March 21, 2011
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№ 2 (February 2011)

Belarus, Russia and Kazakhstan Move to Streamline Standards

   Three states (Belarus, Kazakhstan and Russia) put their heads together to make another step in the right direction to joining the WTO: the countries have established a Customs Union and agreed to form the Common Economic Space (CES), the next project in the pipe, by January 1, 2012.

By Aider Kurtmulayev

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   The Agreement “On Common Principles and Rules in the Sphere of Technical Regulation in the Republic of Belarus, the Republic of Kazakhstan and the Russian Federation” signed in November of the last year in St. Petersburg predetermined the agreed policy in the sphere of technical regulation.

   The intrigue of the past decades reached a commendable finale. How many swords have been crossed between opponents and supporters of bringing national standards of post-Soviet republics in line with international norms! After all, it was about the domestic manufacturers, who use generally outdated equipment and manufacture products conforming to the aged Soviet-time GOSTs. The solution to this pressing problem was shifted entirely into the political plane. As a result, top politicians had to intervene. This happened in Russia when President Dmitry Medvedev literally “pushed through” the amendments on using international and regional standards in the Russian Federation. Here, the term “regional” means to include the European standards, too.

   The Republic of Kazakhstan followed in line. On the one hand, the Central Asian country is a transit state, its territory is crossed by major oil and gas pipelines and its standards are governed either by Soviet-era GOSTs, SNiPs, or corporate system specs (proprietary standards). On the other hand, foreign operators working on Kazakhstan projects, such as the Caspian Pipeline Consortium (CPC), have brought in their cutting-edge technology and up-to-date equipment. The country faced the choice of either halting much-needed foreign investments in the oil and gas sector, or rolling up its sleeves to address the situation. The problem is there are three routes to approving a standard in Kazakhstan. The first route involves a lengthy legalization process, including translation of the standard from the original language into Russian and Kazakh, registration in Kazakhstan’s State Committee for Standardization (Gosstandard) followed by examination and adaptation, and finally switching to the usual adaptation route, this time as the Kazakh state standard (ST RK). The second implies automatic acceptance of CIS-adapted standard. Third, the so-called “pilot” route, allows the application of an international standard for five years (or until cancelled) from its registration date, for each individual project, followed by a protracted re-registration procedure.

   Meanwhile, it surfaced that to develop a single field, it is required to approve over 1,000 standards. Typically, one standard is about a hundred pages. After being translated, the standards must be adapted. Adaptation takes about a year, consisting of expert work, comments collection and coordination of the final reading. In fact, the Kazakh government demands that investors in joint projects use at least 40 percent of locally manufactured equipment in their work. Also, since the USSR had no offshore projects, there was no relevant framework on offshore production standards. Accordingly, all necessary documentation has been provided by foreign companies.

   To remedy the situation, in 2006, Kazakhstan’s Gosstandard jointly with the Ministry of Oil and Gas (RK MOG) decided to establish a Technical Committee for Standardization No. 58 “Oil, Gas and Their By-products, Materials, Equipment and Facilities for Petroleum, Petrochemical and Gas Industry” (hereinafter, TC 58) under the Main Dispatching Board of the Oil and Gas Industry (MDB OGI) at Kazakhstan’s Ministry of Oil and Gas (MOG) (now Oil and Gas Information Analysis Center).

   According to Kuanysh Yelikbayev, Head of Standardization Department at the MDB OGI, of 152 standards developed by ISO TC 67, Kazakhstan adopted 102 standards as state ones (most of them were adopted due to work of TC 58), whereas Russia, Ukraine, Brazil, China adopted less than 60 standards. On this indicator, Kazakhstan is only a little behind the European countries where the European Committee for Standardization (CEN) adopted about 130 standards. Thus, Kazakhstan created favorable conditions both for foreign investors and operators of oil and gas fields and for manufacturing of equipment meeting requirements of international standards. Development of standards for the oil and gas industry is financed both by the government and by attracting funds of the oil and gas industry business communities.  

   The following technical committees are active in Kazakhstan: TC 33 on the standardization of oil and gas industry equipment (at Sapa Intersystem, Almaty), TC 15 on the standardization of oil and gas exploration, drilling, and production (at Scientific Research and Design Institute of Oil and Gas, Aktau), TC 49 on standardization in the oil and gas industry (at Kazakh Oil and Gas Institute, Astana).

   The main challenges in technical regulation and standardization include harmonizing national regulation with international counterparts, forming an evidence base for performance of requirements of the new technical regulations and improving the competitive power of domestic goods. To better inform its business partners, Kazakhstan set up the information center of standards and assessment procedures, with a relevant computerized database.

   Establishing the Common Economic Space erects new requirements, so the country launched reforms of its technical regulation. The relevant legislation is based on Kazakhstan Law “On Technical Regulation” of 9 November 2004, the Government Program for Accelerated Industrial-Innovative Development (GP AIID) and a draft “2011–2014 Program on Development of Technical Regulation System.” The government understands the importance of the legislative cementing of reforms and has already passed the following technical regulation laws: “On Safety of Chemical Products”, “On Oil”, “On Safety of Machinery and Equipment.” The following technical regulations have already been approved: “Pipeline Safety Requirements for Flammable, Toxic, Liquefied Gases”, “Safety Requirements for Equipment Operating Under Pressure”, “Safety Requirements for Oil and Gas Production, Drilling, Geological and Geophysical Equipment”, “Safety Requirements for Construction of Onshore and Offshore Production Facilities of Oil Industry.”

   The state system of technical regulation (GSTR) is rapidly developing. Currently, conformance assessment can be carried out in one of 184 centers (bodies) and 506 independent test labs. Amendments and corrective additions have recently been introduced to the law “On Accreditation of Conformance Assessment.” GSTR work is controlled by a special national body for accreditation of conformance assessment centers and labs, set up on the basis of a subordinate enterprise of the Technical Regulation and Metrology Committee of Kazakhstan’s Ministry of Industry and New Technologies. To ensure conformance assessment in line with European practices, Kazakhstan joined the International Laboratory Accreditation Cooperation (ILAC) and International Accreditation Forum (IAF).

   Overall Kazakhstan operates 2,840 standards (ST RK). Of these, over 200 standards govern oil and gas industry. In general, companies engaged in Kazakhstan oil and gas sector use about 2,000 regulations, including such international standards as API, ASME, ASTM, ISO, IEC, and GOST. In addition, the GP AIID specifies that Kazakhstan is to develop and adopt another 400 state standards for oil and gas industry (while the total number of standards set to be about 2,570).

   Legal basis for the Common Economic Space hasn’t been forgotten either; much attention is being paid to technical regulation issues, which, given the ease of CIS GOST standard approval, will certainly help to make a leap forward in the sphere of technical regulation and standardization. The following documents are already adopted: “Agreement on the Uniform Policy in Technical Regulations, Sanitary and Phytosanitary Measures” (Moscow, 25 January 2008), “Agreement on Mutual Recognition of Accreditation of Certification Bodies (Conformance Evaluation/Validation) and Test Laboratories (Centers) that Perform Assessment (Conformance) Work” (St. Petersburg, 11 December 2009), “Agreement on the Treatment of Products Requiring Mandatory Evaluation (Validation) of Conformance in the Customs Territory of the Customs Union (St. Petersburg, 11 December 2009). Work continues to harmonize national legislation with the legal framework of the Customs Union.

   Kazakhstan’s experience in implementing large-scale oil and gas projects has shown the high significance of international standards. They ensure investment transparency while providing the basis for introduction of innovative technologies and new equipment and creating conditions for promoting domestic products in the international market.

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