Friday, March 24 2017 20:12
Alina Hovhannisyan

EITI public expert: we want to open all financial flows, both inside the country and in offshore zones

EITI public expert: we want to open all financial flows, both inside the country and in offshore zones

ArmInfo. Our expectations are absolutely clear - we want to open all financial flows both inside the country and sheltered in offshore zones. This opinion was voiced on March 24 by the member of the EITI multi-beneficiary group representing the public interest, and the head of the NGO EcoLur, Inga Zarafyan, referring to the possibilities in the framework of Armenia's accession to the Extractive Industries Transparency Initiative (EITI).

In particular, the expert noted that the established multi-beneficiary group EITI aims to obtain information about all real shareholders of mining enterprises. "We pay special attention to the protection of the environment and the protection of nature, since the mining sector carries very high risks to health and the environment. In particular, we are interested in what kind of financial damage is inflicted, how much the company pays for this damage and how much this amount is comparable to the real income received", the expert noted.

At the same time, Zarafyan stated that within the framework of the initiative the group intends to instill a culture of conducting a transparent business, the financial accountability of which is open not only to state bodies, but also to the public. In this context, the head of EcoLur emphasized: "According to our Declaration on Independence, our natural resources, including subsoil resources, belong not to the state, but to the people".

According to her, Artur Grigoryan (Eco Pravo), Sonna Ayvazyan (Anti-Corruption Center Trans. Arran International), Harutyun Movsisyan (Center for Sustainable Development of Yerevan State University) also entered the multi-beneficiary group EITI on behalf of the public.

On behalf of the business sector, journalists were interviewed by the president of Lydian International, and CEO Howard Stevenson, who noted that the company, prior to joining the EITI initiative, carried out transparent financial reporting available to the public. In his opinion, the desire of the Armenian government to join the initiative of transparency will inspire even greater confidence of the company's shareholders to Armenia, in particular, to its investment environment. "This is a signal of the country's readiness for openness and transparency, which certainly increases investor confidence", he stressed. In the multi-beneficiary group of EITI, Armen Stepanyan (Lydian Armenian), Perch Khachatryan (Zangezour molybdenum combine), Artur Nikogosyan (Agarak molybdenum combine) and Vahe Vardanyan entered the business.

To note, Lydian Armenia is a subsidiary of the British Lydian International, whose shareholders are large international institutional investors from the United States, Great Britain, and a number of European countries, including IFC and EBRD. The Amulsar project is the largest industrial project in Armenia today to develop the Amulsar gold deposit at a total cost of $ 370 million. In August 2016, the start of a project involving the construction and development of the field was launched. Preliminary work has been carried out since 2006. The operation life of the Amulsar will be 10 years and 4 months, annually it is planned to produce an average of 200 thousand ounces of gold (about 10 million tons of ore). Within the framework of the Amulsar program, 1,300 jobs will be created in the construction process (construction works will last about 2 years) and 650-700 jobs throughout the entire operation of the field. The shareholders of the company are also international institutional investors IFC and EBRD. The company's shares are quoted on the Toronto Stock Exchange. The Amulsar deposit is the second largest in Armenia.

To recall, currently, the Government of Armenia cooperates with the US Agency for International Development, the World Bank (WB), in the development of the transparency policy of the mining industry of Armenia. EITI is a coalition of government, companies, civil society, investors and international organizations. It was created in 2002 on the initiative of the then Prime Minister of Great Britain Tony Blair at the conference on sustainable development in Johannesburg. The goal of the Initiative is to increase transparency and improve the quality of governance in extractive industries through periodic publication of reports, compliance with standards and strengthening of institutional capacity. Under the Initiative, mining companies should disclose information on the amounts of their tax and non-tax payments to governments, and governments should publish reports on their income. The transparency of information obtained by EITI standards on the amount of income received allows the parliaments of countries, non-governmental organizations, as well as citizens themselves, to monitor the activities of companies and the Government.  Such civil control not only hampers abuse in this area, but will also contribute to more effective development of countries as a result of improved economic conditions and more active attraction of foreign direct investment. As world experience shows, extractive companies only benefit from greater transparency, thanks to the creation of equal and predictable economic relations. At the 35th meeting of the International Board of the "Extractive Industries Transparency Initiative" in Colombia Bogota on March 9, Armenia was also nominated. At present, EITI covers 52 countries that submitted 332 fiscal reports, which brought a profit of $ 2.3 trillion to the participants of the initiative.


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