Colombia

The Secretariat’s assessment is that Requirement 1.5 is fully met, as in the previous Validation. The objective of this requirement is to ensure that the annual planning for EITI implementation supports implementation of national priorities for the extractive industries while laying out realistic activities that are the outcome of consultations with the broader government, industry and civil society constituencies. The Secretariat’s opinion is that the objectives of the work plan are aligned with national priorities, while the detailed activities, costings and timings of activities in the ‘Investment project’ that supports the EITI Colombia work plan have been disclosed during the period for the MSG’s comments on the draft Validation report. The process of developing the work plan also fulfils the objective of having consultations with broader constituencies. EITI Colombia has regularly updated its work plan with a four-year validity. All stakeholders had an opportunity to contribute to it and agreed to extend the validity of the current work plan for two more years. EITI Colombia holds MSG discussions on progress in the implementation of the EITI Standard. However, given the lack of specific actions defined, the work plan does not seem to be the most effective mechanism of accountability. The civil society constituency acknowledges these discussions, adding the necessity of holding stricter progress analysis through the use of the work plan. It was also pointed out in consultations with stakeholders that the accountability process based on a discussion of the work plan falls short of reaching out to broader audiences and the public in general. There were also different opinions regarding the work plan as a mechanism to evaluate how follow-up on recommendations from previous reports and the previous Validation is implemented and the outcomes of this implementation. Colombia’s 2020-2023 work plan sets objectives in line with national priorities related to the extractive sector described in the National Development Plan. The National Development Plan covers all aspects of the Colombian economy and Colombia EITI informed extractive sector-related pillars of the National Development Plan during its formulation. EITI implementation has also served as a basis for the Government’s Policy of Transparency and Integrity in the Mining and Energy Sector. The work plan includes broadly defined activities that would strengthen and mainstream EITI implementation in government systems and at the subnational level (Axis 1) and to strengthen the use and generation of information with a specific focus on systematic disclosure (Axis 4). The MSG has held yearly revisions of progress, as documented in its minutes. However, the version of the work plan that is uploaded to the EITI Colombia website does not seem to be updated after each of these sessions. According to the MSG minutes and the Outcomes and Impact Validation Template, the work plan benefitted from an open consultation period that included opinions from local stakeholders and civil society organisations outside the MSG. The MSG’s ‘Outcomes and Impact’ template notes an MSG meeting where the validity of the 2022-2023 work plan was extended until 2025. However, there is no description of the activities that will be extended or who will be responsible for leading on their implementation. The work plan includes multiple broad activities aimed at facilitating access to information to a broader audience. These range from reporting in a less technical language to producing specific analysis based on the demands of specific communities. These issues have been flagged by the civil society constituency in the report published by MESA in the context of this Validation. The work plan also includes activities aimed at identifying stakeholders’ needs regarding information that is disaggregated through the EITI process. The work plan pushes for stronger interoperability of the information between the different government agencies, to build more intuitive use of the data and to strengthen the publics use of the EITI portal to understand and use the information included in it and in the EITI Reports. The work plan does not include actions to address recommendations from the previous Validation or from EITI reporting, although stakeholder consultations indicated that some recommendations are directly discussed at the MSG meetings as part of overall implementation process and preparation of the EITI Reports. Moreover, activities do not include costings or funding sources nor a timetable for implementation, although the Outcomes and Impact template reports a budget allocation from the Colombian government that would allow EITI implementation to be fully funded until 2026. The International Secretariat is aware of a related ‘Investment Project’ for EITI implementation that the EITI Colombia secretariat submits to the Ministry of Mines and Energy. This document includes a thorough description of objectives and activities in line with the national priorities, and in line with the priorities and goals included in the work plan. The International Secretariat understands this is not a document approved by the MSG, but that its submission is the National Coordinator’s responsibility. However, given the level of detail in the activities described and the identification of responsible agents in each activity, it can be assumed that this submission is based on an active discussion in the MSG. This document should be public, but it is not yet available on the EITI Colombia website. The work plan does not include any specific activity to address legal or regulatory obstacles for EITI implementation. This omission is outstanding when the work plan does not include any specific activity to strengthen contract disclosures or beneficial ownership information, despite the progress that has been achieved in contract transparency with the ANH and the ANM, and in terms of beneficial ownership legislation, and despite the work that the MSG has done in facilitating information on these topics with the production of Cartillas digitales. In its comments on the draft Validation report, civil society members argued for a downgrade in the assessment of Requirement 1.5. They recommended that the tripartite consultation in developing the EITI work plan be reinforced, and that spaces for in-depth debate on the energy transition should be established by the EITI. They also highlighted their concerns about limited progress in EITI implementation at the subnational level and called for the development of strategies for ongoing consultations with stakeholders at the subnational level. In its comments on the draft Validation report, the EITI Colombia Secretariat highlighted evidence in MSG meeting records of proactive MSG engagement in the development of the EITI work plan. The comments explained that the ‘Investment Project’ is the vehicle for the Ministry’s prioritising of activities that funded and is said to be available upon request from the government under the Freedom of Information Law. The comments also noted that the MSG had undertaken a self-assessment of progress against each EITI Requirement in preparing for this Validation. On 16 May 2023, the EITI Colombia website published the full ‘investment project’ underpinning the EITI Colombia work plan for the first time, addressing the gaps in detailed planning identified in the previously published EITI Colombia work plan. Finally, the MSG’s comments on the draft Validation report call for the additional documents related to MSG discussions of the work plan and evidence of subnational EITI outreach be taken into account in the final Validation report. The MSG’s comments also commit to taking all stakeholders’ views into account in the development of the upcoming 20242027 EITI Colombia work plan, to ensure that the EITI process is expanded to cover new issues, but with specific actions. The Secretariat takes account of these clarification and notes the differences in opinions between the comments on the draft Validation report from civil society and from the EITI Colombia Secretariat. There is indeed evidence of the broader constituencies’ input to the development of the work plan and the ‘Investment Project’ provides the detailed information that is missing from the publicly accessible EITI Colombia work plan. The late publication of the detailed ‘investment project’ thus addresses the technical gaps identified in this Validation. While the Secretariat’s assessment remains borderline between ‘mostly met’ and ‘fully met’ given strong concerns from one constitiuency that their views are not adequately reflected in the EITI Colombia work plan, on balance the Secretariat considers that the objective of the work plan providing an accountability mechanism of the MSG vis-à-vis the broader public is fulfilled.

