Transparency initiative annual report

1. EITI REQUIREMENT 1

The Extractive Industries Transparency Initiative (EITI) was launched at the World Summit for Sustainable Development in Johannesburg in September 2002 as a global standard for transparency in oil, gas and mining industry. In many countries, money from oil, gas and mining is associated with poverty, conflict and corruption. Commonly referred to as the "resource curse", this is often driven by a lack of transparency and accountability around the payments that companies are making to governments, and the revenues that governments are receiving from those companies. The EITI seeks to create that missing transparency and accountability. It is a voluntary initiative, supported by a coalition of companies, governments, investors and civil society organizations.

Our country voluntarily joined the EITI at the initiative of Government in 2003 in London on the first international EITI Conference held in Lancaster House. The Committee on EITI has been established by the decree of the Cabinet of Ministers in 2003. The Committee on EITI, foreign and local extractive industry companies and non-governmental organizations operating in extractive industry and Coalition for Improving Transparency in Extractive Industries signed a Memorandum of Understanding (MoU)⁴ on 24 November 2004, following this on 10 June 2014 the main document governing the implementation of the Initiative has been prepared in accordance with the EITI Standard and adopted as a new Memorandum. All foreign and local companies operating in mining industry that joined MoU, participated in the EITI reporting process. Since 2004, the NGO Coalition on EITI initiative actively participates in contribution to the EITI.
MSG comprised of 3 primary and up to 3 alternate members from each Memorandum Parties (Group of Companies, NGO Coalition and Committee) having equal rights was established in 2009 with an intention to further improve the EITI process, permanently implemented in Azerbaijan within the framework of the Memorandum and to ensure stronger and more effective oversight and management on the EITI process.⁵
MSG functions on the basis of “EITI Annual Work Plan”.⁶ In 2015, the Work Plan for implementation of EITI has been prepared in accordance to the requirement of the EITI Standard and national priorities identified for the exctractive industry.
The State Oil Fund of the Republic of Azerbaijan for the successful implementation of EITI became a winner of the 2007 United Nations Public Service Award in the category of “Improving transparency, accountability and responsiveness in the Public Service”. In the same year Azerbaijan btained an EITI Candidate status and in 2009 the EITI International Board designated Azerbaijan as an EITI Compliant country.
In December 2013, a number of changes made to the legislation regulating the activities of NGOs has founded difficulties to the activities of civil society organizations. Azerbaijan was downgraded to “candidate country” on the basis of the Validation report in 2015. In accordance with the decision of EITI International Board, a number of corrective actions must be carried out to to improve the condition of civil society by the government of Azerbaijan.
EITI Report for the year 2015 was prepared in accordance with the updated EITI Standard resulted in impovement in understanding and comprehensiveness of information, to raise the EITI awareness and to ensure the effective dialogue between government, civil society and companies.