31 May 2004 12:43
MINISTRY CONCEIVES NEW SUBSURFACE LAW
MOSCOW. May 31 (Interfax) - The Russian Natural Resources Ministry is close to completing the draft of a new
subsurface development law designed to stamp out corruption and make this particular market more transparent, Yury
Trutnev, the natural resources minister, said during a meeting with President Vladimir Putin.
Trutnev said he wanted to consult with the president on a number of issues because "essentially a mechanism for
subsurface resources use that carries a lot of weight in the economy is being reformed."
"Quite a lot of problems have built up in relations between the state and mineral developers," Trutnev
said. At issue are "corruption and the opacity of the market," he said, adding that President Putin himself
had made that point.
The resources ministry is proposing to "dispense with contests [for natural resource rights] as such
altogether," Trutnev said.
In addition, "production-sharing agreements can be awarded only if auctions have taken place and not produced
any winners," he said.
Trutnev also said "the mechanism of license agreements practically does not work: of the 16,000 license
agreements in effect in Russia, not one license was revoked last year."
The licensing mechanism does not contain distinct requirements of mineral developers, there are no clear-cut
recommendations as to the grounds on which licenses can be revoked. Consequently, the revoking of licenses is being used
as a threat which, however, can practically never be carried out, Trutnev said.
The minister alerted Putin to "fairly serious problems with the replenishment of the mineral
resource-base." So the new law would "offer economic mechanisms to stimulate investments in geological
exploration."
Yet another problem with mineral development is that "this market is on the whole too monopolized," Trutnev
said. "The situation that has arisen with transfer prices and cartel agreements between major mineral developers
practically prevents the state from controlling the situation from the point of view of tax payments and domestic market
prices," he said.
As for differentiating the mineral extraction tax, which the press is writing about so often, Trutnev said this would
be "fairly difficult to implement in its entirety considering all the characteristics and mineral deposits and
minerals [themselves]."
"We think a transition model which takes all the opportunities to develop depleted fields is possible,"
Trutnev said.
"There is another problem today - mineral deposits are being abandoned before they have been worked out,"
Trutnev said.
The president suggested discussing these issues in more detail, then the meeting proceeded behind closed doors.
[Interfax] |
RUSSIA IN FACTS
