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The EITI inspires a culture of transparency

Does Kazakhstan need to publish standalone EITI reports anymore?

Kazakhstan has implemented the EITI for ten years, and is seen as a flagship for natural resource transparency in the region. EITI reports have significantly enhanced information in the extractive sector, disclosing disaggregated revenue data and data on social investments, local content, production, exports, etc. Most of this information was not available to the public before.

The EITI has contributed to a culture of openness in government agencies. Increasingly, more information is being moved online, including submission of applications for various permits, announcements of tenders and tender results, data on geological information, licensed areas (cadastre), etc.

Kazakhstan has made significant progress in making the information required by the EITI Standard available through online government and corporate reporting systems. Making transparency an integral and routine feature of the governance and management systems is what is often called mainstreaming. Kazakhstan’s National Stakeholder Council (NSC - local multi-stakeholder group) recognised limited usability and high cost of paper reporting. Instead of focusing on collecting data for an annual reconciliation of revenues, the NSC prefers to invest its time and money into analysing the data and making recommendations of the governance of natural resource.

Company data that is currently included in the EITI Report is also available through the Unified State System for Subsoil Use Management of Kazakhstan (EGSU portal). Annually all the extractive companies undertake an independent external audit. Their audited financial statements are uploaded to the EGSU portal or can be accessed via the companies’ websites.

Similarly, the government entities disclose revenues through the EGSU portal and the State Revenue Committee’s website. However, it is the Independent Administrator, hired on an annual basis, that inputs the government revenue data from the State Revenue Committee into the EGSU portal. In the long run, the revenue data should be available directly on the State Revenue Committee website.

Government and company data reliability is strong, as illustrated by insignificant discrepancies and audited financial statements published online. The Accounts Committee audits the government entities, but thus far it is not clear if the audit includes the assessment of the revenues received or if the audit only includes the financial control over the State Budget execution.

Notwithstanding this progress, some transparency gaps remain, in particular with regards to the many state-owned companies which control large parts of the Kazakh economy, including the extractive industries. In addition to this, the National Stakeholder Council could explore ways to ensure public access to the licensing processes, the beneficial ownership data and transportation revenues.

Ernst & Young undertook a study that concluded that Kazakhstan the online reporting system is effective and that the country could be ready to do without standalone EITI reports within a year. The National Stakeholder Council is therefore considering submitting a request to the EITI Board to mainstream the EITI, starting with the 2017 fiscal data.