Kazakhstan scores 56 points in EITI implementation

The International Secretariat’s assessment is that Requirement 1.5 is mostly met, which represents regression from the previous Validation. The objective of this requirement is to ensure that the annual planning for EITI implementation supports implementation of national priorities for the extractive industries while laying out realistic activities that are the outcome of consultations with the broader government, industry and civil society constituencies. Based on available documentation and stakeholder consultations, the Secretariat’s assessment is that significant aspects of the requirement have been implemented, and the broader objective of the requirement is mostly fulfilled. Kazakhstan EITI has published work plans online with the most recent since the last Validation covering 2020-2021 and 2024. Stakeholders explained the gap between 2022 and 2023 was due to lack of the national secretariat’s (NS) capacity to coordinate the work planning process. The impact of national protests in 2022 may also have contributed and reflect shifting government priorities. The NS prepared the draft work plan for 2024 and circulated this to NCS members via email. The International Secretariat understands that industry and civil society representatives did not provide input and that the reason for this may relate to inadequate time for contribute to the draft work plan before it was published at the end of March 2024 prior to the commencement of this Validation. Objectives for implementation appear to be linked to the EITI principles and reflect some national priorities, including mainstreaming of EITI disclosures into government reporting systems and specific objectives for disclosure of contracts and beneficial ownership information. However, the objectives miss the national priority to position Kazakhstan as a global leader in production of minerals that are critical for the energy transition. This unrealised potential could address concerns of some stakeholders about the relevance of the EITI (see assessment of Requirement 1.1). Activities in the 2020-2021 and 2024 work plans are measurable with indicators but lack timing details which is problematic for clearly tracking progress on implementation. Activities are similar to previous work plans, which may indicate limited MSG engagement in work plan design. The Outcomes and impact template does not comment on implementation progress or further actions (such as review of the scope, strengthening stakeholder capacity or identifying new donors) to ensure implementation of the work plan. Work plans include examples of capacity-building activities for different stakeholder groups and cover plans for strengthening systematic disclosures. This includes increasing understanding of the EITI process through creating educational videos for broadcasting via local media, social networks and at local events. Activities to connect databases to improve information exchange and open data are included in the work plans. Work plans include specific activities aimed at addressing any legal or regulatory obstacles and plans for implementing the recommendations from Validation and EITI implementation. For example, there was a reference to “establish a Contract Disclosure Plan with a clear timeline for implementation and remove any impediments to full disclosure” in September 2020. This activity is carried over entirely to the 2024 work plan. Costings and funding sources, including domestic and external sources of funding and technical assistance, are partially included in the work plan. The cost of the EITI Report from the state budget is identified but details are not provided for other activities. Government and civil society stakeholders noted increasing difficulty to secure resources for EITI implementation since the previous Validation. State funding available for the EITI Report has declined and civil society stakeholders contend this has resulted in a lower quality report. In comments on the draft assessment, civil society suggested the assessment of partly met based on the quality of work plan activity delivery and gaps in work plans between 2022 and 2023. Whilst acknowledging these concerns, the Secretariat maintains the view that the objective of the requirement is mostly met and broader issues on the lack of engagement by the MSG in the work planning process are factored into the assessment of Requirement 1.4. There is scope for further aligning the work plan objectives and activities with national priorities on attracting investments and critical minerals governance.

The International Secretariat’s assessment is that Requirement 7.1 is mostly met, which represents regression from the previous Validation. The objective of this requirement is to enable evidence-based public debate on extractive industry governance through active communication of relevant data to key stakeholders in ways that are accessible and reflect stakeholders’ needs. Based on stakeholder consultation and review of available documentation, the International Secretariat’s assessment is that significant aspects of the requirement have been implemented, and the broader objective of the requirement is mostly fulfilled. The Validation team found some examples of outcomes and impact during stakeholder consultations and review of online sources. The MIC published a news article about the government’s participation in the 2023 EITI Global Conference. This included explanation about how the EITI works in Kazakhstan and overview of the multi-stakeholder representatives on the NCS. The oil and gas industry association, KazEnergy, which is represented on the MSG, hosted a roundtable discussion in implementation of the EITI in Kazakhstan at the XV KazEnergy Eurasia Forum on 5 October 2023. EITI civil society stakeholders consulted said they received late invitations and were unable to participate. In comments on the draft Validation report, KazEnergy clarified that it had coordinated with the NS on sending of invitations to other constituencies well in advance but a protracted approval process caused delays and resulted in the issuance of invitations on short notice. Civil society also noted a decline in EITI public outreach activities to their broader constituency due to a combination of factors including lack of funding and perceptions that engagement would not result in changes or improvement in extractive sector policies or governance. The 2020-2021 work plan indicates the intention to hold “seminars, roundtables, public meetings on the important role of contract transparency” including regional officials and “publication of the results on the EITI website.” In 2023, civil society including MSG representatives organised workshops on contract transparency including government and business representatives. The 2024 work plan includes the same information in what appears to be repetition of activities from the previous work plan, which may indicate the public events were not held as planned during 2020-2021. The International Secretariat’s assessment considers that during the period under review, the COVID-19 pandemic impacted on the ability of Kazakhstan EITI to hold meetings and public events. Outside of the EITI platform, there is evidence of broader stakeholder engagement in public debate and use of extractive sector disclosures. Examples include a journalistic investigation into beneficial ownership and PEPs, and a news article regarding state participation that exposes how money from the sale of Kazmunaigas shares became a way to finance the budget.

The International Secretariat’s assessment is that Requirement 7.2 is mostly met, which represents regression from the previous Validation. The objective of this requirement is to enable the broader use and analysis of information on the extractive industries, through the publication of information in open data and interoperable formats. Based on stakeholder consultation and review of available documentation, the International Secretariat’s assessment is that significant aspects of the requirement have been implemented, and the broader objective of the requirement is mostly fulfilled. The Validation found no documentation that the NCS had agreed a policy on the access, release and reuse of EITI data. Review of extractives data available online and in EITI reporting did not find evidence that government agencies and companies have published data under an open license and made users aware that information can be reused without prior consent. At the same time, some relevant regulations provide a basis for open data disclosure. Although the NSC has not agreed an open data policy, the 2015 Law on Access to Information, amended in 2016, stipulates the type of data that should be publicly accessible as well as provisions on the format of that data. Specifically, Article 1(5) defines open data as “public electronic information resources presented in machine-readable format, and intended for further use and re-publication in an unchanged form.” More generally, the government is making efforts to move to e-governance and increasingly more data is available to the public on through an open data portal. A feasibility study, conducted with the EBRD support, documents the current state of public online disclosure of EITI data within each relevant agency and company involved in EITI reporting in Kazakhstan. It provides actionable recommendations, along with timelines, to agencies and ministries to facilitate complete systematic disclosure of data. The overall finding is that further efforts are necessary to disclose licenses and contracts, beneficial ownership information, social and environmental payments, and data from state-owned enterprises (SOEs) falling under the responsibility of the MIC. Moreover, the study recommends using the NCS to collaborate with other government agencies, specifically the MoE, MoF, and State Revenue Committee to enhance extractive industry data disclosure. Kazakhstan EITI completed summary data files for 2020 and 2021 reporting years in accordance with the template approved by the EITI Board. EGSU Data available to the public on the EGSU portal can be downloaded in Excel format. License data is available in Excel format. Annexes to Kazakhstan’s 2020-2021 EITI Report are published in Excel format. A research case study by a civil society consortium found that Kazakhstani citizen access to company financial information was hindered by the incorporation in the Netherlands of several partially state-owned companies and their subsidiaries. Furthermore, civil society stakeholders consulted during the Validation noted restrictions on access to beneficial ownership disclosures of Kazakhstani extractive companies registered in the Netherlands, following a decision of the EU Court of Justice in 2022. Another investigative report in February 2024 claimed that a new policy on personal data protection would restrict public access to state registers. Implementation of the policy means that when trying to update any data on legal entities – the composition of the founders, address, management, tax discipline, etc. – these data will be provided only after (and in the case of) the approval of the management or founders of the same legal entity.

The International Secretariat’s assessment is that Requirement 7.3 is partly met, which represents regression from the previous Validation. The objective of this requirement is to ensure that EITI implementation is a continuous learning process that contributes to policymaking, based on the NCS regularly considering findings and recommendations from the EITI process and acting on those recommendations it deems are priorities. Based on stakeholder consultation and review of available documentation, the International Secretariat’s assessment is that significant aspects of the requirement have not been implemented, and the broader objective of the requirement is not fulfilled. The Validation found no evidence in the Outcomes and impact template and only limited evidence in review of documentation and during stakeholder consultations of progress in taking steps to act upon lessons learned, identifying, investigating and addressing the causes of any information gaps or discrepancies in EITI implementation, and progress in responding to the recommendations made by the IA. The NCS Terms of Reference under Order 408 does not include any provision for follow up on recommendations. The work plan includes a working group on contract and beneficial ownership to improve disclosures, which relates to findings and recommendations in the 2020-2021 Kazakhstan EITI Report. The Validation found examples of follow up to improve the comprehensiveness of contract and license disclosure, including work under the EBRD-funded project (see Effectiveness and sustainability indicators section 1.5 EITI-related changes to extractive industry policy and practice). Stakeholders noted work was underway to integrate the Minerals.gov.kz and EGSU data portals, which the IA recommended to improve transparency and reliability of disclosures. The International Secretariat conducted a pre-Validation workshop in November 2023 where NCS members discussed the technical preparation and corrective actions from the previous Validation. NCS members made a short-term plan for addressing the corrective actions before the commencement of this Validation. Under the EBRD grant, the International Secretariat conducted a workshop on beneficial ownership data use for the NCS members and wider stakeholder group. As an outcome of the activity, the participants updated a beneficial ownership roadmap to enhance data disclosure in Kazakhstan.

The International Secretariat’s assessment is that Requirement 7.4 is partly met, which represents regression from the previous Validation. The objective of this requirement is to ensure regular public monitoring and evaluation of implementation, including evaluation of whether the EITI is delivering on its objectives, with a view to ensuring the EITI’s own public accountability. Based on stakeholder consultation and review of available documentation, the International Secretariat’s assessment is that significant aspects of the requirement have not been implemented, and the broader objective of the requirement is not fulfilled. Kazakhstan EITI did not produce an annual review of outcomes and impact of implementation for the period under review. This was a key factor that civil society cited in their comments on the draft assessment. Civil society further highlighted the lack of a formal process including MSG review of the status of work plan objectives. This assessment considers the steps taken by some Kazakhstan EITI stakeholders indicating some work was done to assess progress of implementation and strengthen the impact of EITI in Kazakhstan. However, such efforts are limited as it appears from minutes of the MSG meeting that the MSG met only once in the period to discuss and review impact. During the workshops conducted by the International Secretariat in November 2023, some NCS members and the wider stakeholder group discussed the process of EITI implementation in Kazakhstan. Stakeholders raised a concern about low capacity of the NCS and national secretariat that adversely affected EITI coordination. Stakeholders agreed a short-term plan to prepare for Validation and discussed this in a WhatsApp group. Follow up included the hiring of one additional member of staff to support the national secretariat. Although the NCS did not hold formal consultations with the broader constituencies, activities during the period under review and civil society comments on the draft assessment indicate that the civil society constituency led efforts to involve stakeholders in discussions about progress on thematic priorities including the publication of mining contract and beneficial ownership disclosure. The Validation found no documentation of efforts by the NCS to take gender considerations and inclusiveness into account during the period under review.

