The first meeting of the 'EITI Group' brings Ukraine one step closer to transparency of gas transit taxes.
Photo (from the left): Qimiao Fa, World Bank Ukraine Country Director, H.E. John F. Tefft, US Ambassador to Ukraine, H. E. Yuriy Boyko, Minister of Energy and Coal Industry, Ukraine, Volodymyr Makukha, Vice Minister of Energy and Coal Industry, Ukraine, H.E. Jon Elevedal Fredriksen, Norwegian Ambassador to Ukraine.
Ukraine has formed an EITI multi-stakeholder group that brings together representatives from the government, industry and civil society. The 'EITI Group' was formed on 11 October 2012 at a conference called “Ukraine on the Way of Accession to EITI” held in Kiev. This group is now tasked with overseeing the steps toward implementing the EITI standard in Ukraine. This will require transparency of tax payments from Ukraine's gas transit system.
Investment is impossible without transparency
Opening the event, the Minister for Energy and Coal Industry Minister, Yuriy Boiko, emphasised that implementing the EITI would be an important element of improving the country’s investment climate. He said that securing investment was “impossible without transparency and understandable rules”. Ukraine is looking for the necessary investment to develop its national oil, gas and coal sectors to achieve energy independence.
At their first meeting, the 18 members of the multi-stakeholder group discussed the steps to become an 'EITI Candidate', including a work plan outlining the coverage of EITI Reports. Deputy Minister for Energy and Chair of the Group, Volodymyr Makukha, stated that in the government’s view, the EITI would cover “the oil and gas extraction sector and the gas transportation system of Ukraine”, and that Ukraine would be the first EITI country to report on gas transit.
He also noted that the EITI might consider future extension to the coal industry and other extractive sectors, including iron ore and uranium extraction.
Civil society, companies and government working together
The Ukraine EITI group is composed of six representatives each from government, companies and civil society. The members representing government are from six key ministries and departments of Ukraine, namely the Energy and Coal Industry Ministry; the Economic Development and Trade Ministry; the Finance Ministry; the Ecology and Natural Resources Ministry; the State Tax Service; and the National Electricity Regulatory Commission.
The three national company representatives are from Naftogaz of Ukraine, Ukrgazvydobuvannia and Ukrtransgas, the state gas transit company. The three international company representatives are from BP-TNK Ukraine, Shell and Chevron. The six civil society representatives come from NGOs that specialise in energy questions and are from the resource-rich regions of Ukraine.
In September 2009, Ukraine first committed to implementing the EITI through government resolution No. 1098 “On Ukraine's Accession to the Extractive Industry Transparency Initiative”. It reaffirmed its intent in April 2012 through its commitments to the “Open Government Partnership”.
Photo courtesy of the Ukraine Ministry of Energy and Coal Industry's press office.
For further information about EITI in Ukraine, please contact Regional Director Tim Bittiger at the EITI International Secretariat.