Think Tanks Addressed the Parliament

05 July 2016

Open letter of NGOs and think tanks
that conduct control over the process of reforming the energy
sector of Ukraine and the processes of the European integration to Members of the
Ukrainian Parliament of the VIII convocation

  Dear people’s deputies,

The Parliament of Ukraine has been making huge efforts recently to lift the curtain of “stability” that has been covering corruption in the energy sector for many years. In fact, it has been concealing planned economy all this time that impaired the development in the industry and encouraged the use of the soviet infrastructure which enabled enrichment of several financial and industrial groups.

To a great extent, it is the public stance of the members of the Parliament that helped reveal the schemes on enrichment from gas production and transmission, electricity generation and supply. The last two weeks once again proved that the problem exists. The public events included active discussions of corruption schemes relating to the distribution of gas produced by the enterprises co-financed by the state, challenging the coal pricing methodology and legitimacy of decision of the national regulator in the energy sector — the NEPURC.

All these are the signs of recovery. But the public and the European partners have greater expectations.

We suggest that this process be not limited to finding the guilty, but we should also elaborate a comprehensive decision to prevent corruption in the future.

The recipe is well-known — creating market conditions in the industry and maximum openness of all financial processes.

These are the principles that serve as a basis of the coalition agreement, the work of the Energy Community of which Ukraine is a party, international agreements providing for deep integration with the EU Member States.

These are the principles laid down in the three comprehensive draft Laws now waiting for the vote in the Parliament. Despite regular appeals from the civil society, experts and even the EU Ambassador to Ukraine the consideration of some of these documents has been postponed for weeks.

We hereby call on the Parliament to include in the agenda of the next session week and consider the draft Laws aimed to resolve the industry problems in a comprehensive manner.

The draft Law No. 4840 on the electricity market aims to create real market conditions in the electricity sector in compliance with EU standards. This will not only enable Ukraine’s integration into the European energy network instead of the Russian, but cancel the manual operation of the electricity (hence, coal too) pricing.

The draft Law No. 2966-д on the National Energy and Public Utilities Regulatory Commission will enable proper and professional monitoring and regulation of the energy markets and open a way to competition on such markets. The independent regulator must protect consumers against monopoly suppliers and need trust of all market players — this is what the draft Law aims to achieve.

The draft Law No. 4840 on disclosure of information in extractive industries aimed to make public as much information on profits and payments of oil, gas and coal producing companies as possible. Under the light of publicity, the schemes now being investigated by the National Anti-corruption Bureau and the Prosecutor’s Office will no longer be possible.

These draft Laws have long been considered by experts, representatives of Ministries and agencies, members of the Parliament Committee on Fuel and Energy Complex. Their adoption is among Ukraine’s commitments to the European community.

In the times of a heated populist discussion of energy tariffs, the Parliament can make a real step towards achieving transparency of the energy regulator and the energy markets. Thanks to the new Law on the NEPURC, politicians will be able to minimize influence on the tariff policy, and new transparency and accountability standards of the tariff regulator will bring trust of the public to energy prices for the first time since Ukraine gained independence.

The adoption of relevant draft Laws will demonstrate the Parliament’s will to seek comprehensive solutions to make corruption impossible, the industry efficient, and Ukraine stronger and independent.

 

The Energy Sector Reform Group of the Reanimation Package of Reforms
DiXi Group think tank
Association “Energy Efficient Cities of Ukraine”
Association on Energy Efficiency and Energy Saving
All-Ukrainian Sustainable Development and Investment Agency
Greencubator
Civil Network “Opora”
National Ecological Centre of Ukraine

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