The International Secretariat’s assessment is that Requirement 1.1 is mostly met, which represents regression from the previous Validation. The objective of this requirement is to ensure a full, active and effective government lead for EITI implementation, both in terms of high-level political leadership and operational engagement, as a means of facilitating all aspects of EITI implementation. Based on stakeholder consultation and review of available documentation, the International Secretariat’s assessment is that significant aspects of the requirement have been implemented, and the broader objective of the requirement is mostly fulfilled. Kazakhstan has implemented the EITI since 2007 following a commitment to join the initiative in 2005. Over the years, the government has issued public statements about its commitment and intention to implement the EITI, including a statement by the Kazakhstan EITI Champion at the Leadership Forum of the EITI Global Conference held in June 2023. The EITI Champion serves as the Deputy Minister of Industry and Construction (MIC) and leads implementation of the EITI in his role as Chair of the NCS. The EITI Champion made a public statement at the Leadership Forum about Kazakhstan’s commitment to beneficial ownership disclosure. In response to the draft assessment, some industry and civil society stakeholders voiced concerns about the level of engagement of MIC officials in the work of the NS and MSG including their selective participation in Kazakhstan EITI events. Civil society further expressed concerns on the composition of the national secretariat and cited other observations regarding declining government commitment. These concerns relate directly the commitment of the government to work with companies and civil society and are therefore factored into the assessment of Requirement 1.4. In December 2024, the International Secretariat held a high-level mission to Kazakhstan, resulting in a renewed government commitment on EITI at the highest political level. President Kassym-Jomart Tokayev has publicly committed to the EITI implementation and adhering to the EITI Standard. The meeting between President Tokayev and EITI Chair, Helen Clark received broad media coverage in Kazakhstan and across Central Asia, bringing EITI’s profile to the highest level. Subsequent to the meeting, Minister of Industry and Construction, Kanat Sharlapayev, pledged to revitalise EITI implementation in Kazakhstan. The minister committed to leading quarterly MSG meetings and oversee the rejuvenation of the initiative. These were all communicated through in-person meetings with EITI Chair Helen Clark and Executive Director, Mark Robinson during the country mission. On 4 February 2025, the Validation Committee agreed to take stock of progress on government commitment on the basis of further developments following a high-level mission in December and to evaluate progress on requirement 1.1 at the Validation Committee meeting in May 2025. The International Secretariat shared with the Ministry of Industry and Construction a list of follow up actions in accordance with the 2023 EITI Standard to demonstrate concrete progress on government engagement in EITI implementation. The list includes the following: conduct an in-person EITI MSG meeting with sufficient advance notice and opportunity to contribute to the agenda, chaired by the Minister; clarify MSG membership; discuss the draft 2022 EITI Report, draft 2025 work plan and feedback on the Validation report at the MSG meeting; publish the 2022 EITI Report; review the Memorandum of Understanding (MoU) of the MSG; ensure adequate government resourcing for the EITI national secretariat and its activities as part of a draft work plan; and ensure appropriate staffing of the national secretariat. Since the high-level mission in December, the Ministry of Industry and Construction of Kazakhstan has hired an Independent Administrator to prepare the 2022 EITI Report. The draft report has been produced and circulated with the MSG for feedback and civil society constituency has provided its comments. A productive follow up online meeting was held between Mark Robinson, EITI Executive Director and Kanat Sharlapayev, former Minister of Industry and Construction in February 2025, with the latter fully committing to address the above-mentioned list of actions. However, a subsequent reshuffle in government in early March, contributed to delays in the implementation of the agreed steps despite early positive developments. Although Yersayin Nagaspayev, new Minister of Industry and Construction, appointed in March, is not yet versed in the EITI implementation process, the ministerial staff continues to address the list of previously agreed actions to demonstrate government commitment to EITI. Iran Sharhan, Deputy Minister of Industry and Construction met with CSO MSG members in April to discuss their comments to the EITI Report as well as the 2025 EITI work plan and funding for civil society attendance of in-person meetings in Astana. The deputy minister tasked the Independent Administrator to update the draft EITI report based on comments provided by the CSO and company constituencies. The ministry submitted an official request to the Ministry of Finance to increase the government budget for the EITI implementation by USD 100 000 from 2026. Changes to the 2025 state budget were not possible. With almost three-week advance notice, the ministry has scheduled the in-person MSG meeting, chaired by Minister Nagaspayev, on 19 May to approve the 2022 EITI Report and the draft 2025 EITI work plan. The remaining actions for the government include updating the MSG list, reviewing the Memorandum of Understanding of the MSG, adequately staffing the national secretariat and increasing the state funding for the EITI implementation. The ministry is taking steps to update the MSG list and to increase staffing of the national secretariat, while updating the MSG MoU will require additional time and support. The government demonstrated leadership in the overall EITI process including further development of open data and systematic disclosure (see Annexe C). The International Secretariat noted government use of open data portals to communicate with subsoil users. For example, in January 2024 via the News section of the EGSU portal, the Ministry of Energy asked for updates on project level reporting including the status of fulfilment of standard production contracts. The government sought to address constraints to transparency including the publication of mining contracts ministry led by MIC. Government representatives cited the potential for the EITI to attract investment in the extractive sector and enhance the country’s international reputation as reasons for supporting the EITI. However, the interest in this potential does not appear consistent with the level of government funding for EITI implementation to achieve it. The International Secretariat heard this concern raised by several stakeholders including during a parliamentary debate in 2023. There was broad consensus across constituencies that government should play a greater role in securing resources from the state budget, which stakeholders believe would help to improve the quality of EITI implementation. Government financial support for the EITI implementation has decreased since the last Validation. Stakeholders noted the government declined the invitation to apply to the World Bank EGPS programme for a grant to support EITI implementation. In May 2022, the International Secretariat wrote to MIC to encourage the government to invest more resources in staffing the national secretariat. At that time, only one staff member was working part-time on the EITI reporting process and providing support to the NCS. The resources provided by the government did not appear to be sufficient to deliver work plan activities during the period under review. However, the International Secretariat notes progress in that the government increased the staffing of the national secretariat with an additional support position in place by early 2024. Validation documentation and consultations confirmed that senior government officials from across relevant ministries are represented on the NCS and participate regularly in meetings and working groups. Representatives include officials from the Ministry of Industry and Construction (lead ministry for the EITI which staffs the national secretariat), the Ministry of Energy and the Ministry of Finance. Officials from these departments were actively engaged in working groups on contract and beneficial ownership disclosure. Although the International Secretariat is of the view that government commitment to the initiative has declined since the last Validation, it notes that some key senior government representatives consider that the EITI needs to demonstrate its value proposition to national priorities for the government to justify investing more resources in EITI implementation. One senior government official believes that the EITI Standard has expanded far beyond the revenue transparency agenda that Kazakhstan had agreed to in 2007, and the newer provisions were less relevant for the country.

The International Secretariat’s assessment is that Requirement 1.2 is fully met, as in the previous Validation. The objective of this requirement is to ensure that extractive companies are fully, actively and effectively engaged in the EITI, both in terms of disclosures and participation in the work of the NCS, and that the government ensures an enabling environment for this. Based on stakeholder consultation and review of available documentation, the International Secretariat’s assessment is that the broader objective of the requirement has been fulfilled, and all required aspects of the requirement have been addressed. Documentation and stakeholder consultations confirmed that extractive companies in Kazakhstan are fully, actively and effectively engaged in the EITI process. Representation of the companies’ constituency on the NCS is through two industry associations: KazEnergy for the oil and gas companies including state-owned enterprises and the uranium mining sector; and the Association of Mining and Metallurgical Enterprises representing the mining sector. In comments on the draft Validation report, the civil society constituency suggested that additional representatives of companies operating in Kazakhstan could strengthen the NCS, as per previous practice. The International Secretariat met with a broad range of company representatives in these associations during both in-person and online stakeholder consultations. Companies noted their motivation for participation in the EITI included reputational benefits of demonstrating transparency in reporting. Highlighting social investment in the regions was another reason cited for company engagement in the EITI. Companies did not mention any efforts to address legal and confidentiality barriers to full contract and beneficial ownership disclosure. In terms of participation in EITI reporting, review of Summary Data Files found that 90.6% company payments were disclosed. Kazakhstan EITI has not set a materiality threshold which makes it challenging to determine how substantial was the 9.4% of missing company payments reporting. However, the figures indicate there may be scope to further increase industry participation in the EITI reporting process. The Stakeholder Engagement template documents examples of industry constituency outreach and use of EITI data, including participation in promotional activities. KazEnergy hosted a meeting for twenty of its members and civil society to discuss the findings of a study on contract transparency and a systematic disclosure feasibility study. Kazakhstan Energy Week in October 2023 included a roundtable discussion on implementation of the EITI in Kazakhstan; civil society representatives consulted said that invitations to this event were received on short notice which prevented their participation. In comments on the draft Validation report, KazEnergy clarified that it had coordinated with the NS on sending of invitations to other constituencies well in advance but a protracted approval process caused delays and resulted in the issuance of invitations on short notice. The Validation documentation and consultations did not identify any obstacles to company participation in the EITI process. Relevant laws, regulations and administrative rules support an enabling environment for industry engagement in the EITI.

