Amendments to the international index in connection with Azerbaijan

Baku/28.04.22/Turan: The leadership of the international organization NRGI (Natural Resource Governance Institute - Natural Resource Management Institute) recognized the validity of the recommendations made by the NGO Coalition for Improving Transparency in the Extractive Industries (EITI) regarding the report "Azerbaijan Natural Resource Governance Index for 2021 » (RGI), prepared by an NGO (Non-Governmental Organization) specializing in the study of global issues related to the management of natural resources in different countries.

It should be noted that due to the amendments addressed to the RGI by the EITI Coalition, changes were made to four important points (indicators) presented in the report.

Fuad Hasanov, is member of NGO Coalition of the EITI and the member of the Publish What You Pay (PWYP) Global Council told about this in the “Difficult Question” program.

First of all, it should be noted that NRGI recognized as correct the remark of the NGO Coalition about the absence of an authoritative, independent audit of the financial statements of the State Oil Fund of Azerbaijan (SOFAR) after 2017 (when Azerbaijan left the EITI), Hasanov said. Therefore, the assessment “SOFAZ has also improved its reporting rules” will be removed from the RGI profile for Azerbaijan for 2021.

However, Hasanov pointed out that the law on accounting requires the publication of an annual report, as well as an annual external financial audit of SOFAZ's financial statements.

Regarding the sub-component “Taxation”, he noted that an inaccuracy was made in the Report, and therefore the scores are reduced from 70 (1.2.8 b) to 40 points (1.2.8 d - “Country has not published an EITI report”).

In addition, according to him, NRGI took into account the opinion of EITI Coalition experts that the statement in the RGI report for 2021 that the majority of the SOCAR Board and Supervisory Board members are independent of the government is not true.

“It was also taken into account that the Supervisory Board of SOCAR was established by the decree of the President of Azerbaijan in January 2021, and therefore the correct score for the period 2019-2020, estimated in RGI 2021, is equal to C, that is, 0".

Hasanov also noted that NRGI recognized the EITI Coalition's amendment that "SOCAR has not defined its obligation to disclose its annual reports to the public, and that this nuance undermines the requirement to improve the legal framework to ensure transparency in resource management."

"NRGI has found support for this amendment in Article 12.3 of the Accounting Act, which requires all entities to disclose annual accounts in the public interest," the activist said.—0—