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Ukraine

Development of E-democracy. (UA0069)

Overview

At-a-Glance

Action Plan: Ukraine Third National Action Plan 2016-2018

Action Plan Cycle: 2016

Status: Inactive

Institutions

Lead Institution: State Agency for E-governance, other executive agencies.

Support Institution(s): EGAP Programme, Centre for Innovations Development at the National University Kyiv-Mohyla Academy, the non-governmental organisations Centre of Policy and Legal Reform, e-democracy, and Eidos Centre for Political Studies and Analysis, other civil society institutions and international organisations (by consent).

Policy Areas

IRM Review

IRM Report: Ukraine Mid-Term Report 2016-2018

Starred: No

Early Results: Major Major

Design i

Verifiable: No

Relevant to OGP Values: Civic Participation Technology

Potential Impact:

Implementation i

Completion:

Description

Event: Development of e-democracy.; Implementation timeframe: 2017; Entities responsible: State Agency for E-governance, other executive agencies.; Partners: EGAP Programme, Centre for Innovations Development at the National University Kyiv-Mohyla Academy, the non-governmental organisations Centre of Policy and Legal Reform, e-democracy, and Eidos Centre for Political Studies and Analysis, other civil society institutions and international organisations (by consent).; Expected results: Ensuring the: Development of the Conceptual design for the development of e-democracy and submission in accordance with established procedures for consideration by the Government (May 2017). Development of the action plan for for the development of e-democracy and submission in accordance with established procedures for consideration by the Government (November 2017).

IRM Midterm Status Summary

9. Implement the Extractive Industries Transparency Initiative

Commitment Text:

Implementation in Ukraine of the Extractive Industries Transparency Initiative

Expected results: Support in the Verkhovna Rada of Ukraine for the draft Law of Ukraine 'On the disclosure of information in extractive industries' (until adoption). Publication of reports in Ukrainian and English based on the standards of the Extractive Industries Transparency Initiative (December 2016, December 2017).

Responsible institutions: Ministry of Coal and Energy, Ministry of Economic Development, Ministry of Finance, Ministry of the Environment, State Geology and Subsoil Resources Service.

Supporting institutions: International Renaissance Foundation, German Corporation for International Cooperation (GIZ), American Chamber of Commerce in Ukraine, non-governmental organizations Dixie Group, Analytical Center for Regional Cooperation, Energy Transparency Association, the international initiative Publish What You Pay, other civil society institutions and international organizations (by consent).

Start date: December 2016 End date: December 2017

Context and Objectives

This commitment builds on the actions undertaken in the extractives sector as part of the two previous action plans. Ukraine became an Extractive Industries Transparency Initiative (EITI) candidate country in 2013 and published its first EITI report in November 2015. The country’s assessment of adherence to the EITI standards was scheduled to commence on July 2017. As part of the previous action plan (2014–2016), Parliament passed important amendments to introduce transparency instruments in the extractives industries and government policy. In addition, preparation started for the second EITI report that was to be published by December 2016.

The third action plan outlines two objectives. The first is to support the passage of the draft law on the disclosure of information in the extractives industries. The second involves publishing EITI reports for 2016 and 2017. Although not fully explained in the commitment text, the draft law builds on the amendments passed by Parliament in 2015 and introduces a comprehensive framework for transparency in the sector. The innovative aspects include contract transparency, project-by-project reporting, a complex system of fines for failure to report, separate incentives on beneficial ownership reporting for extractives companies, and a greater level of detail on transportation and transit revenues. If adopted, the law would open up a significant amount of previously inaccessible information. This draft law aligns the Ukrainian legislation with relevant European Union laws. The Ukrainian multistakeholder group, together with external experts and members of parliament, developed the draft law in line with recommendations from the first EITI report (covering 2013 but published in 2015).

The second component of this commitment envisions publication of the second and third EITI reports in December 2016 and December 2017. As mentioned in the IRM end-of-term report (2017), the preparation of the second EITI report (2016) had begun prior to this action plan. The government selected an independent administrator to prepare it. This second report was meant to include the coal and iron sectors, which were not covered in the first report. The first report included production volumes and payments from the oil and gas field.