The Secretariat’s assessment is that Requirement 7.1 is fully met. The information disclosed on the EITI Colombia website, as well as the production of reports on specific topics, and the development of websites and tools to facilitate public understanding of extractive information provide a strong base for public debate on extractive activities in Colombia. The objective of this requirement is to enable evidence-based public debate on extractive industry governance through active communication of relevant data to key stakeholders in ways that are accessible and reflect stakeholders’ needs. Available documentation provided in the Validation templates and consulted stakeholder views suggest that this broader objective has been fulfilled. However, civil society stakeholders consulted highlight a weak linkage between EITI Colombia and national debate, in particular in specific moments where national reforms have been undertaken. Stakeholders consulted also pointed out the need to strengthen data literacy strategies to increase and promote the use of data by local communities with extractive activities. The Secretariat’s view is that, despite concerns over the scope for further improving Colombia EITI’s contribution to public debate, the MSG has addressed all aspects of this requirement, with encouraging progress in addressing some encouraged aspects. Information about EITI implementation, data and analyses is accessible on the EITI Colombia website. The MSG has produced brief summary-reports (Cartillas digitales) on specific issues about EITI implementation, such as beneficial ownership transparency, contract transparency, and environmental revenue streams. These reports include attractive and accessible infographics and tables with specific information. The MSG has also produced an in-depth and timely analysis of the impact that the COVID-19 pandemic had on the extractive industry in Colombia. EITI Reports are accessible on the EITI Colombia website with summary information that is downloadable and in open data format. This information includes visualisations that allow users to compare revenue data that is accrued to subnational and national entities disaggregated by revenue stream. Stakeholder consultations indicated that a major challenge for EITI implementation in the country is the lack of literacy in data analysis, in particular in the regions with extractive activities. Although the work plan includes as an activity generating information with territorial detail targeted to allow citizens to participate in decision-making activities, additional information describing how that territorial detail will be achieved would be welcome. The MSG is active in generating webinars and trainings on different topics related to EITI implementation, such as gender, good practices in the extractive sector, and beneficial ownership transparency. In 2020, EITI Colombia produced quarterly reports (Partial Bulletins) that included updated and timely information. However, the International Secretariat found no evidence of this exercise being repeated in 2021 and 2022. EITI Colombia has also developed online courses to understand the extractive sector’s value chain that are available on their website. The EITI Colombia website is accessible and exhaustive in its contents. It includes easily accessible information on production of oil, gas and mining, contracts, and specific projects as well as summary figures that give the user an overall perspective of the extractive sector in Colombia. EITI Colombia has been active in promoting data use among interested stakeholders in the different communities with extractive activities by holding outreach and dissemination events in mining regions. These activities have also been organised by the civil society constituency. However, consulted stakeholders considered that this is still an area where more efforts should be done with a particular focus on strengthening data use by local communities and providing data that relates directly to the demands of these communities. EITI Colombia produced a specific analysis on the impact of COVID-19 on the extractive activities in Colombia with support from the GIZ. This document collected information from CSOs, local stakeholders, industry and government representatives. COVID-19 restrictions did not stop the MSG from convening meetings and discussing relevant issues that were later disclosed in minutes that are accessible on EITI Colombia’s website. EITI Colombia information has been referred to in several news items and broadcasts (See examples here, here and here). Moreover, EITI Colombia has been an active participant in regional events on data use, EITI Reporting and EITI implementation. Recently, EITI Colombia signed a MoU with the EITI International Secretariat to donate the software EITI Colombia has been utilising for reconciling information for their EITI Reports with other Latin American and Caribbean countries. So far, this program, with support from USAID, has helped Argentina, Dominican Republic, Ecuador, Guatemala and Trinidad and Tobago to strengthen their data gathering exercises. In its comments on the draft Validation report, civil society noted continued challenges in access to information from the EITI Colombia website given concerns over the technical language of the information published, weaknesses in the provision of open data, and the lack of sufficient training for the broader public to understand the data. In the comments on the draft assessments, the MSG committed to continue working on the dissemination of information and on developing tools to support the EITI process and progressively enhance the EITI’s contribution to public debate, as proposed by civil society.

The Secretariat’s assessment is that Requirement 7.2 is fully met. The objective of enabling broader use of information on the extractive industries through the publication of information in open data and interoperable format is mostly fulfilled as much of the information on EITI implementation is available on the EITI Colombia’s website in open data formats. Moreover, information on the extractive sector is available in open data format on the websites of government agencies and on the open data portal of the Colombian government (www.datos.gov.co). EITI Colombia adopted the Colombian Government’s open data policy, based on the Transparency and Access to Information Act of 2014, the International Open Data Charter and the open data portal of the Colombian government. Information on all branches of government and data of public activities is presented in accessible formats that can be exported to a CSV format at the Colombian government portal “datos.gov.co”.Data on production, exports, and revenue of both mining and hydrocarbons can also be downloaded in open data from the EITI Colombia website and further analysed, though some data, such as license details and transportation revenues are not available for download in open data format. Consultations with stakeholders confirmed the steady progress made by EITI Colombia in making more information available and easy to analyse. However, several stakeholders pointed to the necessity of strengthening capacity building, in particular in local communities, to make the most of publicly available information. Ecopetrol publishes production information in open format through the Colombian government open data portal, and it discloses financial information through its regular reports to shareholders and the stock exchanges where it operates. SIMCO, the Colombian Mining Information System, also publishes production information in open data format by mineral, disaggregated by province. The MSG has made most EITI disclosures available in open and interoperable data format, through the EITI portal and the MSG has prepared summary data files for fiscal years 2018, 2019 and 2020. In its comments on the draft Validation report, the MSG would continue efforts to consider ways of improving the EITI’s contribution to public debate, including the role of entities that participate in the EITI process.

The Secretariat’s assessment is that Requirement 7.3 is fully met. Implementation of the EITI Standard in Colombia has been a continuous learning process, where the MSG has actively analysed its own progress and provided recommendations to improve EITI implementation. EITI Colombia has held regular debates and analyses on EITI implementation, shortcomings identified by the different constituencies, and recommendations from Colombia’s previous Validation and EITI reports. The MSG regularly discusses challenges of EITI implementation and tries to serve as a space to share different perspectives and learn from experience to bring EITI implementation forward. While the MSG has regularly considered recommendations and has acted upon them, as highlighted by some stakeholders consulted and in the MSG’s comments on the draft assessment some recommendations have not been addressed to the full satisfaction of every stakeholder represented in the MSG. Nonetheless, while the Secretariat recognises the frustration of civil society about the lack of implementation of all strategic recommendations from the previous Validation, it does consider that there is a robust mechanism for follow-up on EITI recommendations overseen by the MSG. In its comments on the draft Validation report, civil society argued for a downgrade in the assessment of Requirement 7.3, noting that several recommendations from the previous Validation, such as those related to the environment or to subnational implementation, had not yet been implemented. The comments argued for the development of a broader communication, dissemination and training strategy for companies and civil society to meet the demands for information at the subnational level. The comments called for strengthening the MSG’s mechanism for following up on EITI recommendations. In its own comments, the EITI Colombia Secretariat called for the MSG to continue its work on following up on EITI recommendations and to continue working on projects defined in the EITI Colombia work plan. In the common comments on the draft assessment, the MSG called for the MSG’s efforts to be valued and for the MSG to continue working on activities defined in its work plan. The MSG also referred to the need to consider a broader communication, dissemination and training strategy for companies and civil society to meet the demands for information at the subnational level. The MSG’s commitments to strengthen communications and training at the subnational level are welcome, but are not considered to reflect weaknesses in the MSG’s system for following up on EITI recommendations. Despite not being included in the work plan as a specific activity, the MSG’s ‘Outcomes and impact’ template describes a detailed list of all strategic recommendations from Colombia’s previous Validation and the MSG’s followup activities and progress on each recommendation from Validation. The MSG has documented progress in a majority of the recommendations from the previous Validation and from EITI Reports in the Validation templates. The MSG minutes show regular discussions on EITI implementation and on the need to address recommendations from previous Validations and from previous EITI reports. These discussions provide a regular space for followingup on recommendations, from previous Validations and EITI Reports, although there is not a specific mechanism for doing so in the EITI Colombia work plan or in its day-to-day interaction. Stakeholders from civil society also pointed out in consultations that despite regular discussions on some issues of importance, several issues remained unsolved. The civil society coalition engaged in the EITI (MESA) submitted a document for Validation that tracks progress on recommendations made by civil society representatives during Colombia’s first Validation. This document acknowledges the MSG’s important efforts to address these recommendations, but assesses that only five of the ten recommendations have been accomplished, while two are in the process of implementation, two recommendations are partly accomplished and one has not been accomplished. Nonetheless, there appears to be a robust mechanism for the MSG’s follow-up on EITI recommendations even though some of these recommendations have not yet been fully implemented in practice. The MSG has issued recommendations for strengthening the governance of the sector through webinars and capacity building exercises for public officers on beneficial ownership transparency and extractive resources revenue streams.