The International Secretariat’s assessment is that Requirement 1.3 is mostly met, which represents regression from the previous Validation. The objective of this requirement is to ensure that civil society is fully, actively and effectively engaged in the EITI process, and that there is an enabling environment for this. Based on stakeholder consultations and review of available documentation, the International Secretariat’s assessment is that significant aspects of the requirement have been implemented, and the broader objective of the requirement is mostly fulfilled. Civil society in Kazakhstan is well-capacitated and engaged in the EITI process through the EITI Dialogue Platform. However, the level and quality of engagement are affected by government and industry commitment, broader operating environment for civil society, and funding concerns. The Validation identified that civil society engagement in the EITI process has declined and there are reports of restraints on freedom of expression due to instances of self-censorship and adverse consequences for some CSOs engaged in natural resource governance. However, the EITI in Kazakhstan continues to provide space for engagement. Therefore, the assessment did not establish any cases of breaches to the civil society protocol. Nonetheless, the International Secretariat takes note of concerns voiced by some stakeholders about local government interference in civil society attempts to associate on matters related to the extractive industries The International Secretariat noted stakeholder concerns about a negative trend in the operating environment for civil society since the last Validation and particularly since January 2022. There has been a deterioration in some international rankings of civic space in Kazakhstan since 2020. The country’s ranking in indexes compiled by CIVICUS and Reporters without Borders have declined in recent years whilst the Freedom House ranking has remained constant. With regard to these trends in relation to implementation of the EITI Standard, the International Secretariat learned from consultations that the key concerns of CSOs included access to funding, the narrowing of civic space, and government engagement in the EITI process. Stakeholders particularly highlighted civic space developments in Kazakhstan since national protests in January 2022. Several civil society representatives expressed concern about the impact of registration and financial reporting requirements on civil society’s ability to operate freely in relation to the EITI process. In particular, some CSO representatives voiced concerns about violations of individual privacy rights in connection with government publication of personal information about leaders in organisations that receive foreign funding; this government reporting did not appear to have targeted specific individuals or EITI officeholders in reprisal for activities. The International Secretariat found one example of an advocacy organisation involved in EITI work (among other issues) that claimed to be negatively impacted and unfairly treated in comparison with the handling of personal information reported by industry. However, there was no evidence that the government’s reporting requirements had unfairly targeted EITI stakeholders or that there was a pattern of enforcement which had constrained the ability of civil society to operate in relation to the EITI process. The Validation did not find a pattern where civil society representatives or journalists experienced reprisals for coverage of topics related to the EITI. At the same time, some CSOs consulted claimed there was a common practice of self-censorship by some civil society outside of the EITI process on sensitive topics such as beneficial ownership by PEPs in order to avoid problems with authorities. A report on civil society participation in the EITI in Kazakhstan claimed that CSOs refrain from discussing the President’s history of ownership of oil and rare metals. The same report cited an example of one NGO that refused to publish a report on tensions in a mining region for fear of reprisal. However, the Stakeholder engagement template documents examples (and the International Secretariat found further examples online) of active EITI civil society constituency expression on sometimes sensitive or controversial extractive governance issues such as full disclosure of contracts, licenses, beneficial ownership connected with PEPs, scrutiny of subnational revenues and state participation (see assessment of public debate, Requirement 7.1). The Validation found no credible evidence of government constraints on civil society’s ability to associate in relation to the EITI process. However, during stakeholder consultations the International Secretariat heard concerns and examples of restrictions on freedom of association on matters outside the scope of the EITI such as labour union issues. According to a report on civil society participation in the EITI in Kazakhstan, one individual in Atyrau was detained for picketing without permission after attempting to protest about the environmental impact of mining operations. The same report made allegations about restrictions on access to information in mining regions. In terms of NCS participation, civil society representatives are based in the capital, Astana, and in Almaty. Funding constraints affected the ability of regional civil society organisations to participate in the EITI process, particularly those in western Kazakhstan at a far distance from Astana where NCS meetings are conducted. The International Secretariat reviewed records of NCS discussions about this issue in July 2020, including plans to explore industry funding for regional civil society participation in the NCS; a solution had not been found at the time of this Validation. Opinions were mixed about the ability of civil society to access public decision-making on extractives governance. One civil society stakeholder noted the active CSO participation in online chats that have informed the views of NCS representatives. Others commented that data accessibility in the open public consultation process on draft legislation was inadequate and that civil society participation was low due to the platform’s design and high volume of information. The International Secretariat heard concerns about the manner by which the MSG functions affected the ability of CSOs to engage in the EITI process. Civil society stakeholders were unanimous in their view that decision-making practices should be more inclusive (see assessment of Requirement 1.4). In response to the assessment, civil society referred to a case involving a journalist who was sentenced in October 2024 for his accusations of corruption against the Vice Minister of Energy. This assessment further looked into this incident but concluded that it is not sufficient to establish a pattern of concerted effort to target stakeholders involved in extractive sector governance. Similar incidents, however, should be monitored by the MSG. Additional details are provided in Annexe A. Based on stakeholder consultations and review of available documentation, the International Secretariat’s assessment is that Requirement 1.3 is mostly met. Stakeholder concerns about a negative trend in civic space and the broader operating environment for CSOs in Kazakhstan is cause for concern and warrants careful monitoring to ensure that civil society will be able to continue to fully engage in the EITI process.

The International Secretariat’s assessment is that Requirement 1.4 is partly met, which represents regression from the previous Validation. The objective of this requirement is to ensure that there is an independent MSG that can exercise active and meaningful oversight of all aspects of EITI implementation that balances the three main constituencies’ (government, industry and civil society) interests in a consensual manner. Based on stakeholder consultation and review of available documentation, the International Secretariat’s assessment is that significant aspects of the requirement have not been implemented, and the broader objective of the requirement is not fulfilled. The internal rules and procedures for the NCS membership and nomination process are contained in Order Number 408 approved in 2023 by the Minister of Industry and Infrastructure Development. The Order states that “members must be citizens of Kazakhstan, with the exception of cases when subsoil user companies propose foreign citizens working in Kazakhstan.” There are no other criteria or specifications about the nomination process. Order Number 408 suggests that companies are free to nominate their own members but the procedure for civil society is unclear. The International Secretariat understands from civil society stakeholders consulted that the constituency continues to select and appoint its own members and although this is not codified in Order Number 408, there was no indication that civil society faced any restrictions in the nomination process. Similarly, there were no concerns voiced by industry stakeholders consulted regarding their ability to freely select and appoint members to the NCS. The International Secretariat did not find any evidence to suggest coercion or attempts to include members on the NCS who are unwilling to challenge the status quo. The National Council of Stakeholders (NCS) serves as the EITI multi-stakeholder group in Kazakhstan. It is well established and has functioned since prior to the country joining the EITI in 2007. During the period under review, the NCS met less frequently than in previous years and the International Secretariat understands this was partly due to the COVID-19 pandemic. According to meeting minutes, the NCS met twice in 2020 then once annually in 2021, 2022 and 2023. In addition, the national secretariat followed up on meetings by circulating documents for comment and approval via a WhatsApp group. The NCS meeting was conducted during the high-level mission led by Helen Clark, EITI Chair in December 2024 and the next one is scheduled for 19 May 2025. Following the outcomes of the high-level mission, the government committed to revitalise the EITI process, including governance of the NCS. The former Minister of Industry and Construction, that resigned in February 2025, committed to chairing the NCS meetings, increasing their frequency to four time per year, clarifying the list of NCS members and renewing the Memorandum of Understanding that sets up roles and responsibilities of the NCS. The Ministry of Industry and Construction will also consider providing funding for CSO NCS members to attend in-person NCS meetings in Astana in the 2026 State Budget. The ministry has also submitted an official request to the Ministry of Finance to increase the state funding for the EITI implementing to USD 100 000. The ministerial staff of the new Minister Yersayin Nagaspayev, which includes the deputy minister, directly responsible for the EITI implementation and the National Coordinator, continue to implement the commitments declared by the former minister. Several stakeholders consulted were of the opinion that the frequency of NCS meetings was insufficient to carry out the duties including implementation of activities in the work plan. The established NCS working groups have been inactive in recent years but the reasons for this were unclear. The International Secretariat learned that some NCS members were confused by communication via WhatsApp particularly regarding the process for commenting on and approving files, including the reporting templates for this Validation. There was also a lack of clarity about the scheduling of NCS meetings. In its comments on the draft assessment, civil society and industry stakeholders expressed the need for a more coordinated approach to review the preliminary findings of this Validation. Civil society members on the NCS broadly represent the diversity of organisations in Kazakhstan from large umbrella groups to medium-sized public associations independent of government and companies both in operational and policy terms. The CSO NCS representation, however, lacks ethnical Kazakhs and representatives from extractive regions. Stakeholders described different categories of civil society organisations with varying degrees of activism and expression of alignment with or opposition to the regime, which is generally reflected in the composition of the NCS. Representatives on the NCS partly reflect the full range of stakeholders relevant and appropriate to the extractive industries in Kazakhstan, with the exception of civil society representatives from the main oil, gas and uranium extractive regions in western Kazakhstan. The NCS meeting minutes document efforts to identify industry funding sources to enable participation of regional CSOs, however this work had not resulted in increased representation by the time of the Validation. Regarding the capacity of NCS members to carry out their duties, stakeholders consulted said that there is insufficient time for preparation ahead of meetings. Stakeholders also cited the lack of functioning NCS working groups, established to carry out activities in the work plan, as a constraint on their capacity to fulfil the EITI mission in Kazakhstan. The International Secretariat heard that working groups had ceased to function during the pandemic and had not resumed meeting after the public health conditions returned to normal. Some stakeholders noted the NCS process for oversight of EITI report publication did not provide adequate time to address comments. Furthermore, several stakeholders said the infrequency of NCS meetings was a hinderance to carry out their duties. Although the Terms of Reference call for meetings at least once every six months, in practice during the period 2021 to 2023, the NCS met only once annually. Several stakeholders consulted are of the view that this is insufficient even to produce the required EITI reporting. At the same time, Order Number 408 permits any member of the NCS to initiate an extraordinary meeting with the consent of other members, but this did not happen during the period under review. There were no concerns raised in the Validation consultations or documentation regarding any violations of the EITI Code of Conduct. The International Secretariat observed NCS decision-making conducted via electronic communication on WhatsApp. At times this appeared chaotic with some members unclear about who had agreed what particularly in regard to the preparation of the templates for this Validation. The compressed time available for decision-making also raised questions about the ability of NCS members to consult and include their broader constituency. In comments on the draft assessment, civil society noted that delays on the part of the NS to procure IA services resulted in late EITI reporting (see assessment of Requirement 4.8). Civil society stakeholders were unanimous in their view that decision-making practices should be more inclusive and described this in an open letter in July 2023 following the most recent NCS meeting before the commencement of this Validation. In particular, civil society claimed that some government stakeholders perceived their effort to raise concerns about EITI reporting quality as an attempt to sabotage the EITI process. Regarding the composition of NCS working groups, the International Secretariat understands that only government representatives were invited to participate in a working group to address gaps in disclosure of contracts and beneficial ownership information.

The International Secretariat’s assessment is that Requirement 3.1 is fully met. The objective to ensure public access to an overview of the extractive sector in the country and its potential, including recent, ongoing and planned significant exploration activities, is met through disclosures in the 2020-2021 EITI Report and systematic disclosures on government websites. Based on stakeholder consultation and review of available documentation, the International Secretariat’s assessment is that the broader objective of the requirement has been fulfilled with all required and some encouraged aspects of the requirement have been addressed including through systematic disclosures. Chapter 3.1 of the EITI Report provides an overview of the extractive industries, including a summary of significant extraction activities. Exploration activities are described for the oil, gas and mining sectors including a map of prospective fields which is published on the prime minister’s website. The report provides information on estimated reserves of oil and metals, which is an encouraged aspect of the requirement. Systematic disclosures further contribute to fulfilment of the requirement. The Ministry of Investments and Development and the Committee for Geology and Subsoil Use maintain a geoportal with exploration, geological data, maps and a modest analytics section including Kazakhstan’s share of world reserves for 17 minerals. Data is further visualised through an interactive map of subsoil use.

