The mining industry in Kyrgyzstan has developed since Soviet Union times. Gold, uranium, rare metals were extracted. Since that time uranium tailings, deserted open pits have remained in republic. But alongside with negative influence on an environment, at least, at that time the great importance attached to a social component, and inhabitants of mining settlements and cities received free-of-charge medical aid, free-of-charge education, vacations in resorts and boarding houses.

With approach of independence in 1991, the government of the country has decided to stake also on development of the mining industry, not having thus of experience of the making of contracts with the foreign companies.

The population of republic remember, with what infringements the agreement for elaboration of Kumtor gold deposit ( the largest in the CIS ) with Canadian company " Cameco " in 1994-1996 has been developed - without the announcement of the tender, without taking into account opinion of local population and preliminary EIA (Environment Impact Assessment) . Hopes and promises of the former government, that extraction of gold will bring to the country riches and well-being, were not realized. The activity of Kumtor mine was accompanied by several failures, largest of which – cyanide accident in 1998, entailed the cyanide poisonings of local residents and the open pit fall in 2002, caused the death of one mine worker. Indemnification of victims has sat down for cyanide poisonings and for agricultural damage to inhabitants from the company has made scanty figures (approximately 25 dollars to one adult and 12 dollars to the child), that has displeased and raised protests of inhabitants. In June 2004 Kumtor operating company project was restructured and got new name – “ Centerra Gold”. By this name the company Centerrra completed IPO and commended trading to Toronto stock exchange.

By 2005 the big external debt in the country has been saved up (about 2 billion dollars, basically due to credits of the international financial institutions), growth of poverty, unemployment was marked. In March, 2005 there was an overthrow of the government by crowds of protesting inhabitants. After change of the government inhabitants of villages injured from cyanide accident , have again fronted with protests, and have addressed with letters to the new government. Inhabitants several times blocked the road leading to Kumtor gold mine.

Local NGO “ Karek” , the member of eco-safety network , coordinated by HDC “Tree of Life”, carried out public campaigns on attraction of attention to problems of injured inhabitants. In August, 2005, Human Right Bureau and HDC “Tree of Life” visited the place where local people blocked the road to mine, and rendered consultations to local residents and negotiated with central and local authorities under the solution of a problem. In result at the request of inhabitants the State commission on Kumtor gold mine has been created. In the commission were included representatives of the state bodies, local residents, NGOs and the representatives of companies. As a result of long –term , difficult work of this commission, in February, 2006, at last, first tranche of indemnification to inhabitants for cyanide poisoning of 1998 year has been paid.

By 2007 all inhabitants of injured villages of Issy-Kul Oblast, received compensation for the damage caused as a result of cyanide accident in 1998, and amount of 32000soms to each family ( 842USD) has been paid. Also, medical equipment to the hospital of Barskoon village hospital was provided and special micro credit program for inhabitants of these villages - as a result of the State Commission on Kumtor, where 5 NGOs were included to - NGO "Karek", HDC “ Tree of Life ”, Human Rights Bureau, Association of Miners and Geologist and NGO “ Citizen against corruption”.

Now the government tries to reconsider conditions of the General agreement on Kumtor which in the very beginning was made behind the closed doors and national interests of the Kyrgyz republic were not fully taken into account, and also tries to increase a share of the Kyrgyz side in the agreement. Negotiations are recently completed by increasing of Kyrgyz shares from 16% to 30 %. After such failures and difficulties with payments of indemnification on Kumtor, absence of promised increasing of well-being of the country, the population of Kyrgyzstan skeptically concerns the development of new deposits.

Nevertheless, the government has given out licenses for development new gold deposits to other foreign companies in Talas region.

In Talas the work on development of 2 gold deposits – Jerui and Andash have begun. The Government of the Kyrgyz Republic has been engaged in questions of development Jerui deposit since beginning of 90th years. In 1999 development of the feasibility study for elaboration of a deposit was started by the company « Norox mining Companies of Ltd. », wich being affiliated with company « Oxus Gold plc ». For development of deposit "Norox " and joint-stock company Kyrgyz Altyn " have formed joint venture « Talas Gold Mining” company. After many peripetias, cancellation and restoration of the license for development of a deposit on October, 16, 2003 the company « Talas Gold Mining » has carried out the presentation of the project of the accelerated development of Jerui deposit.

The given company has presented the statement of impact to environment in 2003, on which Ministry of ecology and extreme situation of Kyrgyz Republic has made a number of serious remarks and recommendations. In particular, a planned close situation of tailing from living places, crossing by pipe line of water-currents, and transboundary character of environmental impact of planned object were specified.
Public participation in discussion of the given project in 2003-2005 proceeded mostly as a result of the initiative "from down" and had 3 components supplementing each other: participation of local population Talas region initiated by member of eco network, Talas brunch of Association of reproductive health within the framework of the project “ The "Gold" future of our children », public campaign on signing of petition to European Bank of Reconstruction and Development (who was considered as possible creditor of construction of mine) and formation of public opinion and carrying out of an independent estimation of the feasibility study and EIA, carrying out within the framework of activity eco safety network, consisting of 26 organizations and coordinated by HDC “Tree of Life”.

In resolutions of the carried round tables, alongside with other questions, recommendations for increase of knowledge of the population (providing of additional copies of EIA and feasibility study report, the organization of information centre, attraction of mass-media), involving in process of discussion of the project (the organization of round tables and public hearings according to the established procedures, attraction of the interested parties from neibohr Kazakhstan) to decrease risks of negative influence (development of mechanisms of the notification and training of the population to behaviour at occurrence of extreme situations, ecological insurance of the population) were submitted.

