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Lima, Peru

Peru

Status
Suspended for missing deadline
Joined
27 September 2007
Latest validation
2019
Latest data from
2016
Visit the country website

Overview and role of the EITI

Peru is the second largest producer of copper in the world and a significant producer of gold, zinc and natural gas. The extractive sector plays an important role in the country’s economy, and accounted for 12.5% of the total GDP and about 67% of the country's total exports in 2018. The expansion of mining projects such as Toromocho, Mina Justa and Quellaveco have contributed to a surge in investments, which increased to almost USD 5 billion in 2018.

Peru’s government considers the development and good governance of natural resources a priority. This is underscored by Mining Vision 2030, an initiative by the Ministry of Energy and Mines which aims to establish guidelines for inclusive and sustainable natural resource management. Nonetheless, extractive projects have been a trigger for social conflict, especially in communities hosting extractive activities. EITI reporting revealed that more than 80% of documented environmental/social conflicts were related to the mining sector. 

In this context, Peru has been using the EITI process to address key community concerns, in particular on social and environmental issues. EITI Perú is also working to strengthen transparency and accountability in the distribution and use of extractive revenues by regional and local authorities. For this purpose, five regional EITI platforms have been established in Apurímac, Arequipa, Loreto, Moquegua and Piura.  

Economic contribution of the extractive industries

11%
to government revenues
67%
to exports
12.5%
to GDP
1.2%
to employment
  • Step 1
  • Step 2
  • Step 3

Download country data

Download open data on government and company revenues, revenues by revenue stream and indicator, summary data and more.


Innovations and policy reforms

  • EITI Peru has developed a number of regional studies and communications materials on the governance and use of extractive revenues in Arequipa, Loreto, Moquegua and Piura.
  • Peru’s second Validation showed that the country made efforts to ensure that extractives data disclosed by companies and government entities is subject to audit and assurance procedures, in line with international standards.

EITI Piura has opened doors for us to engage in truly informed dialogue with our regional government on the use of the money received from our hydrocarbons.

Francisco Cordova Sanchez CSO activist in Piura

Extractive sector data

Production and exports

Copper

Revenue collection

Level of detail 2

Revenue distribution

2016
Standardised revenue types

Top paying companies

2016

Extractive sector management

License and contracts

Mining concessions are granted on a first come first served basis by the Geological, Mining and Metallurgical Institute (INGEMMET). The agency is also responsible for terminating concessions and systematising information through the national mining cadastre. INGEMMET also publishes some contracts on its website.

Oil and gas concessions are awarded through a bidding process and administered by PeruPetro under the Ministry of Energy and Mines (MINEM). PeruPetro also publishes some contracts on its website.

Beneficial ownership

In 2018, Peru’s government enacted a new law (Decreto Legislativo 1372) requiring companies to disclose beneficial ownership information of legal persons and/or legal entities holding at least 10% of the entity’s capital. Peru also has regulation to prevent money laundering and financing of terrorism, indirect ownership, and political exposed persons (PEPs). Peru has a Financial Intelligence Unit as per Act No. 27693. However, no disclosures of beneficial owners have been made to date.

Revenue distribution

In 2001, Peru established a law whereby 50% of mining, oil and gas revenues are to be distributed to the regions and municipalities hosting extractive projects. These revenues consist of royalties and “canons” (a portion of corporate income tax), and are distributed as follows:

  • 10% of the total canons and 40% of the total royalties to local governments of the municipality where the resource is exploited;
  • 25% of the total canons and 25% of the total royalties to local governments of the district and provincial municipalities where the natural resource is exploited. Of these shares, regional governments provide 20% of the total canon collected to public universities in the regions where the natural resource is exploited and 10% to higher education institutions of the region. 

EITI implementation

Governance

EITI Peru is governed by the Peru Multi-Stakeholder Group (MSG), also known as the Comisión Multisectorial Permanente. The MSG is hosted by the Ministry of Energy and Mines and chaired by the Vice Minister of Mines.

