EITI in Albania, main recommendations for extractive industries – by Enio Civici

Transparency is considered the best policy when it comes to industries that exploit natural resources. In this respect, EITI, the Extractive Industries Transparency Initiative, is one of the most powerful and most important associations in the world. As an EITI-compliant country since 2013, but having joined the coalition since 2009, Albania is among the 51 countries in the world that are implementing the EITI standard regarding the disclosure of data on companies active in the mining, petroleum  and hydropower sectors. Furthermore, I would like to cite Mr.Ardit Kamberi, the Head of the national secretariat for transparency in extractive industries, AlbEITI, who said that: EITI is a volunteer coalition of governments, companies and civil society organizations and a global standard to promote the open and accountable management of natural resources. Albania has published so far 6 EITI reports for the period 2009-2015 and is expected to publish within the first quarter of 2018 a seventh report for the year 2016.

Along with complete reporting and reconciled information on extractive industries, the EITI reports also contain a list of key recommendations aimed at addressing the barriers towards achieving a successful transparency process. Certainly, the recommendations have changed and developed over the years, and in this context, only those interventions that have represented the largest regulatory impact under the EITI standard should be enlisted. For this purpose, we can highlight some of the key recommendations given for each fiscal year, as seen through the curious optics of the independent auditor that prepares such reports. The recommendations for 2009 were largely basic and mainly based on certified reports in accordance with auditing standards and in close cooperation with central government, local authorities, companies and EITI coordinators. Main recommendations in the 2011 EITI report, the first under the EITI standard, were related to the appointment of an EITI focal point in all institutions including MEI, AKBN (NARN), Albanian Geological Survey, Tax Directorate, Customs Administration, etc. Other important recommendations related to the reconciliation of payments by local authorities and the mandatory setting of an annual time-scheduled process for EITI reporting as two initiatives aimed at obtaining timely and quality data from companies. Further on, recommendations in the 2012 report focused largely on the central tax administration office reporting system, with particular emphasis on the recommendation that the EITI Secretariat should work closely with Central Tax Office to integrate contextual and individual reporting requirements in the context of implementing EITI in the new tax system. Recommendations made in the 2013 and 2014 reports focused mainly on the use of the Treasury system as central government’s most important system for the collection of accurate data regarding all payments made by each taxpayer. One of the recommendations in the 2015 report, which has been strongly taken into consideration, relates to the guideline that companies report to the Ministry of Energy and Industry for each license separately. By reconciling the payments with the volume of production and tax payments, MEI can obtain a sufficient database for revenue budgeting and fiscal policy effectiveness analysis in the medium and long run.