The European Business Association highlights the problematic aspects that arise during the state audit of strategic minerals in Ukraine. Since the beginning of the year, the government has expanded the powers of regulatory bodies for inspections, leading to increased monitoring of special permits for subsoil use, particularly those related to strategic and critical resources, as well as oil and gas fields.
This is reported by Finway
Expansion of Inspections and Business Position
According to a decision by the Cabinet of Ministers, state supervision has gained broader capabilities for conducting unscheduled inspections — currently, the audit covers 38 active special permits. Member companies of the European Business Association’s Subsoil Use Committee support the need to enhance the efficiency of control, but point out the emergence of several contentious issues during such inspections.
In particular, state geological control authorities note in their reports alleged non-fulfillment of works stipulated in the programs, which are part of the special permits for subsoil use. However, the current Code of Ukraine on Subsoil assumes automatic extension of the validity of these permits and the completion of works during martial law and for an additional three months after its conclusion if the deadlines expired during military actions.
Consequences for Business Reputation and Investment Climate
Experts emphasize that formal or ambiguous interpretations of legislative norms can lead to companies being designated as “violators.” This, in turn, creates significant risks for businesses: it negatively impacts business reputation, complicates cooperation with banks and partners, and significantly hinders the attraction of international investments. In a situation where the strategic and critical minerals sector requires substantial financial inflows, such approaches can seriously diminish its investment attractiveness.
Experts from the EBA emphasize that decisions on the automatic extension of deadlines were made considering the real threats of martial law, including security risks, constant shelling, personnel shortages, and logistical problems. Military actions significantly affect the ability to carry out works regardless of the location of the deposits.
“The EBA remains open to constructive dialogue with government authorities and is ready to provide expert support to develop balanced solutions and address problematic issues in the field of subsoil use,” the press release concludes.