Legislative features of uranium ore mining and processing activities in Ukraine

Legal relations in the extraction, processing of uranium ores and the use of their processing products as raw materials for the production of nuclear material are regulated by the Law of Ukraine No. 645/97 of November 19, 1997.

The main objectives of this Law are the issues of:

-state regulation of safety in connection with the impact of ionizing radiation;

-state control;

-social protection of workers at uranium facilities;

-duties and responsibilities of enterprises, institutions, organizations, as well as workers at uranium facilities.

Uranium ores extracted from the subsoil and products of their processing are the property of mining and processing entities of all forms of ownership, unless otherwise established by a state order and international treaties of Ukraine.

Uranium ores and products of their processing are purchased under state order at contractual prices that ensure a level of profitability not lower than the minimum.

Property complexes of uranium facilities can be in different forms of ownership.

The activities of enterprises engaged in the extraction, processing, and transportation of uranium ores and their processing products are carried out on the basis of licenses.

Special permits for the experimental and industrial development of uranium deposits and the extraction of uranium ores are granted in agreement with the central executive body implementing state policy in the field of health care.

Special permits for the experimental and industrial development of uranium deposits and the extraction of uranium ores must contain requirements for ensuring the protection of personnel, the population, and the environment, taking into account the impact of radon and its daughter products, as well as preventing radioactive contamination of the environment.

Special permits for the construction of new uranium ore processing facilities and the reconstruction of existing facilities are granted only after receiving a positive conclusion on the environmental impact assessment of the work project.

Export and import of uranium ores and their concentrates is carried out only by legal entities under special permits, which are granted in accordance with the procedure established by the Cabinet of Ministers of Ukraine.

A special permit for the export of uranium ores or their concentrates to non-nuclear weapon states may be granted only if there are official commitments from the authorized state body of the importing state that the materials obtained, as well as nuclear materials produced on their base:

-will not be used for the production of nuclear weapons or other nuclear explosive devices;

-will be provided with physical protection;

-will be re-exported or transferred from the jurisdiction of the importing country to any other country.

A special permit for the export (import) of uranium ores or their concentrates may be granted on a one-time basis (per batch of goods) or for the export to one country (import from one country) of a certain quantity of goods for a certain period for a term of no more than three years.

Extracted uranium ores and their processing products (uranium concentrate, off-balance ore dumps, tailings ponds) are subject to state accounting.

Enterprises for the extraction and processing of uranium ores and users of their products are required to keep records of uranium ores and their processing products and submit reports on this.

The design of a uranium facility must include:

-an economic justification for the feasibility of implementing this project;

-measures to reduce radon emissions;

-measures for the safe storage and processing of radioactive waste.

Uranium ores can be transported in unpackaged form.

Costs associated with the cessation of uranium facilities, which include funds for decontamination, land reclamation, tailings storage facilities, and control in the sanitary protection zone and surveillance zone, are included in production costs.

Theoretical problems of liability insurance for damage to nature in production sharing agreements

One of the essential obligations of investors is the obligation to insure the risks of causing damage to the environment and people's property under the terms of current legislation and under the terms of concluded production sharing agreements.

In Ukraine, insurance legislation was reformed in 2021, and insurance changes and innovations were launched in 2024.

Thus, Article 4 of the Law of Ukraine "On Insurance" No. 1909-IX dated September 18, 2021 introduced 23 classes, and the list of risks for them, characteristics and qualifying determinants for concluding contracts are determined by the Regulator in its regulatory acts.

The final and transitional provisions of Law No. 1909-IX contain provisions in tabular format regarding types of insurance in relation to insurance classes.

The tabular format is made within the framework of the transitional provisions of Law No. 1909-IX itself.

The class "insurance of property against fire and dangerous effects of natural phenomena" (class No. 8) provides for a type of insurance as insurance of property risks under a production sharing agreement in cases provided for by the Law of Ukraine "On Production Sharing Agreements".

In turn, the class "insurance of property against damage caused by hail, frost, other events (including theft, robbery, robbery, intentional damage/destruction of property), except for events specified in class 8" (class No. 9) also includes a provision on the type of insurance as insurance of property risks under a production sharing agreement in cases provided for by the Law of Ukraine "On Production Sharing Agreements".

Similar provisions are contained in class No. 13 "Insurance of other liability (than provided for in classes 10, 11, 12)", which includes a type of investor's civil liability insurance, including for damage caused to the environment, human health, under a production sharing agreement, unless otherwise provided for by such an agreement.

Briefly summarizing, the legislator divided the risks of insurance under production sharing agreements into 3 classes (8,9,13), which concern

- insurance of property risks;

- insurance of property risks of the subsoil user during experimental and industrial extraction and use of gas (methane) from coal deposits;

- insurance of property risks during industrial development of oil and gas deposits in cases provided for by the Law of Ukraine "On Oil and Gas";

- insurance of civil liability of the investor, including for damage caused to the environment and human health, under a production sharing agreement, unless otherwise provided for by such agreement.

That is, the legislator followed the path of including Class 3 applicants in the license of insurers for product sharing agreements without allocating them separately.

This point of view is justified by the fact that the Regulator (National Bank of Ukraine) has not adopted a regulatory legal act on the issue of insurance of production sharing agreements, their features and limits.

However, the function of the Regulator was taken over by the former Ministry of Environmental Protection and Natural Resources of Ukraine, adopting Order No. 331 of 01.04.2024 "On Approval of the Procedure and Conditions of Liability Insurance for Damage Caused by Fires and Accidents to Territories and Objects of the Nature Reserve Fund".

In accordance with this Order No. 331, the minimum insurance amount under a liability insurance contract is twenty-five thousand non-taxable minimum incomes of citizens.

The amount of the insured amount under a liability insurance contract is determined by agreement between the insurer and the insured during its conclusion or amendment, depending on the area of ​​the territory and objects of the nature reserve fund that may be damaged, but cannot be less than two thousand five hundred non-taxable minimum incomes of citizens per one hectare of area that may be damaged.

Several questions arise from a legal point of view.

Does Order No. 331 cover property risks under insurance under production sharing agreements?

Does the regulation of Order No. 331 extend directly to production sharing agreements?

Does Order No. 331 go beyond the regulation of nature reserve fund territories?

Of course, the answer is no!

Order No. 331 of the Ministry of Environmental Protection and Natural Resources of Ukraine concerns a narrow aspect of the protection of the natural and protected fund in the context of liability insurance.

Order No. 331 therefore leaves it up to the investor to understand its content as a framework instrument for insurance.