The Secretariat’s assessment is that Requirement 7.4 is mostly met, which represents backsliding since the previous Validation. The MSG is an active group that continuously discusses progress of EITI implementation, although according to some stakeholders from the industry and civil society constituencies, it faces a challenge to have a stronger influence in the decision-making processes of the extractive activities. EITI Colombia stopped producing Annual Progress Reports in 2019. It had previously published Annual Progress Reports for 2018 and 2019. The MSG’s template on ‘Outcome and impact’ reports that MSG minutes #48 of 9 April 2021 include information of an MSG discussion on progress of EITI implementation. The MSG discussed and shared in the template an overview of the MSG’s responses to EITI strategic recommendations from the previous Validation, as well as a discussion on progress in meeting work plan objectives. EITI Colombia’s 2020 Report presents a thorough description of recommendations from previous EITI Reports and the actions described to address them. Despite there being no comparable exercise for fiscal year 2021, the MSG minutes reflect a regular discussion on progress and provide a narrative of the efforts to strengthen the EITI’s impact enriched by the regular discussion and exchange of ideas between the different stakeholders. Although the previous Validation concluded on a “satisfactory progress” assessment for all the EITI Requirements, the MSG did not report any discussion on the annual assessment of progress in meeting all EITI Requirements, not even the two requirements that have entered into force since 2019 (contract transparency and beneficial ownership disclosure), despite the progress that EITI Colombia has achieved in these two requisites. The MSG held consultations for the development of the new work plan; however, the MSG minutes do not reflect any broader consultation requesting feedback from all stakeholders on the EITI process and their perspective on the impact of the EITI. In its comments on the draft Validation report, civil society agreed with the assessment of Requirement 7.4 but called for the development of processes to improve public deliberations on the outcomes and impacts of the EITI process in order to preserve the EITI’s legitimacy in the eyes of national stakeholders. They noted that, while the MSG had committed to disseminate more information about the outcomes of the EITI process, this should not only be civil society’s responsibility but also the duty of government and companies. In its comments, the EITI Colombia Secretariat noted that the MSG periodically reviewed the outcomes and impact of the EITI process as well as progress on work plan activities and objectives, as evidenced in MSG meeting minutes. In the common comments agreed by the MSG on the draft Validation report, the MSG concedes that more work is needed in this aspect of the EITI process, but argued that there had been progress on Requirement 7.4 in reviewing progress in EITI implementation even if the annual review of outcomes and impact could be more thorough.

The Secretariat’s assessment is that Requirement 1.1 is fully met, as in the previous Validation. Available documentation and stakeholder consultations confirmed that the objective of this requirement related to ensuring a full, active and effective government lead for EITI implementation, both in terms of high-level political leadership and operational engagement, as a means of facilitating all aspects of EITI implementation had been fully met, in the period from the previous Validation until the commencement of Colombia’s 2022 Validation in October 2022. The MSG is headed by the Ministry of Mining and Energy. The government constituency on the MSG is represented by the leading ministry, the National Planning Department (DNP) and the National Directorate of Taxes and National Customs (DIAN). The government has consistently ensured the implementation of the EITI is led by a senior official, with Vice Minister of Mining and Energy Carolina Rojas Hayes and Vice Minister of Mining and Energy Sandra Rocio Sandoval heading the MSG in August 2018 – November 2020 and December 2020 – August 2022 respectively. Both MSG Chairs appeared to have the confidence of all stakeholders, the authority and freedom to coordinate action on the EITI across relevant ministries and agencies, and were able to mobilise resources for EITI implementation. In addition, several sectoral agencies such as the National Hydrocarbon Agency, the National Mining Agency and the Energy-Mining Planning Unit participate in the MSG and working group meetings on a regular basis, providing advisory and technical assistance. MSG meeting minutes and stakeholder consultations confirm that representatives of the government constituency participate in the MSG meetings on a regular basis and contribute to the agenda items. Moreover, there is evidence of government representatives participating in various capacity-building activities, including thematic webinars. The government has also demonstrated continuous commitment to EITI by supporting EITI operation through regular budget allocations since 2014. In 2022, the investment project for “Strengthening of trust in the mining-energy institutions in Colombia (EITI Initiative)” was approved for the 2023-2026 period. In 2022, Colombia has undergone a political transition due to presidential and parliamentary elections. Stakeholders consulted didn’t express any concerns related to working with the new government, but noted that there might be a shift in the national priorities. There is an indication that at least one MSG meeting has been held since the new government officials were appointed. In its comments on the draft Validation report, the MSG provided copies of letters from senior government officials in the new administration that demonstrated the continuity in the new government’s commitment to the EITI despite the change in administrations in 2022.

The Secretariat’s assessment is that Requirement 1.2 is fully met, as in the previous Validation. Available documentation and stakeholder consultations indicate that the objective of this requirement related to ensuring that extractive companies are fully, actively and effectively engaged in the EITI, both in terms of disclosures and participation in the work of the multistakeholder group, and that the government ensures an enabling environment for this has been fully met. According to the Stakeholder engagement template, industry representation is organised through trade chambers and associations – Colombian Association of Oil and Gas Companies (ACP) and Colombian Association of Mining Companies (ACM). In addition, Ecopetrol is included in the MSG. Stakeholders consulted confirmed that there is regular communication with companies that are members of ACP and ACM as well as with Ecopetrol. Association representatives confirmed that while most communication is coordinated by respective associations, individual companies have the ability to reach out to the national secretariat and the MSG directly if needed. Available documentation confirms regular participation of association representatives in the MSG meetings and capacity-building activities. In addition, there is evidence that all data required for the EITI reporting process have been submitted in a timely and comprehensive manner. Stakeholders consulted noted that there is an enabling environment for company participation in the EITI. While it appears that there are extractive companies that are not members of either oil and gas or mining company associations, stakeholder consultations indicated that the MSG and the national secretariat conducted regular outreach activities to engage more companies in the EITI process. It was also noted in stakeholder consultations that the share of companies that are not currently members of company associations in total extractive revenues is relatively small. In its comments on the draft Validation report, the industry constituency noted that not all companies that were members of the Association of Mining Companies were engaged in the EITI process and therefore considered that the outcomes of the EITI Report necessarily reflected the results of the entire mining sector. In its own comments on the draft assessment, civil society called for a strategy to engage energy companies engaged in electricity generation, transmission and distribution in the EITI process as part of future work on the energy transition. The EITI Colombia Secretariat’s own comments highlighted the evidence of industry engagement in MSG meeting minutes and noted the interest expressed by the country’s largest gold producer, Aris Mining, to participate in the EITI process. The MSG’s common comments on the draft assessment committed to consider ways of engaging electricity in the EITI process in future.

