI Board decides that Kazakhstan has made meaningful progress overall in implementing the EITI Standard.

The Board congratulates the Government of Kazakhstan and National Stakeholders Council (NSC) on the progress made in improving transparency and accountability in the extractive industries by providing timely and reliable information to the public, including civil society, media and affected communities. It is notable how Kazakhstan has gradually expanded its EITI reporting in response to demand for more information, including on local content, social investments and transportation of oil, gas and minerals. The Board encourages the government to continue the recent discussions on transparency in contracts and beneficial ownership, and to improve the disclosures of transactions related to state-owned enterprises in order to address existing transparency gaps.

After ten years of EITI reports, Kazakhstan has taken important steps towards “EITI mainstreaming”, including by providing public access to relevant financial data the government’s database for tracking contractual obligations as well as the launch of the online license cadastre. The Board encourages the government and the NSC to explore opportunities for fully transitioning to mainstreamed implementation by implementing the recommendations of the recently completed feasibility study.

The Board recognises Kazakhstan’s efforts to go beyond the requirements of the EITI Standard regarding disclosures related to the legal framework (requirement 2.1), exploration data (3.1), export data (3.3), data timeliness (4.8), distribution of revenues (5.1) revenue management and expenditures (5.3), and data accessibility (7.2). The Board also takes note of the government’s efforts to increase beneficial ownership transparency by proposing mandatory beneficial ownership reporting by oil, gas and mining companies in the draft new Law on Subsoil.

The Board has determined that Kazakhstan will have 18 months, i.e. until 13 August 2019 before a second Validation to carry out corrective actions regarding the requirements relating to MSG governance (1.4), license register (2.3), state-participation (2.6), production data (3.2), barter arrangements (4.3), transportation (4.4), data quality (4.9), social expenditures (6.1), SOE quasi-fiscal expenditures (6.2) and outcomes and impact of EITI implementation (7.4), with SOE quasi-fiscal expenditures being the main area of concern.  Failure to achieve meaningful progress with considerable improvements across several individual requirements in the second Validation will result in suspension in accordance with the EITI Standard. In accordance with the EITI Standard, Kazakhstan’s multi-stakeholder group may request an extension of this timeframe, or request that Validation commences earlier than scheduled.

The Board’s decision followed a Validation that commenced on 1 July 2017. In accordance with the 2016 EITI Standard, an initial assessment was undertaken by the International Secretariat. The findings were reviewed by an Independent Validator, who submitted a draft Validation report to the MSG for comment. The MSG’s comments on the report were taken into consideration by the independent Validator in finalising the Validation report and the independent Validator responded to the MSG’s comments. The final decision was taken by the EITI Board.

Corrective actions and strategic recommendations

The EITI Board agreed the following corrective actions to be undertaken by Kazakhstan. Progress in addressing these corrective actions will be assessed in a second Validation commencing on 13 August 2019:

