The private company “EPO Operator”, which was engaged in the collection of recycling fees for cars in Kazakhstan, was transferred to the ownership of the state under a donation agreement. That is, it was actually nationalized.
Before the nationalization, according to rumors, the company belonged (and no one denied it) to Aliya Nazarbayeva (the youngest daughter of the first President of Kazakhstan, Nursultan Nazarbayev). The permission for the EPO Operator to collect recycling fees was once issued by the then Prime Minister Karim Masimov, who is now under arrest on suspicion of attempting to carry out a coup d’état.
In order to understand this whole story, you need to plunge into history.
On November 17, 2015, Kazakhstan adopted the law “On amendments and additions to certain legislative acts on issues of industrial innovation policy”. This law introduces Chapter 41-1 into the Ecological Code of the republic, which defined the obligations of producers (importers), as well as the legal status of the Operator of extended producer obligations (EPO). It also stated that the EPO Operator, determined by the government of Kazakhstan, would collect a recycling fees for cars.
On November 30, 2015, a limited liability partnership (LLP) “EPO Operator” was registered in Kazakhstan. The founder of the company was Aliya Nazarbayeva, the youngest daughter of the current President of Kazakhstan, Nursultan Nazarbayev.
On December 30, 2015, the government of Kazakhstan adopted the resolution, which stipulated that EPO Operator LLP was designated as the operator of extended producer obligations. The government decree was signed by Prime Minister Karim Masimov.
On January 14, 2016, the EPO Operator LLP changed its founder. Eco Waste Solutions LLP and Shnar Muktarova became the founders. The latter, by the way, was the founder of Eco Waste Solutions LLP.
That is, in fact, the collection of recycling fees in Kazakhstan was carried out by a private company that didn’t have any state participation. In January 2022, the Minister of Ecology of Kazakhstan, Serikkali Brekeshev, stated that since 2015, the amount of recycling fees (collected by EPO Operator LLP) amounted to more than $1.5 billion.
At the same time, it should be noted that according to the data of the public movement #Нетутильсбору [no recycling fee] (about it a little later), the rate of recycling fees’ collection in Kazakhstan was too much – from about $1,000 to $13,000. For comparison: in Germany, the recycling fee is 100 Euros, in the Netherlands – 30 Euros, and in Japan – 80 times less than in Kazakhstan.
Despite the public indignation concerning this huge tax, which was imposed on all citizens who purchase new cars, the authorities not only overlooked the activities of the EPO Operator LLP, but also justified it. Moreover, this was done not only by officials, but also by public figures and bloggers. By the way, now the same bloggers are declaring the illegality of the activities of the EPO Operator.
In December 2019, the group #Нетутильсбору [no recycling fee] appeared on social networks, which operated strictly within the framework of the law. “All our demands are purely economic in nature. We are not pursuing any political goals, such as changing the political system, repealing laws, the Constitution, etc. We are against the fact that the people and the economy of Kazakhstan, for the first time in the world, are experimented with mixing the concepts of ecology and support for mechanical engineering. We are against unreasonably high utilization rates. We are against stimulating the automotive industry at the expense of the citizens of Kazakhstan, in the absence of control over the fulfillment of cross obligations. We are against the payment of fees bypassing the budget, to a private company, in the complete absence of financial transparency and in the presence of high corruption risks,” it says in the description of the group.
For three years, members of the group have urged the authorities to revise and reduce the recycling fees, but to no avail. After the well-known independent Kazakhstani journalist Vadim Boreiko and his YouTube channel “Гиперборей” [“Hyperborey”] joined the group, the group’s activities received wide publicity and support from the population. The style of the group has also been changed. If earlier it all came down to a behind-the-scenes discussion of those dissatisfied with the recycling fees’ collection, now petitions have gone into action (over 195 thousand people signed them), press conferences are held, etc.