The Secretariat’s assessment is that Requirement 1.3 is mostly met. There is a fundamental difference of opinion between civil society and other constituencies over the scope of application of the EITI protocol: Participation of civil society, with the former considering that the scope included all civil society representatives working on extractive industry issues nationwide, while the latter consider that the scope include those CSOs that engage in EITI activities, including CSOs not directly represented on the MSG. Most stakeholders consulted that were substantially engaged in the EITI process, particularly from government and industry, considered that the objective of full, active and effective civil society engagement in all aspects of the EITI process, and within an enabling environment for such participation, had been fulfilled in the period under review. In its comments on the draft assessment, the EITI Colombia Secretariat highlighted the importance of the MSG having discussed the scope of Requirement 1.3 and the civil society protocol at its June 2022 meeting. Based on its perception that Requirement 1.3 relates to civil society’s participation in the EITI process rather than broader civic space issues, the EITI Colombia Secretariat reiterated its views that there was no evidence of barriers to civil society’s participation in the EITI process, including at the subnational level. However, some civil society representatives consulted considered that the objective was only mostly met given the activities of non-state armed groups in extractive areas under weak government control, as stated in the civil society report submitted for this Validation. In its comments on the draft Validation report, civil society criticised the preliminary assessment that there had been no restrictions on civil society’s engagement in the EITI process or public debate on natural resource governance in the period under review and argued strongly for a downgrade in the preliminary assessment of Requirement 1.3 as ‘fully met’ in the draft Validation report. The comments considered that it should not be deduced that civil society freedoms to engage in public debate on natural resource governance simply because CSOs engaged in the EITI process had not been affected by government constraints. Indeed, the civil society comments argued that the distinction between government constraints directly impacting CSOs engaged in the EITI process and the impact on other CSOs was not aligned with the definition of civil society in the EITI protocol: Participation of civil society. Focusing particularly on civil society engagement at the subnational level, the civil society comments highlighted the asymmetry in access to information that was detrimental to civil society, the deterioration in minimum guarantees for the participation of CSOs in issues related to the extractive sector, the increase in conflict in mining and hydrocarbon areas, and the government's alleged lack of political will to promote dialogue processes with communities in resource rich territories as examples of impediments to civil society engagement in the EITI process and public debate on extractive industry governance. They further alleged that there “may exist” links between illegal armed groups, subnational government officials and mining companies. Finally, the civil society comments argued that the civil society groups that engaged in the EITI process were not a “representative sample” and were not aware of the challenges faced by CSOs in seeking to participate in extractive sector governance or in terms of broader civic space. These comments are consistent with those included in the civil society submitted report prepared for the Validation process. The Board's conclusion of this Validation found that the objective of Requirement 1.3 was mostly met, given the continued existence of violence against civil society activists working on extractive industry issues perpetrated by non-state armed groups, without sufficient protections from the state. Nonetheless, Validation acknowledged the views of stakeholders consulted that civil society is able to operate, express, associate and engage freely on extractive industry governance issues within the EITI process, the Validation found no indication that intimidation, harassment or threats experienced by activists operating within the EITI process are undertaken or endorsed by government officials or state security forces. Government-led protective measures such as the National Protection Unit and the early warning system of the Office of the Ombudsman, along with broader efforts to strengthen the rule of law in areas with weak government control, are signs of government efforts to ensure that civil society is fully engaged in discussions around natural resource governance. Nevertheless, illegal armed groups maintain de facto control over certain areas of the country and appear to be the primary source of danger for civil society and appear to hold interests in some legal and illegal extractive projects. The concerns expressed by civil society in consultations and in the submitted report prepared by this constituency, about constraints faced by civil society groups working on extractive issues in subnational areas, particularly those resource-rich areas where there is weak government control, must be acknowledged. Yet the MSG has not yet developed a mechanism to effectively handle such concerns. A detailed assessment of progress towards Requirement 1.3 and adherence to the EITI protocol: Participation of civil society is provided in the external expert’s report on progress with Requirement 1.3 and adherence to the protocol in Annex to this report. In addition, the civil society submitted report prepared for this Validation can be consulted in this link. Colombian civil society participating in the EITI process and consulted for this Validation acknowledges that it is a safe platform to comment on the broader civic space constraints present due to illegal armed groups. These broader civic space constraints have been discussed by the MSG and are acknowledged by government and industry stakeholders. Consulted civil society representatives were of the opinion that these constraints did limit broader discussions around natural resource governance given that threats and violence against environmental defenders had increased since the previous Validation. Government and industry stakeholders engaged in the EITI appear committed to maintaining dialogue among all representatives within the multi-stakeholder group, though some in civil society considered that government and industry often share the same agenda. Colombia’s broader civic space appears to have become more restricted since the previous Validation, with international rankings of civic space in Colombia declining somewhat since the previous Validation. There have been nationwide protests in the period under review that are not linked to the extractives sector, to which the Colombian government responded by enacting Law 2197 of 2022 (the Citizen Security Bill). The International Centre for NotFor-Profit Law cautions that this new law could lead to further restrictions on the right to protest, although there is no evidence that Law 2197 has been used to constrain civil society’s ability to engage in public debate on natural resource governance or the EITI process since 2020. However, international rankings of civic space point to the mounting deaths of environmental activists by non-state forces as a severe threat to civil society that may lead to self-censorship should existing government efforts related to protection of environmental defenders, restoration of land to displaced persons and strengthening of the rule of law in areas under weak government control not prove successful. In its comments on the draft Validation report, civil society argued that the murders of 222 civil society activists in 2022 reflected the risks to democracy in Colombia and that the EITI process did not provide a space representative of broader citizen advocacy. In terms of expression, there do not appear to be any new constraints on civil society’s ability to express itself on any aspect of the EITI process or natural resource governance. Consulted civil society stakeholders considered themselves able to express views critical of government and extractive companies during MSG meetings, EITI events and in EITI-related reports, with the civil society submitted report submitted by the civil society coalition (MESA) for this Validation serving as a prime example of civil society’s ability to publicly criticize aspects of the Colombia EITI process. The civil society submitted report describes instances of violence against civil society that are perpetrated by non-state actors in resource-rich areas, but did not clearly attribute them to a pattern of government actions to restrict civil society space related to extractive industry governance. However, in its comments on the preliminary assessment, civil society raised concerns over the high degree of violence in areas under weak government control, arguing that there “may be” links between illegal armed groups that caused the violence and certain local government officials and mining companies. The murder of civil society activist Rafael Moreno in October 2022, amidst his opposition to a local nickel mine operated by South 32, is held as a prime example of this alleged collusion between armed groups and mining companies. However, the Secretariat’s review of documents and stakeholder consultations did not identify a clear documented link between non-state perpetrators of violence against civil society and specific local or national government officials. In terms of operation, there do not appear to be government restrictions on civil society holding meetings related to the EITI process. There are no impediments to registration of civil society organizations, though the civil society submitted report notes that the former presidential administration limited the timeliness and accessibility of some foreign funding by controlling disbursements to CSOs. However, there are no specific examples of these limitations to foreign funding having had an impact on the operation of civil society organisations engaged in the EITI process. Indeed, there are ample examples of CSOs accessing foreign funding without any restrictions, including from development partners such as GiZ and international NGOs. In terms of association, the broader civil society constituency has continued to freely associate in relation to the EITI process and in their broader activities related to natural resource governance. The MESA coalition continues to act as the constituency’s coordinator, with evidence of regular consultations and coordination between Bogotá CSOs and stakeholders based in other areas, including communities hosting extractive activities. Consulted stakeholders considered that there was no evidence of legal restrictions that affected civil society’s ability to associate but highlighted the insecurity, especially in communities hosting extractive activities in areas of weak government control, caused by non-state armed groups as a limit to association within the EITI process and in the broader public discussion on natural resource governance in practice. Other stakeholders consulted did not consider these alleged restrictions to have had an impact on CSOs substantially engaged in the EITI process. In terms of engagement, some members of civil society alleged challenges around their ability to shape the design, planning, discussions and implementation of the EITI process. These members stated that government and industry stakeholders set the agenda for the EITI process without proper input from civil society. As a result, some CSO members mentioned that EITI discussions on natural resource governance were superficial and remained at the national level, without delving into specific issues faced by communities hosting extractives activities. The allegations of exclusion and superficiality has caused some civil society members to question their involvement in the EITI process. The Secretariat acknowledges these civil society concerns, which are covered under the assessment of MSG oversight (see Requirement 1.4). In terms of access to public decision-making, civil society uses the EITI process to influence public decision-making, including through input to legal and regulatory reforms. Civil society was involved in the drafting of Law 2056 of 2020 that reformed the General Royalty System, which is an important source of revenue for communities where extractive activities take place. The MSG’s ‘Stakeholder engagement’ template for this Validation and the external expert’s report in annex to this Validation report provide additional examples of civil society access to public decision-making on the extractive industries. The Secretariat takes note of civil society concerns, raised in the civil society report for this Validation and in civil society comments on the draft Validation report, regarding the lack of civil society access to public decision-making. However, consultations with all constituencies confirmed that, in practice, civil society has been able to use the EITI process to influence public decisionmaking on governance of the extractive industries.

