Promoting Hydrocarbon Transit Transparency in Georgia

Project title: "Promoting Hydrocarbon Transit Transparency in Georgia"
Year: 2009 - 2010
Budget in USD: 31,200
Funding sources: Open Society Georgia Foundation and Revenue Watch Institute
Project Coordinator: Irina Lashkhi

Project is operated by the OSGF Human Rights and Good Governance Program. The proposed project is a part of a regional initiative (Georgia, Ukraine) aiming at achieving Transparency in Hydrocarbon (oil and gas) Transportation sector in Georgia. There is a need to enhance transparency, accountability and public financial management of the Georgian Government and private companies in oil and gas transportation sector. Public oversight over these revenues is a crucial component of the national efforts to eradicate corruption.

Project description:

The proposed project sets as its overall objective to promote the idea of broadening the agenda of Extractive Industries Transparency Initiative (EITI) to Transit Industries and to empower the Government of Georgia to launch EITI Transit Initiative.

The primary objective of the project is to reveal the areas where a concerted effort of civil society, with cooperation of the government and the private sector, would significantly improve the level of information transparency, and increase the accountability of companies, as well as the relevant state institutions in the hydrocarbon transportation sector.

The project aims at achieving its goals through the following main activities:
1) Probating EITI Transit idea in Georgia in terms of creation of an illustrative case on Hydrocarbon Transit Transparency;
2) Working with the Government of Georgia and Private Transit Companies (involved in Hydrocarbon Transportation) to secure their commitment to transparent revenue management that is inclusive of all sources of revenue and meets the standards outlined in key international guidelines and recommendations;
3) Working with EITI Secretariat and advocate for the idea of EITI Transit.

Activities and achievements

The first step of the project was to create a regional working group of experts, and to engage other transit countries in this initiative. OSGF identified and selected oil and gas experts in Azerbaijan, Ukraine, Kazakhstan and created a working group. 

1) In 2009 there was elaborated the EITI Transit Reporting Template for Georgia and Ukraine together with Georgian, Azerbaijan and Kazakhstan experts that is envisaged by the EITI guidelines for the governments and the companies in Georgia and Ukraine to reflect country- and sector-specific situations and requirements. The reporting templates served to define the scope and nature of disclosure, determine the companies or government entities required to report and decide which benefit streams should be reported.

2) In 2009 was released a Report "Expanding the EITI Agenda to Transportation of Hydrocarbon Resources" (joint proposal by NGOs from Kazakhstan, Azerbaijan, Georgia and Ukraine) based on EITI principles and the reporting template (payments made by private companies to the state budget - payments received by government and reflected in public revenues). Experts collected, aggregated and evaluated revenue data provided by companies and governments in Georgia and Ukraine what is included in the Report. Georgia part the Report focus at is: all four pipelines operating in the country and railway transportation (2008-2009).

3) In 2010 was released a Report  Hydrocarbon Transit Revenue Transparency in Georgia overviewing the legislation and in general agencies in charge for energy sector in Georgia.

4) In parallel during 2009-2010 there were organized several working meetings/workshops in Georgia, Ukraine, Azerbaijan and Kazakhstan to share experience, discuss challenges indentified, methodology and progress achieved in the process of project fulfillment in each country. There are three key messages advocated by the project team: a) EITI Secretariat should expand EITI Agenda on Hydrocarbon Transit; b) Governments should publish what they receive from hydrocarbon transit routes and initiate EITI Transit; c) Companies should publish what they pay to the Government and take an active part in EITI Transit.

The project activities will be continued in 2011.




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