Overall, this commitment represents a continuation of progress toward full EITI compliance. This is an important undertaking, given the role of the extractives sector in Ukraine. While the country is rich in natural resources, internal mismanagement and external interference have resulted in the extractives sector contributing a relatively insignificant amount to the economy.[Note253: EITI Ukraine, https://eiti.org/ukraine.] In 2015, the extractives industries constituted 11 percent of the Ukrainian economy. According to the State Statistics Service, the natural gas and oil produced in Ukraine are not exported, while ferrous metals comprise 18.7 percent of the country’s exports. Petroleum companies accounted for 77 percent of government-generated revenue reconciled in the EITI 2015 report. Coal accounted for roughly 11 percent, and metal ores (iron, manganese, and titanium) accounted for 12 percent. Another important subsector is oil and gas transportation, operated by a state-owned enterprise.

Completion

The multistakeholder group, including Extractive Industries Transparency Initiative (EITI) Ukraine, has helped to prepare the draft law. Parliament first debated the bill in February 2017, but it did not pass. A second updated draft, 'On Ensuring the Transparency in Extractive Industries,' was submitted in April.[Note254: 'The Interim Report on the Realization of the Action Plan for the Implementation of the Open Government Partnership Initiative in 2016–2018,' Civil Society and Authorities: Governmental Website, accessed 13 September 2017, (link no longer accessible as of 25 April 2018) http://civic.kmu.gov.ua/consult_mvc_kmu/uploads/attach-3467-910681586.doc. ] The parliamentary Committee on Fuel and Energy Complex, Nuclear Policy and Nuclear Safety recommended this second bill.[Note255: 'The Draft Law on Ensuring Transparency in Extracting Industries,' The Verkhovna Rada of Ukraine, http://w1.c1.rada.gov.ua/pls/zweb2/webproc4_1?pf3511=61409.] Although its activity occurred outside of the period of this assessment, the draft law passed the first hearing in Parliament in February 2018.

The second EITI report was published in February 2017. The report covers two calendar years (2014 and 2015) and includes additional extractives industries. An independent administrator, Ernst and Young, prepared the report. Its scope covered 97 of extractives companies, which together paid more than 99 percent of the extractives industries tax revenues to the state budget. Overall, 51 of 97 companies responded to a request in the preparing of the report.

After the Russian annexation of the Crimean Peninsula and the eruption of armed conflict in the Donetsk and Luhansk regions, the multistakeholder group proposed to the EITI board to adapt implementation of EITI standards for the 2014 and 2015 fiscal years. The group requested that the possible lack of comprehensive information from the Donetsk and Luhansk regions and Crimean Peninsula not be held against Ukraine in validation. The request stated that the government and multistakeholder group will continue their efforts to obtain the data from the conflict zones and include them in the EITI report. In October 2016, the EITI board approved the group’s request pertaining to the 2014–2015 EITI report. The board asked the government of Ukraine to include links to other publicly available sources where information from the entities in the region was not provided. It also asked the government to ensure full unilateral disclosure of any revenues received by the government from companies and local government agencies in these regions. Ernst and Young sent out reporting requests to the companies operating in the conflict regions. One of the biggest coal producers, the DTEK Group, provided full revenue data on its operations in the Donetsk and Luhansk regions in 2014–2015. This enabled Ernst and Young to cover 93.9 percent of the government revenues from the coal subsector in 2015. The State Fiscal Service of Ukraine has provided full unilateral disclosure of total income, including from nonreporting companies, for each material revenue stream. In addition, the 2014–2015 EITI report provides data on tax revenues from extractives industries. This data is disaggregated by regions, including Donetsk and Luhansk. The report does not assess the comprehensiveness of government ownership, due to the lack of information regarding the regions affected by the EITI board-approved adapted implementation request.

Next Steps

The multistakeholder group should continue advocating passage of the draft law through the second and third Parliament hearings.

The next action plan can consider other important reforms that are directly relevant to moving the EITI agenda forward in Ukraine. The EITI secretariat recommends the following measures:[Note256: Oliana Valigura, country manager, EITI secretariat, email correspondence with IRM researcher, March 2018.]

