Anton Artemyev - PWYP Montreal Conference 2009


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Social investment projects

Anton Artemyev, Soros Foundation Kazakhstan

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Anton Artemyev - PWYP Montreal Conference 2009

  1. 1. Anton Artemyev , Kazakhstan Revenue Watch Program Director Soros Foundation-Kazakhstan The Wider EI Context: Social Investment Projects Publish What You Pay International Conference 2009
  2. 2. <ul><li>“ Extractive companies and local authorities should disclose information about social investments and payments to local budgets made by extractive companies. These payments and investments can be important factors of sustainable social and economic development and thus the public should be involved in the process of managing these revenues” (PWYP Mission Statement, June 2007) </li></ul><ul><li>Projects aimed at the social and economic development of a province funded by the extractive companies in accordance with contractual obligations or agreements with local authorities </li></ul><ul><li>In most cases, recoverable costs to companies (quasi-fiscal activity) </li></ul><ul><li>Regular payments Implemented within a formal framework (contract, MoU, minutes) </li></ul><ul><li>Should be differentiated from ad-hoc sponsorship and charity </li></ul>What is a social investment project in our context?
  3. 3. Five most expensive social investment projects in Kazakhstan <ul><li>A swimming-pool in Atyrau - $14.5 million </li></ul><ul><li>Sports complex in Janaozen - $ 14 million </li></ul><ul><li>Electrification of Atyrau - $12 million </li></ul><ul><li>Drama theater in Uralsk – $10.5 million </li></ul><ul><li>Vocation school in Kulsary - $9 million </li></ul><ul><li>Material payments to the government?? </li></ul>
  4. 4. What are the main problems with social investment projects? <ul><li>Contractual confidentiality – terms and conditions are not quite clear </li></ul><ul><li>Bi-lateral nature, no mechanisms for inclusive decision-making or independent monitoring </li></ul><ul><li>Lack of access to project documentation (including audits) </li></ul><ul><li>In some cases, funds channeled through opaque structures </li></ul><ul><li>Little or no control from the central government </li></ul>
  5. 5. Low transparency leads to low effectiveness <ul><li>A football stadium was built in Atyrau oblast on the swamp and has never been used ever since </li></ul><ul><li>CNPC whose operations are concentrated in water-deficient Aktobe oblast allocates hundreds of thousands of dollars to sponsor the diving federation of Kazakhstan </li></ul><ul><li>Villages in western Kazakhstan oblast located around the huge Karachaganak gas field experience shortages with drinking water and many are not gasified </li></ul>
  6. 6. What do we want to achieve? <ul><li>Three-lateral and inclusive approach to decision-making </li></ul><ul><li>Open and transparent tenders </li></ul><ul><li>Accessibility of all project documentation to civil society groups and empowering them to conduct independent monitoring </li></ul><ul><li>Improving transparency and governance of any structures established to channel the money through </li></ul><ul><li>Integration of social investments into the broader context of EITI in Kazakhstan </li></ul>
  7. 7. How are we achieving that? <ul><li>Pilot monitoring held in 5 resource-rich oblasts in 2005-2009 – to be continued </li></ul><ul><li>Building capacity of local civil society groups in all resource-rich oblasts </li></ul><ul><li>Raising international and national awareness (documentary “Money Gone to the Wind”) </li></ul><ul><li>Advocacy (up to the level of the Prime Minister) </li></ul><ul><li>Supporting establishment of Regional Citizens Advisory Councils (pilots in Aktau, Atyrau) </li></ul><ul><li>Establishment of a Sub-Comminntee on social investments under the National Stakeholders Council on EITI </li></ul>
  8. 8. Ideas for the discussion <ul><li>Can social investments be regarded as material “payments” to the government and therefore be subject to EITI disclosure requirements? </li></ul><ul><li>How can social investments become part of the PWYP international agenda? </li></ul><ul><li>social investments are different from fiscal or non-fiscal payments by companies, a need in a completely different mechanism enabling their greater transparency and inclusion of CSOs into the decison-making. Any ideas are welcome! </li></ul><ul><li>Experience sharing with other groups and local capacity building are crucial (an example of RCAC in Alaska) – any suggestions are welcome! </li></ul>
  9. 9. Thank you ! [email_address]