Azerbaijan Announces Withdrawal from EITI

Following the decision of the Board of the Extractive Industries Transparency Initiative (EITI) to suspend Azerbaijan's membership, the head of the government delegation, Shahmar Movsumov, issued a statement on the country's withdrawal from the EITI. The statement says as follows:

 “Azerbaijan was one of the countries that achieved a lot of “firsts” in EITI. It was the first country to join the EITI and support the international efforts for higher transparency in the extractive industries in 2003. It was the first country to publish the world’s first EITI Report in 2005 and the first Compliant EITI country in 2009.

From the very beginning the government of Azerbaijan was strongly committed to the EITI and its principles, and constantly took steps to underpin positive environment for the smooth implementation of the Initiative. Azerbaijan was able to make difference in each EITI report since then by putting multi-stakeholder efforts together to advance the process as much as possible. In total 20 EITI reports were reconciled and disclosed in Azerbaijan (2003-2015).

The State Oil Fund of the Republic of Azerbaijan for the successful implementation of EITI became a winner of the 2007 United Nations Public Service Award in the category of "Improving transparency, accountability and responsiveness in the Public Service".

In order to give a strong backing to EITI process and rise it’s momentum at the international level the Government of Azerbaijan initiated and tabled United Nations General Assembly Resolution on EITI, which on 11 September, 2008 was adopted by consensus.

At its latest meeting in Astana the Board agreed that Azerbaijan had made meaningful progress in implementing the 2016 EITI Standard, and with considerable improvements across several individual requirements compared to the first Validation in 2015. According to the decision of the Board Azerbaijan maintained its “Candidate” status. The Board assigned a number of new corrective actions to be implemented till the next EITI Board meeting.

We strongly believe that as a result of significant changes made to the current regulations Azerbaijan was able to accomplish the implementation of all corrective actions.  We consider Board’s decision on suspension of Azerbaijan as an unfair one. The mandate of the EITI has been significantly shifted far from transparency and accountability in extractive sectors. The irrelevant facts introduced by different advocacy groups on various occasions show that the Initiative failed to stick to its original mission and objectives.

In 2003 Azerbaijan has signed up to the principles of revenue transparency and revenue governance and remains strongly committed to those principles of good governance, transparencyand accountablityin extractive industries. Azerbaijan will continue to disclose all the information related to revenues received from extractive industries to the full extent. However, it is with a deep regret I have to officially anounce that Azerbaijan is leaving EITI. I kindly ask the International Secretariat to remove Azerbaijan from the list of EITI implementing countries effective immediately. I wish you all success in your future endevours.”

A member of the Azerbaijani NGO Coalition on increasing transparency in the extractive industries, Sabit Baghirov, commenting on Turan what is happening, noted that the EITI insisted on changes in Azerbaijani legislation providing free conditions for donor activities and grants.

The government simplified the system of registration of grants and donors with acts of the Cabinet of Ministers. However, the EITI considered these measures inadequate.

The government had two options: either to implement the EITI recommendations, or to prove that these recommendations do not comply with EITI principles and standards, Baghirov said.

When asked about the consequences for Azerbaijan after the termination of membership in the EITI, Baghirov said this decision would damage the image of the country and negatively impact the investment and credit ratings.

"Of course, the issuance of international loans to Azerbaijan will not stop, but the terms of borrowing will be tightened," Baghirov said.

In turn, Executive Secretary of the REAL movement Natig Jafarli called the EITI decision the result of the authorities' policy "over narrowing the field for civil society" over the last five years.

This decision will have a negative impact on the economy of Azerbaijan and will lower the country's credit and investment ratings. -06D-