Billions of dollar credits for a gas pipeline linking Azerbaijan with Europe are at risk
Azerbaijan’s membership in the Extractive Industries Transparency Initiative (EITI) has been suspended. This may pose risk to billions of dollar credits for a gas pipeline linking Azerbaijan with Europe.
The aforesaid decision was made at the organization’s international board session, in Bogotá(Colombia), on March 9.
The Extractive Industries Transparency Initiative (EITI) is an international organization, uniting the governments, companies and nongovernmental groups. The aim of this group is to promote more efficient management in resource-rich countries.
In particular, the countries-members of this organization are committed to ensure open public debate in the community and media on the methods of oil and gas extraction, selling procedure, as well as on the system of distribution of revenues earned.
The member-countries, in turn, get positive rating, which makes it easier to obtain credits from the international financial institutions and offers other economic benefits.
Azerbaijan was one of the first oil producing countries that joined the EITI in 2005, 2 years after its foundation.
The problems began in 2014, when Azerbaijan started making decisions that restricted the freedom of the local NGOs.
Namely, the Extractive Industries Transparency Initiative demanded from the Azerbaijani government as follows:
- to simplify the system of registration of grants and donors;
- to lift travel bans imposed on civil society activists;
- to unfreeze their banking accounts.
However, after a while, the EITI considered that Azerbaijani government failed to meet the requirements. Then, in April 2015, Azerbaijan’s status in the organization was downgraded to a candidate country.
It was then that a plan on particularmeasures to improve the situation was proposed, allowing to restitute Azerbaijan’s full membership in the organization.
The EITI international board decided to give Baku time till March 2017. However, as the EITI believes, the steps taken by Azerbaijan were insufficient.
Namely, the organization pointed to the following violations, due to which Azerbaijan’s membership in the international organization has been finally suspended:
- local NGOs have either to confirm their registration or undergo re-registration once in 2 years;
- they are also liable to register all obtained grants with the Ministry of Justice;
- foreign donors should officially register individual grants.
Azerbaijan, in turn, claimed, it had partially met this requirement. A large group of NGOs, that are believed to be pro-governmental, also confirmed the aforesaid.
However, a group of well-known independent NGOs denounced those allegations and produced to the EITI the evidence that the activity of independent groups in the country was still impossible. In particular, many activists have been put on the so-called ‘stop-list’ and can’t leave the country, whereas the accounts of some NGOs haven’t been de-blocked so far.
QubadIbadoglu, Coordinator of the Board of Azerbaijani NGO Coalition and also the EITI international board member, participated in the EITI session in Bogotá.
QubadIbadoglu wrote on his Facebook page as follows:
“I believe that Azerbaijan’s expulsion from such a prestigious organization…will lead to serious consequences. The government should do everything possible to maintain its membership in the EITI and continue the initiated reforms.Otherwise, it will further worsen the already poor investment environment. The credit rating of both, the country and the national companies operating in the extractive industry, will drop. This, in turn, will make it hard to obtain loans from the international financial organizations.”
- EITI also suspended membership to 3 more countries: Tajikistan, Kyrgyzstan and the Solomon Islands;
- Armenia has become a new, 52nd member of the organization, under the condition that its reports wouldn’t cover the activity carried out in NagornoKarabakh and the controlled areas around it.