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Achieving transparency, a step by step process

Olena Pavlenko, President of the Ukrainian think-tank DiXi Group and Chair of the Publish What You Pay’s Global Council.

A decade of campaigning has led to a new, groundbreaking transparency law in Ukraine. Olena Pavlenko outlines the lessons learned along the way.

On December 16, 2021, Ukraine’s parliament passed one of the  most progressive oil, gas and mining transparency laws in the world.

This means that from now on, all extractive contracts between authorities and companies must be disclosed.

In a country with vast hydrocarbon and mineral reserves and where extractives help drive the economy, the impact of this legislation, if implemented, could be immense.

In Ukraine – as elsewhere – the more data that the extractive sector discloses, the harder it is for the government or companies to hide unfair deals. Disclosure prevents corruption, and makes it easier to detect them. It also means people can assess how their natural resources are being governed – who is benefitting from them, and by how much.

Around the world, PWYP members are pushing for similar transparency laws, campaigning under the banner of #DiscloseTheDeal. So what potential lessons does our journey –  and the tactics we used and the challenges we faced along the way – hold? 

Building momentum

For those in the early stages of campaigning for an open and accountable extractive sector, it’s important to note that progressive laws do not appear overnight. Rather, they come incrementally, step by step and through the effort and goodwill of different actors –  from companies to civil society organisations (CSOs) to governments – until the momentum for change is irresistible. 

In Ukraine, we formed important alliances with other CSOs who shared our goals, for example the Reanimation Package of Reform and Energo Transparency Association (our national PWYP coalition), and together we organised events, prepared data and infographics, and sent statements to members of Parliament and others.  

Along the way, we learned that the reform process can be complex, but that the people supporting it can be found at all levels. 

For instance, support for an idea may come from one level of a company’s management, or one high-ranking public official or government minister, but not another. As such, taking a combative or antagonistic stance towards a whole ministry would be counter-productive. We were supported by many officials from various ministries, who in the end, formed the backbone of the team which helped the new law become reality.

One of our biggest challenges however, was the rapid turnover of government officials: in five years we had seven different ministers, and with each new appointment we had to raise their awareness of the issues, of how the Extractive Industries Transparency Initiative (EITI) works, and why it is so important.

Building on successive victories 

The path to the new transparency law had notable victories along the way.

In 2013, for instance, Ukraine joined the EITI. This was followed in 2015 by the passing of a minor – but significant – law which obliged companies in the oil and gas production sector to report under the EITI Standard.

Following this, we obtained a more comprehensive second law in 2018, which supported opening data throughout the extractive sector, and outlined the procedure for cooperation between companies, the government and the public. Then, following other important legislative staging posts, a third law was adopted, which not only took account of problems with the EITI Standard implementation, but introduced stronger requirements: the full opening of contracts, taking account of gender in reporting, paying greater attention to environmental degradation from extractive activities. 

Finally, Ukraine has legislation which is on a par with the most open transparency laws in the world, such as those in Mexico, the Netherlands, the UK, Germany and Mongolia.

Accountability and transparency can seem like abstract concepts, but applying them through this new law will make them real, and bring concrete, far-reaching impacts. 

Recently, for example, potential investors have sought to sign a Production Sharing Agreement (PSA) on a lithium field in the centre of Ukraine. Local communities need to understand the impact that this project could have on their revenues, on their land and on their rights. And to do so, they need to assess key data in the contract. Its publication will give us the opportunity to see how the new law works in practice and whether the local populations will really be able to access all the information they are now entitled to have. 

At times in the last decade, the prospect that Ukraine would pass groundbreaking transparency laws for its extractive sector, seemed remote. But we never lost faith that it could happen. If we have one message for PWYP members around the world striving towards the same goal, it is that they should never stop believing in the possibility of change, or working towards it. 

Yet for us, getting the new law in place marks the end of one journey and the beginning of another. Now our coalition will monitor how the law is applied, and if it isn’t done so fully and robustly, hold those responsible to account.  

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