Open Statement of Kumtor Operating Company Employees addressed to the President, Jogorku Kenesh and Government of the Kyrgyz Republic

published: 20 July 2012

Recently, the attacks and accusations by Members of the Parliament and the Government of the Kyrgyz Republic, carrying an exceedingly negative and provocative nature, affecting the activities of our company negatively and discrediting its business reputation, have become a common practice.

In this regards, we, the citizens of Kyrgyzstan and employees of Kumtor Operating Company, are extremely concerned about the happenings and, exercising our constitutional right, we wish to express our views and civil position regarding the criticism and the issues raised by Members of the Parliament as well as the Government, who visited the Kumtor mine.
Many of us had been working at the mine for more then 15 years, and we are well aware of the procedures followed in gold mining operations and of the high standards of safety and environmental protection established and observed here.

Moreover, some of our specialists, who had worked at other foreign and CIS enterprises of this kind admit that nowadays there are very few similar ventures with such an organization and working conditions, constant improvement of the technological process as at Kumtor.

It is no secret that Kumtor is the main source of budget revenues of Kyrgyzstan. According to the statistics, that reflect basic industrial production indices, our company makes the most significant contribution to the economy and improvement of living standards, not only of the Issyk-Kul region but throughout the whole country.

We all know that Kyrgyzstan has not yet been included in the list of countries, where the greater part of the country’s budget revenue is generated through export of industrial goods, while Kumtor is still the only enterprise providing more than 26,1% of the country’s industrial export, promoting inflow and strengthening of foreign currency reserves.

There is a large number of examples of positive effects and contribution of the Company’s activities, besides production operations, such as providing jobs, funding of social projects in local communities of Issyk-Kul region, covering fees for training of youths with subsequent employment, sponsoring of construction and rebuilding of schools, funding microfinance agencies for poverty reduction, etc. Such activities must be carried out essentially by the State, and not a private enterprise. However, our Company, realizing the necessity and importance of supporting the local communities, shows an example of a successful implementation of the principles of corporate social responsibility.

It is also important to note that the above results are being achieved with such artificially created barriers of various kinds as hostility of certain groups against the Company, which periodically interferes with normal life and with the work of the Company by blocking roads, demanding compensations for unjustified reasons, blocking the Company’s transport and robbery of Company’s provisions, fuel, etc. Inaction and demonstration of the status-quo by the State authorities responsible for the compliance with law and order, gives us a reason to believe that it is a generally recognized and widely accepted rule of conduct towards foreign investors in our country, giving the reason to doubt the authority, legitimacy and capacity of government to nip such actions of illegal nature in the bud. All this does not only impede normal operation of the largest employer and taxpayer in the country, but also impacts perception of our image by international business community in the most negative way.

The so called “patriots of Kyrgyzstan” represented by some representatives of the Parliament and Government, who are grieving over national interests of Kyrgyzstan, do not understand that their thoughtless actions will lead to a complete halt of production at the Kumtor mine, where neither more nor less three thousand employees and citizens of Kyrgyzstan are working and providing for their families. In the event of interruption of mine operations, about ten thousand people (employees and their families) will be left without means of livelihood, adding to the already long lines of unemployed in our country.

This suggests a question addressed to those in power: could they demonstrate another successful example of an existing large-scale production in the mining sector in Kyrgyz Republic, providing so many work places with high working condition standards as at Kumtor? Besides, can the Government demonstrate at least one example of successful management of a “nationalized” enterprise? We very much doubt that after the nationalization of Kumtor, current working conditions, wages and organization of production will remain. The nationalization of Kumtor will destroy not only this unique production, but also the entire economy as a whole, and will give a negative signal to other foreign investors.

The threat of an “ecological disaster” concluded upon visiting Kumtor mine, which was immediately evaluated in monetary terms by the representatives of recent official delegation, is not confirmed by competent findings of a credible corresponding authority, and the statements and evaluations made by the so called “environmental protection experts” invited by the Parliamentary Committee are superficial and are not backed by specific scientific reliable data of continuous observation and monitoring.

Since the beginning of its activity, our Company did not take any unilateral actions or decisions related to all aspects of its operations, including compliance with law, environmental protection rules and regulations, safety of tailings dump and utilization of industrial and domestic wastes.

All decisions and projects were approved by relevant supervisory authorities of the Kyrgyz Republic and fulfilled in accordance with their prescriptions, which is confirmed by specific documents and acts signed by the supervisors of these authorities.

Therefore, statements declaring that our Company has not been allowing any representatives of the supervisory and regulatory authorities of Kyrgyz Republic to enter the Kumtor mine facilities are a pure misinformation.

If KOC does indeed comply poorly with environmental regulations, let the Parliament and the Government show us a company of a similar profile operating in the Kyrgyz Republic, where all the requirements of industrial and environmental norms are met. We will organize a visit by our specialists to that enterprise to receive training and get their experience in environmental protection, to bring things to order in our Company based on such obtained knowledge.

The Kumtor gold-mining enterprise is undoubtedly the first and the largest investment project in the history of the independent Kyrgyzstan, being a fact of high importance precisely because the project is an example of successful and effective investment in our economy by private western investors.

We are concerned for the fate of our Company, which gives us jobs, decent income and confidence in the future.

We believe that common sense of our leaders will prevail and that all the accusations against our Company will be dismissed.