The International Secretariat's assessment is that Requirement 6.3 is mostly met, which represents regression from the previous Validation. The objective of this requirement is to ensure a public understanding of the extractive industries’ contribution to the national economy and the level of natural resource dependency in the economy. Based on stakeholder consultation and review of available documentation, the International Secretariat’s assessment is that significant aspects of the requirement have been implemented, and the broader objective of the requirement is mostly fulfilled. The 2020-21 Kazakhstan EITI report provides the gross value added (GVA) of the mining industry in absolute value in national currency, which represents 14.1 percent of GDP in 2021. The absolute value and percentage of GDP for the extractive industries in the report refers only to mining and does not include oil and gas. , but there is a cross reference to the tax and revenue section where total government revenues from oil and gas are listed (chapter 4.1) which makes it possible to calculate the percentage contribution to GDP. There is no information regarding informal sector activity included in the report. Information on government revenues from the extractive sector can be found on the EGSU portal and is covered in chapter 4.1 but it is unclear whether the figures include non-material companies, and no breakdown is given by receiving government entity, only that payments go to the national fund or state budget. Export data are provided in chapter 3.2 including the absolute value of 37 billion USD in 2021 of which 83 percent represented crude oil sales. The report does not provide a percentage of extractives against total exports. The data in chapter 3.2 include export values or volumes (not both) and some aspects are unclear such as table 28 which is labelled volume but with units in USD. Furthermore, the data reporting covers only 2021 and not 2020. A discussion about commodity export trends indicates a decline in revenue explained by the pandemic and OPEC+ deal. Tables 78 and 79 present information about employment in Kazakhstan’s extractive sector, including gender disaggregation figures and a percentage contribution towards total employment numbers. In 2021, women employed in the extractive sector represented 1.3 percent of women employed nationally. The report provides gender disaggregated employment figures for several companies but notes that full disclosure is not possible, as subsoil users have no obligations to submit reports on employment disaggregated by gender. The primary regions where Kazakhstan’s extractive industries are concentrated are listed in Table 80. The Atyrau, Mangistau and West Kazakhstan regions had the highest GVA for oil and gas in 2021.

The International Secretariat’s assessment is that Requirement 2.1 is fully met, as in the previous Validation. The EITI Report and systematic disclosures reference the existing legal framework and fiscal regime, including fiscal devolution, with most laws and regulations published on the Ministry of Justice’s Institute of Legislation and Legal Information. The Secretariat is of the view that the objective of ensuring public understanding of all aspects of the regulatory framework for the extractive industries is fulfilled. Consulted government and industry stakeholders agreed with this assessment of the objective. The 2020-2021 EITI Report contains a description of the legal framework, referred to as the Subsoil Use Code, and fiscal regime governing the extractive industries and provides links to where this information is systematically disclosed. The Subsoil Use Code came into force in December 2017 and established updated licensing and contracting systems in the mineral and hydrocarbon sectors. Fiscal devolution of extractive revenues occurs between national and subnational budgets and is described in EITI reporting. EITI reporting also provides descriptions of the six kinds of licenses used in the mining sector for solid minerals other than uranium. The hydrocarbon and uranium sectors are governed by a contracting system and the 2020-2021 EITI Report summarises the exploration and production contracts used in these sectors. The Ministry of Energy and the Ministry of Industry and Infrastructure are the main government entities responsible for the hydrocarbon and mining sectors, respectively, though uranium production falls under the jurisdiction of the Ministry of Energy. The 2020-2021 EITI Report contains a detailed section on changes to legislation and regulations governing licenses and contracts that occurred since 2020 and includes links to where these various changes are documented on government websites. Given that the Subsoil Use code is still relatively new, there are active contracts in the mineral sector that the government is attempting to align with the updated licensing procedures. When asked why there was a resistance by some companies to transition to a licensing system in the mining sector, one industry stakeholder considered that the new licensing system limits the bargaining power held by foreign companies operating in Kazakhstan due to the lack of investor-state dispute mechanisms present in the licensing regime.

The International Secretariat’s assessment is that Requirement 2.4 is partly met. Government policy does not endorse full contract disclosure in mining or oil and gas. While Article 77 of the Subsoil Use Code establishes for the public disclosure of information related to subsoil use rights, key commercial terms of contracts, such as signature bonuses, are not included in public disclosure and the full text of most contracts, including amendments, annexes and riders are not disclosed. In June 2022, the National Council committed to resolving barriers to full contract disclosure but there does not appear to have been continued activities or discussions since this commitment. While consulted government stakeholders attributed lack of progress on contract transparency to turnover in relevant government ministries, there remains no clear government policy on contract disclosure and the full text of most contracts are not publicly available, which limits the public’s understanding of the contractual rights and obligations of companies operating in Kazakhstan’s extractive industries. Therefore, the Secretariat considers that the objective is not fulfilled. Consulted industry and civil society stakeholders echoed this assessment of the objective and pointed to the government’s central role in overcoming barriers to full license and contract disclosure. Until December 2017, mining, uranium and hydrocarbon rights were governed by a contract regime. The Subsoil Use Code introduced a more formalised licensing system for the mining sector, though existing contracts, including those in the process of being adjudicated, were respected. This has resulted in a period of award of contracts and licenses in the mining sector. While the model license is publicly available with awarded licenses being pro forma, scanning efforts are still underway to digitise active mining licenses, with the assistance of Moore Insight. These licenses will be posted on the Kazakhstan EITI website and the Minerals.gov.kz portal. Some mining contracts that were entered into before 1 January 2021 are disclosed on the Ministry of Industry’s website while the independent website, ResourceContracts.org, also contains some license and contract texts in the mining sector. Despite disclosure efforts, consulted civil society stakeholders highlighted the confidentiality of signature bonus and geological information as barriers to full contract disclosure in the mining sector. When civil society stakeholders requested specific contracts, this information was redacted from the text of contracts provided by government. Hydrocarbon rights remain under a contracting regime and while the model contracts are disclosed on the Ministry of Justice Adilet portal, the full text of hydrocarbon contracts are not available. Some oil and gas contracts, including the 2023 KazMunayGas production-sharing agreement, are published on the ResourceContracts.org website, though it is not clear whether this text is includes all amendments, annexes and riders. During consultations, government stakeholders indicated that a review of active oil and gas contracts revealed that out of the 304 active contracts, 212 adhered to the model contract. These figures are confirmed via MoE publications but it is unclear whether they are still accurate as the publication’s last date of update is 30 April 2024. Kazakhstan has provided what appear to be comprehensive lists of all active contracts in the mining and oil and gas sectors and a list of active mining licenses can be found through the mining register. There are, however, inconsistencies in the number of active oil and gas contracts, depending on the source of reference. These lists, however, do not comment on the public availability of the full text of these licenses and contracts, which in the case of Kazakhstan, are not fully published. Beyond the June 2022 MSG discussion committing to overcoming legal barriers to disclosure, there is no evidence of MSG discussions on the comprehensiveness and regularity of the disclosure of contracts. Consulted industry stakeholders indicated that most companies were waiting for government guidance on how to proceed with contract disclosure. Of note, Glencore took the initiative to publish 16 full contracts entered into with Kazzinc, which represents an example of industry acting on its own to promote contract transparency.

The International Secretariat’s assessment is that Requirement 6.4 remains not assessed, given that several encouraged aspects of this requirement remain to be addressed by Kazakhstan EITI. Consulted stakeholders across constituencies highlighted the importance of environmental management and monitoring. The MSG is invited to provide feedback on addressing the objective of providing a basis for stakeholders to assess the adequacy of the regulatory framework and monitoring efforts to manage the environmental impact of extractive industries, and to assess extractive companies’ adherence to environmental obligations. The 2020-2021 Kazakhstan EITI Report provides a comprehensive overview of the relevant legal provisions, including the Ecological Code. The Transparency template provides a reference to the unified internet resource on environmental issues under the Ministry of Ecology and Natural Resources. It is noted that environmental information is provided free of charge upon request through the e-government website. The 2020-2021 Kazakhstan EITI Report also provides information on emission payments, expenses for nature protection and monitoring of air quality by region as well as an overview of activities directed an environment protection for four extractive companies. Available documentation does not appear to clarify actual practices related to legal provisions and administrative rules in 2020-2021. Further information could be also provided on environmental impact assessments, certification schemes, licenses and rights granted to oil, gas and mining companies, as well as information on the roles and responsibilities of relevant government agencies in implementing the rules and regulations. Lastly, available documentation could be strengthened by including information on regular environmental monitoring procedures, administrative and sanctioning processes. Analysis of publicly accessible information identified that some data are available through routine disclosures (for example, through the National report on the state of the environment and the use of natural resources). However, further analysis would be required to map publicly available disclosures and evaluate their comprehensiveness.