  1. In accordance with requirement 1.4.a.i and 1.4.a.ii on MSG governance, civil society should agree a process for ensuring diverse and representative participation of civil society in the National Stakeholder Council. The invitation to participate in the work of the NSC must be open, transparent and independent. In accordance with requirement 1.4.a.ii and the NSC MoU, civil society members of the NSC should also make sure that their funding sources and affiliations are transparent. 
  2. In accordance with requirement 2.3 on license registers, the government should publish the date of application for licenses and contracts, as well as the date of award and duration of the licenses and contracts, ideally on the online license register.
  3. In accordance with requirement 2.6 on state-participation, the government should engage SOEs in the EITI process and ensure that future EITI Reports comprehensively:
  • lists all SOEs and all subsidiaries engaged in exploration, production or transportation of oil, gas and minerals. For each of these SOEs and subsidiaries, any ownership held in oil, gas and mining assets should be disclosed, as well as any changes in ownership during the financial year and the terms and valuations related to such changes in ownership. The terms attached to the equity stake of the SOE and/or subsidiary in each of their projects should also be transparent.
  • Describes the rules and practices regarding the financial relationship between each SOE and/or subsidiary and the government, e.g. the rules and practices governing transfers of funds between the SOE/SOE subsidiary and the state, retained earnings, reinvestments and third-party financing. The description could also include other benefits such as e.g. preferential rights to licenses and contracts, etc. 
  • Details on any loans or loan guarantees provided by the government and SOEs, to any private companies or subsidiaries or affiliates that are engaged in oil, gas and mining activities.
  1. In accordance with requirement 3.2 on production data, the government should disclose production values for minerals and metals.
  2. In accordance with requirement 4.3 on barter arrangements, the government and the NSC should establish the relevance and applicability of barter arrangements, i.e. whether oil, gas and minerals are fully or partially exchanged for any goods or services. This should include assessment of whether any bilateral swap agreements with Russia could qualify as a barter arrangement.
  3. In accordance with requirement 4.4 on transportation, the government and the NSC should strengthen its plans for overcoming barriers to full transparency in revenues from transportation of oil, gas and minerals in the country, including by engaging more directly with transportation companies.
  4. In accordance with requirement 4.9 and the Standard Terms of Reference for Independent Administrators, the NSC should make sure that the production of future EITI Reports includes the development of an inception report. The NSC should also ensure that the Independent Administrator carries out a review of prevailing auditing and accounting practices in government agencies and that the approach to data assurance for government agencies is reflected in the inception report. Alternatively, the NSC is encouraged to explore opportunities for fully transitioning to mainstreamed implementation.
  5. In accordance with requirement 6.1, the NSC should clarify the various types of mandatory social expenditures that exist and ensure that all material social expenditures are covered in the next EITI Report.
  6. In accordance with requirement 6.2, the government and the NSC should ensure that SOEs disclose any material quasi-fiscal expenditures. Quasi-fiscal expenditures include arrangements whereby SOE(s) undertake public social expenditure such as payments for social services, public infrastructure, fuel subsidies and national debt servicing, etc. outside of the national budgetary process. The multi-stakeholder group is required to develop a reporting process with a view to achieving a level of transparency commensurate with other payments and revenue streams, and should include SOE subsidiaries and joint ventures.
  7. In accordance with requirement 7.4, the NSC should ensure that the next annual progress report includes an assessment of the impact of the implementation of the work plan and other EITI activities. In addition, the NSC should ensure that the production of the annual progress report is an opportunity for wider stakeholders to provide feedback and input to the EITI process in Kazakhstan.  

The government and the National Stakeholder Council is encouraged to consider the other recommendations in the Validator’s Report and the International Secretariat’s initial assessment, and to document the NSC’s responses to these recommendations in the next annual progress report.  For example, in its consideration of further amendments to laws affecting civil society and in its practice of enforcing these laws, the government should take care to ensure that such measures do not affect the ability of civil society to effectively participate in the EITI. The MSG is also encouraged to continue its work on the governance challenges associated with environmental payments. Specifically, there are concerns that environmental rehabilitation payments and environmental fines are not spent on environmental reclamation as intended, but on other budget needs. Further transparency in these transactions would be desirable, notably tracking payment and receipt of environmental fees and fines as well as transparency in spending of the money earmarked for environmental rehabilitation through the EITI.


The Government of Kazakhstan committed to implementing the EITI in 2005 and a multi-stakeholder group. The country was accepted as an EITI candidate in 2017, and became compliant with the 2011 EITI Rules in September 2013.

The Validation process commenced on 1 July 2017. In accordance with the Validation procedures, an initial assessment (in English and Russian) was prepared by the International Secretariat. The Independent Validator reviewed the findings and wrote a draft Validation report (in English and Russian). Comments were received from the MSG (in English and Russian). The Independent Validator reviewed the comments and responded to the MSG, before finalising the Validation report (in English and Russian).

The Validation Committee reviewed the case on 4 December 2017 and 12 January 2018. Based on the findings, the Validation Committee agreed to recommend the assessment card and corrective actions outlined below.