The Secretariat’s assessment is that Requirement 1.4 is mostly met, which represents backsliding from the previous Validation. The objective of this requirement is to ensure that there is an independent MSG that can exercise active and meaningful oversight of all aspects of EITI implementation that balances the three main constituencies’ (government, industry and civil society) interests in a consensual manner. Available documentation and stakeholder consultations indicate that this objective is mostly met given active MSG oversight of the EITI process, but note that internal governance rules and procedures could be improved. There appears to be a different conception of the scope of the EITI process between many civil society stakeholders on the one hand and industry and government stakeholders on the other, which help explain the different constituencies’ appreciation of progress towards the overall objective of the requirement. Several CSOs consulted do not consider the objective as met given their calls for greater MSG attention on extractive activities at the subnational level, particularly among communities hosting extraction activities in areas of weak government control. However, several government and industry stakeholders consulted considered that the objective was met given their focus on the core aspects of the EITI Standard. In their comments on the draft Validation report, civil society argued for a downgrade in the assessment given their frustration at the lack of progress on certain recommendations and the asymmetry of information between civil society on the one hand and government and industry on the other. The comments particularly raised concerns over the lack of project-level disaggregation of data on government revenues, and civil society’s challenges in dissemination and information platforms. In their comments on the draft assessment, the EITI Colombia Secretariat noted that stakeholders beyond the MSG had been invited to its discussions. The Secretariat acknowledges civil society’s frustrations at the lack of progress in following up on certain EITI recommendations and the perception of asymmetry in access to information among different constituencies on the MSG, but considers that the objective is in process of being fulfilled given the MSG’s robust oversight of most aspects of the EITI process. The MSG consists of adequate representation from the three constituencies of government, industry and civil society. In addition, working groups (GATs) are formed when a more comprehensive discussion is needed on a particular implementation issue. Information on the membership of the multistakeholder group is available on Colombia EITI website. Stakeholders from all constituencies did not express concerns related to the process by which each stakeholder group nominated their representatives. Government seats are allocated to representatives of relevant ministries and changes of a particular person are due to rotation in those roles. For the industry constituency, the representation is coordinated by the petroleum and mining chambers that coordinate consultations with members of the broader constituency as well as the national oil company Ecopetrol. Members of these chambers also directly engage with the Colombia EITI national secretariat and MSG. Consulted stakeholders noted continuous efforts to reach out to companies that are currently not members of the chambers represented on the MSG, but highlighted the complexity of this process due to the existence of a significant number of small-scale producers. Civil society has used the wider mechanism of the MESA coalition to ensure consultations and selection of their representatives when refreshing their MSG representation. Moreover, civil society MSG members confirmed that they were operationally and in policy terms independent of government and companies in the period under review. All changes in the MSG representation are reflected in the Stakeholder engagement template and followed each constituency’s procedures. The MSG ToRs were approved in February 2014. The Stakeholder engagement template notes that the MSG decided to update the MSG regulations and several working group sessions were held on the topic. It is expected that the new ToRs will be approved later in 2023. The 2014 MSG ToRs seem to address all key aspects of Requirement 1.4.b. The Stakeholder engagement template indicates that there were no discrepancies between statutory MSG regulations and procedures in practice in the period under review. At the same time, stakeholder consultations indicated some delays related to sharing relevant documentation prior to MSG discussions and minutes of the MSG meetings were often published outside of the 15-day window mandated in the ToR. Indeed, the MESA civil society report submitted for this Validation alleged that there had been a delay of up to two years for the circulation of some draft MSG meeting minutes, which were only prepared in the preparations for this Validation. Some stakeholders consulted attributed the delay in publishing meeting minutes to COVID-19. In addition, it was noted that MSG discussions on EITI priorities could be expanded to discussions on emerging policy areas. Some consulted CSO stakeholders considered that the MSG’s decision-making processes could be strengthened, including more inclusive discussion on topics that go beyond the EITI Standard, but are considered relevant to the national context. Consulted stakeholders expressed mixed opinions about the balance between the three constituencies on the MSG, with some civil society concerns about the inclusivity of the decision-making process. At the same time, there appeared to be a broad understanding, including among civil society stakeholders consulted, that all constituencies on the MSG were treated equally. However, there were differences of opinion, particularly from some civil society representatives, around challenges in the MSG agreeing on the scope of the EITI process in Colombia and around opportunities for improving the EITI Colombia Secretariat’s operational management, such as advance circulation of documents ahead of MSG meetings and timely publication of meeting minutes. In its comments on the draft assessment, the EITI Colombia Secretariat explained that it circulated documents to the MSG as soon as it received them, with proposals of extensions to the period for comment in cases where documents were circulated late. The MSG meeting minutes provide a detailed account of the MSG discussions on these issues.

The Secretariat’s assessment is that Requirement 3.1 is exceeded, which is an improvement on the previous Validation. The Secretariat’s assessment is that the objective of public access to an overview of the extractive sector and its potential has been exceeded given extensive systematic disclosures by government, which appears in line with the views of stakeholders consulted. Public access to an overview of the extractive sector in the country and its potential, including recent, ongoing and planned significant exploration activities is provided through systematic disclosure on government websites and portals, including the ANH-hosted GeoVisor and the ANM-hosted SIMEC portals. EITI reporting consolidates information on extractive commodities with economic potential in the mining and oil and gas sectors and details plans to diversify export markets. Pilot studies have been conducted on particular artisanal and small-scale mining areas and the ANM’s website contains information for miners wishing to formalize their operations. There are also numerous third-party studies on the ASM sector in the public domain, particularly concerning gold production and export, such as the OECD report on due diligence in the gold supply chain and the Global Financial Integrity report on illicit financial flows in the gold sector.

The Secretariat's assessment is that Requirement 6.3 is fully met, as in the previous Validation. Stakeholders consulted considered the objective of public understanding of the extractive industries’ contribution to the national economy and the level of natural resource dependency in the economy had been fulfilled, which is in line with the Secretariat’s assessment. Colombia systematically discloses information on the contribution of the extractive industries to the economy, with this information also centralised through EITI reporting and the EITI Colombia website. The mining, oil and gas sectors’ contributions to the economy are provided in absolute and relative terms, including to GDP, government revenues and exports. Employment figures are provided in aggregate and relative to overall employment but gender and occupational disaggregation is limited to the scope of companies participating in the EITI reporting process. An overview of the location of mining, oil and gas activities is available through government websites that include portals such as the GeoVisor and SIMEC portal. Extractive investment data is disclosed through the Central Bank’s website and extractive sector export data relative to total exports is provided through the National Tax and Customs Directorate website. While Colombia could be considered to have exceeded Requirement 6.3 due to the high level of systematic disclosure on government websites, the lack of gender-disaggregated employment data pertaining to the whole extractive sector, including systematic disclosures covering all extractives companies’ employment, and the lack of references in EITI reporting to credible estimates of informal extractive activities support the Secretariat’s assessment that the requirement is fully met, but not yet exceeded. Third-party publications from the OECD, OAS and non-profits provide insight into the contributions of the informal sector to the overall economy but these are not referenced by the MSG in the Transparency template or in the 2020 EITI Report. In its comments on the draft Validation report, civil society called for better coverage of the artisanal and small-scale mining sector and for a substantive debate on EITI extending to the ASM sector. In its own comments on the draft report, the industry constituency called for better reflection of other publicly available data on gender in the extractive industries in EITI Reports. The government’s comments committed to reviewing the gender survey and the documentation derived from the gender policy. The civil society comments raise general concerns about insufficient public disclosures in the extractive industries, although these are not strictly related to the data listed in Requirement 6.3, such as “contracts, royalty reports, tax payments and conflicts of interest involving companies in the sector for which there is no information”. The EITI Colombia Secretariat’s comments note that coverage of gender had been improving in more recent EITI reporting and noted the publication of the guidelines for gender equality in the mining and energy sector agreed in 2019. The MSG’s common comments on the draft assessment highlight the gender guidelines, which include a roadmap, toolbox and a second survey carried out in the sector in 2022.

