Colombia extractive industry advances transparency

The 17 largest extractive companies in Colombia signed up to implementation of the Extractive Industries Transparency Initiative (EITI) on Monday 26 October 2015. In a meeting convened by Tomás González Estrada, Minister of Energy and Mines, CEOs and senior VPs from the largest hydrocarbon and mining companies committed to participate in the first reporting process under the EITI. Civil society representatives at the EITI MSG, Fabio Velazquez from Foro Nacional por Colombia and Ana Carolina González from Universidad del Externando also attended this meeting.

At the signing ceremony, Minister González Estrada said to Portafolio.co:

“We feel proud because we are improving access and transparency of information in the sector. This has meant great efforts in terms of updating the information infrastructure of state agencies.”

The participation of the CEOs, Juan Carlos Echeverry from Ecopetrol, Roberto Junguito from Carbones del Cerrejón, and Javier La Rosa from Chevron, among many others, was a clear commitment to transparency at the highest corporate level. Together with the government’s strong commitment, the robust participation of industry is an important step to further transparency in in the way the extractive industry is managed. 

Francisco Lloreda, president of the Colombian Oil Association (ACP), in an article published by El Espectador.com noted: “This industry is one the most committed to doing things right, but that does not mean it is infallible. With this instrument, targeted to taxes and fiscal contributions, we want to disclose what the industry contributes in taxes, royalties and other contributions in accordance with contractual obligations”.

EITI Colombia has scheduled the publication of the first EITI Report by the end of year.  It is estimated that one fifth of government revenues come from the extractive industries. The report will allow Colombians to access for the first time a consolidated report on companies’ payments and government receipts from the extractive industry.  The report is also due to include disclosure on payments and receipts from Ecopetrol, the National Oil Company (NOC),  which is 88% state-owned. 

For Fabio Velázquez, Director of the NGO Foro Nacional por Colombia, EITI Reports will enable an informed debate around the management of the extractive sector. Velazquez said to El Espectador.com “Those debates are not about on whether there is or there is not information, but rather on where we are going and if this sector is the spearhead of the economy”.

Mining companies participating in the first EITI report include Drummond, Carbones del Cerrejón, Prodeco, Glencore and Paz del Río, among others. Together, they make Colombia the largest coal producer in Latin-American and forth largest exporter worldwide. Colombia is also a regional leader in nickel production extracted from the Cerromatoso mine operated by BHP Billiton. Colombia produces gold and there are several other projects in the pipeline.  

In El Espectador.com, Santiago Ángel Urdinola, president of the Colombian Mining Association stated that “[citizens] will see the figures by company, by type of payment for any reason and should be able to crosscheck it to know how the government invested that money…”. In fact an EITI Report will put on the table the necessary data to follow the money from production information, tax collection and the way how those revenues are invested. 

Transparency in corporate reporting will be a central theme in the 7^th EITI Global Conference in Lima.

The signatory companies were: Cerrejon Zona Norte; Drummond Ltda; Prodeco; Cerro Matoso SA; Peace River mines; Mineros SA. The Oil & Gas companies were: ECOPETROL; Meta Petroleum Corp., Pacific Stratus Energy Colombia Corp .; Petrominerales Colombia Corp Sucursal Colombia; Equion Energia Limited; Perenco Colombia Oil and Gas Limited; CNE Oil & Gas; Geoproduction Oil and Gas Company of Colombia; Chevron Petroleum Company; Hocol and Mansarovar Energy Colombia Ltda.