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Ecuador commits to implement the EITI

Ecuador commits to implement the EITI

Ecuador highlights desire for responsible mining

On 5 March Ecuador’s Mining Minister Rebeca Illescas committed to implement the EITI Standard. The commitment was made at “Ecuador Day” at the PDAC in Toronto on 5 March. Minister Illescas stressed that joining the EITI is “ very important for the government as an step to ensure mining is developed in the country following the best practices in the industry”. She added that it’s Ecuador priority to promote mining investments while aiming to use its geological potential to uphold high standards in environmental protection, community engagement and accountability of revenue management.

Minister Illescas was accompanied by EITI Board Member Mark Pearson, who is the Director General, Planning, Delivery and Results Branch, Natural Resources Canada. Ramon Espinasa, from the Energy Division at the Inter-American Development Bank welcomed Ecuador’s willingness to bring transparency to the mining sector.

Ecuador, a member of OPEC, is an important oil producer. It has produced half-million barrels a day for the last decade. The sector contributes around half of the country exports and generates close to a quarter of government revenues. There is also untapped mining potential.

Reforms and Challenges

In 2016, the country updated its geological and cadastral information. Investors have announced commitments of more than one billion USD in new mining developments. The sector contributed 1.3% of GDP in 2017 is expected to triple this contribution by 2021.

The NRGI’s 2017 Resource Governance Index identified weaknesses in Ecuador’s governance of the sector in areas such as licensing of minerals rights, commodity sales disclosures and information of Petroecuador joint ventures and subsidiaries. Civil society in Ecuador has called the attention on a number of challenges in areas such as subsidies, undervalued revenues, and the barter oil deals with China. Leonardo Sempertegui of the Energy Studies Center in Quito said, “a number of civil society organisations have already started to discuss how to address governance challenges through tools like the EITI”. 

President Lenin Moreno won a strong mandate to fight corruption on the 4 February’s referendum. “The government’s intention to bring transparency to the extractive sector is very welcome” said Jonas Moberg, Executive Director of the EITI. He added that the EITI is ready to support Ecuador’s efforts to improve governance of its extractive sector.

Next steps

Ecuador’s next steps in preparing for EITI implementation includes appointing an EITI Champion, forming the multi-stakeholder group with the relevant actors in government, the hydrocarbon and mining sectors and civil society, and agreeing how they will implement the EITI in Ecuador (EITI).