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Former Kyrgyz Deputy Prime Minister Detained In Kumtor Mine Investigation

Taiyrbek Sarpashev

Former Kyrgyz Deputy Prime Minister Taiyrbek Sarpashev has been arrested as part of an investigation into alleged corruption during the development of the Kumtor gold mine project.

The State Committee for National Security (UKMK) says Sarpashev was detained on June 17 on corruption charges.

The UKMK says Sarpashev is suspected of lobbying in the interests of the Canadian firm Centerra Gold by securing legislation that allowed the company to work at higher elevations of the mountains where the mine is located. Kyrgyz officials say that work resulted in environmental damage on two glaciers.

Other recent arrests in the case by Kyrgyz authorities include former Prime Minister Omurbek Babanov, former presidential staff chief Daniyar Narymbaev, and several former and current parliamentary deputies.

The giant Kumtor gold mine project has been the focus of international attention in recent months as Bishkek has moved to take over temporary control of its operations.

Centerra calls Kyrgyzstan's actions "wrongful and illegal."

On May 16, the Canadian firm said it had "initiated binding arbitration to enforce its rights under long-standing investment agreements with the government."

Centerra’s claims will be adjudicated at arbitration proceedings in Stockholm that are conducted under the rules of the United Nations Commission on International Trade Law (UNCITRAL).

President Sadyr Japarov has said it was necessary to take over from Centerra Gold in order to remedy environmental and safety violations.

According to a law approved on May 14, Kyrgyzstan's government can take control for up to three months of any company that operates under a concession agreement in Kyrgyzstan if that firm violates environmental regulations, endangers the local environment or lives of people, or causes other significant damage.

Centerra's Kyrgyz subsidiary, Kumtor Gold Company (KGC), Kyrgyzstan's biggest taxpayer, is the only firm in the country that operates under a concession agreement.

On May 17, the head of a Kyrgyz state investigative commission announced that Centerra Gold's mining concession agreement was being revoked over what he called "corruption" and "violations of safety and environmental regulations."

Centerra's chief executive officer, Scott Perry, says Kyrgyzstan's leadership "has acted with astonishing speed" since the beginning of 2021 "to undermine the basis on which the Kumtor mine has been operated."

He said Kyrgyz officials have "refused to engage with us on any matters it considers to be the subject of dispute."

Centerra also has accused Kyrgyz law enforcement of intimidation -- including police visits to the homes of several senior KGC managers and a May 15 raid of KGC's office in Bishkek.

Canada, Britain, and the European Bank for Reconstruction and Development (EBRD) have all criticized Kyrgyzstan's moves against Centerra.

Japarov's sudden rise to power in October 2020 after being freed from jail in the midst of a political crisis was particularly bad news for Centerra.

As an opposition politician during the past decade, Japarov led an unsuccessful bid in parliament and at street demonstrations to nationalize the mine.

He oversaw several chaotic rallies against the company -- including a 2013 rally in which a provincial governor was kidnapped. That incident was the basis of Japarov's 2017 arrest and 11-year prison sentence on hostage-taking charges.