At the meeting which has been carried out on December, 26, 2003 in rural district Becmoldo , taking place in a zone of direct influence of Jerui project , 132 inhabitants of villages Kara –Oi, Saak, Kenesh and Khan- Biurge have participated. Participants of meeting had been created committee for protection of public interests from 11 persons - farmers, teachers and deputies of local council ( Kenesh) . Taking into account results of the carried round tables, one of requirements of participants of meeting was inclusion of chairman of the created committee - the deputy of local council ( Kenesh ) - in the structure of board of Talas Gold Mining Company.

There was became obvious a non-compliance by Oxus company the term of signing of the agreement with government. According to the decision of Government KR, terms of performance was expired, and company could not liquidate in time the remarks of state ecological examination of Ministry EES, not having presented the contract design coordinated with the state bodies on protection of subsoils, an environment, technical safety, and owners of the land rights (infringement of item 3, a part 2, an item 18 of “ Law of subsoils ») and has not started the basic stage of construction the mine , not having executed point 5 of the license agreement. That all has led to to cancellation of the license in August 2004.

But by this the history with an ill-starred deposit has not ended. The company tried to continue work on a deposit without the license in 2005 and continued to build objects on a deposit. Changes have been brought in the feasibility study on strengthening of measures of ecological safety. In the meantime, the Government transfers the license for development of Jerui deposit (again without carrying out of the tender) to the company " Global Gold " registered in Austria, and the new company starts over again preparation of the feasibility study, an establishment of contacts to local authorities and meetings with local population. The opposition of two companies - "Oxus " and Global Gold » begins. In 2006 - 2007 in an orbit of this conflict the population of the region, oppositional deputies who criticize actions of administration of the President and the Government were involved. Protests of the population get spontaneous and in some cases were beyond the law, actions on blocking roads to a deposit, attempts of capture of a deposit begun. And manipulation with separate groups of the population on protection of interests of this or that company was on occasion traced.

During a meeting of activists and local people of Talas region with prime-minister of KR on a question of development of Jerui ans Andash deposits in May 2007, the part of aggressively adjusted crowd has blocked road to a cortege of prime-minister and pelted it with stones. As a result of this incident which some activists called as provocation that was arranged by local authorities, a number of activists have been detained and put in prison. And some activists who were not on road during this incident ( they were at home, or in the other place) , have been arrested, too. Only after several statements and appeals of some Kyrgyz NGOs to authorities and the publication of these statements in mass media with demand to release the detained activists, they have been released under written undertaking not to leave. Now these activists waiting for the court decision.

As a whole the basic requirements of inhabitants of region were simple and came to the following: maintenance of ecological safety of the future enterprises, the contribution of the companies to social development of regions, providing of job places of inhabitants of region at these enterprises., access to the information on activity of the enterprises.

Presentation of the feasibility study of already new company " Global Gold " has taken place in July, 2007 in a building of Agency of geology and mineral resources ?? where journalists passed only under strictly limited list, and many NGOs have not been invited at all. Only general information on this presentation has published in mass-media.

In 2004 Kyrgyzstan has joined Extractive industries transparency initiative ( EITI) , according to which the government and the companies should publish annual reports on deductions to the state budget. Now 6 mining companies have joined EITI. However, since then 2 reports of 2 companies have been published only: « Kyrgyz Altyn » and “ Centerra Gold », and in a case with « Centerra Gold » the divergence of the data of the government and the company was marked.

In 2004 a number of leaders NGOs of Kyrghyzstan, such as « Citizens against corruption », the Bureau of human rights ", Human Development Center “ Tree of Life”, , Association of miners and geologists of KR, NGO “Karek”, NGO “ Taza Tabigat” and others have formed the Consortium on promotion of the EITI. The consortium carries out a monitoring of performance the Initiative by the companies and the government, gives the remarks and recommendations on improvement of the reporting and a transparency of the companies, trains local NGOs and informs the population on this Initiative.

After 2 years of monitoring of performance of the given Initiative by companies and by government, we as members of the Consortium, came to a conclusion, that the given Initiative being the useful tool for the accountability of the companies, but at the same time it has rather narrow format and concerns only incomes of the companies and their deductions in the state budget. In the meantime in Kyrghyzstan the main part of conflicts occurs because of non-transparency of contracts and agreements (when the company does not reach income yet), and also because of questions of ecological safety of the future enterprises. Therefore in our opinion, expansion of a format of the Initiative and inclusion in it the questions of a transparency of contracts and agreements and questions of ecological and social safety are necessary.

In Kyrgyzstan the Conception of sustainable development of the country also was accepted in 2002, however, it also is not implementing in full scale. The government with eagerness, worthy to the best application, hastens to develop new deposits, not considering an alternative variants of development of regions. And in fact in the Talas region for example, farmers perfectly earn on cultivation of a kindney bean. Also it is necessary not to forget, that we live in mountain ecosystem, which is fragile and vulnerable.

At the same time in Kyrgyzstan there are magnificent opportunities for eco-tourism development , there is a biodiversity of mountain regions with rare kinds of plants and animals, the clean (still) mountain rivers and lakes. Whether we shall keep this beautiful nature for the future generations or we are waited for the "gold" future?

Kalia Moldogazieva,
HDC “Tree of Life”
September. 1 , 2007