SUBSOIL WEALTH IS THE STRENGTH OF THE COUNTRY


UA EN
EN
Main pageMediaArticlesUnder the terms of openness

Under the terms of openness

Ukraine has become a year closer to the implementation of the Extractive Industries Transparency Standard
 
In October 2014 marks exactly one year as Ukraine has received the status of 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 and publish its first report on the implementation of EITI to 17/10/15, the
 
Sign an association agreement with the EU, Ukraine has witnessed the intention to move to European ways, including by bringing national legislation to international standards, among them - Extractive Industries Transparency Initiative. Recall, back in 2009 the Cabinet decided on Ukraine's accession to the EІTІ and determined that the implementation of the Initiative is a priority in Ukraine oil and gas industry. 10.17.13, Ukraine received the status of candidate country EІTІ.
 
The main emphasis in the implementation of EITI is made 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 obtained by reversing the supply from Europe all the same Russian gas. Aggravation of the Russian-Ukrainian political conflict jeopardized direct gas supplies from Russia, and Russian origin "European" life gave Russia an opportunity to manipulate the volumes of these supplies.
 
Therefore, even if the coming winter, and will be reached agreement on imports from Russia Ukrainian energy necessary volumes of gas, Ukraine, according to official statements, yet will increase its own production of hydrocarbons and enhance energy independence. But for this it will need to attract significant investment.
 
Parish investors can reduce the severity of another problem, namely, the shortfall in the state budget, as well as rapidly rising unemployment. Thus, in case of projects to develop new fields, Ukraine may receive financial contributions to the state budget through the sale of special permits for subsoil use, and neposredstveno in mining companies can be created new jobs. However, the complex situation in the economy not only affects the mood in the country: foreign investors prefer not to hurry with the participation in 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 engaged in activities in the field of mining, and power. For the 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 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 is controlled 129 laws and other documents. Thus, on the one hand, there is the problem of improvement of legislation, on the basis of which the authorized supervisory and regulatory authorities in the extractive industries, as well as agreement on basic legal terms of European and Ukrainian legislation. On the other hand, the bureaucratic system inhibits the adoption of the basic document of the industry, namely, the new edition of the Code on mineral resources, which could integrate all the subsoil use legislation and to ensure the implementation of European standards, transparent and understandable.
 
Over the years, interest in Ukrainian deposits known international mining companies such as Shell, Chevron, Eni and others. However, to effectively work in Ukraine in their way instability 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 population of the areas where planned geological work. This leads to uncertainty of business and delaying the timing of development projects.
 
Benefits of EITI
 
EITI implementation as an international standard can bring some positive qualitative changes in the industry subsoil, and in the course of work on the new edition of the Code on subsoil will stimulate public dialogue among all stakeholders as to how it should be managed natural resources of Ukraine. Thus, the government will get "tested" in other countries reform principles sphere of subsoil and tools for improving cooperation with foreign investors, the improvement of processes of geological work in the fields, the introduction of technological innovations in the industry, tax collection, and as a result - improved stability in the sector. At the same time, companies can take advantage of 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. Application of the EITI principles reflected also on social issues: population can get reliable information about the sector, 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 support the process of implementation of EITI and actively participate in it, working in implementing countries, as well as through international obligations and industry associations.
 
Ukraine in the current environment implementation EITI - a reliable guaranteed 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 the holders of licenses 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 received from the extractive industries, the description of the fiscal regime and encourage the disclosure of mining contracts. Also standard EITI requires more public information on the activities of state-owned enterprises. For example, in countries that have already implemented the standard EITI, by state-owned companies are required to provide statements of income, including income from the sale of the equity resources of the state; any social spending, public infrastructure or fuel subsidies.
 
Or another example: if countries receive significant revenues from transit of oil, gas or other resources, the government is obliged to disclose information about their income. Each country sets its own set of objectives EITI, according to which develops Workplan 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 must 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 in the extractive industries - an independent and voluntarily supported 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 fees, which carry out the mining companies, and government revenues associated with the development of natural resources, implementing more than 40 countries, including the United States, Norway, Kazakhstan, Azerbaijan and others.
 
 
 
Roman Storozhev, president of the Association "Ukrainian Subsoil users"
"Energobusiness" on October 14, 2014 №41 (879)