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Subsoil users are willing to use EITI standards

The lion's share of the income of the state budget of Ukraine formed mining companies. But ignorance of society on income from subsoil and the fair distribution of these funds often leads to the fact that there is a distrust of the companies, the distortion amounts of their income. Thanks to the implementation of the EITI standards in the first place the population as well as business and investors could watch the payments to the state subsoil and their distribution.
And now, experts urge Ukraine to make every effort to work on the implementation of the standard EITI, to publish the first data in accordance with the Extractive Industries Transparency Initiative in October 2015. The report mining companies for their part must disclose payments to the budget, and the Government - the revenue from the extractive companies. To implement these goals in the near future will sign an agreement with the World Bank and the search for an independent administrator accounts.
To date, two scenarios are considered the ways in which Ukraine can go in the preparation of the first reporting. One of them is the disclosure of payments by extractive companies with the consent of their own. In this case, unlikely to be published the information of all oil and gas companies that operate on the Ukrainian fields. The other - this is the way of legislative regulation when the duty of companies to disclose payments and government income from the subsoil will be approved in one of the regulations. This way more hard and long, but in this case there is a strong likelihood that the report data will EITI maximum number of players in the sector.
As part of the implementation of standard reporting each country includes a list of data to be disclosed in accordance with their own situation. The initiative is based on 12 principles that require mining companies to disclose paid money, and the government - to publish information about their income. EITI can be called a coalition of governments, extractive companies, civil society, investors and international organizations. And the report provides an understanding of who, how and where mines distributes the money.
EITI is an international standard for the synthesis of measures and mechanisms to ensure the transparency of revenues from oil-, gas and mining industries. In simple words, the standard makes available to the public revenues subsoil. Thus, EITI - an international movement that aims to ensure that all industry revenues subsoil became transparent. The reports can be submitted data on volumes of production, paid taxes and shipping. You can also include information on the contribution to the economy and social investments of a company.
The initiative reduces mistrust, reduced social tensions. The many round tables, presentations, discussions expert community action teams and involvement of government officials talking about how this process is important. Statements give insight into what proportion of the country's GDP is income from the mining industry. This is a fairly large segment of the revenue side of the budget, so there should be transparency.
Participating in the conference the parties agreed that it is necessary to establish even closer communication and cooperation with the government and third parties to ensure rapid passage and adoption of normative legal acts. State support for this initiative is based on the benefits that can be gained using standard EITI: using reports state provides information that natural resources are well managed and properly distributed. And as a result, reaching payments transparency in the extractive sector, Ukraine can make a significant step in the development of its economy and expand opportunities of the investment portfolio, the possibility of the most favorable realization of subsoil licenses.
A good example of the implementation of the EITI is the history of Kazakhstan, where this mechanism is working successfully now and whose experience can be an example for us. For example, Kazakhstan way to implement EITI standard began with the disclosure of tax information and state companies, but today has become a much broader standard: any payments mining organizations sponsored allocation, payment of dividends - everything is public and anyone can read this information, see How are these or other income from the subsoil. To ensure that this work was carried out continuously and efficiently, the obligation to comply with the principles of the EITI mining companies registered in the legislation of Kazakhstan on subsoil, according to which all companies that extract minerals in Kazakhstan are required to disclose their data. In 2013, Kazakhstan has received the highest status of the country - a follower of the EITI. Why is this status important? Because it means recognition of the country by the international community as such, where the activities of extractive industries transparency and openness of the company controlled by the Company. And all the countries that have received such status initiative immediately received high ratings, the status of a few points improved.
Of course, the implementation of initiatives imposes on the State and certain obligations. But for Ukraine Extractive Industries Transparency Initiative is to improve the investment climate by sending a signal to potential foreign partners about the commitment of the Government of Ukraine to the principle of equitable distribution of income, and thus minimize corruption and the absence of risks of social conflicts
For investors, the initiative to reduce reputational risks and to demonstrate its commitment to social responsibility. Improving the country's ratings continue to lead to other positive aspects. This branding bonuses, improved credit conditions for obtaining capital, risk reduction. This is important in the current economic situation in Ukraine, because with such a country all ready to work.
Thus, Ukraine Extractive Industries Transparency Initiative - is a flexible tool that allows you to enter the effective management of natural resources, allowing to harmonize in the first place the legal requirements with the requirements of the standard and create an attractive environment for mining companies in Ukraine to attract investments in the production of hydrocarbons.
April 7, 2015