Timeline

Validation

Peru was found to have made meaningful progress with considerable improvements in implementing the 2016 EITI Standard in June 2019, following its second Validation. Peru has fully addressed most of the six corrective actions identified in its previous Validation. The next Validation is expected to commence in April 2022.

Scorecard

Latest Validation: 17 June 2019
Year

Assessment of EITI requirements

  • Not met
  • Partly met
  • Mostly met
  • Fully met
  • Exceeded
Scorecard by requirement View more Assessment View more

Overall Progress

MSG oversight

1.1Government engagement

The Ministry of Energy and Mines and Mines has led the Government’s active participation in the EITI. It has maintained a satisfactory level of engagement, appointed senior officials to lead, and coordinated and mobilised resources for EITI implementation. Stakeholders confirmed that they trust and have confidence in the appointed officials

1.2Industry engagement

There is an enabling environment for company participation. Companies are actively and effectively engaged in the EITI process. Obstacles to company participation regarding taxpayer confidentiality provisions have successfully addressed.

1.3Civil society engagement

Civil society is actively and effectively engaged in the EITI process. There is an enabling environment for civil society participation. The fundamental rights of civil society actors are respected and there are no major obstacles to their participation in EITI related activities and discussions. Civil society stakeholders speak freely, collaborate with each other, are not restrained, coerced or reprimanded as result of their EITI-related activities. There is, however, scope to increase civil society engagement in the EITI beyond the multi-stakeholder group.

1.4MSG governance

The CMPE comprises relevant actors and appears to function well with an inclusive decision-making process. Stakeholders have identified opportunities for reviewing the representation of government entities. The ToRs for the CMPE largely addresses the requirements of the EITI Standard and appears to be followed in practice.

1.5Work plan

Peru has an updated work plan that sets out the key aspects of the EITI process, aligned with national priorities. The work plan is publicly accessible with specific and measurable implementation objectives. Stakeholders and companies were adequately engaged in the EITI work plan´s preparation.

Licenses and contracts

2.1Legal framework

Comprehensive disclosure of relevant laws, regulations and fiscal regime in the 2014 Report. Improvement in the disclosure vis-ávis the 2013 Report.

2.2License allocations

While the E-cadastre system appears to comprehensively address license allocation in the mining sector, the issue of licence transfers in the hydrocarbon sector has not been addressed by the CMPE. Similarly, in the oil and gas sector, substantial information is publically available. However, the comprehensiveness of this information and the disclosure of license transfers has not been addressed by the CMPE.

2.3License register

The information required is publically available through the webpages of INGEMMET and Perupetro.

2.4Policy on contract disclosure

Peru’s approach to contract transparency is exemplary. Contracts are publically available via MINEM or Perupetro’s websites. The EITI Reports provide an overview of the mining projects that have signed special contracts for guarantees and promotion of investments and links to hydrocarbon contracts.

2.5Beneficial ownership

Not assessed

There is no evidence that the CMPE has discussed this topic in any detail.

2.6State participation

With respect to Activos Mineros, EITI Peru provided a detailed explanation of the prevailing rules and practices regarding the financial relationship between this state-owned enterprise and the government. Activos Mineros has no ownership in any operating company within the country’s extractive sector. EITI Peru provided a clear description of Perupetro’s activities and revenues, including the operation of Block Z-2B. The coverage of royalty payments from license contracts appears to be comprehensive.

Monitoring production

3.1Exploration data

The EITI Reports provides an overview of exploration including significant exploration activities. Links to further reading are provided. Stakeholders were satisfied with these disclosures.

3.2Production data

Production data by commodity is included in Peru’s EITI reports and on government websites

3.3Export data

The EITI Report contains the value of exports by main commodities. Although export volumes are not disclosed as part of the EITI Report, the International Secretariat has confirmed this data is readily available through other official publications.

Revenue collection

4.1Comprehensiveness

EITI Peru have agreed a definition of materiality in terms of the value of production. However, the EITI Board has been clear that basing the definition of materiality on the value of production alone is not sufficient. An ex post assessment of the coverage of payments showed that a material company have been omitted.

