05 August 2015
Illegal extraction of amber is in the limelight now. Having started analyzing the issue, EPL stopped at the point of analyzing functioning of public authorities that fail to perform their functions, which lead to embezzlement of national values causing economic and environmental losses.
Let us start with a definition of amber. According to Art.1, p. 3) of the Law of Ukraine “On State Regulation of Extraction, Production and Use of Precious Metals and Precious Stones and Control over Operations with them” (Закону України «Про державне регулювання видобутку, виробництва і використання дорогоцінних металів і дорогоцінного каміння та контроль за операціями з ними»), these are precious stones of organogenic origin in tooled and untooled forms.
According to the Instruction on Use of Classification of Stores and Resources of Minerals of State Subsoil Fund for Amber Deposits(Інструкції із застосування Класифікації запасів і ресурсів корисних копалин державного фонду надр до родовищ бурштину), amber is a collective term that unites various kinds of extractive resins suitable for use in jewelry, chemical, pharmaceutical and other industries.
By the Resolution of the Cabinet of Ministers of Ukraine of 12 December # 827 “On Approving the List of Minerals of National and Local Importance” amber is classified as mineral of national importance, jewelry raw material, precious stone. This means that without a special permit for use of minerals amber extraction is prohibited. According to the procedure of issuing special permits for subsoil use (Порядок надання спеціальних дозволів на користування надрами),the exception from the general rule is as follows: it is allowed to extract peat and amber without tender procedure only for the purpose of geological surveys and scientific industrial developments on amber bearing territories that have no industrial value and are no bigger than one ha.
Art. 52 of the Law of Ukraine on Minerals envisages the possibility to set quotas for extraction of certain types of minerals with the aim to prevent adverse demographic, social and environmental consequences of intensive minerals extraction.
The procedure of setting quotas for minerals extraction is approved by the Cabinet of Ministers of Ukraine pursuant to the provision of 22 December 1994 # 862 “On Approval of the Provision on the Procedure of Setting Quotas for Extraction of Certain Types of Minerals” (Про затвердження Положення про порядок установлення квот на видобуток окремих видів корисних копалин). It is interesting to mention that among the main criteria of setting quotas is the state of mineral and raw materials basis, especially regarding strategic and deficit types of mineral law materials, environmental conditions in the areas of extraction; conjuncture of mineral law materials in the state and abroad; the possibility to purchase raw materials outside of Ukraine on more favorable conditions than extraction in its territories.
The Instruction on applying the Classification of Minerals Stores and Resources of the State Subsoil Fund for amber deposits defines the groups of amber deposits by geological and industrial types, distribution of amber deposits by the size of reserves and complexity of geological structure, principles of distribution of amber reserves by their industrial importance, technical-economic and geological studies, as well as requirements to the level of studies of amber deposits, calculations of amounts of reserves and their readiness for industrial use, principles of assessment of amber resources within perspective locations.
Requirements of the instruction are mandatory for enterprises, organizations, institutions of all ownership forms that perform planning, funding and execution of geological surveys for amber, planning and construction of mining enterprises, exploitation of deposits and accounting of amber reserves and resources. (The Order of the State Commission of Ukraine on Minerals Reserves of 10.02.2003 # 29).
Before liquidation in September 2014 of the State Probing Service of Ukraine by the Resolution of the Cabinet of Ministers #442 of 10 September 2014 “On Optimization of the System of Central Executive Authorities” it performed state probing control over the quality of precious metals, precious stones and precious stones of organogenic formation, semi-precious stones (hereinafter – precious stones), products made of them or materials that contain them. Now inspections of compliance with the law during operations with precious stones, their circulation and accounting are performed by the Ministry of Finances of Ukraine (hereinafter – Minfin of Ukraine).
The Minfin of Ukraine is the main central executive authority in charge of building and realization of the state financial, budget, taxation and customs policy (except for administration of taxes, fees, customs tolls and realization of taxation and customs policy), policy in the sphere of state financial control, treasury servicing of budget funds, accounting, issuing lottery tickets and holding lotteries, organization and control over production of valuable papers, document of strict account, extraction, production, use and storage of precious metals and precious stones, precious stones of organogenic formation and semi-precious stones, their circulation and accounting, in the sphere of prevention and counteraction of legalization (laundry) of profits acquired in a criminal way or funding of terrorism.
