Point of view

 

Ukraine has become a year closer to the standard implementation of Extractive Industries Transparency 

 
In October 2014 marks exactly one year since Ukraine gained the status of a candidate country Extractive Industries Transparency Initiative (Extractive Industries Transparency Initiative, EITI). According to the decision of the Board Initiative, Ukraine should implement the necessary reforms in the subsoil use and publish his first report on the implementation of EITI to 17/10/15 
 
Sign an association agreement with the EU, Ukraine witnessed the intention to move the European way, including by bringing the national legislation to the international standards, among them - Extractive Industries Transparency Initiative. Recall, back in 2009, the CM decided on Ukraine's accession to the EІTІ and determined that in the implementation of the Initiative in Ukraine is a priority oil and gas industry. 10.17.13, Ukraine has received the status of a candidate country EІTІ. 
 
The emphasis of the EITI implementation is done to increase the transparency of payments, particularly in the oil and gas sector, which is the most important component of the state budget revenues and significantly affects the formation of the deficit in the public finances. 
 
The situation in the energy sector, as vprchem, in general, and in the Ukrainian economy today is complicated. Of consumed annually 52-54 billion cubic meters of natural gas to about 30 billion cubic meters Ukraine imported from Russia or part of the required volume is determined by reversing the supply from Europe of the same Russian gas. Aggravation of Russian-Ukrainian political conflict jeopardized the direct supply of gas from Russia, and the Russian origin of the "European" resource gave Russia an opportunity to manipulate the volume of these shipments. 
 
Therefore, even if the coming winter, and will be reached agreement on imports from Russia Ukrainian energy required amount of gas Ukraine, according to official statements, yet will increase its own production of hydrocarbons and enhance energy independence. But to do this it will need to attract significant investment. 
 
Parish investors can reduce the severity of another problem, namely, the lack of funds in the state budget, as well as rapidly rising unemployment. Thus, in case of projects for the development of new deposits, Ukraine may receive financial contributions to the state budget through the sale of special permits for subsoil use, and neposredstveno extractive companies can create new jobs. However, the complex economic situation affects not only the mood in the country: foreign investors prefer not to hurry with the participation of Ukrainian projects. In this situation, the real implementation of the EITI principles should be an important signal to investors about the constant exchange of Ukraine on the implementation of European standards and the stabilization of the economic situation. 
 
Implementation of the Extractive Industries Transparency Initiative is aimed primarily at creating conditions for a more open dialogue between business entities operating in the field of mining and power. For early implementation of the EITI principles in Ukraine must first provide a qualitative change legislation that will improve management practices in the extractive industries, and the investment climate in the country as a whole as a result of projects related to mining. Tip: Only the oil and gas sector of the country in terms of production govern the 129 laws and other documents. At the same time, on the one hand, there is the problem of improvement of legislation, on the basis of which the authorized supervisory and regulatory bodies in the extractive industries, as well as coordination of the basic legal terms of European and Ukrainian legislation. On the other hand, bureaucratic system inhibits the adoption of the main document industry, namely, the new edition of the Code of the bowels, which could unite all subsoil use legislation and ensure implementation of the European standards of transparent and clear. 
 
For many years the Ukrainian deposits are interested in well-known international mining companies, such as Shell, Chevron, Eni and others. However, to work effectively in Ukraine they prevent instability of the Ukrainian legislation: change the order of issuance of special permits, changes in fiscal policy in relation to the mining companies, the low level of awareness of both the companies and the people of the Territories, where the planned geological work. This leads to an uncertainty of business and prolong the timing of development projects. 
 
Benefits of EITI 
 
Implementation of EITI as an international standard can bring some positive qualitative changes in the industry subsoil, and in the process of working on the new version of the Subsoil Code would stimulate public dialogue among all stakeholders as to how it should be managed natural resources of Ukraine. Thus, the government will have "tested" in other countries, the principles of reforms in the sphere of subsoil use and tools to improve cooperation with foreign investors, the improvement of the processes of the geological work on the fields of technological innovation in the industry, tax collection, and as a result - improved stability in the sector. At the same time the company will be able to take advantage of the identical rules of the game, according to which all mining companies will be required to disclose the same information. 
 
Thus, Ukraine will be able to create a more favorable investment climate and develop the potential of the mineral resource base of Ukraine. Applying the principles of EITI impact also on social issues: people will be able to obtain reliable information on the sector, the local social infrastructure investment and the impact of the work of various companies on the environment. Currently, almost 80 largest oil and gas and mining companies supported EITI implementation process and take an active part in it, working in implementing countries, as well as through international commitments and industry associations. 
 
Ukraine in the current context implementation EITI - a safe and secure process of applying international standards. Thus, EITI reports should contain basic information on the mining sector: Disclosure of data on production volumes, the disclosure of the names of licensees and encourage the disclosure of beneficial ownership, a description of the distribution of income between the general state, local and other accounts c full disclosure of all government revenues derived from the extractive industries, the description of the fiscal regime and encouraging the disclosure of contracts for production. Also standard EITI requires more public information about the activities of state-owned enterprises. For example, in countries that have already implemented the standard EITI, from state-owned companies are required to provide statements of income, including income from the sale of the equity of state resources; any social spending, public infrastructure or fuel subsidies. 
 
Or another example: if countries receive significant revenues from the transit of oil, gas or other resources, the government is obliged to disclose information about their income. Each country sets its own set of goals EITI, according to which the work plan develops EITI. In early September the Ukrainian plan, consisting of more than 75 events, has been revised and reduced to the most important ones for the period 2014-2015. Revision Ukrainian Work Plan should be presented to the public in the near future, but the performance of even the reduced list of activities will depend on the financial support. 
 
What is EITI 
 
Transparency Initiative Extractive Industries - an independent and voluntary supported by international standard of transparency in the extractive industries. EITI aims to ensure transparency on the one hand, payments made by mining companies to the state, and, on the other hand, governments received income related to the development of national natural resources (minerals). 
 
The current standard EITI, requiring audit of payments, which carry out the mining companies, and government revenues from the exploitation of natural resources, introduce more than 40 countries, including the United States, Norway, Kazakhstan, Azerbaijan and others. 
 
 
Storojev Roman, president of the Association "Subsoil users of Ukraine" 
"Energobusiness" from October 14, 2014