The Committee also agreed to recommend an overall assessment of “meaningful progress” in implementing the 2016 EITI Standard. Requirement 8.3.c. of the EITI Standard states that:

ii.    Overall assessments. Pursuant to the Validation Process, the EITI Board will make an assessment of overall compliance with all requirements in the EITI Standard.

iv.   Meaningful progress. The country will be considered an EITI candidate and requested to undertake corrective actions until the second Validation.

The Validation Committee agreed to recommend a period of 18 months to undertake the corrective actions. This recommendation takes into account that the challenges identified are relatively significant and seeks to align the Validation deadline with the timetable for Kazakhstan’s 2017 and 2018 EITI Reports.

Scorecard for Kazakhstan: 2017

Assessment of EITI requirements

  • Not met
  • Partly met
  • Mostly met
  • Fully met
  • Exceeded
Scorecard by requirement View more Assessment View more

Overall Progress

MSG oversight

1.1Government engagement

The government is fully, actively and effectively engaged in the EITI process, including through senior government participation and by providing funding for implementation.

1.2Industry engagement

Companies are providing substantial input to the EITI process and there is an enabling legal framework facilitating company participation in the EITI.

1.3Civil society engagement

The space for civil society in Kazakhstan is clearly narrowing. There is limited freedom of expression, high levels of self-censorship and the legal framework is increasingly imposing greater restrictions and control over civil society. Notwithstanding this overall picture of the civic space, there is limited evidence that the broader situation is having an impact on civil society’s ability to participate in the EITI.

1.4MSG governance

The government has established a well-functioning MSG with clear governance rules and practices. Most constituencies have developed procedures for liaison and nominations.Some improvments can be made to ensure inclusive representation of civil society in the MSG.

1.5Work plan

The NSC has developed a work plan that serves as a management tool for the secretariat and that is regularly updated. Although the work plan functions less well as a strategic planning tool for the NSC, this has not prevented the NSC from making sure that the EITI Report addresses relevant issues in the country nor has it prevented discussions and engagement on topics such as environmental reporting and contract transparency.

Licenses and contracts

2.1Legal framework

Kazakhstan has disclosed the required information related to the fiscal regime and level of fiscal devolution, an overview of the relevant laws and regulations, and information on the roles and responsibilities of the relevant government agencies. Kazakhstan has also gone beyond the minimum requirements by providing a detailed account of reform efforts as encouraged by the EITI Standard.

2.2License allocations

Kazakhstan has disclosed the required details related to contracts awarded and transferred in 2015.

2.3License register

Kazakhstan has undertaken a major reform with the launch of the online cadastre. However, the cadastre does not yet include information on the date of application for the contracts applied for in 2015, nor does it always include the duration of the license. It is noted that work is underway to populate the cadastre with this information.

2.4Policy on contract disclosure

The 2015 EITI Report and the draft supplementary report clarify that contract transparency is not practiced, and set out the legal provisions preventing contract transparency.

2.5Beneficial ownership

Not assessed

Kazakhstan has made good progress on developing a legal framework for beneficial ownership reporting, although further work is needed to ensure that the new Subsoil code provides a sound foundation for comprehensive reporting and publication of this information.

2.6State participation

Kazakhstan has disclosed some information related to SOEs, but there are questions about the comprehensiveness of the data provided, which sometimes conflicts with information from other sources. It is noted that the NSC has acknowledged the weaknesses in SOE reporting and has agreed plans for addressing that.

Monitoring production

3.1Exploration data

Kazakhstan has disclosed an overview of the extractive sector, information about exploration activities as well as additional information on geological prospecting and reserves.

3.2Production data

Kazakhstan has disclosed all data apart from production values for minerals and metals. This information should be available online from the National Statistics Committee, but Validation was not able to confirm this.

3.3Export data

Kazakhstan has disclosed all data related to export volumes and export values, as well as additional information on main export destinations.

Revenue collection


Kazakhstan has ensured comprehensive disclosed of all payments and revenues pertaining to the extractive sector.