The Secretariat’s assessment is that Requirement 2.1 is exceeded, which is an improvement since the previous Validation. The Secretariat’s assessment is that the objective to ensure public understanding of all aspects of the regulatory framework for the extractive industries has been exceeded due to systematic disclosure on government websites. Stakeholders consulted did not express particular views on progress towards this objective. The 2020 EITI Report describes the legal, environmental and fiscal regime for mining, oil and gas sectors, including the roles of government entities and the level of fiscal devolution. Relevant government websites are well-referenced through EITI reporting and provide the full text of broader laws and regulations that are summarized in the 2020 EITI Report. Colombia has exceeded this requirement by providing information on planned and ongoing reforms to the General Royalty System, for example, and detailed information on the fiscal incentives pertinent to the extractives sector through systematic disclosure.

The Secretariat's assessment is that Requirement 2.4 is fully met. When consulted, industry and civil society stakeholders considered that the objective of contract transparency had been fulfilled. While Law 1712 of 2014 provides for certain economic rights information contained in documents that are not considered to be part of oil and gas contracts cannot be disclosed by law, as clarified in the government and EITI Colombia Secretariat’s comments on the draft Validation report. The Secretariat’s view is that the objective of Requirement 2.4 is fully met given that all active contracts and licenses appear to have been disclosed. In its comments on the draft Validation report, civil society acknowledged the important advances in contract transparency but highlighted the continued challenges in accessing and understanding contracts by stakeholders at the subnational level. Further improvements in the accessibility of contracts and licenses could help improve their use by a broader range of stakeholders. Relevant government policy on contract and license disclosure in the mining and oil and gas sectors is summarized in the 2020 EITI Report and links are provided to where the full text of these laws and regulations can be found on government websites. Government policy is in favour of contract and license disclosure, although there are legal constraints to publicly disclosing economic information that is not considered part of the contract. The redacted information consists of data that, if disclosed, is alleged by government and industry stakeholders to be harmful to natural persons or legal entities and proprietary technical information, such as variables used to calculate the economic contributions of extractive projects. However, this explanation of the rationale for redacting portions of published contracts has not yet been published. In practice, the ANH and ANM provide lists of all active licenses and contracts (including those awarded prior to 1 January 2021), as well as the full text, with annexes, amendments and riders other than what is expressly prohibited. It appears that the Colombian government has made great efforts to publish contracts in the mining sector and the concession contract webpage hosted by the ANM appears to publish the full text of numerous mining contracts. EITI reporting provides figures for each type of active mining contract and license and includes a link to where the text of these contracts and licenses are found on the ANM website. While there is no comprehensive review of which contracts and licenses are published (including annexes, amendments and riders in accordance with Requirement 2.4.c.ii) all contracts and licenses appear to be published on the ANM and ANH websites according to all stakeholders consulted. There does not appear to be an established plan in place to further improve the accessibility of published contracts and licenses.

The Secretariat's assessment is that Colombia has made considerable efforts to disclose information on the environmental impact of the extractive industries, and that it has addressed a majority of aspects of Requirement 6.4. Thus, the Secretariat’s assessment is that Requirement 6.4 is fully met, but not yet exceeded. There is scope for Colombia to expand its use of EITI reporting to provide an annual diagnostic of practices in environmental management, building on its existing work of centralising links to relevant datasets. Information on regular environmental monitoring procedures, administrative and sanctioning processes of governments and the roles and responsibilities of relevant government agencies are described through EITI reporting. Environmental liabilities, environmental rehabilitation and remediation programmes and planned or ongoing reform efforts do not appear to be addressed in the 2020 EITI Report or through systematic disclosure. Nevertheless, EITI Colombia has produced several reports and tools with support from German cooperation (GiZ), including an Environmental Payment Card and an Environmental Platform Study. While it does not appear that the National Authority for Environmental Licenses (ANLA) maintains a database of environmental impact assessments, the ANLA website does publish information about environmental measures of projects considered of national interest as well as figures on environmental complaints by department and extractive sector. In their comments on the draft Validation report, civil society and the EITI Colombia Secretariat requested that their efforts to expand EITI reporting to environmental issues be taken into account, given the importance of the issues for Colombia’s EITI process.

The Secretariat's assessment is that Requirement 2.2 is mostly met. While information on stakeholders’ perception that there were no non-trivial deviations from statutory procedures in license awards and transfers in 2020 was confirmed in the period reviewed in the previous Validation, the results of the MSG’s diagnostic of licensing practices was not covered in the 2020 EITI Report or in other publicly accessible documents. The objective of this requirement is to provide a public overview of awards and transfers of oil, gas and mining licenses, the statutory procedures for license awards and transfers and whether these procedures are followed in practice. Across the board, stakeholders voiced their satisfaction with the level of transparency in contract and license awards but were less clear where to find publicly accessible information on license transfers in mining and oil and gas. In their comments on the draft Validation report, civil society recommended that there be an annual review of licensing practices and of public consultations carried out as part of the licensing process. The EITI Colombia Secretariat’s comments on the draft assessment argued that the 2021 report and a contracts booklet (‘tableros') provided information on technical and financial criteria assessed in the transfer of mining and hydrocarbons licenses, as well as information on any deviation from statutory licensing procedures. However, while the additional documents clarify the technical and financial criteria assessed for government approvals of license transfers, they did not provide evidence of the MSG’s diagnostic of non-trivial deviations in extractive licensing in 2020 compared to statutory procedures. Thus, the Secretariat considers that the objective remains mostly met pending the completion of EITI Colombia’s annual diagnostic of extractive licensing practices. Colombia systematically discloses information on the award of mining licenses, though there were no new awards in the period under review. No information is provided to inform the public of transfers of mining licenses, including for the period under review. In oil and gas, government websites mirror information found in the 2020 EITI Report that shows that four oil and gas licenses were awarded in 2020, which is confirmed by third party sources. Like in mining, there is no information on potential transfers of licenses or participating interests in oil and gas licenses and contracts in the period under review. While technical and financial criteria are defined for the award of mining and oil and gas licenses, it is not clear from public sources whether the same criteria would apply in mining and oil and gas license transfers. It is not clear whether any weightings are applied to technical and financial criteria that value some over others. The EITI Colombia Secretariat’s comments on the draft assessment noted that the technical and financial criteria assessed in mining and hydrocarbons license transfers were contained in the 2021 report and the contracts booklet. Mining licenses can be awarded in three ways, either through “first in, first assessed”, direct negotiations or bid rounds. Stakeholders confirmed that there were no new mining licenses awarded in FY 2020. For oil and gas licenses, bid rounds or direct award by ANH are possible. Government stakeholders confirmed that the four hydrocarbon licenses awarded in 2020 were awarded through bidding rounds. Full lists are provided for both the winners of bidding rounds and unsuccessful bidders. The 2020 EITI Report does not provide evidence of a review of non-trivial deviations from statutory procedures in license awards and transfers in mining or in oil and gas. While the MSG’s comments on the draft Validation report argued that the findings of the MSG’s review of non-trivial deviations was contained in the 2021 report, the Secretariat could not find evidence of such a diagnostic in the additional documents cited in the MSG’s comments. Some mining industry stakeholders were of the opinion that the process for awarding contracts and licenses was too bureaucratic and time-consuming while oil and gas industry stakeholders noted that bid rounds had resumed after the COVID-19 pandemic delayed the introduction of new bid rounds.

