To facilitate a second EITI report, Myanmar Oil and Gas Enterprise (MOGE) revealed the details of its other account

10 ตุลาคม 2560

Negotiations are underway for the Myanmar Oil and Gas Enterprise (MOGE) to reveal details of its Other Account to facilitate a second report under the Extractive Industries Transparency Initiative (EITI).

Myanmar published its first EITI report on January 2, 2016, opening up its extractive sector to public scrutiny for the first time. The country’s natural resources include oil and gas, minerals and gems.

The EITI is a global standard which encourages good governance and transparency over the income generated within a country’s extractive sector. By implementing EITI standards, Myanmar also aims to improve its tax collection system.

Although Myanmar has been an EITI member since 2014, its EITI status has yet to be assessed pending results of a second report, which will include information on income generated by the Myanmar oil and gas and mining sectors during the 2014-15 and 2015-16 fiscal years.

Scheduled to be submitted to the EITI board by the end of March 2018, the second report will also include details of MOGE’s Other Account for the two years, U Than Htay Aung, technical expert from the Ministry of Electricity and Energy, told The Myanmar Times.

Since 2012-13, the Ministry of Planning and Finance has allowed State-owned economic enterprises like MOGE to park the rest of their revenues in so-called Other Accounts after paying 45pc of net profits to the government and accounting for raw materials and other operating costs, a 2016 report by the Natural Resource Governance Institute (NRGI) revealed.

In the 2013-14 fiscal year, MOGE retained some K1.3 trillion in revenues in its Other Account after paying just K880 million to the government.

In comparison, the total budget deficit for that year amounted K2.9 trillion, implying that transfers to MOGE’s Other Account were worth 45 pc of the year’s deficit. It was also worth more than national spending on healthcare and education, the same report revealed.

As the Ministry of Energy does not publish information on MOGE’s Other Account, no details are available on how much money the State-owned company has accumulated in the account.

According to the NRGI’s estimates on cumulative transfers made since 2012-13 though, the MOGE could be sitting on as much as K4.6 trillion in its Other Account. However, “it is uncertain what MOGE with the money,” NRGI reported.

As such, the second EITI report could reveal how much money MOGE keeps in its Other Account and who manages it, Myanmar EITI civil societies’ representative Daw Moe Moe Tun told The Myanmar Times during a press conference on October 2.

“Since MOGE was permitted to keep money in the Other Account, how much money has been deposited? Who is managing that account? We all want to know,” she said.

"Even though the MOGE said the Other Account is kept for them to stand on their own feet, they are also spending from that account, so they must surely let the public know how the money is used and managed," Daw Moe Moe Tun added.

Aside from the oil and gas sector, State-owned companies in the mining sector also have Other Accounts. "We will clearly know the amount of money each enterprise has in their Other Accounts when the report is out. According to EITI standards, any revenue from extractive industries regardless of the source or the type must be disclosed," Daw Moe Moe Tun said.

Under the first report, only cash flows into the Other Accounts during 2013-14 were disclosed. However, the report did not reveal the outstanding amounts of the accounts. So if the government can disclose these sums in the second report, there will be more transparency which is better for the industry, U Maw Tun Aung, Myanmar officer from the NRGI told The Myanmar Times.

To facilitate the report, MOGE must submit details of its Other Account to the Ministry of Planning and Finance after getting approval from the Hluttaw. "The account is now being audited by the Auditor General’s office,” U Than Htay Aung said.

In 2013-14, the government collected a total of K3 trillion from the extractive sector. The oil and gas sector contributed 85pc of the total received while gems and jade and other minerals contributed 13pc and 2pc respectively.

The extractive sector accounted for 6pc of GDP, 23.6pc of State revenue and 38.5pc of exports in 2013, according to EITI’s first report.

 

(The Myanmar Times: https://www.mmtimes.com/news/moge-reveal-other-account-details-second-eiti-report.html )