Colombia produces oil, gas and coal, as well as minerals like gold, silver and platinum. The extractive sector accounted for 56% of the country’s export earnings, nearly 11% of government revenues and 32% of the country’s foreign direct investments in 2019. While mining production has increased by over 6% in 2019 due to a rise in gold outputs, coal production has reduced following legal conflicts with local indigenous communities.
Colombia is using the EITI platform to support the government’s anti-corruption efforts, for example by contributing to the development of the Economic Growth law, which introduced regulations related to beneficial ownership disclosure in the extractive sector.
A report published in 2021 by Transparencia por Colombia and Foro National por Colombia, analyses the conditions for citizens to participate in the oversight of the extractive sector and examines the dynamics of interaction between stakeholders in decision-making.
A study, published by EITI Colombia and GIZ in 2020, examines the impact of COVID-19 on Colombia’s extractive sector and includes recommendations to address related challenges.
In 2019, EITI Colombia and GIZ prepared a practical guide and an explanatory video to raise awareness on the 14 different types of environmental payments that extractives companies must comply with. In 2018, companies paid a total of USD 2.9 million in environmental payments and 88,500 hectares were replanted, according to EITI reporting.
The EITI is important for us and we are keen to learn from EITI and adopt state of the art on transparency practices and good governance of the oil, gas and mining sector.
The sector is regulated by the Ministry of Mines and Energy. The Ministry of environment and sustainable development oversees environmental management of the extractive sector, and the Ministry of Finance manages royalties and taxes.
Licenses and contracts
Colombia’s hydrocarbon sector operates under a contractual regime. Contracts are awarded by the National Hydrocarbons Agency (ANH), and take the form of either an exploration and production contract or a technical evaluation contract. All oil and gas contracts are published on the ANH website.
Mining licenses and contracts are awarded on a first come first served basis and granted by the National Mining Agency (ANM) in accordance with the Mining Code. A description of the types of mining licenses and contracts, as well as the criteria used to award them, is available on the EITI Colombia website.
Colombia’s tax reform bill, enacted in September 2021, establishes the creation of a beneficial owners register operated by the National Tax and Customs Directorate (DIAN). The bill provides a defines a beneficial owner as owning 5% or more of shares, voting rights or benefits and includes an identification system for unincorporated structures.
In October 2020, the EITI developed a tool in partnership with Directorio Legislativo to identify corruption risks related to politically exposed persons (PEPs) in Colombia. The system cross-checks beneficial ownership data for extractive companies with financial disclosures to generates red flags, such as potential conflicts of interest in licensing and contracting. The project was awarded second place in the IMF Anti-Corruption Challenge.
In 2019 and 2020, the legislative authorities in Colombia modified the General Royalties System to increase the allocation of extractive revenues in regions that host extractive activities. Royalties from the extractive sector are distributed as follows:
25% to municipal and departmental authorities;
15% to a local investment fund and 34% to regional investment fund;
23% to various funds dedicated to innovation, sustainable development, peace and reconciliation fund, etc.;
3% to auditing and control.
The National Department of Planning hosts Mapa Regalías, an online tool which tracks the execution of projects benefitting from extractive revenues at the local level.
EITI implementation
Governance
EITI Colombia is administered by the Colombia Multi-Stakeholder Group (MSG), also known as the Comité Tripartito Nacional. The MSG is hosted by the Ministry of Mines and Energy and chaired by the Vice Minister of Mines, Ms Sandra Sandoval. The MSG is supported by the Technical Support Team (GAT), which supports the execution of the operational plan, and the National Technical Secretariat (STN), which supports the Vice Ministry of Mines with its National Action Plan.
Colombia was found to have made satisfactory progress in implementing the 2016 EITI Standard in June 2018, following its first Validation. Colombia’s next Validation is expected to commence in October 2022.