A Dialog between Communities and Extractive Companies Is Possible
18 July 2016
A roundtable on the topic The Poltava Region Extractive Industry: Economic Development or Decline for Local Communities? was held at the Shyshaky Raion State Administration (RSA) on 14 July. As part of this event, opportunities were discussed as offered by the Extractive Industries Transparency Initiative (EITI) international standard and the joint action by local government and local community on EITI implementation in the Poltava oblast.
The event was held as part of the Municipal Finance Strengthening Initiative (MFSI-II) Roll-out Project with regard to assisting in implementation of the Extractive Industries Transparency Initiative in Ukraine, which is financed by the United States Agency for International Development (USAID).
The roundtable was organized by the Poltava branch of the Social Service of Ukraine. The branch head Hanna Kiiashchenko has told the attendees about the importance of addressing the problems, which emerged in the region as the result of extractive industry operations. Mrs. Kiiashchenko has stressed that those problems could only be resolved by taking into account the interests of the local community, the government, and the extractive companies.
An EITI Expert Yurii Filenko has made a presentation The Essence of the Extractive Industries Transparency Initiative, Presentation of the First EITI Report. Among other things, he has shown a map of boundaries between the plots covered by special permits for use of subsoil resources in the Shyshaky raion. Mr. Filenko has pointed out that a total of about a 100 special permits were issued in the Poltava region, ten of which are located in the Shyshaky raion jurisdiction. "We have all the instruments to keep receiving the benefits from extraction of hydrocarbons in our area; however, we need to develop a dialog, without being afraid to speak about problems, and striving to resolve them together," emphasized Mr. Filenko.
The Shyshaky Raion State Administration Chairman, Viktor Ivanenko has told the audience about cooperation between the authorities and the private extractive companies PrAT Naftogazvydobuvannia and PrAT Plast. "We have made social partnership agreements with these enterprises. The funds received under these agreements are allocated for development of the social sector, educational and medical establishments, remediation of the effects from operations of extractive companies. This process, however, is not fully resolved. We do not know how the taxes are being distributed after their payment by the companies into the state budget. At the same time, it is not only the extractive companies that should take care about social development of local communities. We believe that part of the rent should be remitted into local budgets. This will
curb corruption and dependence on the companies," underlined the Shyshaky RSA head.
The Shyshaky Raion Rada Chairman, Vladyslav Safonov has told the participants about an increase of financing provided by PrAT Naftogazvydobuvannia, from UAH 1.5mn last year to UAH 2.8mn this year. According to him, part of these funds is intended for renovation of water line and detour roads in the village Kovalivka, Shyshaky raion.
Maksym Asauliak, a representative of PrAT Naftogazvudobuvannia, which is a member of the DTEK Group of companies, has noted that the company only had two special permits for use of subsoil resources out of the 96 issued for this purpose in the oblast. He has remarked it is very difficult to obtain new permits via a transparent tender, whereas some unknown companies can easily have such permits without any effort and having to prove their production capacity. Still, it does not prevent the company from working with the local authorities, as well as monitoring the quality of drinking water, soils, and radiation level.
The roundtable participants have agreed that the local authorities, extractive companies, and local communities will need to make joint efforts on the road of EITI implementation in the Poltava oblast, in particular, via payment of taxes into local budgets.
The event was held as part of the Municipal Finance Strengthening Initiative (MFSI-II) Roll-out Project with regard to assisting in implementation of the Extractive Industries Transparency Initiative in Ukraine, which is financed by the United States Agency for International Development (USAID).
The roundtable was organized by the Poltava branch of the Social Service of Ukraine. The branch head Hanna Kiiashchenko has told the attendees about the importance of addressing the problems, which emerged in the region as the result of extractive industry operations. Mrs. Kiiashchenko has stressed that those problems could only be resolved by taking into account the interests of the local community, the government, and the extractive companies.
An EITI Expert Yurii Filenko has made a presentation The Essence of the Extractive Industries Transparency Initiative, Presentation of the First EITI Report. Among other things, he has shown a map of boundaries between the plots covered by special permits for use of subsoil resources in the Shyshaky raion. Mr. Filenko has pointed out that a total of about a 100 special permits were issued in the Poltava region, ten of which are located in the Shyshaky raion jurisdiction. "We have all the instruments to keep receiving the benefits from extraction of hydrocarbons in our area; however, we need to develop a dialog, without being afraid to speak about problems, and striving to resolve them together," emphasized Mr. Filenko.
The Shyshaky Raion State Administration Chairman, Viktor Ivanenko has told the audience about cooperation between the authorities and the private extractive companies PrAT Naftogazvydobuvannia and PrAT Plast. "We have made social partnership agreements with these enterprises. The funds received under these agreements are allocated for development of the social sector, educational and medical establishments, remediation of the effects from operations of extractive companies. This process, however, is not fully resolved. We do not know how the taxes are being distributed after their payment by the companies into the state budget. At the same time, it is not only the extractive companies that should take care about social development of local communities. We believe that part of the rent should be remitted into local budgets. This will
curb corruption and dependence on the companies," underlined the Shyshaky RSA head.The Shyshaky Raion Rada Chairman, Vladyslav Safonov has told the participants about an increase of financing provided by PrAT Naftogazvydobuvannia, from UAH 1.5mn last year to UAH 2.8mn this year. According to him, part of these funds is intended for renovation of water line and detour roads in the village Kovalivka, Shyshaky raion.
Maksym Asauliak, a representative of PrAT Naftogazvudobuvannia, which is a member of the DTEK Group of companies, has noted that the company only had two special permits for use of subsoil resources out of the 96 issued for this purpose in the oblast. He has remarked it is very difficult to obtain new permits via a transparent tender, whereas some unknown companies can easily have such permits without any effort and having to prove their production capacity. Still, it does not prevent the company from working with the local authorities, as well as monitoring the quality of drinking water, soils, and radiation level.
The roundtable participants have agreed that the local authorities, extractive companies, and local communities will need to make joint efforts on the road of EITI implementation in the Poltava oblast, in particular, via payment of taxes into local budgets.
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