UWC Calls Upon Ukraine’s Authorities to Stop Debate Immediately on the Draft Law on Oil and Gas Industry Reform
January 30, 2012
UWC CALLS UPON UKRAINIAN AUTHORITIES TO STOP DEBATE IMMEDIATELY ON THE DRAFT LAW ON OIL AND GAS INDUSTRY REFORM
On January 30, 2012, the Ukrainian World Congress (UWC) sent letters to President Viktor Yanukovych, Verkhovna Rada Chairman Volodymyr Lytvyn, and Prime Minister Mykola Azarov, expressing grave concern over the content of a draft law on amendments to certain legislative acts of Ukraine,tabled in the Verkhovna Rada by the Cabinet of Ministers, which provides for the reform of the oil and gas industry.
In particular, the UWC highlighted the proposed amendments to article 7 of the Law of Ukraine on trunk and distribution lines, which currently bans the reorganization (merger, joining, division, separation or transformation) and privatization of state-owned trunk pipeline enterprises.
In the new draft of this article, the references to banning the reorganization and privatization of state-owned trunk pipeline enterprises are repealed and replaced with terminology that broadens the government’s mandate. The new language provides that the reorganization (merger, joining, division, separation or transformation) of state-owned enterprises, of subsidiaries of the National Joint‑Stock Company Naftohaz Ukrayiny – which control shipments via trunk and distribution lines and storage in underground gas facilities – or of the National Joint-Stock Company Naftohaz Ukrayiny, can be achieved by a decision of the Cabinet of Ministers of Ukraine.
The UWC also drew attention to the fact that the National Joint-Stock Company Naftohaz Ukrayiny is one of the companies specifically named in the Law of Ukraine on the list of state-owned properties whose privatization has been prohibited since July 7, 1999.
Noting the strategic significance for Ukraine of its gas sector, the UWC stressed that the proposed amendments to the aforementioned draft law are very dangerous because they would set the stage for the potential privatization of the National Joint-Stock Company Naftohaz Ukrayiny, and could contribute to the loss of state control over the national gas distribution system.
The UWC urged the Ukrainian authorities to stop the debate immediately on this anti-Ukrainian draft law which poses a threat to the security of the energy sector and Ukraine’s independence.