Tajikistan

The government is committed to the EITI and relevant government representatives are part of the multi-stakeholder group (MSG).

In 2017, the industry constituency’s action plan for addressing weaknesses identified in Tajikistan’s first Validation was developed by the national secretariat and approved by the EITI Council. Nonetheless, industry membership on the EITI Council was renewed in 2017 and since then it has been fully, actively and effectively engaged in the EITI process.

There is evidence to suggest that there have been improvements in terms of civil society representatives’ engagement and expression. There are several examples where previously taboo topics are now being discussed more openly (gold production, beneficial ownership and licence allocation), and no obvious gaps in engagement on issues related to EITI implementation where the most likely explanation is self-censorship. Rather, there is considerable evidence that the EITI platform is working as intended to open up more space for debate.

The multi-stakeholder group (MSG) comprises relevant actors and all stakeholders feel adequately represented. The Statute that serves at the Terms of Reference (ToR) for the EITI Council is largely followed in practice. Although the ToRs do not fully address the requirements of the EITI Standard, this does not appear to have affected the functioning of the MSG.

The work plan has clear objectives linked to national priorities for the extractive sector, as well as detailed actions and timelines. Although there were significant delays in implementation of previous work plans, the execution of the current work plan appears to be on track.

The 2014 EITI Report discloses legal and fiscal framework, with a brief description of the roles and responsibilities of government agencies involved in the extractive sector.

The 2015-2016 EITI Report provides more detailed information on the licensing process. However, while the report highlights the main deviation that licenses in 2015-2016 were awarded through direct negotiations rather than the statutory bidding, it does not include the EITI Council’s assessment of any other non-trivial deviations from statutory procedures in the award of licenses in 2015-2016.

The 2015-2016 EITI Report provides all information listed under Requirement 2.3.b for all active mining licenses in Tajikistan other than dates of application and license coordinates.

The updated 2015-2016 EITI Report describes the main types of agreements, notes that contracts are not currently disclosed in practice and mentions reforms that are currently underway. However, the report does not clarify the government’s policy or any legal provisions related to contract disclosure.

Tajikistan has already commenced work on beneficial ownership through the beneficial ownership pilot project. In addition, the EITI Council has proposed amendments to the subsoil use law aimed at making beneficial ownership transparency mandatory.

The 2015-2016 EITI Report describes prevailing practices regarding the financial relationship between the government and state-owned enterprises (SOEs) in the extractive industries. However, the report does not comprehensively describe the statutory financial relations between SOEs and the government, aside from the rules governing SOEs’ reinvestments. The report includes an assessment of loans and guarantees from the government to SOEs, but not from SOEs (nor government) to companies operating in the mining, oil and gas sector.

The 2014 EITI Report provides a comprehensive overview of the extractive sector, including exploration activities.

The updated 2015-2016 EITI Report discloses total production volumes and the values for 2015 and 2016 by commodity. Given that the location of production is provided for most minerals and information on the production of ores and silver by region can be accessed online, the Secretariat considers that most of the mineral production in 2015-2016 was disaggregated by region.

The updated 2015-2016 EITI Report discloses total export volumes and values by commodity, including gold and silver, during the two fiscal years covered by the report. However, the report neither provides export data by region of origin, nor links to where this information can be found.

The 2015-2016 EITI Report provides descriptions for some, but not all, material revenue streams. While the decisions related to the materiality of companies and revenue streams are clearly set out and documented, the adjustments in reporting companies after the start of data collection raises serious questions over the comprehensiveness of the reconciliation, as well as of broader government record-keeping systems.

The 2015-2016 EITI Report clarified that the government collects gold in-kind from Tilloy Tochik for the State treasury depository, but that the Treasury holds this gold rather than selling it to a third party. There are thus no proceeds from the sale of the gold collected in-kind. Nonetheless, volumes of transfers of gold and their value based on market prices are disclosed for the reporting period.

The EITI Council comprehensively reviewed the legal framework and practice on infrastructure provisions and barter agreements in full or partial exchange for oil, gas or mining exploration or production concessions or physical delivery of such commodities in Tajikistan. The government and extractive companies shared the terms of the relevant investment agreements, disproving that infrastructure and barter agreements in the extractive industries were in force in Tajikistan.

The 2014 EITI Report contains a description of transportation arrangements on p.33. The Report confirms that there were no material transportation payments in 2014 (p. 57).

The 2015-2016 EITI Report confirms that SOEs do not collect revenues from other extractive companies on behalf of the government. The report discloses details of dividends paid by 7 material SOEs operating in the extractive industries. The 10% net profit pay was below EITI Council’s materiality threshold and thus was not disclosed.

Only one revenue stream i.e. ‘compulsory fees for issuing licenses or other permits’ may be paid to “the public authorities or local self-government, depending on the type of payment”. Based on the payment data disclosed for this revenue stream, it is reasonable to conclude that there are no material direct subnational payments.

The 2014 EITI Report is disaggregated to the levels required by the EITI Standard.

The 2014 EITI Report was published in November 2015 and, therefore, meets the requirement on data timeliness.

The reconciliation of payments and revenues has been undertaken by an IA, appointed by the EITI Council, and applying international professional standards. The IA and the EITI Council agreed ToRs for the production of the 2015-16 EITI Report consistent with the standard ToRs. However, the report does not provide a final reconciliation coverage in light of reporting omissions, nor the IA’s clear assessment of the comprehensiveness and reliability of reconciled financial data.

In the 2014 EITI Report the proportion of the distribution between the central and local budgets is determined by the law on budget for the specific year. This is not limited to distribution of extractive industry revenues, but all revenues.

The 2014 EITI Report confused budget allocations to local governments with subnational transfers. However, stakeholder consultations have confirmed that there are no statutory or mandatory transfers of extractive industry revenue in Tajikistan.

The Supplementary Report provides some limited information on revenue management and expenditures.

The Secretariat concludes lack of clarity on the legal regime for mandatory social expenditures in Tajikistan. Therefore, the EITI Council should make further work to demonstrate the applicability of the requirement.

The definition of quasi-fiscal expenditures agreed for EITI reporting is narrower than that provided in Requirement 6.2 and the IMF’s Fiscal Transparency Manual and is applied to only six of the 23 SOEs, and their five subsidiaries. Additionally, the identity of beneficiaries of these quasi-fiscal expenditures is unclear from the report.

The 2014 EITI Report provides comprehensive overview of the contribution of the extractive industry to the economy.

The EITI Report was published in three languages – English, Russian and Tajik – and was officially launched at the regional conference as well as made publicly available through different relevant websites. While the civil society constituency led the dissemination activities and communication with media, there is a sufficient evidence of government and company engagement and support in the outreach process.

Tajikistan’s 2014 EITI Report is not machine-readable. Tajikistan adopted the Classification system on revenues and expenditures with instruction of use, however, it does not seem to be used in the 2014 EITI Report.

The MSG has taken steps to act upon lessons learnt, to identify, investigate and address the causes of discrepancies and to consider the recommendations for improvements from the Independent Administrator for the 2014 EITI Report. The EITI Council also established a working group to assess the gaps and prepare to the Validation.

In 2017, the annual progress report was prepared and approved by the EITI Council in a timely manner. Although the report provides a useful overview of the last year’s activities and outcomes, it still lacks a thorough assessment of the impact of EITI implementation, of progress in meeting the objectives set out in the work plan and of efforts to address recommendations from past EITI Reports.