License allocations

Even though, there is now increased transparency in license allocations, several stakeholders state the licensing system is burdensome and prone to corruption. Frequent changes in the legal and fiscal environments, overlapping reporting requirements, and uncertainty of rules and procedures have contributed to noncompliance by companies. Ukraine should work toward mainstreamed disclosures that clarify the laws and regulations in real time.

Transparency and governance of state-owned companies

Given the influence and prevailing ownership in extractives assets held by state-owned companies, Ukraine’s government could work toward increasing transparency regarding state-owned enterprises (SOEs). This effort could involve transparency in governance, ownership, financial transactions, lending and spending, drawing on the Organization for Economic Cooperation and Development guidelines for state-owned enterprises, and other best practices. Clarifying the full list of the SOEs and their subsidiaries, and detailing the full extent of financial relationships among these companies would also contribute to the government’s SOE privatization agenda.

Contract transparency

Civil society organizations have expressed a desire for all contractual terms to be disclosed, especially the social-fiscal provisions, environmental safety provisions, reclamation obligations, and infrastructure investments.

Quality assurance in financial reporting

Quality assurance of financial reporting in Ukraine is not transparent. The Ukraine Extractive Industries Transparency Initiative could tap into existing government agencies and their current work. Making use of the internal as well as independent audits performed by the State Audit Service and the Accounting Chamber can help reflect the true quality of EITI data and possibly improve government information on extractives.


Ukraine's Commitments

  1. Infrastructure data portal

    UA0070, 2018, E-Government

  2. open standard for e-system

    UA0071, 2018, E-Government

  3. Ensuring openness and transparency of selling public assets and property

    UA0072, 2018, E-Government

  4. Transparency in public procurement (Prozorro)

    UA0073, 2018, E-Government

  5. Awarenss raising about social and economic development

    UA0074, 2018, Aid

  6. e-calls for proposals to support CSOs

    UA0075, 2018, Civic Space

  7. Beneficial ownership registry

    UA0076, 2018, Beneficial Ownership

  8. Anti-corruption Training

    UA0077, 2018, Anti-Corruption Institutions

  9. Publishing environmental information

    UA0078, 2018, E-Government

  10. Database of natural resources

    UA0079, 2018, E-Government

  11. Interactive map of mines

    UA0080, 2018, E-Government

  12. Priority electronic services

    UA0081, 2018, Citizenship and Immigration

  13. online platform for executive bodies and CSOs

    UA0082, 2018, Civic Space

  14. EITI online data

    UA0083, 2018, E-Government

  15. electronic resources for education

    UA0084, 2018, E-Government

  16. online verification of education certificates

    UA0085, 2018, E-Government

  17. Free access to national repository for academic texts

    UA0086, 2018, E-Government

  18. Administrative Service Decentrilisation and Improvement

    UA0057, 2016, Capacity Building

  19. United State Portal Extension; Electronic Government Information Services Unification; Modern Tools for Electronic Identification

