Data Disclosure Helps See the Actual Effect of Using Resources and Timely Make Necessary Decisions

21 February 2017

Implementation of the Extractive Industries Transparency Initiative (EITI), which requires disclosure of data and financial information, is a possibility for the government, business, and public to know the real state of extracting industries and gain the maximum extraction efficiency. The sector transparency enhancement and further steps to be taken by Ukraine to improve the situation in the extracting industries were the key topics discussed at the conference "EITI in Ukraine: How to Manage Resources Efficiently", which was held in Kyiv on February 21 and 22.   
According to the People's Deputy of Ukraine and Member of the EITI Board Olha Belkova, the disclosure of information will allow avoiding many problems and pursuing the policy with utmost efficiency: "Emergency measures have been introduced today in the Ukrainian energy industry. They result from a failure to assess properly all risks, economic and political, related to the coal shipments from the occupied territory. If we knew more, we could prevent this from happening and take necessary actions with a view to the diversification. The Extractive Industries Transparency Initiative standard and provisions of the EU transparency and reporting directives help make a variety of information available to the general public. The complete knowledge of the industry will allow the Government and the Parliament pursuing the policy that takes account of the actual state of affairs and timely making justified decisions based on facts and needs." 
During the conference, the second report was presented as part of the Extractive Industries Transparency Initiative where the extractive industry's role in the country's economy was detailed and information provided on reserves and production volumes of coal, oil and gas, and iron, manganese, and titanic ores. 
Chairperson of the EITI National Secretariat Dina Narezhneva pointed out that the experience of producing EITI reports demonstrated again the need to make the Initiative's reporting process as convenient as possible for all parties involved: "Many developed countries have the electronic reporting system, and core databases are publicly available – this is the objective we should be aimed at." 
In the course of the conference, a statistical base of public data of the Ministry of Energy and Coal Industry was presented, as well as a new energy sector on-line map developed by experts that will allow tracing quickly enough the route of energy resources from production to consumption and financial routes that accompany them. 
As Olena Pavlenko, Deputy Chairperson of the Multi-Stakeholder Group and President of the DiXi Group's Think Tank put it, through implementing the EITI and similar initiatives, the government could keep the reforming pace stable. "Since the time the Extractive Industries Transparency Initiative was launched in Ukraine, four energy Ministers have changed; but in spite of that, the EITI is under way. This means that the reformation process can be rendered stable and irreversible only through continuous cooperation between the government, business, and public," Olena Pavlenko summed up.   
It should be noted that the business is interested in information disclosure no less than the government and public. In particular, Oleh Prokhorenko, Ukrgazvydobuvannia PJSC's Head of the Board, claimed that the company supported EITI implementation in Ukraine: "Ukrgazvydobuvannia is a leader of the Ukrainian gas industry. We follow the 20/20 strategy to increase the Ukrainian gas production until 20 billion cub. m by 2020. We have always supported and continue to support the Transparency Initiative in our industry and were among the first ones to start submitting our data for the EITI Report because transparency in the gas industry will contribute to a more open dialog with communities and will become a foundation for sustainable development of gas extracting regions," the company's Head commented.   
Roman Opimakh, Executive Director of the Ukrainian Association of Gas Producers, added that the gas industry is currently ready to report not only to the state but also to the public: "Such multi-party monitoring of compliance with the international principle 'Publish What You Pay' is necessary to build a transparent producer-to-consumer chain that assures the subsoil management performance appraisal."   
The better Ukrainians understand the situation in the energy sector, the better awareness of the governmental policy they will have and the easier it will be to restore trust between the government and public, which was ruined long ago. Under the conditions where complex reforms and decisions are required, the government will benefit if people have such trust and understanding. Transparency and disclosure of data is a step of trust between the government and people.   
For reference: 
The Extractive Industries Transparency Initiative (ЕІТІ) is an independent and voluntarily maintained international standard intended to increase government earnings transparency in the extractive industry. It is currently implemented in 51 countries. The EITI requires auditing of corporate payments and government revenues from the development of national natural resources. Further, this standard requires disclosing information on subsoil use licensing procedures and other subsoil use information. More information on the EITI in Ukraine is available at www.eiti.org.ua.

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