Ensuring Transparency in Mining (AM0017)

The current situation in the mining sector does not meet the contemporary requirements presented by the state and the society, particularly, the level of accountability of mining companies and the state on expenses and revenues needs improvement.
Joining the initiative will increase the transparency in the sector, will ensure high level of accountability, as well as improve the investment environment.

2. Ensure Transparency in Mining

Commitment Text:

The current situation in the mining sector does not meet the contemporary requirements presented by the state and the society, particularly, the level of accountability of mining companies and the state on expenses and revenues needs improvement.

Joining the initiative will increase the transparency in the sector, will ensure high level of accountability, as well as improve the investment environment.

Responsible institution: Ministry of Energy and Natural Resources of the Republic of Armenia

Supporting institution(s): Ministry of Foreign Affairs, Ministry of Justice, Ministry of Economy, and Ministry of Finance

Start Date: July 2015 ............                                                                End Date: December 2016

Commitment Aim

The commitment aims to enhance transparency in the extractive sector by joining the Extractive Industries Transparency Initiative (EITI), a global standard to promote open and accountable management of natural resources. The commitment also mentions holding discussions, negotiations, and other necessary preparatory work without, however, specifying their outcomes.

Status

Midterm: Limited

At the time of writing the midterm report, the government had publicly announced its intention of joining EITI as well as appointed the Chief of the Government Staff for leading the implementation of EITI in Armenia.

End of Term: Substantial

Government made substantial progress on this commitment. The Government took several measures to join the EITI. Firstly, it appointed the Chief of the Government Staff, a senior official, to lead the implementation process. Secondly, to oversee the EITI implementation process, the Government also established a multi-stakeholder group, during its second session on 26 December 2016¹, discussed and approved its work plan for 2017-2018¹.

The multi-stakeholder group comprises: six officials representing the government, four representatives of the industry, four representatives of CSO community (representing TIAC, Ecoright CSO, Association of Young Environmental Lawyers and Economists, and EcoLur CSO), and one person representing scientific community (the Sustainable Development Center of Yerevan State University). The draft of Government decree on establishment of a multi-stakeholder working group was in circulation from September 2016  ^{“GOA Draft Decree”, Gov.am, September 8, 2016. PDF form available in Armenian at http://bit.ly/2rW5Oya} . On 19-20 September 2016, in cooperation with USAID, the Government organized training on “Mine Inspection and Reclamation Bonding” for the members of the EITI Armenia multi-stakeholder group and other specialists working in the mining sector. The Minister – Government Chief of Staff presented information about the implementation process of the EITI in Armenia during a television interview  ^{Davit Harutyunyan, “Initiative within the Framework of Anti-Corruption Measures”, YouTube interview video, 9:57, posted by Square TV, November 28, 2015, https://www.youtube.com/watch?v=pFnKjvfX8KI} .

The EITI working group was formally set up by Prime Minister Decree №1104-A adopted on 24 November 2016, and held its first official session on 26 November 2016. During its second session on 26 December 2016, the EITI working group discussed and approved its work plan for 2017-2018  ^{“EITI_Work Plan_Armenia”, Gov.am, December 26, 2016. Available in Armenian in PDF form at http://bit.ly/2s6PVXI} . The work plan foresees activities in following areas:

(1) making information on extractive industry and EITI available to the public via creation of a dedicated website, development and approval of communication strategy, and preparation of the EITI report during a conference to be organized in October 2018;

(2) development of roadmap to reveal the beneficial owners and presenting the roadmap to EITI Secretariat by September 2017;

(3) study and analysis of Armenian legislation to identify gaps with EITI requirements with the approval of respective action plan in December 2017;

(4) study of best international practice and development of roadmap in line with requirements specified under EITI Standard 2016 requirement 8.3.a.iii  ^{‘8.3.a.iii’ requirement can be explained as: ‘8.3’ denotes ‘EITI Validation Deadline and Consequences', ‘a’ signifies ‘Assessment of Progress with EITI Implementation’ and 'iii' stands for 'Efforts beyond the requirements'} ;

(5) assurance of EITI candidate country status for Armenia;

(6) preparation of a complete report in line with EITI standards by August 2018 and review of comments from EITI Secretariat by December 2018.

To help the Government implement this commitment, the British Embassy in Yerevan, USAID Armenia, the World Bank and invited experts to conduct series of workshops to assist Armenia develop a successful EITI Candidature Application and become an EITI candidate country  ^{British Embassy Yerevan's Facebook page, accessed June 9, 2017, http://bit.ly/2sMLVcK} . Information on Government’s efforts related to implementation of this activity is available on the Government website  ^{“The EITI Implementation Process of Armenia”, Gov.am, accessed June 12, 2017, http://gov.am/en/armeniaeiti/ . For more information on EITI multi-stakeholder group see “The EITI MSG of Armenia”, ibid., http://gov.am/en/eitimsg/ }  .

IRM researcher notes that Armenia became 52^nd EITI candidate country on 10 March 2017  ^{'Official News: Armenia Became a Candidate Country of the Extractive Industries Transparency Initiative/EITI', Gov.am, March 10, 2017, http://bit.ly/2sgYCio. For more information on Armenia’s EITI candidature, see “The EITI Board Welcomes Armenia to the EITI Family”, eiti.org, March 9, 2017, http://bit.ly/2rjCPaF. }  . However, the researcher also points out that Armenia’s EITI candidature happened long after the completion of the second action plan (late June 2016 or late December 2016). Also considered was the fact that commitment language did not clearly specify the government’s intention to join the initiative at the time of completion of the action plan. For these reasons, as of late December 2016, IRM researcher assesses the completion level as 'Substantial'.

Did it Open Government?

Access to Information: Did Not Change

Civic Participation: Marginal

Despite substantial steps taken to bring Armenia closer to the EITI Candidate status, at the time of writing this report (January 2017), there is no evidence to indicate that the implementation of this commitment has improved access to information on the extractives industry in the country. Access to information is expected to improve once the Government implements the EITI standard and publishes its first EITI report.

Creation of the multi-stakeholder group has generated an opportunity for civil society in the governance of the extractive sector. However, according to representatives of Transparency International Armenia, there have been disagreements between the government and the CSO community related to future decision-making process within the framework of multi-stakeholder group. CSOs were looking for consensus based system for decision making. At the meeting held in May 2016, the Government representatives and the CSOs agreed on a decision-making process.

Carried Forward?

According to TIAC, the Government rejected the proposal to include this commitment in the third action plan. According to the Government, the process of preparation of successful EITI Candidature Application is already an official policy reflected in programs of the Ministry of Energy Infrastructure and Mineral Resources, and other government programs. Therefore, this commitment being a precondition for implementation of other international agreements, the government is interested in its full implementation, whether a part of the OGP action plans or not.