Experts on EU-Ukraine Association Agreement: There are more talks and populism, than real work


Kyiv, September 7, 2016. How has Ukraine spent summer, how is it implementing the EU Association Agreement and does the country continue to approximate its legislation to the European standards? Experts tried answers these questions during discussions at Ukraine Crisis Media Center.

Gas sector
Despite our progressive legislation a pace of changes leaves much to be desired. According to Roman Nitsovych, head of DiXi Group projects and programs, currently, there is no independent regulator, so it is impossible to influence the monopolies and abuses from suppliers. The issue of gas pipelines has not been solved: how will work a methodology for internal suppliers? It is unclear whether the gas distribution networks will be used on a leasehold or concession basis. And without this it is impossible to talk about the competition. It is planned to restructure “Naftogaz” (national oil and gas company – UCMC note) and to separate the transport function and the storage function. New enterprises will be created. But currently, a lawsuit against “Gazprom” is being continued, and this external cause, independent of government, is protracting the above processes,” noted Mr. Nitsovych.

Electric-power industry
Svitlana Golikova, independent expert, head of “TransEnergoConsulting,” noted that the corresponding laws on a regulator and electricity market had to be adopted to implement the Association Agreement and the Directives in the field of electric power. “It’s rather a political struggle than meaningful actions or organizational and legal issues,” noted the expert.

According to her, although the law on the electricity market had to work last year, it does not function. In fact, this is a legal nonsense: the law has not been implemented and no one bears responsibility for this. At the same time no one cancels the law.

According to Ms. Golikova, among the advantages is switching low-voltage networks from 60 kV to 20 kV, which will effect savings. This should also encourage consumers in saving energy and using counters.

According to the expert, the network security issue is also very important. “The Ukrainian electric power system is to enter the European system. Recently, because of an accident in Russia (currently Ukraine is united in a single system with Russia and the Baltic countries – UCMC), Ukraine had to maintain the system in manual mode, because Russia hurled all effort into emergency work. Nobody has counted the price of this incident. In the European system, such cases are calculated economically: who owes and how much,” explained Ms. Golikova.

Natalia Andrusevych, CEO of Resource and Analysis Center “Society and Environment,” informed that there are plans to implement the decrees in the environmental field. “Over the past three months three European integration projects have been adopted and the Paris Agreement has been ratified. We also see interest of the minister,” explained Ms. Andrusevych.

She also noted some progress in the ambient air issue. However, as to the protection of birds, Ukraine goes to the limit.

Public utility sector
According to Tetyana Boiko, coordinator of public utilities & energy programs, civil network “OPORA”, there is more populism and promises than actions and documents in Ukraine today. Draft laws on energy efficient buildings and commercial accounting have been elaborated, but they have been roaming over Parliament for about five years: MPs either do not support them or their term changes and the papers disappear.

Today there is a unified heat loans program – UAH 900 million. But the demand exceeded the offer: the money was insufficient. The government promised to allocate additional UAH 100 million in July. “There is still no new resolution on these 100 million, the program for individuals is blocked because there is no money. According to our information, there was no extra money, it was planned to take them from condominiums. But to do this would mean that people who took million-hryvnia loans for homes will take buses and arrive at the Cabinet tomorrow,” said Ms. Boiko.

As for the Concept of energy efficiency, there are still no action plan and regulations to implement it, she said. Social protection is the government’s priority. “People who get subsidies are not interested in energy efficiency measures. They are not interested in reducing their energy consumption, but in further getting money from the state,” added Tetyana Boiko.

Oil sector
According to Gennadiy Ryabtsev, special projects director, scientific & technical center “Psykhea”, “summer in the oil sector passed without reforms: everything is postponed again and again, new workgroups and new draft documents are created, but the government does not solve any problems.” He explained that commitments in the oil sector are postponed in time. “This has played a cruel joke. Establishment of minimum stocks of oil and oil products requires not only purchasing products, but also an appropriate infrastructure, which cannot be formed within twelve or eighteen months,” stressed Mr. Ryabtsev.

Business climate
Valentyna Belyakova, director of European-Ukrainian Energy Agency, noted the progress in the country’s business climate. In particular, it includes transparency of mining companies, promoting a law on environmental impact assessment: now it is the obligation of companies. Also, the EU project on administrative assistance in legislative approximation to EU requirements is being implemented. Speaking about the achievements, Ms. Belyakova also mentioned the launch of a single window at the customs, Prozorro activities and opening of an office for investment promotion in Ukraine.