The Secretariat's assessment is that Requirement 2.3 is fully met. The objective of this requirement is to ensure the public accessibility of comprehensive information on property rights related to extractive deposits and projects. The Secretariat’s view is that this objective has been fulfilled given the comprehensive license information provided through the new ANM cadastral portal. In mining, the cadastral portal was last updated in January 2020 and it is unclear whether there have been transfers since this date that are not contained in the register. While this cadastral portal is still operating and provides information on license-holders, dates of award and expiry, and commodities covered by the mining license, the fact that the cadastral portal is no longer updated makes it unclear if this information is current or if the cadastral portal is missing information on mining licenses more recently awarded (or transferred). Furthermore, dates of application were not found in any mining portal, nor were coordinates of mining areas, though the geographic visualizer shows general areas of operation of major extractive activities that enable the public to see the size and location of license areas. In oil and gas, the license register takes the form of a PDF document with a last date of update as 31 December 2022. License-holder names as well as names of partners and their specific participating interest are listed for each license. Oil and gas license coordinates can be found through the Geographic Visualizer hosted by the ANH. ANH webpages document the various bid rounds for oil and gas licenses and provide dates of application, award and expiry as well as bidder information. Commodities covered by licenses are defined in the license text, which is publicly accessible for all licenses. EITI reporting was not used to address gaps in the mining cadastre or to distinguish the year in which mining licenses were awarded. While the EITI Colombia webpage on contracts and licenses provides an assessment of all active mining licenses as of 2021, without distinguishing the year of award, it is not possible to consider that the mining cadastre is up to date. There is no comment in the 2020 EITI Report as to the frequency of update of this mining license register. However, in their comments on the draft Validation report, the MSG, government and EITI Colombia Secretariat highlighted that the new ANM cadastral portal contained all information listed under Requirement 2.3.b for all active mining licenses, confirming that the EITI Colombia Secretariat had reviewed all active licenses in preparing comments on the draft assessment. Thus, the Secretariat is satisfied that the new ANM cadastral portal is now regularly updated and provides the required information on all active mining licenses. The availability of all required license information is also supported by the findings that all mining licenses and contracts have been publicly disclosed in full (see Requirement 2.4).

The Secretariat’s assessment is that Requirement 2.5 is partly met. While Colombia enacted legislation defining government policy on beneficial ownership in September 2021, the deadline for companies to submit this information is June 2023. Given the extended deadline for reporting it appears too early for the MSG to provide an assessment on the comprehensiveness of collection efforts. The objective of this requirement is to enable the public to know who ultimately owns and controls the companies operating in Colombia’s extractive industries to help deter improper practices in the management of extractive resources. Despite robust legislation in favour of collecting beneficial ownership information, the public does not have access to this information, leaving the objective of this requirement partly met. In their comments on the draft Validation report, civil society expressed support for this assessment and called for the development of a roadmap for progressing towards full beneficial ownership transparency. The EITI Colombia Secretariat’s comments on the draft assessment note that, while there is no public beneficial ownership register yet, EITI Colombia had carried out a series of workshops and studies on the subject, had provided input to the development of the legal framework, had socialised beneficial ownership transparency with relevant government agencies and developed good practices in reviewing beneficial ownership data to improve due diligence in the licensing process. The comments noted that, while there were currently no provisions for beneficial ownership information to be publicly disclosed, this would be a priority for the MSG moving forward, at least for companies included in the scope of Colombia’s EITI reporting. The MSG’s common comments on the draft Validation report highlighted the progress achieved to date, even if there was more to do. The Secretariat acknowledges the significant work undertaken by the MSG and government authorities in establishing an enabling legal framework for beneficial ownership data collection and in launching the collection of such data. However, in the absence of an enabling legal and regulatory environment for the public disclosure of beneficial ownership data and the lack of assurances that ownership data has been requested from all companies holding or applying for mining and petroleum rights, combined with the lack of a published assessment of the comprehensiveness and reliability of beneficial ownership data collection to date, the Secretariat’s view is that the objective is not yet fulfilled and thus that Requirement 2.5 is partly met. The Colombian government passed Law 2155 on Social Investment in September 2021, which details government policy on beneficial ownership and is regulated by Resolution 000164. These laws were highlighted again in the government constituency’s comments on the draft Validation report. While a definition of beneficial ownership and politically exposed persons, and thresholds for their disclosure are defined in Law 2155, this law stops short of requiring the public disclosure of beneficial ownership information and only the tax authority (DIAN), the General Consult of the Republic, the Attorney General’s Office and the Financial Information and Analysis Unit have access to this information. Law 2155 requires all Colombian companies to report BO information to DIAN, including those bidding and applying for extractive licenses. While Law 2155 does not fully account for foreign legal owners, a March 2022 resolution, Resolution No. 000037 of 2022, modified existing legislation to minimize conflicting language. Given that Colombian legal persons, permanent establishments and/or structures without legal persons are already required to report, foreign legal owners are only required to report when their investment is not made through a Colombian entity already required to report BO information. While Law 2155 was passed at the end of the period under review and initial collection efforts may still be underway, there is no assessment from the MSG on collection efforts and it is not clear what the MSG’s approach is to ensure the public disclosure of this information. One government stakeholder indicated that the establishment of Law 2155 for the collection of BO information was in the government's interest and was not an initiative aimed at the public disclosure of this information. Likewise, while there is a company register with legal ownership information through the Single Tax Registry, this information is not publicly accessible. Concerning those government agencies that do have access to BO information, one government stakeholder noted that there should be more interagency communication to facilitate data sharing. This is particularly relevant given that the Ministry of Mines and Ministry of Environment do not have access to BO information.

The Secretariat’s assessment is that Requirement 2.6 is fully met, as in the previous Validation. Ecopetrol, as the only Colombian SOE in the extractive sector, regularly discloses financial and operational information as well as a thorough overview of its legal structure and legal framework. Information allows citizens to understand the role of the company in the extractive sector and in the national economy. The objective of this requirement is to ensure an effective mechanism for transparency and accountability of the SOE’s and the state participation through a public understanding of whether the SOE’s management is undertaken in accordance with the relevant regulatory framework. Information that is systematically disclosed, although very technical, allows for a general understanding of the SOE’s management, hence reaching the objective. In their comments on the draft Validation report, civil society acknowledged Ecopetrol’s extensive systematic disclosures but raised concerns over alleged weaknesses in the SOE’s disclosures related to processes for transfers of assets, negotiations and commercial relations with consortiums, subsidiaries and contractor companies with which it does business. While the Secretariat recognises these additional calls for public disclosures, it considers that all information listed in Requirement 2.6 regarding the rules and practices of the national oil company’s financial relations with the state and with its own subsidiaries and joint ventures has been publicly disclosed. Ecopetrol systematically discloses financial and corporate information, its legal framework and its relations with the Colombian state. This information includes the rules and practices that govern the transfer of funds (through dividends) to the state as the major shareholder, and the rules for use of retained earnings (described in the law). The dividend policy is also explained in the form 20-F to the SEC. The rules regarding third-party financing and reinvesting are also disclosed on Ecopetrol’s website. These are also available at the website of the Ministry of Public Service (Ministerio de Función Pública), and in the statutory filings to financial exchanges (form 20-F to SEC). The rules and practices regarding the financial relationships between Ecopetrol and its different joint ventures and subsidiaries are described in the EITI Report and in systematically disclosed documents, such as Ecopetrol’s Audited Financial Statements and its 20-F report to the SEC. However, the International Secretariat could not identify specific rules regarding the dividends paid to the parent company by each of Ecopetrol’s subsidiaries, although stakeholders consulted confirmed that the rules for distribution of profits by Ecopetrol subsidiaries was the same as for any privately-held company. Nonetheless, disaggregated results per company are published in the audited financial statements and the 20-F form Colombia’s 2020 EITI Report provides a clear explanation of the participation of Ecopetrol in the oil and gas sector. Since the Colombian state owns less than 90% of Ecopetrol’s shares, Ecopetrol is not included in the Nation’s General budget and the Government of Colombia does not inject additional funding to Ecopetrol’s budget. However, it is the Congress of Colombia that approves the issuance of new debt by Ecopetrol and the Government of Colombia, as indicated by law. Ecopetrol’s audited financial statements are systematically disclosed on its website on an annual basis. Information on financial relations between Ecopetrol and its subsidiaries are systematically disclosed. Ecopetrol’s audited financial statements disclose a list of all equity interests held by Ecopetrol in different extractive companies and projects and the revenues each subsidiary contributes to Ecopetrol. Changes to state participation in different subsidiaries are disclosed in its audited financial statements, as well as in its 20-F form. These publications provide a solid basis of transparency on the financial relations between the Colombian state and Ecopetrol in practice, on which the EITI could build in terms of coverage of the practices of procurement, contracting and corporate governance. Ecopetrol discloses information on the composition and the appointment procedure of the Board of Directors. The process is clearly described on Ecopetrol’s website. It also includes information on the code of conduct of the company as well as information on the compensation of directors and management. Information on capital expenditures is available at the 20-F form of Ecopetrol for fiscal years 2019, 2020 and 2021. Operating expenses are also disclosed in its 20-F form. Ecopetrol publishes information on its supplier relationship plan, that includes a description on its policy of procurement and subcontracting, although a description of actual practices related to procurement and contracting by Ecopetrol does not yet appear publicly accessible. These disclosures were highlighted again in the industry constituency comments on the draft Validation report.