    UA0058, 2016, Capacity Building

  20. System for Entities Performing Government Functions

    UA0059, 2016, Capacity Building

  21. Free Urban Planning Documentation

    UA0060, 2016, E-Government

  22. Beneficial Ownership Verification System

    UA0061, 2016, Beneficial Ownership

  23. CoST Beneficial Ownership Standards

    UA0062, 2016, E-Government

  24. Transpartent Budget System

    UA0063, 2016,

  25. Starred commitment Open Public Procurement

    UA0064, 2016, Capacity Building

  26. Starred commitment Extractive Industries Transparency Initiative

    UA0065, 2016, Extractive Industries

  27. Environmental Public Monitoring

    UA0066, 2016, Environment and Climate

  28. Community Policing System

    UA0067, 2016, Education

  29. Draft Law on Public Consultations

    UA0068, 2016, Legislation & Regulation

  30. Development of E-democracy.

    UA0069, 2016,

  31. Improve government rules on CSO involvement

    UA0031, 2014, E-Government

  32. Financing of charities

    UA0032, 2014, Civic Space

  33. Not-for-profit status for CSOs

    UA0033, 2014, Civic Space

  34. Public participation law

    UA0034, 2014, E-Government

  35. Establishing Rules on Processing Official Information

    UA0035, 2014, E-Government

  36. Access to Urban Planning Documents

    UA0036, 2014, E-Government

  37. Starred commitment Access to Communist-Era Archives

    UA0037, 2014, Legislation & Regulation

  38. Starred commitment Draft law on open data

    UA0038, 2014, Legislation & Regulation

  39. Starred commitment Supervisory mechanism for the right to information

    UA0039, 2014, Legislation & Regulation

  40. Compliance with EITI

    UA0040, 2014, Extractive Industries

  41. Monitoring of infrastructure projects

    UA0041, 2014, Anti-Corruption Institutions

  42. Adopt regional anti-corruption programmes

    UA0042, 2014, Anti-Corruption Institutions

  43. Corruption risk assessment methodology

    UA0043, 2014, Anti-Corruption Institutions

  44. Starred commitment Asset disclosure on a single web portal

    UA0044, 2014, Asset Disclosure

  45. Law on administrative procedure

    UA0045, 2014, Legislation & Regulation

  46. Law on streamlining payment of administrative fees

    UA0046, 2014, E-Government

  47. Administrative services portal

    UA0047, 2014, E-Government

  48. Draft law on decentralisation of administrative services

    UA0048, 2014, Legislation & Regulation

  49. Draft law on social services

    UA0049, 2014, E-Government

  50. e-Government laws

    UA0050, 2014, E-Government

  51. Electronic readiness assessment

    UA0051, 2014, E-Government

  52. Government regulations on open data

    UA0052, 2014, E-Government

  53. Electronic democracy development roadmap

    UA0053, 2014, E-Government

  54. Open budget initiatives

    UA0054, 2014, E-Government

  55. e-Petitions

    UA0055, 2014, E-Government

  56. e-Governance training for local government

    UA0056, 2014, Capacity Building

  57. Laws on public participation

    UA0001, 2012, Civic Space

  58. Amendments to the law on community associations

    UA0002, 2012, Civic Space

  59. Amendments to resolutions on collaboration with civil society

    UA0003, 2012, E-Government

  60. Training for public servants on consultations

    UA0004, 2012, Capacity Building

  61. Harmonisation of access to information laws

    UA0005, 2012, E-Government

  62. By-laws on access to information

    UA0006, 2012, Legislation & Regulation

  63. Guidelines for classifying data

    UA0007, 2012, Public Participation

  64. Public information recording systems

    UA0008, 2012, Records Management

  65. Law on public broadcasting

    UA0009, 2012, Civic Space

  66. Public access to information in state registers

    UA0010, 2012, E-Government

  67. Starred commitment Extractive Industries Transparency Initiative

    UA0011, 2012, E-Government

  68. Law for controlling declarations of public servants

    UA0012, 2012, Asset Disclosure

  69. Public declarations of officials’ assets

    UA0013, 2012, Asset Disclosure

  70. Guidelines on conflicts of interest

    UA0014, 2012, Conflicts of Interest

  71. Updated anti-corruption laws

    UA0015, 2012, E-Government

  72. Regional anti-corruption programmes

    UA0016, 2012, E-Government

  73. Law on competitive e-government procurement

    UA0017, 2012, E-Government

  74. Starred commitment Administrative services reforms

    UA0018, 2012, E-Government

  75. Electronic access to administrative services

    UA0019, 2012, E-Government

  76. Governmental web portal of administrative services

    UA0020, 2012, E-Government

  77. Administrative services in a digital format

    UA0021, 2012,

  78. Starred commitment Regional administrative service centres

    UA0022, 2012, Public Service Delivery

  79. Programme for promotion of e-government

    UA0023, 2012, E-Government

  80. Electronic collaboration between executive agencies

    UA0024, 2012,

  81. Web-based petitions system

    UA0025, 2012,

  82. One stop shop for e-Reporting

    UA0026, 2012, E-Government

  83. E-region pilot project

    UA0027, 2012, E-Government

  84. Network of e-government practitioners

    UA0028, 2012, Public Participation

  85. Public libraries as bridges towards e-governance

    UA0029, 2012, E-Government

  86. E-government knowledge management portal

    UA0030, 2012,