4.2In-kind revenues

Although companies operating under PSAs in Kazakhstan has the option of paying production share in-kind, all such payments were effectuated in monetary payments in 2015.

4.3Barter agreements

The NSC has made some attempts at addressing barter. Although it seems that barter agreements between companies and the government do not exist, the swap arrangements between the Government and Kazakhstan and the Government of Russia could constitute a type of barter whereby goods (refined oil and gas products) are provided in return for physical delivery of crude oil.

4.4Transportation revenues

Transport revenues are material in Kazakhstan. Although the NSC has taken steps to disclose data related to volumes of oil, gas and minerals transported, and the associated revenues received by SOEs engaged in transportation activities, some gaps remain in particular regarding transportation of minerals.

4.5SOE transactions

The only direct financial transactions between SOEs and the government appears to take the form of dividends (to Samruk-Kazyna) and the payment of taxes (to the Treasury and National Fund). These transactions have been fully disclosed.

4.6Direct subnational payments

Not applicable

Although some taxes are channelled to the local level upon payment, there is a centralised taxes and payments collection system monitored by the MoF.


The 2015 EITI Report is disaggregated by individual revenue stream, company and government entity.

4.8Data timeliness

Kazakhstan is well within the deadlines for annual EITI Reporting, and has also gone beyond the requirement by exploring opportunities to disclose data as soon as practically possible through continuous online disclosures as encouraged by the EITI Standard.

4.9Data quality

Although the NSC has agreed a ToR for the EITI Report, the ToR is not always followed by the Independent Administrator. This has affected the quality of the EITI Report in that NSC decisions on how to approach certain issues have been unclear, resulting in gaps in reporting. It has also affected the approach to assurance of government data.

Revenue allocation

5.1Distribution of revenues

Kazakhstan has disclosed which extractive industry revenues are recorded in the national budget, and which once are allocated to the National Fund. In addition, the report references national budget classification codes as encouraged by the EITI Standard.

5.2Subnational transfers

Not applicable

The 2015 EITI Report confirms that there are no statutory subnational transfers particular to the extractive sector in Kazakhstan.

5.3Revenue management and expenditures

The 2015 EITI Report discloses ad hoc spending of National Fund revenue earmarked for particular projects. It also includes an explanation of the budgeting process.

Socio-economic contribution

6.1Mandatory social expenditures

The NSC has made extensive efforts related to the 1% social investments that are part of the contractual obligations, including reconciling company and government data on social expenditures, as well as including information on what ought to be paid in accordance with the contracts versus what was paid. However, stakeholder consultations seem to suggest that other mandatory social expenditures exist, including social expenditures paid under MoUs.

6.2Quasi-fiscal expenditures

EITI reporting recognises challenges in disclosing quasi-fiscal expenditures, and indicates that the NSC has plans for following this up through a separate study.

6.3Economic contribution

The 2015 EITI Reports discloses information on the contribution of the extractive sector to Kazakhstan's economy.

Outcomes and impact

7.1Public debate

The NSC has ensured that the EITI Report is comprehensible, actively promoted, publicly accessible and contributes to public debate. Although no open data policy has been published, this does not seem to have affected the NSC practices of publishing all data in excel format.

7.2Data accessibility

Kazakhstan has ensured that financial EITI data is available in machine readable format from Kazakhstan’s EITI website as well as from EGSU, the government's online portal. Further steps are also underway with regards to mainstreaming and open data.

7.3Follow up on recommendations

Although the EITI Report does not include a stocktake of progress in implementing recommendations from previous reports, stakeholder consultations and other documents confirm that the NSC has considered the recommendations from the Independent Administrator, and the discrepancies are largely explained.

7.4Outcomes and impact of implementation

The NSC has produced annual progress reports that take stock of the activities conducted, the execution of the workplan, the follow up on the recommendations of the EITI report, and strengths and weaknesses of the EITI process. However, the APR lacks an assessment of impact of the implementation of work plan objective and activities.