engineers, metallurgists, architects, geologists, and geophysicists (KPMG 2011).60 In addition, subsoil users and their subcontractors must grant equal conditions and rewards to local and foreign personnel. Limitations on Granting of Work Permits
Resolution 71 also introduced the geographical ring-fencing of work permits. In Kazakhstan subsoil work permits must be requested from and are valid in the administrative-territorial units of issuance. This entails that any relocation of foreign employees among the territories of Kazakhstan or any geographical job rotation program is bound by certain limitations. For example, the duration of business trips to administrativeterritorial units other than that in which a work permit has been issued was reduced from 120 to 60 calendar days during a calendar year (RoK 2011). In case foreign employees are seconded to other companies in the country, or if foreign staff limits are violated, work permits are cancelled. If a violation occurs, the authorities can impose a 12-month bar on obtaining new work permits. Minimum Budget Dedicated to Training of Local Workforce
In addition, the new law on subsoil use—Law No. 291/2010—mandates subsoil users to commit to a minimum amount of money to be allocated to education and training activities, as part of other requirements such as social programs. This includes education, training, and retraining of Kazakh workers and personnel involved in the execution of the contract. Subsoil users are also required to train and finance the training of other personnel, specified by the MOG (RoK 2010c). Domestic Sourcing of Goods, Works, and Services Three key categories of policy tools are being used by the Kazakh government to increase domestic sourcing of GWS in the oil and gas sector:
Specification of GWS procurement rules for subsoil users MOG Kazakhstan Content Development Programs KMG (National Oil Company) local content development efforts.
Goods, Works, and Services Procurement Rules
The permissible methods for procurement of local content GWS are specified in Resolution No. 1139 of November 2007 on Procurement Rules for Subsoil Users. The rules also define the monetary fines a subsoil user is subject to in case of noncompliance. In particular, the procurement of GWS shall be carried out through one of the following procedures:
Open tenders giving potential contractors at least 30 days of notice A restricted bidders list based on a request for proposal An online purchasing system managed by the Kazakhstan Contract Agency (KCA) A commodities stock exchange.
Upon technical evaluation, winning contractors shall be chosen on the basis of the lowest price across all relevant procurement methods. Under the procurement rules, subsoil users are required to publish announcements of forthcoming purchases, tender documentation, draft procurement agreements, and results onto an online registry of GWS.61 Subsoil users should also publish such information in company periodicals in both the Kazakh and Russian languages. The bid evaluation criteria provides for the inclusion of a 20 percent price premium for the following categories of suppliers:
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The above-mentioned individuals must fulfil certain criteria of higher education and experience of five years in relevant positions. This is publicly accessible at http://www.report.camng.kz/Default.aspx.
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