No payments from the royalties for local governments

No payments from the royalties for local governments

“Shqip” Newspaper 26 June 2014

Income / Head of Albanian EITI Secretariat, Dorina Çinari: Ready the “2011 EITI” report.

According to data for 2011, no payments transfer were made to the local government in the form of royalties collected, fees paid by companies exploiting natural resources of the country. This is the conclusion of the report prepared from the Albanian Extractive Industry Transparency Initiative (Albanian EITI Secretariat) in the Ministry of Energy. “The EITI principle” is that from the income generated throw the exploitation of natural resources should benefit the people of these areas. Communities living in Bulqiza, where operate hundreds of mining licenses, or Patos with it’s ecological problems, would significantly benefit and alleviate the social and environmental phenomena from the return of royalties rate in the area”,said for “Shqip” newspaper, Dorina Çinari, head of Albanian EITI Secretariat. We should erase poverty that comes as “curse of areas rich in natural resources,” says Çinari and adds that “the intention is to make these standards object of our work.” Asked what is the transparency that is realized with EITI reports, Çinari explains, “EITI reports are related to the state revenues generated from use of country’s natural resources: oil, gas and mining. Companies operating in this sector publish what they pay to the state (taxes, rent, etc..) And this data is reconciled to the income declared by the state. Later these payments are confirmed, in case of discrepancies our institution investigates where the money went, as this discrepancy implies abuses and corruption. This report allows citizens to see revenue that government receives from the country’s natural resources and how these revenues are used”. They say that the new report, EITI 2011, which will publish this week, has no findings of irregularities in the reconciliation of these payments. Regarding the main conclusion that makes this report, Dorina Çinari states: “We note the very low level of revenues collected by state from these companies.For example, in 2010 these revenues accounted only 1.2 percent of the state total fiscal revenue. In the past, these sectors accounted 40 percent of the revenue of state budget”. According to Head of Albanian EITI Secretariat, June 30 is the deadline to release transparency report for 2011. Within October 2014, Albania will publish the 2012 EITI report. Delay was caused from 2013 electoral year and the previous government. “No efforts were done to produce the report”, said Çinari. Preparation of this report, according to the head of Albanian EITI, is performed by an independent administrator who is selected among firms with international reputation to reconcile payments for the fiscal year in question. “Because Albania did not keep the standard with the publication of 2011 EITI report by 2013, in January 2014 the international EITI Board, discussed the extent of Albania suspension from membership in this organization.

An immediate commitment of the ministry and the World Bank support enabled the provision of funds necessary for the continuation of EITI activities and start of work on the new report”, explains Çinari.

Albanian EITI

Objective

Publication of an electronic registry of licenses and concessions; Publication of income from royalties for local governments, in order to improve community life in these areas.

Taxes

2% of income from oil and mining companies

The 2011 EITI report 2011 considers the statements of 67 companies larger operators in the oil, gas and mining sectors. “According to the new report, 10 major oil and gas companies, pay about 80 percent of the total contribution of these entities to the state budget, while 57 other companies pay the remainder (20%)”, notifies the head of Albanian EITI, Dorina Çinari. Conclusion, according to the report, is that the mining sector operates in a growing number of small and medium companies and few large mining companies. About 752 mining permits are reported in 2011, but only 57 of them contributes with 71.8% of the value of production from the mining sector and about 71.4% of the total amount of money generated by the mining sector. The rest of the licensees have almost negligible economic activity. In this report, the revenue collected by the state from companies in the extractive industries sector do not exceed 2 percent of the total national revenue for 2011.