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: Kyrgyzstan

As Mining Auction Criticized by NGO Proceeds, NGO’s Arguments Find Proof

Bishkek, 13 November 2013

A much awaited first mineral rights auction for four placer gold licenses was held yesterday in Chatkal, Kyrgyzstan. Two exploration licenses were sold, for a total of about 700,000 US dollars to Kyrgyz companies owned by Chinese and Azerbaijani interests. The auctions for two other licenses, including Bashky-Terek goldfield, were called off. Anticorruption Public Initiative, the Kyrgyz NGO which criticized the auction rules for their legal defects and corruption potential, used the opportunity to reply to previous accusations by auction-supporting Kyrgyz officials.

The NGO published a photocopy of its petition to the Attorney General’s Office to prove that the pre-auction statement by the Mineral Resources Agency denying that fact was wrong. NGO further remarked that the Bashky-Terek auction was called off for the very same reason that was fervently denied by the Agency only a day ago, that reason being the ecological uncertainties with water pollution from mining on the site. Finally, the NGO said that the public statement by the Agency made two days ago in fact proved verbatim what the NGO was calling a defect of the auction rules – the Agency confirmed that many important license conditions are to be determined after the auctions, not before (although the Agency called it “good international practice” in its 11 November statement).

Recalling Minister of Economy Temir Sariev’s public clash with Nazira Raimkulova, NGO chairman, the Anticorruption Public Initiative circulated an open letter to Sariev saying: “Mr. Sariev, you got our intentions wrong. We support the auctions. We are against corruption. But we find it unacceptable that investors who bought mineral licenses at auctions could lose them in one month, two months, one year or later because anyone could legally challenge the results. We also stand against a very well known Kyrgyz practice of interpreting the ambiguities in law against the investor, not the bureaucrat.”

The Mineral Resources Agency postponed the two cancelled auctions till 12 December. However, in a later statement it said that the next auction would be not on gold placers, but on coal licenses in the South of the country. The Attorney General’s and Antimonopoly Agency’s formal reaction to the NGO petition is expected by that time.

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