The International Secretariat’s assessment is that Requirement 2.2 is mostly met, as in the previous Validation. The Secretariat’s view is that the objective of providing a public overview of the rules and practices of oil, gas and mining license awards and transfers is mostly fulfilled. The list of bidders in auction rounds is not published and the methodology for assessments of non-trivial deviations in licensing procedures are not adequately explained, and did not consider reports of documented irregularities in licensing procedures for the period under review. Information on companies and individuals holding licenses and contracts prior to 2020-2021 are disclosed. The 2020-2021 EITI Report notes the number of licenses awarded for 2020 and 2021. A licensing regime is employed in the solid mineral sector (excluding uranium) and in 2020, 609 exploration and production licenses were issued. The 2020-2021 EITI Report states that there were no non-trivial deviations in awards and transfers in the period under review. However, a government report of improper procedures in the award of solid mineral contracts in the same period highlights the need for further assessment of non-trivial deviations including the methodology used by the MSG for such assessment. In December 2017, Kazakhstan passed a new law “On Subsoil and Subsoil Use” (the Subsoil Use Code) that instituted a licensing system to regulate the exploration and production of solid minerals in the country. In the period under review, and up to present day, this new law and its regulations have been in the process of being implemented. As a result, there were adjudications of contracts and licenses the mining sector (excluding uranium) as solid mineral contract negotiations that were ongoing at the time that the Subsoil Use Code was passed were respected. For old and new holders of mining contracts, the government has offered to transition these contracts to the new licensing system under the Subsoil Use Code. Consulted government stakeholders posited that the passage of the Subsoil Use Code has greatly simplified the process to obtain solid mineral exploration and production rights and demonstrates to foreign investors that there is a stable climate for investment and the preservation of mining rights. These stakeholders highlighted the ten-day window in which licenses must be adjudicated as evidence of more efficient systems. Consultations and a review of adjudications show that this ten-day period was respected in practice. The statutory licensing and contracting procedures are well explained through systematic disclosures and changes to the laws and decrees governing the allocation and transfer of licenses and contracts are summarised through EITI reporting. Consulted government stakeholders clarified that the transfer of uranium contracts can only occur among legal entities in which a national company in the field of uranium holds greater than a fifty percent share (direct or indirect) in the acquiring legal entity (see Article 160 of the Subsoil Use Code). EITI reporting further expands on changes to the tax regimes for different license and contract types, with links included to where this information is systematically disclosed. The licensing system introduced in the mining sector by the Subsoil Use Code practices a first come, first served system while prior mining contracts were granted through direct negotiation. The only caveat to this new licensing system is that for licenses located outside of the region governed by the State Subsoil Fund Management Programme, and when multiple bidders desire the same license, an auction system is used. Similarly, uranium contracts are awarded through direct negotiation with Kazatomprom, the state-owned entity in charge of the uranium value chain. Uranium contracts always take the form of joint ventures with Kazatomprom. In oil and gas, exploration and production contracts are awarded through both direct negotiation and auction. The process used depends on whether the private company is considered a “strategic partner” and the commodity and region in question. Technical and financial criteria used in direct negotiations and auctions are described (and systematically disclosed – see Articles 23, 64) and government stakeholders confirmed that the same criteria are applied in transfers of licenses and contracts. Stakeholders are invited to specify in which Articles of the Subsoil Use Code specific technical and financial criteria are listed. EITI reporting confirms that updated license and contract information is recorded online after a transfer is made. The determining factor to decide the winner of contracts adjudicated through an auction system is the size of the signature bonus offered by the private company, which is redacted from contracts due to confidentiality concerns (see Requirement 2.4). While information about the recipients of awarded and transferred licenses and contracts is publicly available, the International Secretariat understands that the lists of bidders in auctions are not publicly available and invites the MSG to clarify. Additional information on the allocation of contracts and licenses, such as commentary on the efficiency and effectiveness of new licensing procedures under the Subsoil Code are provided through EITI reporting. Likewise, a description of procedures and actual practices related to renewing, suspending and revoking contracts and licenses is provided. In 2021, 434 exploration and production licenses were issued. The 2020-2021 EITI Report further reports that 15 and 85 mining exploration licenses were terminated in 2020 and 2021, respectively.

The International Secretariat’s assessment is that Requirement 2.3 is mostly met, which is a regression from the previous Validation. The strategic recommendation from the previous Validation touched on inconsistent data related to application dates and duration of mining and oil and gas licenses and contracts. While it appears that license and contract duration periods are comprehensively disclosed, application dates are still not comprehensive for mining licenses and contracts and oil and gas contracts. The previous Validation did not deem these gaps in application date to be material in its assessment. However, given that these gaps persist, the Secretariat considers that the objective of ensuring public accessibility of comprehensive information on property rights related to extractive deposits and projects is only mostly fulfilled. For the extractive sector as a whole, the Committee of Geology and Subsoil Use of the Ministry of Investment and Development hosts an interactive geoportal that contains much of the information required under Requirement 2.3.b for exploration and production licenses and contracts except for application dates. This geoportal is supplemented by annexes (scroll to the bottom of the page) published on the Ministry of Industry and Construction website. These annexes appear to be updated with some regularity given that they have been updated since the Validation period began. EITI reporting also covers some information regarding license and contract holders but the 2020-2021 EITI Report mostly references where this information is systematically disclosed. Between the geoportal and annexes on the Ministry of Industry and Construction website, all information required under Requirement 2.3.b, other than date of application, are available for exploration and production licenses and contracts granting rights to solid minerals, uranium and oil and gas. When exact coordinates are not provided in annexe, the size and location of the license area is disclosed on the geoportal. This includes contracts and licenses that fall outside the scope of EITI implementation. While most associated dates of application are provided, there are gaps across all contracts and licenses for all commodities. Given the scandal in the award of solid mineral contracts in the period under review, ensuring that dates of application are publicly available for all contracts and licenses is important. There does not appear to have been discussion in the MSG to improve the comprehensiveness of dates of application and it is unclear how the MSG intends to address this gap despite previous discussions.

The International Secretariat’s assessment is that Requirement 2.5 is partly met. The objective of this requirement is to enable the public to know who ultimately owns and controls the companies operating in the country’s extractive industries, particularly those identified by the NCS as high-risk, to help deter improper practices in the management of extractive resources. Based on stakeholder consultation and review of available documentation, the International Secretariat’s assessment is that significant aspects of the requirement have not been implemented, and the broader objective of the requirement is not fulfilled. The legislative basis and process for government collection of BO data does not seem to be complemented by adequate public disclosures, which restricts the ability for data use. The Kazakhstan EITI Report for 2020-2021 contains a beneficial owner definition that aligns with Requirement 2.5.f.i. However, no information is provided on thresholds and politically exposed persons. Article 47 of the Subsoil Code requires companies applying for oil, gas and mining licenses to disclose beneficial ownership information to the government but lacks an ownership threshold. It is unclear whether the 25 percent threshold identified in the AML/CFT Law applies to the extractives sector. Mining companies must disclose to MIC whilst oil and gas companies are required to disclose to the MoE. Partial information on beneficial ownership in the mining sector is systematically disclosed and publicly accessible via the MIC website. However, these disclosures lack the following information: • Nationality, country of residence and whether the beneficial owners are PEPs (required elements of Requirement 2.5) • National identification number of the beneficial owner, date of birth, residential or service address, and means of contact (encouraged elements of Requirement 2.5). Review of the minutes of the NCS meeting in May 2021 confirm that members discussed the lack of disclosure of beneficial ownership information for oil and gas companies, collected and held by the MoE. The IA asked the NCS for assistance after failure to obtain the information from the MoE during preparation of the Kazakhstan’s 2018-2019 EITI Report in accordance with the established legislative framework for public disclosure. Subsequently the MoE published information about oil and gas contracts, which contains some names of companies and persons although it is unclear whether this represents beneficial owners. The Kazakhstan EITI 2020-2021 Report documents the number of companies that published beneficial ownership information and where this data can be found. According to a list of 670 extractive sector companies: Information from the register of issued licenses for 46 companies; information from EGSU for 111 companies (hydrocarbons summary report - 104, license and contract conditions report - 7); from E-gov for 483 companies; information from the company website for 1 company; and no information for 29 companies for 2021. Similar overview is provided for 2020. The Summary Data Template (Part 3) contains links to stock exchange listings where beneficial ownership information may be found for publicly listed companies. Regarding public registers, some information is accessible via the EGSU online portal. The IA created a file with some BO information for extractive companies, but the list does not cover all the aspects of Requirement 2.5 and most BO names do not refer to a natural person (entries are either empty or the name of a corporation). According to Order No. 33 of the Chairman of the Financial Monitoring Agency of the Republic of Kazakhstan dated September 16, 2022, legal entities and foreign structures without the formation of a legal entity are required to submit beneficial ownership information provided for in subparagraph 2-2) of paragraph 3 Article 5 of the AML/CFT Law, at the request of the authorized body. The report highlighted numerous omissions and discrepancies in beneficial ownership data. The responsible ministry has subsequently sent requests to companies to provide more accurate data. Review of meeting minutes provides no evidence that the NCS discussed gaps or weaknesses in disclosure of beneficial ownership information, including an assessment of the materiality of omissions and the reliability of data. However, during a workshop in November 2023, NCS members and a broader group of CSOs discussed gaps and weaknesses in BO data disclosure, and the MSG agreed to develop or update the BO roadmap. The International Secretariat found no evidence that the relevant government entity or the NCS had established an approach for participating companies to assure the accuracy of the beneficial ownership information they provide. For publicly listed companies, including wholly-owned subsidiaries, the name of the stock exchange has been disclosed and a link is included in the Summary Data Files to the stock exchange filings where they are listed. In cases of joint ventures, it is unclear whether each entity within the venture discloses its beneficial owners. Some information about legal owners is only publicly available via EITI reporting. Investigative journalists in Kazakhstan have reported freely on beneficial ownership disclosure practices in the country, including allegations about the disappearance of some data from public registries. According to one investigation reported in 2023, a Ministry of Justice order in 2015 allowed certain individuals exemption from provisions of the Civil Code of the Republic of Kazakhstan and the Law of the Republic of Kazakhstan "On Limited Liability Partnerships." Exemption applies to clients of the Central Securities Depository who are certain politically connected people allowed to exclude information they determined was confidential, including beneficial ownership. Another investigative report in February 2024 claimed that a new policy on personal data protection introduced by Kazakhstan's Minister of Digital Development, Innovation, and Aerospace Industry, Bagdat Musin,restricts public access to state registers by requiring banks and other organisations to access government registries through a personal data control service. This service allows individuals to approve or deny data access via SMS. Implementation of the policy means that when trying to update any data on legal entities – the composition of the founders, address, management, tax discipline, etc. – these data will be provided only after (and in the case of) the approval of the management or founders of the same legal entity. Some commentators argue that the policy could obstruct transparency and enable concealment of beneficial ownership, which contradicts Kazakhstan's commitments to transparency and public information access.

The International Secretariat’s assessment is that Requirement 2.6 is mostly met, as in the previous Validation. The objective of the requirement is to ensure an effective mechanism for transparency and accountability for well-governed state-owned enterprises (SOEs) and state participation more broadly through a public understanding of whether SOEs’ management is undertaken in accordance with the relevant regulatory framework. Review of available documentation and stakeholder consultations suggest that this objective has been mostly met, given availability of systematic disclosures on state participation through annual company reporting but considering lack of clarity on the comprehensiveness of disclosures, in particular related to the scope of covered SOEs. While consulted stakeholders did not identify significant omissions, they emphasized the need for a nuanced understanding of local SOE management practices and the need for further analysis, given the complexity of state participation in the country. In response to the draft assessment, civil society noted the following concerns: the lack of a common definition of SOE; planned legal reforms; full list of state-owned companies was not published in the 2020-21 EITI Report nor online; a decline in the quality of reporting where previously SOE data was included in annexe; and the lack of follow up on the previous Validation. The International Secretariat recognises that whilst the 2020-21 EITI Report might be less informative than previous reports, Kazakhstan maintained a significant share of SOE systematic disclosures including financial statements. The broader concerns are factored into the assessment of regression on Requirements 4.2 and 4.5. Furthermore, the assessment of Requirement 7.3 reflects the lack of follow up on the previous Validation. State participation in Kazakhstan’s oil, gas and mining sectors was significant in 2020-2021. While EITI reporting covers some aspects of state participation, including financial relations between SOEs and state, there appear to be remaining gaps in comprehensiveness, specifically regarding the definition of an SOE, materiality decisions, disclosures for subsidiaries and joint ventures, rules and practices governing transfers of funds, details regarding the terms attached to the state’s equity stake. Relevant data, in particular related to practices, appear to be systematically disclosed through government and SOE websites. However, the International Secretariat found limited evidence of stakeholder analysis of publicly available data. The MSG did not respond to the invitation to comment on this point. Please see a detailed analysis of Requirement 2.6 in Annexe B.

