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Identify the principal agencies that regulate the energy sector and briefly describe their general jurisdiction.
Below is a list of the principal agencies that regulate the energy sector in Turkey.
The MENR is the main administrative authority that determines energy policy objectives, plans and programmes with the related institutions.
EMRA is the key body that regulates the electricity, oil, and gas markets. EMRA can issue directives in order to promote consumer rights, ensure quality of service, and set pricing principles. Moreover, EMRA is responsible for issuing and revoking licences.
The General Directorate of Petroleum Affairs supervises applications and issues licenses in relation to upstream oil and gas activities.
The General Directorate of Mineral Research and Exploration is an institution supervised by MENR to conduct geographical surveys in Turkey to explore natural resources.
Access to infrastructure
Do new entrants to the market have rights to access infrastructure? If so, may the regulator intervene to facilitate access?
Although Turkish Law encourages private legal entities to enter the energy market, it also guarantees equal treatment for new entrants to ensure the efficient and safe operation of energy resources.
As per the Electricity Market Law No. 6446, operators of distribution and transmission networks are required to provide distribution and transmission services to all distribution and transmission system users equally without discrimination.
Furthermore, according to the Natural Gas Market Law No. 4646, companies in the natural gas market are required to provide other companies active in the same market with accurate and adequate information. In the natural gas market, companies holding transmission licences are obliged not to discriminate between third parties of equal status. Such companies may reject third-party access requests only on the grounds exhaustively listed under the Natural Gas Market Law.
The Petroleum Market Law No. 5015 also obliges companies to meet market demands equally and without discrimination so long as the demands do not infringe on the transmission and storage capacity restrictions.
What is the mechanism for judicial review of decisions relating to the sector taken by administrative agencies and other public bodies? Are non-judicial procedures to challenge the decisions of the energy regulator available?
Judicial review of decisions made by administrative agencies is mainly regulated under the Administrative Procedural Law. Individuals may file annulment procedures and compensation procedures against the administrative acts or actions. As stated under question 20, the Administrative Procedural Law provides a discretionary administrative review option for individuals seeking remediation against the acts and actions of administrative agencies.
By nature of the energy sector, judicial review of concession agreements is also of importance. In the previous years, there has been question as to whether or not the individuals affected by these administrative law agreements can file for judicial review of the provisions of these agreements. The Council of State, in its many rulings, has stated that individuals whose rights are affected by the concession agreements can file cancellation actions against the concession agreements. In this regard, the Council of State classifies administrative law agreements as if they were regulatory legislation, and conducts judicial review of the agreements.
Additionally, the Ombudsman Law No. 6328 allows an ombudsman to review the acts and actions of an administrative body upon the complaint and is entitled for the unbinding review of administrative actions; therefore, its decisions are advisory in nature. That being said, administrative bodies tend to comply with the advice of the ombudsman.
What is the legal and regulatory position on hydraulic fracturing in your jurisdiction?
There is no special regime on unconventional upstream activities (such as the exploration and production of shale gas, shale oil, gas hydrates, and coal-bed methane); they are governed under the general framework of Turkish Petroleum Law No. 6491 and its secondary regulations. The hydraulic fracturing method, mostly used for shale gas exploration activities, falls within the scope of unconventional upstream activities and is subject to a strict set of environmental compliance and filing requirements in respect to environmental law obligations. Informing the local population of such activity is also required.
Other regulatory issues
Describe any statutory or regulatory protection for indigenous groups.
There is currently no statutory or regulatory protection provided specifically for indigenous groups. Nevertheless, judicial review procedures for the annulment and cancellation of administrative acts are open to all applicants having locus standi under the Administrative Procedural Law.
Describe any legal or regulatory barriers to entry for foreign companies looking to participate in energy development in your jurisdiction.
Energy sector regulations are very investor friendly. However, by extension of the limitations set forth in other fields of law, in practice, local investors sometimes gain advantages over energy investments. For instance, the licensing process requires potential investors to prove its sufficiency to the relevant administrative body. While assessing the sufficiency of the investor, the administration also takes into consideration whether or not the investor has enough assets or connections within the country. For instance, when assessing the licensing applications for solar energy and wind energy generation, when the owner of the land on which generation activity will be conducted is also among the applicants, EMRA should grant the licence to the landowner. Given that the acquisition of immovable property in Turkey is slightly more cumbersome for foreign investors, local investors gain an advantage ipso facto. That being said, many mechanisms are available to accommodate foreign investors round such obstacles.
What criminal, health and safety, and environmental liability do companies in the energy sector most commonly face, and what are the associated penalties?
Pursuant to the Environmental Law, expenses incurred to prevent, limit and eliminate pollution and degradation should be covered by the polluter or by the person who caused the degradation, and certain administrative fines are imposed by the related the administrative authority.
According to the general principles of the TCO, a person who caused damage is obliged to eliminate this damage. As explained under question 9, there are also some strict liability provisions set forth under the relevant legislation. We refer to our explanations under question 9 for the strict liability and the penalties associated with the same under the Environmental Law. As for the criminal aspect, pursuant to article 181 and the following articles of the Criminal Code, a person who intentionally or negligently causes pollution of soil, water or air, or causes noise pollution, zoning pollution or intoxicates the environment is either imprisoned, punished with a monetary penalty, or both.
The Occupational Health and Safety Law No. 6331 also sets forth certain responsibilities for employers to ensure the occupational health and safety of employees by carrying out all kinds of measures. Failure to comply with this requirement may result in administrative fines, compensation of damages or the shutting down of the facility.