4.2In-kind revenues

Not applicable

Based on the information that is publically available, it seems clear that this requirement is not applicable.

4.3Barter agreements

Not applicable

This requirement is not applicable in Peru. The Independent Administrator has confirmed the inapplicability of the “Works for Taxes” regime under 4.3 Requirement, noting its coverage under income tax payments under requirement 4.1.

4.4Transportation revenues

Not applicable

The assessment confirms that the government does not collect material revenues from transportation of oil, gas or minerals.

4.5SOE transactions

The 2013 EITI Report addresses the role of the state-owned enterprises. Material revenues collected by Perupetro are well documented in the assessment of Requirement 4.1. Revenues collected by Petroperu are related to the downstream sector and are not relevant for the EITI in Peru.

4.6Direct subnational payments

Not applicable

The International Secretariat could establish that subnational government entities do not levy any specific taxes to the extractives industries. Other taxes collected by subnational governments as registration fees appear to be immaterial.

4.7Disaggregation

It has been confirmed that the report is fully disaggregated by company and revenue stream.

4.8Data timeliness

Peru has published timely EITI Reports covering four fiscal years (2011-2014). Minutes of CMPE meetings document the decision regarding the fiscal period covered by the reports, the approval of the reports and a decision to pilot an online disclosure system.

4.9Data quality

Although the standard ToRs for Independent Administrator services has not been consistent with the Board-approved template, the 2015-2016 EITI Report addresses most of the key requirements and the overall objective of safeguarding reliable data has been satisfied. The Independent Administrator has reviewed the scope of the payments (and revenues) to be reported and reviewed the associated audit and assurance procedures. The Independent Administrator commented on the comprehensiveness and reliability of the data.

Revenue allocation

5.1Distribution of revenues

EITI reports indicate how the income from the extractives revenues are distributed. Peru has a publicly available system disclosing the distribution and use of these revenues.

5.2Subnational transfers

Statutory subnational transfers in Peru are disclosed. Two regions are piloting EITI implementation.)

5.3Revenue management and expenditures

Not assessed

EITI Reports disclose earmarked revenues as part of the Requirement 5.2. Peru has publicly available government systems disclosing national budget, audit processes and studies addressing the sustainability and resource dependence. EITI Reports could be an opportunity to educate the public about these systems.

Socio-economic contribution

6.1Mandatory social expenditures

EITI Peru have agreed on the existence of mandatory social expenditures in the oil and the mining sector. There remains however a lack of comprehensive disclosure of social expenditures codified in provisions of mining companies’ mandatory environmental impact assessments and oil and gas mandatory social expenditures by law or terms of the contract governing extractives activities.

6.2Quasi-fiscal expenditures

Not applicable

Based on the information available, the understanding of the International Secretariat is that SOE’s quasi-fiscal expenditures are not applicable in Peru.

6.3Economic contribution

Information regarding the contribution of the extractive sector to the economy is widely available in the webpages of public entities as well as in the EITI Reports

Outcomes and impact

7.1Public debate

Peru EITI Reports have been actively promoted and distributed, are publicly available and contributed to the public debate. The government, parliamentarians, civil society, the media and the industry are familiar with the reports. Dissemination events have been carried out in the capital and in several regions. Civil society and the industry have separately disseminated the EITI Reports.

7.2Data accessibility

Not assessed

EITI-Peru has undertaken some work to make data from EITI Reports accessible like an online visualization tool. Nevertheless, additional efforts should be implemented to fully address this provision.

7.3Follow up on recommendations

The MSG has taken steps to act upon lessons learnt, to identify weaknesses of the EITI process and to consider the recommendations for improvements from the Independent Administrator. There is evidence that stakeholders have discussed how to strengthen EITI’s impact.

7.4Outcomes and impact of implementation

The APR notes on recommendations provided by the Independent Administrator. Even though an impact assessment was not launched, there is evidence on regularly discussions to identify opportunities to increase impact. EITI Peru has an active role in developing recommendations and exploring options for addressing issues of greatest relevance such as subnational implementation.


Key documents


Contacts