August 6, 2008

Ukrainian Security Council Outlines Coal Industry Development Strategy

Excerpt from report by private Ukrainian news agency UNIAN

Kiev, 5 August: Ukrainian President Viktor Yushchenko has signed a decree on the implementation of a decision by the National Security and Defence Council of 30 May 2008 "On the state and prospects of the coal industry development and urgent measures to increase labour safety in this industry."

The decision was implemented by presidential decree No 685/2008 of 5 August.

The decree mentioned that the National Security and Defence Council had described the current state of the industrial safety in Ukraine's coal industry and miners' labour safety as unsatisfactory, and the present system of state management, coordination and regulating relations between the economic entities in this industry as such, which does not fully comply with the interests of ensuring the country's energy security.

In particular, the council pointed out the disproportion between the level of launching new coal industry facilities and their shutting down. The National Security and Defence Council also noted a low speed of modernization and re-equipping of the coal production along with ineffective use of the state funds for the industry development.

In this connection the National Security and Defence Council has instructed the Ukrainian cabinet to provide drafting of the relevant bills by the end of September 2008 and submit it to the Supreme Council [parliament].

The relevant bills must outline the details of shutting down the coal and mining industry facilities; the principles of the coal market, including implementation of coal sale via stock exchanges, setting the rules and aspects of signing exchange deals, introduction of open coal auctions; on coal-methanol fields, in particular outlining measures for attracting investments to drain gas from coal seams, extraction and use of methane; introducing changes to the Ukrainian law "On basic principles of the state control over economic activity" on excluding from the law influence the relations connected to state control over industrial safety, labour protection, handling industrial explosive materials and mining control; introducing changes to several bills on increase of responsibility for violating laws on labour and labour protection, on deposits, on storage, use and registration of explosives at industries and facilities controlled by special central bodies of the executive power for supervision of labour protection; introducing changes to the Ukrainian law "On obligatory state social insurance from accidents at work and professional diseases that have prompted loss of working ability" that will envisage the duty of an employer in case of technological emergencies of the state level (accidents) that caused people's deaths or deterioration of their health to compensate the expenditures of the social insurance fund, improvement of the tools for economic encouraging of employers for increasing industrial safety; on details of privatization of the coal extracting enterprises, envisaging a tool to attract non-state investments and securing the fulfilment of the sale-purchase agreement provisions by coal enterprises' investors, coordination of the volume of their participation in maintaining the fuel and energy balance of the state; provisions of the state support for the coal industry, envisaging outlining the procedures of economic readjustment of enterprises and improvement of the mechanism of state subsidies for state coal extraction enterprises taking into account the norms and demands by the WTO and the EU.

[Passage omitted: the council's further instruction]

Originally published by UNIAN news agency, Kiev, in Ukrainian 1432 5 Aug 08.

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