Conference on Presentation of the EITI 2016 Report and Promotion of Transparency in Natural Resources Utilization in Albania

Conference on Presentation of the EITI 2016 Report and Promotion of Transparency in Natural Resources Utilization in Albania

The Ministry of Infrastructure and Energy in cooperation with the Extractive Industries Transparency Initiative (EITI) organized on February 28, 2018 a Conference on “Presentation of the EITI 2016 Report and Promotion of Transparency in the Natural Resources Utilization in Albania” Present at this conference were the Vice-Minister of Infrastructure and Energy, Mr.Enis Aliko, the Secretary General of the Ministry of Infrastructure and Energy, Mr.Gentian Keri, the Head of the Albanian EITI Secretariat, Mr.Ardit Kamberi, the Chairman of the Parliamentary Committee on ProductiveActivity, Trade and Environment, Mr. Eduart Shalsi, as well as Representatives from various State Institutions, Diplomatic Corps, International Donors and Partners, Civil Society and Companies operating in Extractive Industries.

The publication of the EITI 2016 Annual Reportm which aims at promoting Transparency in the Governance of Natural Resources in Albania, marks the conclusion of the National Secretariat’s annual activity and is the result of the cooperation between MSG and Interest Groups.

While congratulating the EITI Secretariat on the results, Mr. Enis Aliko, the Vice-Minister of Infrastructure and Energy, stated in his speech the importance of greater civil society involvement.

“As you know, Albania became an EITI member in 2009. Its aim is to ensure transparency, fight corruption and increase people’s benefit from natural resources which are after all owned by the state, thus by the citizens”- said Mr. Aliko.

The head of the Albanian Secretariat of the Extractive Industries Transparency Initiative, Mr. Ardit Kamberi, noted that Albania is the only country in the region that is a member of the Global Transparency Initiative, and that Transparency narrows Corruption, while Good Governance goes far beyond Transparency, since its open structure ensures that all stakeholders are involved in decision-making process. While Transparency is the right to be informed, Openness is the right to participate”.

Likewise, the Chairman of the Committee on Productive Activity, Trade and Environment, Mr. Eduart Shalsi, praised the progress made by the EITI Secretariat over the years in promoting Transparency in Albania.

Other participants speaking at the  Conference included executives of the Foreign Investors Association (FIAA); representatives of TAP, Shell Albania, Statkraft (Devoll HP), Antea Cimento, Civil Society representatives, academics, etc. who stressed the importance of the Transparency process and its support by the three main pillars of the Triangle: Government, Companies and Civil Society.

The AlbEITI Secretariat has produced so far reports covering 8 fiscal years, 2009-2016, with marked qualitative progress because the reports issued since 2013 include data not only from oil, gas and mining, but also from the Hydropower sector.

According to the EITI 2016 Report, prepared by Deloitte Albania, the production generated by these three sectors in 2016 was estimated at USD 834 million, specifically: Crude Oil at USD 179.2 million, Mining: USD 214 million and electricity at $ 441 million, which has increased significantly with over 315% compared to 2013.

Crude oil exports reached 899 thousand tons in 2016, about 87% of the country’s total crude oil production. The exports reached a value of 155.78 million USD.

The number of employees working in the oil and gas sector reached an average of 3,080 people during 2016, with Albpetrol being the largest employer with about 64% of employees in oil extraction.

Chromium and Ferrochromium contributed the largest share during 2016, making up about 74% of total mining production, with 730 thousand tons and 49 thousand tons respectively; and an estimated value of about 148.7 million USD.

The domestic power output reached about 5,091 GWh during 2016, with the Electrical Power Corporation (KESH) generating about 71.4% of total power output with an installed capacity of 1,350 MW built in a cascade over Drini River.

The process for the preparation of the EITI 2016 Report included: all companies operating in oil & gas exploration and production; 120 mining companies (contributing to over 80% of the total mining production), and 12 hydro-energy companies.

Following the Validation Process, the Oslo-based EITI Board, officially announced by mid-February 2018 that Albania has made Significant Progress in implementing the EITI standard.

The EITI International Board congratulated the Albanian Government and the Multi-Stakeholder Group (MSG) for the progress made in improving transparency and accountability in extractive industries, by using the process to address local concerns, both through active dissemination and outreach efforts and by expanding the scope of EITI reporting to the hydro-power sector.

The EITI Board also made a series of recommendations to strengthen transparency, notably by ensuring more public access to information on the state enterprises and their transactions, tax and distribution of revenues at local levels as well as increasing an active and effective civil society engagement in the EITI process.

The main priorities of the Albanian EITI Secretariat for 2018 include: Beneficial Ownership Transparency as one of the recent objectives of the EITI International Board. It is intended that by 2020, each company operating in extractive industries will disclose the full identity of their Beneficial Owners as a crucial element in addressing issues such as corruption, conflict of interest and fiscal evasion. In this context, a new draft law on Transparency in Extractive Industries has been initiated, along with the creation of a Public Register containing detailed information on Beneficial Owners.

This initiative in is line with the European Union Decision requiring all member states to publish Public Registers for Beneficial Owners. Other important priorities on which the EITI Secretariat will focus on during its activity, with the support of the World Bank, include: Implementation of Recommendations of National and International Validation Reports in line with the EITI standard; Transparency over Local Revenues from the utilization of natural resources and real benefits in time and quantity of communities living in areas where these activities take place; Environmental Impact Assessment for all Oil, Mining and Energy Projects and Activities; Cooperation with local government regarding full transparency over the royalty income and the local component of the agreements, as well as their destination and effectiveness in the social impact; Transparency in Transactions and Sales of Petroleum Products (Commodity Trading), Creation of a Mining Register; Use of Open Data; Increasing Civil Society role in the Transparency process, etc.