The International Secretariat’s assessment is that Requirement 4.2 is partly met, which represents a regression compared to the previous Validation. Available documentation and stakeholder consultations suggest that the objective of ensuring transparency in the sale of in-kind revenues of minerals, oil and gas to allow the public to assess whether the sales values correspond to market values and ensure the traceability of the proceeds from the sale of those commodities to the National Treasury is not met, considering the lack of clarity on the scope of in-kind revenue, insufficient disclosures of volume data and opportunities to strengthen data disaggregation. According to the Tax Code (Article 722, Article 772), companies in Kazakhstan are allowed to pay two revenue streams – royalty and payment called “Production Share of the Republic of Kazakhstan” pertaining to production sharing agreements (PSAs) – in kind. According to the Government Decree #67, PSA LLP was identified as a recipient on behalf of the state of the share of the Republic of Kazakhstan under the PSA for the Northern Caspian Sea. Based on available documentation, it is not clear whether there are other operators that collect in-kind payments on behalf of the state and whether both royalty and payment “Production Share of the Republic of Kazakhstan” are collected by PSA LLP. The 2020-2021 Kazakhstan EITI Report notes that relevant obligations are transferred to the Kazakhstan National Fund under the budget code 105328 “Share of the Republic of Kazakhstan according to production sharing under concluded contracts from oil sector organisations”. The report provides the total monetary value under this code for 2020 and notes that no payments were made in 2021. However, the values under this budget code appear to differ on the EGSU portal for both 2020 and 2021. Some consulted stakeholders noted that there were relevant payments in 2021 and that there might have been a mistake in the report. Available documentation does not appear to comment on materiality of in-kind revenues and does not provide volumes and sufficient disaggregation to levels commensurate with the reporting of other payments and revenue streams. The EITI reporting does not clarify if swap agreements and resource-backed loans were applicable in the period under review. Additionally, available documentation does not provide information on the encouraged aspects of Requirement 4.2. Overall, limited views on this requirement were expressed during stakeholder consultations.

The International Secretariat’s assessment is that Requirement 4.5 is mostly met, which represents a regression compared to the previous Validation. The objective of the requirement is to ensure the traceability of payments and transfers involving SOEs and to strengthen public understanding of whether revenues accruable to the state are effectively transferred to the state and of the level of state financial support for SOEs. Review of available documentation suggest that this objective is mostly met, given limited availability of disaggregated information on transactions related to state-owned enterprises. Consulted stakeholders across constituencies expressed limited views on the objective of this requirement, apart from highlighting availability of systematic disclosures of some relevant data. Available documentation provides limited information on the rules governing the financial relationship between SOEs and state (see Requirement 2.6 – Annexe B) which subsequently provides limited information on the transactions related to SOEs. Based on the previous Validation, the Secretariat’s understanding is that there are no direct payments beyond taxes and dividends. The materiality decisions related to Requirement 4.5 do not appear to be documented. The MSG is invited to provide further information on applicable transactions and the scope of relevant transactions. Company payments to SOEs The previous Validation report notes that it is unlikely that there are any financial transactions between SOEs and private companies, except for those that are related to equity shares held by SOEs. Available documentation does not appear to comment on this aspect of Requirement 4.5. EITI reporting appear to provide some disclosures of intra-SOE transfers of dividends between subsidiaries/JVs and parent companies, however, it is not clear if such disclosures are comprehensive. SOE transfers to the government Stakeholder consultations with companies indicated that SOEs make the same tax and non-tax payments as private companies which are disclosed as part of financial reporting through the EGSU platform. The 2020-2021 Kazakhstan EITI Report provides some information on dividend payments. Additionally, some information is available through systematic disclosures (see Requirement 2.6 – Annexe B). The Transparency template notes that annual reporting of the National Welfare Fund Samruk-Kazyna JSC (hereinafter – the Fund) contains information about portfolio companies and the amount of dividends paid by them in favour of the state. It appears that the Fund’s annual reporting provides a total value of its dividends to the state, without further disaggregation by company. Additionally, available documentation does not appear to provide comprehensive information on dividends from all material subsidiaries, joint ventures and affiliates by individual company. Government transfers to SOEs Available documentation does not appear to confirm if there were any material government transfers to SOEs in 2020-2021.

The International Secretariat’s assessment is that Requirement 6.2 is mostly met, as in the previous Validation. The objective of this requirement is that where state-owned enterprises undertake extractive-funded expenditures on behalf of the government that are not reflected in the national budget, these are disclosed to ensure accountability in their management. Review of available documentation and stakeholder consultations suggest that this objective has been mostly met, given available reporting on quasi-fiscal expenditures (QFEs) but noting opportunities to clarify categorisation of quasi-fiscal expenditures and strengthen relevant disclosures. The 2020-2021 Kazakhstan EITI Report notes that QFEs were identified as social expenditures by SOEs that were outside of the national budgetary process. At the same time, the Transparency template notes that no clear definition of QFEs was defined for EITI reporting and civil society further highlighted this in their comments on the draft assessment. Analysis of available documentation appear to indicate no clear categorisation of QFEs for 2020-2021. The MSG did not respond to the International Secretariat’s request to comment on the main types of QFEs (payments for social services, public infrastructure, fuel subsidies and national debt servicing, etc.) applicable to the period under review. In their comments, civil society also mentioned the national significance of QFE and gaps in comprehensiveness of QFE disclosures via the EGSU portal. The International Secretariat takes note and acknowledges that whilst significant gaps in QFE reporting remain, many issues are linked to SOE definitions and broader challenges with Kazakhstan EITI report preparation and MSG functioning factored into the assessment of Requirement 7.3. Furthermore, the public interest in QFE could merit Kazakhstan EITI to consider a work plan objective to strengthen the implementation of Requirement 6.2 and contribute to public debate. The report provides information on quasi-fiscal expenditures for KazMunayGaz JSC and JVs of Kazatomprom JSC. Similar QFE data are disclosed through the EGSU portal. Additionally, the Transparency template notes that annual reports of the Fund describe social and charitable activities of the holding through the trust fund; however, it is unclear whether these expenses were budgeted or whether they were (and in what part) quasi-fiscal. The information includes detailed descriptions of projects/services and recipients. At the same time, relevant information is provided only for two SOEs, with limited clarification whether other companies had any QFEs in the period under review.

The International Secretariat’s assessment is that Requirement 3.2 is mostly met, which is a regression from the previous Validation. The Secretariat’s view is that the 2020-2021 EITI Report and systematic disclosures of production volumes are only mostly disclosed and production values are not provided for all commodities, which leads the Secretariat to conclude that the objective of ensuring a public understanding of extractive commodity production levels and their valuation is only mostly fulfilled. Kazakhstan’s EITI reporting, with associated annexes, provides for a detailed summary of most production volumes for oil, gas and minerals with links to where this information can be found systematically disclosed. While disaggregation by region is an encouraged aspect of Requirement 3.2, Annex 4 to the 2020-2021 EITI Report notes that oil, gas and mining production volumes are confidential for some regions, which calls into question whether aggregate production volumes include these confidential production volumes. There are also some mineral ores, such as the category “Mining of ores other than iron ore” and “Mining of precious metals and rare metal ores” that appear to represent significant production volumes (and values) that are not disaggregated. As in the previous Validation, the corrective action to improve public understanding of the methodology used to calculate production values has not been acted upon, and it appears that values associated with production are sales values. It does not appear that there has been progress on this aspect and no production value estimates have been provided. While these values were based off of production costs in the previous Validation, it is not clear if this method was used for the 2020-2021 EITI Report. Production data is disaggregated by region, though some commodity’s production volumes and values are noted as confidential in this regional breakdown and the materiality of these omissions are unknown. These data are not further broken down by company or project. The methods for calculating production volumes and values are not provided. There does not appear to be any reference to artisanal and small-scale mining production volumes or values, though government stakeholders acknowledged the presence of artisanal mining.

The International Secretariat’s assessment is that Requirement 3.3 is mostly met, which is a regression from the previous Validation. Confidentiality provisions limit the comprehensiveness of data and not all export volumes are adequately disaggregated by commodity. The Secretariat’s view is that Kazakhstan has regressed in their fulfilment of the objective to ensure a public understanding of extractive commodities export levels and valuation. The objective is only now mostly fulfilled due to the lack of comprehensive information on exports via government websites and incomplete data submitted in Validation reporting templates. Export volumes are available disaggregated for most commodities but the same issue of lack of disaggregation of different mineral ores similar to Requirement 3.2 exists. The 2020-2021 EITI Report appears to mistakenly omit export volumes for 2021, but Annex 4 provides the majority of these figures. This annex provides for export volumes by region but notes that some of these volumes are deemed as confidential. Likewise, there are mineral exports for regions that do not have associated production volumes. The International Secretariat welcomes MSG clarification as to how exports can stem from regions that do not produce the commodity being exported. Absent an explanation, this misalignment could point to data quality issues. In addition to the omission of 2021 export volumes from the 2020-2021 EITI Report, there are also no figures on export values. Annex 4 also does not provide information on export values. While this data may be found on government websites, EITI reporting does not serve as a guide to where members of the public could find this information and the International Secretariat invites the MSG to indicate where this information can be found. The 2019-2020 EITI Report provides export volumes and values so it is not clear why this did not carry over in the latest EITI Report. Nevertheless, it serves as a great impediment to public understanding of export values in the year under review given the lack of systematic disclosure of this data. Sources of export data are not available in the 2020-2021 EITI Report and there is no discussion on the reliability of this data. Given that export values are not disclosed in this latest EITI Report, there is no explanation of how these export values were calculated. There is no mention of exports of artisanal and small-scale mining, if this occurs.

