The draft law 6229 on transparency of extractive industries will help identify dishonest players in extractive industries, Roman Nitsovych, Dixi Group’s Head of Programs said during the round table “How to ensure transparency of extractive industries?”
Experts and MPs urge passage of the draft law 6229
“Investors go where they can do a long-term planning. Such a trust is impossible without publicity and information exchange between the government, the public and businesses”, he said.
According to Mr. Nitsovych, the passage of this legislative act will help to do something about “dormant” licenses. “In Ukraine, almost 30% of licensed sites may be categorized as “dormant”, i.e. those which haven’t been used for years. The law requires companies to report on every project, and therefore, it will allow to determine who uses the right to extract resources and how efficiently it is being used”, Roman Nitsovych said.
“Only extractive businesses know extraction economy and whether extracted resources are spent on yachts, apartments in London, etc. for the benefit of a narrow circle of senior execs of extractive businesses, or they generate budget revenues. Neither the government nor the society has this information”, MP Ostap Yednak, a co-author of the draft law said.
In his opinion, the passage of the draft law 6229 will help correct the national policy which regulates extractive industries.
“Since effective January 2018, a portion of the taxes collected in extractive industries is remitted to local budgets, this draft law attains huge importance”, his colleague Lev Pidlisetskyi, another co-author of the draft law said.
He reminded the audience that a year ago, the parliament has "killed" the previous version of this document after lacking just one vote in support of the bill. “We could have already had a law that opens the entire information regarding extractable resources, regarding output of a particular well, regarding particular deposits, licenses, and all tax payments. It would’ve made extractive industry absolutely transparent”, Mr. Pidlisetskyi stressed.
On 1 March, the draft law 6229 on transparency of extractive industries was submitted again to the Verkhovna Rada. This document was developed for the purpose of implementing international standards and advanced information disclosure practices in Ukraine in accordance with the Extractive Industries Transparency Initiative (EITI) standard and Ukraine’s commitments under the Ukraine-EU Association Agreement. The passage of this law will allow to avoid abuses which were possible because of the secrecy of extraction conditions and the risks of appearance of new corruption schemes.