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Duplication of government functions complicates the work of business

11/ 06/ 2020
  As reported by the EBA Energy Committee experts, the current subsoil use legislation duplicates the functions of public authorities in issuing special permits. The cumbersome process of obtaining permits can create additional barriers to attracting potential investors and subsoil users. The duplication of functions arose with the requirement to agree on the issuance of special permits with the Ministry of Energy and Environmental Protection. At the moment, within no more than 15 working days, the Ministry of Energy must submit its proposals for the issuance of permits or extension of their validity, as well as comments on the conditions of subsoil use, compliance with environmental legislation and more. The European Business Association consistently supports the initiatives of the State Service for Geology and Subsoil to introduce equal rules of the game, compliance with the principles of fair competition and deregulation in the field of subsoil use, in particular, transparent auctions for the sale of special permits for subsoil use. According to the EBA member companies, such an agreement is formal, as these functions are already implemented by Gosgeonadra, and given the future division of the Ministry into two departments, it may lead to delays in issuing permits during the transition period. Therefore, the EBA experts propose to make changes to the procedure for issuing permits and eliminate the requirement for Gosgeonadra to agree on the issuance of special permits and extension of its validity with the Ministry of Energy. Also, it is worth noting the importance and effectiveness of the initiatives already implemented by the Ministry of Energy and Gosgeonadra, namely: creating data room of geological information for oil and gas fields under the production sharing agreements; publishing protocols for approval (approbation) of mineral reserves and resources of the State Commission of Ukraine on Mineral Resources; introducing the Single Window for subsoil users for effective communication. At the same time, member companies of the EBA Energy Committee expect the full implementation of the service “Electronic Cabinet for Subsoil Users”, the opening of the Catalog on geological information, and further implementation of the program to improve the field of subsoil use.

As reported by the EBA Energy Committee experts, the current subsoil use legislation duplicates the functions of public authorities in issuing special permits. The cumbersome process of obtaining permits can create additional barriers to attracting potential investors and subsoil users.

The duplication of functions arose with the requirement to agree on the issuance of special permits with the Ministry of Energy and Environmental Protection. At the moment, within no more than 15 working days, the Ministry of Energy must submit its proposals for the issuance of permits or extension of their validity, as well as comments on the conditions of subsoil use, compliance with environmental legislation and more.

The European Business Association consistently supports the initiatives of the State Service for Geology and Subsoil to introduce equal rules of the game, compliance with the principles of fair competition and deregulation in the field of subsoil use, in particular, transparent auctions for the sale of special permits for subsoil use. According to the EBA member companies, such an agreement is formal, as these functions are already implemented by Gosgeonadra, and given the future division of the Ministry into two departments, it may lead to delays in issuing permits during the transition period.

Therefore, the EBA experts propose to make changes to the procedure for issuing permits and eliminate the requirement for Gosgeonadra to agree on the issuance of special permits and extension of its validity with the Ministry of Energy.

Also, it is worth noting the importance and effectiveness of the initiatives already implemented by the Ministry of Energy and Gosgeonadra, namely:

  • creating data room of geological information for oil and gas fields under the production sharing agreements;
  • publishing protocols for approval (approbation) of mineral reserves and resources of the State Commission of Ukraine on Mineral Resources;
  • introducing the Single Window for subsoil users for effective communication.

At the same time, member companies of the EBA Energy Committee expect the full implementation of the service “Electronic Cabinet for Subsoil Users”, the opening of the Catalog on geological information, and further implementation of the program to improve the field of subsoil use.

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