The main tasks of Minfin include formation and ensuring realization of the state policy regarding extraction and processing of precious stones of organogenic formations and semi-precious stones, their circulation and accounting, in the sphere of prevention and counteraction of legalization (laundry) of profits acquired in a criminal way or funding of terrorism. According to the sphere of its responsibilities the Minfin of Ukraine performs normative legal regulation in financial, budgetary, taxation, customs spheres, in particular regarding precious stones of organogenic formations and semi-precious stones, their circulation and accounting, in the sphere of prevention and counteraction of legalization (laundry) of profits acquired in a criminal way or funding of terrorism.
The law of Ukraine “On Licensing Certain Types of Economic Activities” that lost validity on 2 March 2015 because of adoption of the law “On Licensing Types of Economic Activities” classified as licensed types of activities extraction of precious metals and precious stones, precious stones of organogenic formations, semi-precious stones and collection, primary processing of waste and junk precious metals and precious metals, precious metals of organigenic formation, semi-precious stones. Thus, there was lost the possibility to inspect objects that for the first time received a license from the Ministry of Finances of Ukraine for production of precious metals and precious stones, precious stones of organogenic formation, semi-precious stones, production of articles of precious metals and precious stones, precious stones of organogenic formation, semi-precious stones that was envisaged by the Instruction on the Procedure of Holding Inspections of Compliance with Legislation of Ukraine of Operations with Precious Metals and Precious Stones approved by the Order of Minfin of 22.12.2008 #1519.
Regarding export of amber, according to the Resolution of the Cabinet of Ministers of Ukraine of 24 October 1994 #734 “On Liberalization of Export Operations”, amber belongs to the List of goods that can be exported only by the permit of the Minfin and according to the classifier of external economic activities amber has the number 25.30.9000.
Importantly, the current Ukrainian classifier of goods of external economic activities developed by the State Fiscal Service of Ukraine in the chapter 71 does not include amber although Ukrainian deposit of amber is one of the biggest in the world and amber is used both in medical sphere and for manufacturing decorations.
The same in the customs sphere – the customs tariff of Ukraine does not include such a type of goods as amber. However, it is well known that it is exported abroad while Ukraine does not receive a single hryvnia as result of this. In previous years export of amber was performed according to quotas set by the Cabinet of Ministers of Ukraine and by permit of minfin. For example, in 1995 the Resolution of the Cabinet of Ministers set the limit for amber export – 50 kg.
Unlike Russia where there is responsibility for illegal extraction of amber, Ukraine does not have such legal provisions. There is responsibility for violation of the legislation on subsoil. Violation of the legislation on subsoil envisages disciplinary, administrative, civil and criminal responsibility according to the legislation of Ukraine. The legislation envisages responsibility for unauthorized use of subsoil, violation of norms, rules and requirements regarding works for geological survey of subsoil; selective development of rich deposits that causes excessive loss of minerals; excessive losses and deterioration of the quality of minerals in the course of their extraction; damage to mineral deposits, which exclude all or substantially limit the possibility of further exploitation; violation of the established order of construction works in areas of occurrence of mineral resources;
failure to observe rules of protection of mineral resources and requirements for the safety of people, property and the environment from the harmful effects of works related to subsoil use;
destruction or damage of geological sites of special scientific and cultural value, observation regime wells and surveying and geodetic marks; unlawful destruction of geological surveying documentation and duplicate samples of minerals necessary for further geological study and development of deposits; non-compliance with the requirements for bringing mines and wells that are liquidated or closed down to the state that guarantees safety of people, as well as requirements for the conservation of deposits, mining wells for the period of their conservation.
Therefore,a systematic analysisof the legislationof Ukraine showssystemicinactionof public authorities,which ledto adverse consequences for the state of theenvironment, economy and human rights compliance inUkraine. In particular,unauthorizedmining is performed using hydromechanical method that leads topoverty, damage to deposits andcausesnegative environmentalconsequences and also can cause decrease of content of sortedamber–inambercontaining layerand the loss ofcommercial valueof these deposits.
The territories of unauthorized extraction are fixed to official users of nature (forestry enterprises), subsoil users (enterprises for the extraction and processing of minerals), land users (agricultural enterprises) that according to the environmental and land legislation are responsible for the use of the land for other purposes, or these areas are on the reserve lands of village and settlement councils, whose competence in accordance with Para. 4 of Article 10 of the Code of Ukraine on Subsoil includes control over the use and protection of mineral resources.
