On 31 March 2005 the NGO Coalition on Increasing Transparency in the Extractive Industries released a statement as regards the Government’s first Extractive Industry Transparency Initiative (EITI) reports audited by Deloitte & Touch. It is said in the statement: “At its meeting on March 25, 2005 the Coalition Board analysed the opinions by Deloitte&Touche on the government’s 2003 annual and 2004 first 6-months reports and came to the conclusion that the opinions of the audit company cover the activities of the companies operating under PSA only. Thus, only partial information on the revenues received by Azerbaijan from the exploitation of the oil and gas resources in the year 2003 and 2004 first six months has been disclosed (i.e the operations of SOCAR haven’t been reflected in the report). Such approach contradicts with the principles of EITI and deprives the Azerbaijani community from obtaining ample information on income made from operating the oil and gas reserves, which is the common property of Azeri people.” The Coalition has also noted in its statement that the comments of the audit company allegedly raise a range of serious questions and relates these questions “to some obscure phrases as well as to a number of discrepancies in the figures.”

Samir Sharifov, the Chairman of the National Committee on EITI has provided his comments in connection with this statement: “I believe that the statement of the Coalition concerning the Reports of D&T does not reflect the real status of things. In accordance with the Memorandum of Understanding on implementation of EITI in Azerbaijan that was signed between the governmental Committee on EITI, foreign and local extractive industry companies and NGO Coalition, D&T was submitted both the reports of the Committee on EITI and the reports of 21 local and foreign extractive industry companies. These are not only the companies working under PSA, but also SOCAR, Azgerneft, Shirvan Oil and Anshad Petrol joint ventures.(Please click here for the full list of companies)The reports about payments to the government based on the reporting formats, which had been agreed upon under MOU were submitted by the latter 4 companies also. Thus, the statement by the NGO Coalition claiming the audit Reports to cover only the payments of the PSA companies sounds surprising “to put it mildly.”

Mr. Sharifov reckons that the NGO Coalition misunderstood the Reports by D&T. “The allegation that information presented in audit reports violates the EITI principles is absolutely groundless. Misunderstanding may be considered natural for the process of comprehending the audit reports.” At the same time the Chairman of the Committee stressed that such a statement without any discussion with the MOU parties should be recognized as “hasty and wide from truth.” According to him, any issue which raises a question should be resolved by the joint meetings of the MOU parties, as envisaged by MOU.

Mr. Sharifov informed that the next meeting of the MOU signatories would take place on April 6, 2005. He said that the meeting might be used as a floor for the questions of the MOU parties. According to him, such meeting can solve the problems the NGOs has been facing while comprehending the Reports of the audit firm.