The International Secretariat's assessment is that Requirement 4.1 is mostly met, which is a regression from the previous Validation. Consulted government stakeholders and documentation provided for this Validation acknowledged that the complete universe of extractive payments made by companies, disaggregated to appropriate levels, was not provided but that total government revenues were available. Confidentiality of signature bonuses that represent the key financial criteria used to decide the award of licenses, represents a clear barrier to accurate assessments of the materiality of government revenues from the extractive sector. The Secretariat agrees with stakeholders’ assessments and considers that the objective to ensure comprehensive disclosures of company payments and government revenues from oil, gas and mining as the basis for a detailed public understanding of the contribution of the extractive industries to government revenues is mostly fulfilled. While materiality thresholds were employed in the previous Validation, members of the national secretariat confirmed that materiality thresholds were not used in the 2020-2021 EITI Report in terms of selecting material companies that should be included in the scope of EITI reporting. In effect, this means that a zero percent materiality threshold is used and all companies are considered material. EITI documentation cites that 90.6% of company payments were included in EITI reporting for 2021, but without a materiality threshold, it is unclear whether there are significant companies that were not included in reporting that could make up sizeable portions of the 9.4% of government revenues that were not reported. Consulted government stakeholders did not consider the lack of materiality threshold in company selection to be important given that the EGSU portal covers payments from all active companies and company selection was based on the size of companies’ payments to government. Similarly, there were no materiality thresholds used in the selection of revenue streams and it is the Secretariat’s understanding via consultations with government stakeholders that the entire universe of revenue streams related to oil, gas and mining are included via EITI reporting and systematic disclosures, other than certain commercial terms, such as signature bonuses, as these are regarded as commercially sensitive. Revenue streams are clearly described in the 2020-2021 EITI Report, with links to where this information is systematically disclosed in the Tax Code. It does not appear that there was an explicit comparison with all revenue streams listed in Requirement 4.1.c performed by the IA, but these revenue streams are systematically disclosed through the EGSU portal outside of signature bonus. Given the pivotal role that signature bonuses played as financial criteria for the award of mining contracts that occurred in 2021, the MSG should explore avenues to overcome this confidentiality. The full universe of government entities receiving revenues from oil, gas and mining companies is disclosed via EITI reporting and annexes to the 2020-2021 EITI Report provide aggregate information about total revenues received from each benefit stream. Despite the fact that there were no materiality thresholds determined, the reporting covers all revenue streams related to oil, gas and mining companies, other than signature bonuses. Similarly, through the EGSU portal, it is possible to view all oil, gas and mining companies that are making payments to government by revenue stream. The Secretariat was not able to locate figures of extractive revenues paid to each government entity, and the Kazakhstan MSG is invited to comment on whether revenues government entity are publicly available, or whether they are only available in aggregate. While there are numerous instances of companies operating multiple exploration and production licenses and contracts, there has not been a discussion or agreement around project-level reporting and revenues are not disclosed at this level of disaggregation (see Requirement 4.7), though it is the Secretariat’s understanding that some revenue streams are levied at the project level. EITI documentation provides the links to the vast majority of companies’ audited financial statements, which also appear to be accessible via the Ministry of Finance website, Financial Statement Depositary.

The International Secretariat's assessment is that Requirement 4.3 is partly met, which is a regression from the previous Validation. The previous two Validations demonstrated improving documentation of infrastructure provisions and barter arrangements present in the previous period under review. This level of documentation has not been maintained in this Validation and it is unclear whether infrastructure provisions and barter arrangements that were active in previous years remain in force as this information is not yet comprehensively disclosed on government or company websites. Given the lack of updated information on these provisions and agreements, the Secretariat considers that the objective of ensuring a public understanding of infrastructure provisions and barter-type arrangements, which provide a significant share of government benefits from an extractive project, that is commensurate with other cash-based company payments and government revenues from oil, gas and mining, as a basis for comparability to conventional agreements is not fulfilled. Prior EITI reports document the parties involved, the resources which have been pledged by the state and the value of the balancing benefit stream for the barter arrangements that were in force and considered material. Factors that remained unknown at the conclusion of the prior Validations, and remain unknown now, include the terms of the pre-financing loan arrangement, the repayment modalities and the specific volumes and values of crude oil and liquefied natural gas delivered in 2021 in repayment for two loans in exchange for future delivery of crude oil and liquefied natural gas. The 2016-2017 EITI Report explains the formula used to calculate gas price in the KMG JSC – Gazprom – Uzbekneftegaz gas swap but it is not clear if this formula is still applicable. There is no documentation of discussion between the MSG and the IA with regards to a definition of materiality as it concerns infrastructure provisions and barter arrangements that could shed light as to whether previous agreements remain material and active or whether new provisions and arrangements of this nature are active and should be considered material. An October 2021 press release from KMG Kashagan B.V. reports that the company fulfilled its financial obligations under the presales oil agreement that it signed with Vitol in 2016 related to the North Caspian Production Sharing Agreement but that the oil supply contract within this agreement remains in effect until December 2025. Given that parts of this agreement remain active, it is important to provide documentation that allows a public understanding of the volumes and values of these in-kind oil payments. With the fulfilment of the financial obligations of this loan, the disclosure of remaining volumes and values of oil to be supplied could enable the MSG to assess the materiality and benefit of this presales oil agreement relative to conventional oil supply contracts. Other agreements documented in previous EITI Reports such as the KMG JSC – Gazprom – Uzbekneftegaz gas swap, the Kazakhstan – Russia crude oil swap, the possible Kazakhstan – Russia – Iran oil swap and the NC KMG pre-sales agreement for crude oil and liquefied natural gas are not mentioned in the 2020-2021 EITI Report and open-source online searches did not yield updated information about these agreements.

The International Secretariat's assessment is that Requirement 4.4 is mostly met, which is a regression from the previous Validation. Prior EITI Reports documented sustained expansion in the systematic disclosures of information related to the role of state-owned enterprises and government entities in the transportation of oil, gas and minerals, resulting in an assessment equivalent to ‘mostly met with improvements’. The corrective action for Temir Zholy to disclose volumes and revenues associated with rail transport of mineral commodities has been partly followed, though these revenues are only presented in aggregate and published in annex to the 2020-2021 EITI Report. Volumes of oil transported are reported by pipeline and company but disaggregation of transportation volumes and values are not fully in line with Requirement 4.7 and there has been regression in the documentation of gas transportation. This leads the Secretariat to conclude that the objective to ensure transparency in government and SOE revenues from the transit of oil, gas and minerals as a basis for promoting greater accountability in extractive commodity transportation arrangements involving the state or SOEs is only mostly fulfilled. The 2020-2021 EITI Report acknowledges the applicability of revenues accumulating to the state and SOEs due to their involvement in the transportation of oil, gas and minerals. EITI reporting does not explicitly comment on the materiality of these transportation revenues, but it is understood from the effort devoted to documenting transportation and tariff arrangements that these revenues are significant. The 2020-2021 EITI Report provides a detailed description of how oil and minerals (gas transportation is curiously not documented) are transported in Kazakhstan and the integral roles of state-owned enterprises in these transportation networks. In the hydrocarbon sector, KazTransOil, and its subsidiaries, own and operate the oil pipeline network in Kazakhstan and EITI reporting documents the ownership stakes and main export destinations for each of the four oil pipelines. Changes in the ownership structure of state-owned enterprises operating gas transportation pipelines is documented in the 2020-2021 EITI Report, with Samruk-Kazyna JSC acquiring 100% equity interest in KazMunaiGas (KMG), the sole shareholder of KazTransGas, which operates the gas transportation pipelines in the country (see Annexe B on Requirement 2.6). Outside of the acquisition of KMG, the 2020-2021 EITI Report does not describe the gas transportation infrastructure in the country. Despite this lack of documentation, the 2019-2020 EITI Report documents the gas transportation network in Kazakhstan and the central role of KMG. KMG continues to produce annual reports that are available on their website, which confirms their ongoing role in gas transportation. Concerning solid mineral transportation, the 2020-2021 EITI Report highlights the pivotal role of rail transport in Kazakhstan, not least because of the country’s large size, and the role of Temir Zholy, the state-owned enterprise responsible for rail transit. Transportation taxes, tariffs and other relevant payments including the methodologies used to calculate them are defined for oil, gas and solid mineral transport in the 2020-2021 EITI Report and through the government and SOE websites. Tariff rates for all commodities and the volume of transported commodities are disclosed in the oil and gas sectors, by pipeline, but it is not clear if the volumes of mineral commodities transported via Temir Zholy are available in a disaggregated manner, as available documentation only provides aggregate volumes transported. It is possible that these volumes are disaggregated in Temir Zholy’s annual reports but this has not been documented by the MSG in EITI reporting. Revenues received by KazTransOil and Temir Zholy are presented in aggregate for fiscal year 2021 via annex published on the Ministry of Industry and Construction website (Annex 7 at the bottom). While not provided in the 2020-2021 EITI Report, the Secretariat understands that aggregate revenues should be available for gas transportation through KMG’s annual reports but Kazakhstan MSG is invited to indicate where this information is publicly available. While information supplied about Temir Zholy’s solid mineral transport activities is a welcome improvement from the previous Validation, oil, gas and solid mineral transport volumes and values are not disaggregated to levels required in Requirement 4.7 (by revenue stream, company and cargo). It does appear that the state-owned entities active in transportation adhere to appropriate data quality standards, as noted in Requirement 4.9. Given the lack of MSG discussions on materiality of transportation revenues for the year under review, it is difficult to assess whether the lack of disclosure of disaggregated transportation volumes and revenues are due to insurmountable barriers or other reasons. The MSG did not document barriers to provision of this information or government plans to overcome these barriers. This assessment would be particularly useful given the acquisition of KMG by Samruk Kazyna.

The International Secretariat's assessment is that Requirement 4.7 is mostly met. EITI data is disaggregated by company, government entity and revenue stream, but the Secretariat understands that some revenue streams, such as signature bonus and "Deductions of subsoil users for the socio-economic development of the region and the development of its infrastructure", are levied at the project level and the EGSU portal does not provide data at this level of detail. The Secretariat considers that the objective to ensure disaggregation in public disclosures of company payments and government revenues from oil, gas and mining that enables the public to assess the extent to which government can monitor its revenue receipts as defined by its legal and fiscal framework, and that the government receives what it ought to from each individual project, is mostly fulfilled. The 2020-2021 EITI Report serves as a consolidated source of reference for financial data of extractive companies. While EITI reporting presents much of this information in aggregate form, annexes (Annexe 8 at bottom of web page) to the 2020-2021 EITI Report and the EGSU portal allow for public access to financial data by company, government entity and revenue stream, but not by project. It is the Secretariat’s understanding based on documentation provided for this Validation and consultations with government stakeholders that there are some revenue streams levied at the project level. The lack of disclosure of these revenue streams levied is notable given that EITI reporting on contract and license allocation demonstrates that it is common for mining and oil and gas companies to operate multiple projects at once. A documented discussion on substantially interconnected agreements and the revenues derived from them would enable the public to have a more informed conception of the payments emanating from each individual project that companies operate.

The International Secretariat's assessment is that Requirement 4.8 is mostly met, which is a regression from the previous Validation. The previous Validation noted that data timeliness had been exceeded due to regular publication of EITI Reports and robust online disclosures through company and government websites. However, there has been less regularity in the publication of EITI Reports since this Validation, with Kazakhstan being temporarily suspended in February 2023 for missing the original 2020-2021 EITI Report deadline for publication. The MSG extension request was not approved (see Board Decision 2022/65). Suspension was lifted in late October 2023 when the Board determined that the 2020-2021 EITI Report had been published within the six-month extension window. Kazakhstan continues good practices in the systematic disclosure of data on government and company websites and generally ensures that oil, gas and mining data disclosures are sufficiently timely to be relevant to inform public debate and policy-making. However, considering delays in the publication of the 2020-2021 EITI Report, the Secretariat considers the objective to be mostly fulfilled.

