News

A conference EITI in Ukraine: How to Manage Resources Efficiently was held in Kyiv on 21 and 22 February.

The event featured a presentation of the Extractive Industries Transparency Initiative (EITI) Report for 2014-2015 and demonstration of a statistical open energy sector database of the Ukrainian Ministry of Energy.

The First Deputy Minister of Energy and Coal Industry Halyna Karp has stressed the importance of having an extractive industry budget in order to understand what companies are operating transparently. “Out of the 99 companies, 51 companies have provided their data for the Report,” Ms. Karp has noted. According to Olena Pavlenko, deputy chair of the Multi-Stakeholder Group (MSG) and president of the DiXi Group Analytical Center, an ongoing interaction between the government, business community, and the public is a prerequisite for sustainable reforms in the extractive industry.

Steve Gonyea, director of Economic Growth Office at the United States Agency for International Development (USAID) Mission to Ukraine has noted the role the United States play in supporting the EITI. USAID is funding a significant number of the programs, which contribute to strengthening the energy independence and security of Ukraine and combating corruption. The event participants also included subgrantees of the USAID Municipal Finance Strengthening Initiative (MFSI-II) Roll-out Project. In particular, the Head of the Bureau for Development, Innovations, and Technologies and Secretary of the Energotransparentnist Association Maksym Karpash has pointed to the need of introducing the accounting of resources produced at each well. The expert believes that splitting the rent will make it possible to start addressing the main problems of the localities where minerals are being extracted. He also recommends paying attention to the plans of using the rent fees received at the raion and oblast levels.

In turn, representatives of the business community have assured that their companies are as interested in disclosing information, as the government and the public. Thus, Oleh Prokhorenko, chairman of the board of the PAT Ukrgazvydobuvannia company has reiterated his company’s support for EITI: “We support the transparency initiative in our industry and we were one of the first to start submitting our data for the EITI Report, as transparency in the gas extractive industry will promote an open dialog with local communities and will become the guarantee of sustainable development for extractive regions.”

Discussed at the conference was the need of transitioning to electronic reporting forms for companies. The State Service of Geology and Minerals Resources of Ukraine has expressed its willingness to take part in developing a digital database, regarding it as one of the main tasks for speeding up and simplifying the processing of relevant information.

Presented at the event was also a new online map of the energy sector developed by experts of the DiXi Group, which allows tracking both the supply chain of energy resources from extraction to consumption, and the accompanying financial flows.

Reference: The Extractive Industries Transparency Initiative (EITI) is an independent and voluntarily maintained international standard intended for increasing transparency of the public revenues from activities in the field of extraction of natural resources. It is now being implemented in 51 countries worldwide. EITI requires auditing of payments made by companies and the revenues related to the extraction of national natural resources received by national governments. In addition, the standard requires disclosing the information about the procedures of granting permits/licenses for use of mineral resources and other information related to the use of subsoil resources. For more information about EITI in Ukraine visit www.eiti.org.ua.