In January 2022, mass riots took place in some regions of Kazakhstan, behind which, according to President Tokayev, there was an attempted coup d’état. On suspicion of its implementation, the chairman of the National Security Committee, Karim Masimov, was detained. Personnel changes began in the highest echelons of power. Everyone, who was in one way or another connected with the first President of Kazakhstan, Nursultan Nazarbayev, began to lose their posts.
On January 12, President Kassym-Jomart Tokayev spoke at a parliamentary session. Among other things, he touched upon the topic of recycling fees’ collection.
“For entrepreneurs and in general in society, a lot of questions are caused by the activities of the company called EPO Operator. It got to the point that some public movement was organized against this private company. I instruct the government to take measures to stop the collection and disposition of the recycling fees by the EPO Operator LLP. This should be done by a state organization, as in foreign countries. As for the fees themselves, their rates should be reviewed. Nobody canceled the functions of the state for recycling, supporting the automotive industry and agricultural engineering,” Tokayev said.
From the point of view of the laws of any capitalist countries, such actions, when the state nationalizes a private company, are nothing more than raiding. Immediately, there are a lot of uncomfortable questions. For example, what prevented the second President of Kazakhstan from raising the issue of transferring the function of collecting recycling fees to the state earlier? What prevented the same officials from arranging an audit of the activities of the EPO Operator in order to find out how, for what and how transparently the EPO Operator used the money received in the form of recycling fees? Why was the fate of the Operator set only after the January tragedy and after Nazarbayev’s inner circle, as well as himself, were left out of work?
On January 18, a draft resolution “On certain issues of subordinate organizations of the Ministry of Ecology, Geology and Natural Resources of the Republic of Kazakhstan and the adoption of a share in the authorized capital of the EPO Operator” (limited liability partnership from private ownership to republican ownership under the donation agreement) appeared on the website of open regulatory legal acts.
It said the following, “To accept the proposal of Eco Waste Solutions LLP and Muktarova Shnar Uralgazynovna to transfer to republican ownership a 100% stake in the authorized capital of EPO Operator LLP under the donation agreement.”
The joint-stock company “Zhasyl Damu”, owned by the Committee for Environmental Regulation and Control of the Ministry of Ecology, Geology and Natural Resources, was identified as a new operator for the collection of recycling fees. However, the members of the movement #Нетутильсбору [no recycling fee] are not entirely satisfied with the result.
“As for the fees themselves, their rates should be reviewed,” Tokayev said. So, some disagreements can be between the state and the population. Now Kazakhstan’s recycling fees are 30-50 times higher than European ones. And the group #Нетутильсбору [no recycling fee] just demanded a reduction in rates to a reasonable level – $100-200 per car. Semiconductors of Aliya Nazarbayeva’s ideas – such as Minister of Ecology Serikkali Brekeshev and ex-Minister of Energy Magzum Mirzagaliev, who, as he was supposed to, came to light and became an adviser to the President – can, after all, convince the President that a reduction in interest rates by 10-20% is quite enough.
Another ambush is Tokayev’s quote, “No one canceled the state’s functions for recycling, supporting the automotive industry and agricultural engineering.”
“This could mean that the state will continue to support the domestic auto industry through recycling fees. The same auto industry that has been existing for 20 years. But in fact, there was a screwdriver erecting works: spare parts were imported from abroad and wheels were screwed up. Not a single really Kazakh brand is produced on the assembly line. And the cessation of incentives for the automotive industry at the expense of recycling fees was the second (after lowering rates) main requirement of the group #Нетутильсбору [no recycling fee]. This means that this demand is torpedoed, and the auto industry is mummified. However, it’s not surprising. One of the main lobbyists of the mythical Kazakh auto industry, Roman Sklyar, not only remained in the government, but also went for a promotion – he became First Deputy Prime Minister. So, there was no trace of my euphoria. And I’m ready for the next round,” Vadim Boreiko wrote on Facebook about this.
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