Equal participation by all stakeholders is critical during discussions on the implementation of the EITI in Kazakhstan

Source: NGO Coalition "Oil Revenues - Under Public Oversight!"
Date: 14 Sep 2005

The « Oil revenues – Under Public Oversight! » Coalition, comprised of around 50 non-governmental organizations representing all regions of Kazakhstan, welcomes the decision of the Government of the Republic of Kazakhstan to adopt and implement the Extractive Industries Transparency Initiative (EITI).

Our Coalition is willing to cooperate with the Government and extractive companies on the elaboration of the Memorandum of Understanding as an equal party. On 11th August 2005, members of our Coalition participated in the meeting of the Inter-departmental Working Group set up by the Government to begin discussions on the text of the Memorandum.

However, in our view, the preparation process for the implementation of the EITI in Kazakhstan still does not provide sufficient opportunities for fair participation of all interested parties. Moreover, representatives of the mining industry have not yet participated in the negotiation process, and their position regarding the EITI implementation in Kazakhstan remains unclear.

We are specifically concerned by the fact that the idea of establishing a National Stakeholders Council for EITI implementation, proposed by our Coalition, has not been properly reflected in the last draft Memorandum: it does not contain a distinct description of the mechanism for the establishment and operation of this council. Having such a council, comprised of equal representation of all parties, will certainly contribute to the efficiency of the negotiations.

We also think that the Government should develop a schedule of meetings to discuss the draft Memorandum and ensure that all parties are fully involved. Participation of civil society organizations in the negotiations process has been seriously impeded by inappropriate short notice of the dates of meetings. At the same time, the absence of any key stakeholder raises questions about the legitimacy of any agreements achieved.

In our view the Memorandum cannot be signed until all parties reach consensus regarding its key provisions.

Below, please find our main recommendations and comments on the current draft Memorandum:

  • The Memorandum should clearly define what financial information shall be requested from the companies, as well as what information shall be published in addition to the audit report;

  • Disaggregated information on payments by companies should be accessible. We are confident that this information should not be a commercial secret;

  • Full text of the audit report, which compares payments of the extracting companies with actual revenues to the budget, should be published in its entirety;

  • The Memorandum should contain a distinct description of the procedure to be followed in the case of any discrepancies in the data on extracting companies’ payments and data on budget revenues;

  • Within the framework of the EITI, extractive companies should also publish data on payments made to local budgets for social development;

  • International EITI guidelines should be taken into account while developing the reporting templates for the Government and extracting companies;

  • Civil society should be an equal partner in all discussions related to the implementation of EITI. Only in this case will the implementation process meet the EITI criteria, adopted at the London Conference in March 2005.

  • Representatives of the World Bank and European Bank for Reconstruction and Development should also enter the National Council (without vote) as an intermediate party and to provide expertise when necessary;

  • The Government of the Republic of Kazakhstan should be represented in the negotiations process by the Prime Minister and he should sign the Memorandum on behalf of the Government;
  • We sincerely hope that the Government of the Republic of Kazakhstan will take our comments into account and will provide all parties with the opportunity to participate fully in the discussions regarding the implementation of the EITI in Kazakhstan. We believe that a more efficient model for EITI implementation may be developed as a result of all parties being able to contribute equally in the negotiation process. As such, the Republic of Kazakhstan may become an example to be followed by other countries joining the EITI.

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