In accordance with Article 240 of the Criminal Code of Ukraine, the illegal extraction of minerals of national importance shall be punishable by a fine of four hundred to seven hundred untaxed minimum incomes, or imprisonment for up to three years, or imprisonment for the same term.
State Service of Geology and Mineral Resources of Ukraine is the central body of executive power directed by the Cabinet of Ministers of Ukraine through the Minister of Ecology and Natural Resources of Ukraine (hereinafter – the Minister), is part of the executive government and ensures the implementation of state policy in geological study and rational use of minerals.
The State Service of Geology and Mineral Resources of Ukraine in accordance with its tasks carries out the state registration of deposits, stocks and displays of minerals; conducts state balance of mineral resources; keeps state cadastre of deposits and occurrences of minerals; maintains state reserve of explored deposits of precious metals and precious stones; forms state fund of mineral resources and reserves of the fund; performs state registration and accounting work and research related to geological exploration of mineral resources; maintains a unified information system of subsoil; organizes the work of the Commission of the discoverers of mineral deposits and the Interdepartmental Commission for discoverers of mineral deposits under the State Commission on Mineral Resources, the Interdepartmental Commission on the organization of the conclusion and implementation of production sharing agreements; exercises state control over geological study of subsoil (state geological control) for the rational and effective use of mineral resources of Ukraine, exercises other powers determined by the laws of Ukraine and related to fulfillment of the tasks commissioned to the State Service of Geology and Mineral Resources by the President of Ukraine.
Therefore, in view of the fact that the State Service of geology and Mineral Resources is the only body in the system of central executive bodies, endowed with adequate powers to monitor, control the use and protection of natural resources of Ukraine, we believe that it committed the following crimes:
- professional negligence, ie failure of officials of the State Service of Geology and Mineral Resources to perform their duties and their omissions, which caused significant damage to legally protected rights, freedoms and interests of individual citizens, state or public interests, or interests of legal entities (Art. 367 of the Criminal Code Ukraine), namely the mass destruction of the state of mineral resources of national importance (amber), its illegal production and sale.
- Participation of officials of the State Service of Geology and Mineral Resources in looting of minerals of national importance (amber) in Rivne, Volyn and Zhytomyr regions (Art. 186 of the Criminal Code of Ukraine), intentional destruction of property (soils, forest stands of natural reserve fund) (art. 194 Criminal Code of Ukraine ), pollution and deterioration of land (Art. 239 of the Criminal Code of Ukraine), ecocide mass destruction of plant or animal life, the poisoning of the atmosphere or water resources, and any other actions that could cause an ecological catastrophe (Art. 441 of the Criminal Code of Ukraine).
It is worth noting that the adoption in the second reading of the bill 1351-1 “On production and sale of amber” does not solve the problem of illegal mining of amber, compliance with environmental legislation, control over export-import operations, the creation of resources for processing amber in Ukraine, because it does not contain appropriate provisions. On the contrary, it will effectively legitimize all negative phenomena in the field of environmental protection related to illegal extraction of amber. In particular, according to the draft law, it is allowed uncontrolled extraction of forest areas for extraction of amber without guaranteeing their return back to the forest fund, it is allowed to extract amber in the forests of the water protection and conservation value, to extract amber in the territories suitable for creation of “Emerald Network”, which Ukraine is obliged to protect under “Ukraine Association Agreement with the EU,” there are no guarantees of reclamation of lands after amber mining and so on.
SoEPLrequiresto pass a lawproviding forliabilityfor illegalextractionof amber instead of legitimizingactivity thatharmsthe environment and does not developthe economy.
Immediatesteps thatthe stateUkraineshouldmakeinclude closing our borders toillegal export ofamber,setting appropriate exportquota,creating conditions forinternal amber processing,employing people currentlyengaged inamber extraction in compliance withenvironmental legislation.
We encourageCSOs, which are aimed at protectingthe environment not to trustthebillandcontributeto solving the problem.
For further information please contact Sophia Shutiak, EPL lawyer of the 1st category
Email: office@epl.org.ua; sofiya.shutiak@gmail.com,
tek.: (032) 225 – 76 – 82
Petro Testov, EPL environmentalist
Email: office@epl.org.ua; petro.testov@gmail.com
tel.: (032) 225 – 76 -82
