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Policy-Maker Ulanbek Ryskulov on Kyrgyz Republic Mining Sector Reform

The recently released 2017 Resource Governance Index indicates the Kyrgyz Republic has extensive room for improvement in extractives management.

Among 89 country assessments, the Kyrgyz Republic's mining sector is ranked 38th, in terms of composite score. However, the country does better in specific areas, including subsoil use licensing , in which it ranks sixth thanks to license allocation transparency reforms. To learn what drove the reform process and gain a sense of future government plans, NRGI consultant Nazgul Kulova interviewed Ulanbek Ryskulov, chairperson of the State Committee of Industry, Energy and Subsoil Use.

Kulova: What does “good resource governance” mean to you?

Ryskulov: The most important factors for good resource governance are protecting the environment and ensuring that the state and all citizens—including local communities living near the mines—benefit from resource extraction.

Kyrgyzstan ranks sixth in licensing in the 2017 RGI. Do you think that Kyrgyzstan still has room for improvement in this area?

Certainly. But first I would like to say that I did not expect our reforms—including those aimed at improving licensing transparency—to achieve such results. The RGI findings show that our efforts have not been in vain. That said, reforming the mining sector in the Kyrgyz Republic is a continuous process. For example, the new iteration of the Subsoil Law requires the replacement of “direct negotiations” with a “first-come, first-serve” approach. In addition, the proposed bill was designed to include NRGI recommendations for the disclosure of community development agreements like social packages; beneficial ownership; and licenses and license agreements that are allocated via tenders and auctions.

What has been driving the licensing reform process?

Until recently, civil society and journalists were highly distrustful of how licenses were allocated in the Kyrgyz Republic. Local communities reacted very negatively to any activities in the sector, be it exploration or mining. They were protesting, blocking roads. They even damaged the equipment of mining companies. People did not understand what benefits they could expect from resource extraction; they were concerned about environmental damage and they had no information to help inform their opinions. To handle this problem, the government initiated a range of reforms, such as the allocation of licenses for medium and large extractive projects through open tenders and auctions that local communities and journalists can attend. While earlier licenses were granted for a nominal fee, today the allocation of subsoil rights brings millions of dollars into the state budget. The government has made a licensing cadaster publicly available. The government provides important information on licenses and license holders that is updated on a regular basis. In addition, new payments have been introduced at the legislative level and now are being remitted to the budgets of communities where subsoil use is taking place. Legislative reforms were accompanied by an advocacy campaign. Our staff and the staff of other government agencies visited the subsoil use areas regularly to raise awareness in local communities.

Transparency has become one of the most effective instruments we use to build trust in communities about mineral resource governance—it was crucial that we showed the public how decisions are made. Data disclosures have also allowed us to significantly reduce citizens’ distrust.

Lately, a lot of people have been talking about the Taza Koom project. What needs to happen to make this project successful?

Taza Koom is a fairly promising project that aims to use a digital public governance system (making public services available online) to increase the government’s openness, increase its transparency and accountability, and combat corruption. To implement this project successfully, all government agencies should work closely together and all government officials should have a clear understanding of why improving transparency is important. It’s key that policy-makers and civil society are actively involved. Without continuous monitoring, the government’s accountability to its citizens cannot be ensured.

What do you think stakeholders can do to improve resource governance? What kind of support might they need?

I’ll begin with the government. All reforms that aim to increase the openness and transparency of decision-making processes in the government, as well as improve data disclosure, should be continued. If each ministry had promoted such reforms, our Resource Governance Index scores would have been much better. What do we lack? Financial resources, unfortunately, and also proper experience-sharing with other countries and targeted technical assistance from the international community.

As for civil society, I need to mention the lack of independent, qualified experts who can serve the interests of citizens. The country needs a civil society that doesn’t simply criticize the government, but criticizes it in a reasonable and constructive way—that gives proposals and critiques that are well-considered. This would significantly help civil society to be heard.

Finally, the majority of our journalists have little understanding of mineral resource governance. Journalists should be delivering important information to citizens in a clear and comprehensible manner. This is particularly important for local communities. I wish our journalists would produce more analytical articles and take a more responsible approach to covering the news.

While the role of international development institutions is undoubtedly important, many things still depend on citizens themselves.

Nazgul Kulova is a consultant with the Natural Resource Governance Institute (NRGI) in the Kyrgyz Republic.

Kyrgyz Republic