The International Secretariat's assessment is that Requirement 4.9 is mostly met, which is a regression from the previous Validation. The previous assessment considered that Kazakhstan had sufficiently improved on data reliability reporting and documentation since the first assessment. However, the period since this assessment has seen a less-capacitated Kazakhstan EITI, mainly due to COVID-19 and lack of adequate financing of national secretariat activities, that has resulted in limited documentation of data quality and assurance practices in the period documented by the 2020-2021 EITI Report. As a result, the objective of ensuring that appropriate measures have been taken to ensure the reliability of disclosures of company payments and government revenues from oil, gas and mining is only mostly fulfilled. While the Secretariat acknowledges the solid work done to maintain routine government and company audit and assurance systems and practices, aspects of Requirement 4.9 related to agreement on reporting templates, safeguarding confidential information and a summary of key findings from the assessment of the reliability of data disclosed by companies and government entities are not documented in the latest EITI reporting. The 2020-2021 EITI Report briefly outlines the methodology of elaborating the report, principally that it was a flexible report. Financial data was collected from the EGSU portal, which publicly discloses data submitted by company and government entities. So while data was unilaterally provided by government and there was no reconciliation of data, there is still effective disclosures from government and companies. In sum, the EITI Report followed a procedure to address data quality and assurance based on a standard procedure endorsed by the EITI Board. While missing from EITI reporting, consulted government stakeholders confirmed that government entities and companies are subject to credible, independent audit, applying international standards. It appears that the same legal provisions in place during the previous Validation (namely Law 304 of November 1998 and Law 392-V of November 2015) requiring companies and governments to undergo regular external audits are still in place. Other documentation provided in the course of EITI Implementation, mainly summary data templates, contain information and links to the majority of companies’ audited financial statements. MSG comments on the Transparency template acknowledge that not all companies have associated links to where these statements can be found. Nevertheless, it appears that audited financial statements are available for the largest contributors to government revenues, and for all government entities themselves. There is little documentation concerning reporting templates used by participating government entities or appropriate provisions for safeguarding confidential information. When asked, consulted government stakeholders did not present a plan that could overcome confidentiality barriers to allow for the IA to review contract provisions considered commercially sensitive. Further efforts to allow for a review of commercially sensitive information in contracts could allow for greater adherence to Requirements 2.4 and 4.9. It is commendable for summary data templates to provide links to audited financial statements for the majority of extractive companies, but in the spirit of fulfilling the objective, the IA should provide a summary of the key findings from the assessment of the reliability of the data disclosed by companies and government entities in the 2020-2021 EITI Report that notes whether all reporting companies had their financial statements audited. Non-financial information should be more clearly sourced.

The International Secretariat's assessment is that Requirement 5.1 is fully met. The objective of ensuring the traceability of extractive revenues to the national budget and ensuring the same level of transparency and accountability for extractive revenues that are not recorded in the national budget is fully met, However, there is scope to clarify understanding of the retained earnings of extractive revenues that may have been held by state-owned enterprises. The 2020-2021 EITI Report and associated annexes sum up and point to information that is systematically disclosed on the Ministry of Finance’s State Revenue Committee website. Taken as a whole, these sources explain how, in theory and practice, extractive revenues flow to the Republican Budget (national budget), the National Oil Fund (an extra-budgetary fund) and subnational budgets. EITI reporting clearly explains which revenues flow to each collecting entity and there are financial reports available documenting flows to the National Oil Fund. The state’s share of production that is the operator’s responsibility to pay to the National Fund is required to be made in kind, which is clearly documented in EITI reporting and on government websites. Missing from EITI reporting or disclosure on government websites is an explanation of extractive revenues retained by state-owned enterprises (see Requirement 2.6). Also lacking some clarity are national revenue classification systems or international data standards used in reporting this data. While national revenue classification codes are provided for revenue streams, there is no explanation of the overarching system in which these codes apply.

The International Secretariat's assessment is that Requirement 5.3 is not assessed. This requirement was deemed to be ‘exceeded’ in the previous Validation, but a lack of sustained documentation of budget and audit processes, as well as a lack of information on budget cycles, production and commodity price assumptions and revenue forecasting, leads the Secretariat to consider that there are still encouraged aspects that remain to be assessed. The 2020-2021 EITI Report continues to document how companies pay into the National Fund and explains the fund’s role in supplementing the national budget and providing targeted revenues earmarked for specific programmes and geographic regions. Rules for these transfers are systematically disclosed on government websites, though it is not clear whether these rules also contain methods for ensuring the accountability and efficiency in the use of transferred revenues. EITI reporting does not contain a description of Kazakhstan’s budget and audit processes, though the Secretariat understands that these systems are robust. The government and Kazakhstan MSG do not provide further information around revenue sustainability and resource dependence, which could take the form of projected production, commodity prices and revenue forecasts and the proportion of fiscal revenues expected to come from the extractive sector, even if trends for the period under review are well discussed.

The International Secretariat’s assessment is that Requirement 4.6 is mostly met. This requirement was assessed as not applicable in the previous Validation. The MSG is invited to comment on the applicability of Requirement 4.6 in 2020-2021. The objective of the requirement is to enable stakeholders to gain an understanding of benefits that accrue to local governments through transparency in companies’ direct payments to subnational entities and to strengthen public oversight of subnational governments’ management of their internally generated extractive revenues. The International Secretariat’s assessment based on review of available documentation and stakeholder consultations indicate that the objective is mostly met, given availability of relevant disclosures but noting opportunities to strengthen data disaggregation. The International Secretariat found that available documentation is not conclusive about the applicability of subnational payments in 2020-2021. The Transparency template notes land tax, property tax for individuals and legal entities, vehicle tax, fees for registration of individuals engaged in entrepreneurial activity and legal entities, state fees, payments for the socio-economic development of regions and other income as subnational payments. While aggregated data per region is available, the full list of applicable revenue streams and related disaggregated disclosures do not appear to be available. The 2020-2021 Kazakhstan EITI Report and Annexe 8 to it provide some information on the local taxes in the period under review. The data are disaggregated by company and region but not by revenue steam. Similar information is disclosed on the State Revenue Committee website. Information available through the EGSU portal is disaggregated by a revenue stream but does not appear to clarify which local entities receive subnational payments. The Budget Code (see Articles 50-52) regulates which revenue streams are paid to the local level (regions, cities, rural areas, etc.); however, available documentation does not appear to either confirm the full list of relevant revenue streams that were classified as subnational payments in 2020-2021 or disclose relevant disaggregated data. In terms of the process, consulted stakeholders indicated that all payments go through the treasury but are shortly (within one day for payments in KZT) redirected to relevant local government entities.

The International Secretariat’s assessment is that Requirement 5.2 is not applicable, as in the previous Validation. While available documentation provides an overview of relevant laws and references the mechanism for subnational transfers, it does not appear that such transfers are related to the extractive sector but rather cover all sectors of the Kazakhstani economy. The MSG is invited to comment on the applicability of Requirement 5.2 in 2020-2021.

The International Secretariat’s assessment is that Requirement 6.1 is mostly met, as in the previous Validation. The objective of the requirement is to enable public understanding of extractive companies’ social and environmental contributions and providing a basis for assessing extractive companies’ compliance with their legal and contractual obligations to undertake social and environmental expenditures. The International Secretariat’s assessment based on available documentation and stakeholder consultations indicated that this objective is mostly met. While some information on social and environmental expenditures is routinely disclosed through the EITI reporting process, there is scope to further clarify the list of applicable mandatory social expenditures and environmental payments, and strengthen the comprehensiveness of relevant disclosures. Social expenditures The 2020-2021 Kazakhstan EITI Report notes that there are two types of social expenditures – payments to the budget code 206114 “Payments of subsoil users for the socio-economic development of the region and the development of its infrastructure” and memoranda with akimats (local government entities). The report does not appear to confirm whether both types of expenditures were mandatory and material in the period under review. Opinions expressed in stakeholder consultations differed in particular on the issue of what constituted mandatory social expenditures, including on memoranda with akimats. Some stakeholders noted that such memoranda are signed on a voluntary basis, while others noted that they could be mandatory, for example, for production in particular areas or depending on the terms defined in a subsoil agreement. During consultations, it was indicated that memoranda with akimats are not available for public access. Some stakeholders also noted that companies could provide social expenditures on a volunteer or sponsor basis. According to the Subsoil Code (Article 129), extractive companies are required to finance regional socio-economic development and development of their infrastructure. Additionally, the Tax Code (Article 261) notes that such expenditures are considered to be tax deductions. From available documentation, it is unclear if social expenditures could be provided in kind. Based on EITI reporting, it appears that all such payments are directed to local budgets, while being recorded under the budget code 206114. The International Secretariat’s understanding is that this type of social expenditures cannot be paid directly to third parties. The 2020-2021 Kazakhstan EITI Report and its annexes provide the total value of social payments in 2020 and 2021, information on some infrastructure projects that were conducted as part of social expenditures and detailed information per region. Moreover, payments under the budget code 206114 are available per each reporting company through the EGSU platform. A spot check of data on the EGSU platform revealed that the social expenditure value for some companies is zero. It is unclear whether these companies had no social expenditures or if they did not provide relevant information for the fiscal years under review. Annexes to the 2020-2021 Kazakhstan EITI Report also provide information on social expenditures outside the budget code 206114 (under memoranda with akimats). However, the Transparency template indicates that data are incomplete, considering that not all akimats provided reporting. Additionally, the Transparency template notes that it is unclear which projects implemented under memoranda are mandatory and which are voluntary. Consultations with stakeholders across various constituencies revealed significant interest in the topic of mandatory social expenditures. Analysis of available documentation also identified different research projects and analyses on social expenditures (see, for example, here for 2019 and 2020) that indicate the relevance of this topic for local communities and CSO constituency. At the same time, stakeholders highlighted the need for further clarification regarding the scope and classification of mandatory social expenditures, including opportunities to improve data comprehensiveness. Environmental payments The 2020-2021 Kazakhstan EITI Report notes that environmental payments are regulated by the Tax Code, Environmental Code and Order #68-p “On approval of the Methodology for calculating fees for environmental emissions”. However, available documentation does not appear to provide either a clear list of relevant mandatory environmental payments or confirm which of them were material in 2020 and 2021. The report provides information on the top company payments for emissions. Additionally, payments under the budget code 105316 “Fee for emissions into the environment” are available per each reporting company through the EGSU platform. A spot check of data on the EGSU platform revealed that the value for environmental payment for emissions for some companies is zero. It is unclear whether these companies had no environmental payments or if they did not provide relevant information for the fiscal years under review. Further clarification is also required to identify if such payments are levied on a project or company level.