The Secretariat's assessment is that Requirement 4.2 is fully met. The objective of this requirement is to ensure transparency in the sale of in-kind revenues, and to allow the public to assess whether the sales values correspond to market values and ensure the traceability of the proceeds from the sale of those commodities to the national treasury. Information published gives an oversight of the volumes and values that the Colombian state received from the proceeds of the sale of oil in the production sharing agreements signed by the Colombian state. However, civil society stakeholders consulted raised some questions regarding the lack of disaggregated data by individual sale. In a document tracing progress of 10 recommendations from civil society stakeholders in the 2018 Validation, these civil society stakeholders highlighted this recommendation as the one with the least progress on follow-up to date. In their comments on the draft Validation report, civil society asked for a downgrade in the assessment given the lack of disaggregation in Ecopetrol’s onward sales of oil and gas to third parties and the lack of publication of oil sales contracts. The government’s comments on the draft assessment highlighted the public availability of key terms of the marketing contract between the government and Ecopetrol, despite the fact that the contract itself is not publicly available. The Secretariat recognises civil society’s demands for additional information encouraged under Requirement 4.2 regarding the national oil company’s own sales (not on behalf of government) and publication of the oil sales contracts, but considers that these are encouraged, rather than required, provisions of Requirement 4.2. Ecopetrol was, in the period under review, the sole company responsible of receiving and selling crude oil in-kind revenues according to the contracts that ANH signs on behalf of the Colombian state with different companies. The state (through the ANH) renewed a contract with Ecopetrol for selling in-kind oil in the period from October 2020 to October 2022. The contract, the description of the process and the technical and financial criteria do not appear to be publicly accessible. Information on in-kind revenues of oil is disclosed at the EITI Colombia website. Volumes received and sold by the state and the revenues transferred to the state are disclosed at the EITI Colombia website, the ANH website, and the 20-F form. The volumes of royalties commercialised by Ecopetrol as well as the monetary value derived from those transactions are reported on the EITI Colombia website. The EITI Report includes detailed descriptions of the process with accessible infographics. However, there is no disaggregation of the volume delivered to Ecopetrol by company with information solely presented for the total value of the amount sold by Ecopetrol. Ecopetrol discloses its buyer selection process although a list of all buying companies is not publicly available, as mandated in Requirement 4.2b. The MSG is encouraged to publish whether there are any concerns related to data reliability. Moreover, Trafigura publishes in its Payments to Governments Report that provides the volumes by cargo bought from state-owned enterprises in EITI implementing countries. For the year 2020, it discloses crude bought from Ecopetrol and one of its subsidiaries, Equion Energía.S.A. Stakeholder consultations with government representatives confirmed that ANH has only one contract signed for the sale of in-kind revenues and that this sales contract is with Ecopetrol.

The Secretariat's assessment is that Requirement 4.5 is fully met, as in the previous Validation. The objective of this requirement is to ensure the traceability of payments and transfers involving SOEs and strengthen public understanding of whether revenues accruable to the state are effectively transferred to the state and to assess the level of state financial support for SOEs. Information disclosed describes the revenues that the Colombian state receives from the state-owned enterprise, Ecopetrol, thus the objective of Requirement 4.5 has been fulfilled. In their comments on the draft Validation report, the industry constituency highlighted Ecopetrol’s extensive systematic disclosures of EITI data. Information regarding the role of Ecopetrol in the Colombian economy is clearly described. Ecopetrol discloses payments to government and its contribution to the national economy. Payments to government are disclosed and reconciled by revenue stream and disclosed in Ecopetrol’s audited financial statements. EITI Colombia’s website and Colombia's 2020 EITI Report differentiate between the revenue streams that must be paid by the SOE and those that are paid by every company. These revenue flows have been reconciled and are included in Colombia’s EITI Report. Revenue from Ecopetrol’s subsidiaries is disclosed in Ecopetrol’s audited financial statements. Volumes and revenue received by Ecopetrol as the only authorised company to sell the government’s in-kind revenue is also disclosed and reconciled at the EITI Colombia website and in Ecopetrol’s 20-F form. Given the role of Ecopetrol as a company that falls below 90% of state-owned shares, it is not part of the national budget and does not receive funding from the State.

The Secretariat's assessment is that Requirement 6.2 is not applicable in Colombia, as in the previous Validation. The objective is that where state-owned enterprises undertake extractive-funded expenditures on behalf of the government that are not reflected in the national budget, these are disclosed to ensure accountability in their management. There is no evidence that the state-owned enterprise undertook expenditures on behalf of the government in the period under review. The government subsidises gasoline and other fuels (gas) for household consumption. A fund for the stabilisation of oil prices (Fondo de Estabilización de Precios de los Combustibles, FEPC) was established in 2007. This Fund receives resources from the national budget. The sole responsibility of this Fund falls under the Ministry of Finance and is recorded in the national budget. In May 2022, the Colombian government announced that it would allocate part of the dividends received from Ecopetrol to fund the deficit that the FEPC has been running. An extraordinary assembly of shareholders in 17 June 2022 approved this extraordinary dividend. The International Secretariat could not verify that this share of extraordinary dividends to compensate the FEPC’s deficit was recorded in the national budget (it was not possible to verify information on the Ministry of Finance website). Press analyses point out that the National budget for 2023 established the possibility of utilising Ecopetrol’s extraordinary dividends to reduce the deficit of FEPC. However, the International Secretariat does not have clarity on whether this was managed off-budget. This specific issue should be described and assessed in Colombia’s future EITI Reports. The EITI Report states that Ecopetrol does not participate in any form of quasifiscal expenditures, although it does not provide a detailed explanation to confirm this lack of participation. However, it was confirmed in stakeholder consultations held during this Validation that Ecopetrol did not undertake public social expenditure on behalf of the government.

The Secretariat’s assessment is that Colombia has fully met Requirement 3.2. The Secretariat concludes that the objective of this requirement has been fulfilled, given that Colombia’s EITI Reports disclosed oil and gas volumes to all encouraged levels of disaggregation while sufficient information to estimate production values is publicly accessible through systematic disclosures on the ANH and ANM websites. In their comments on the draft Validation report, the industry constituency provided a link to Ecopetrol’s 20-F filings to the U.S. Securities and Exchange Commission. Civil society’s comments called for greater disaggregation of production data, by region, company and project. However, the Secretariat’s view is that this additional disaggregation in production data is encouraged, but not strictly required, under Requirement 3.2. In the oil and gas sector, production volumes are systematically disclosed online to levels of disaggregation encouraged by the EITI Standard. The government’s comments on the draft Validation report highlighted the availability of oil and gas production data from the ANH website, including information on production values. In the mining sector, production volumes are disclosed through EITI reporting by commodity at the national level. For mining projects considered to be ‘Projects of Strategic National Interest’, there are public disclosures of production volumes disaggregated to levels encouraged by the EITI Standard, but this production data is not comprehensive of all production in the mining sector (including from projects not deemed of ‘strategic national interest’. It is also unclear whether production data was provided by the National Minerals Agency (ANM) or the Colombian Mining Association (ACM), as conflicting citations are used on the 2020 EITI Report and on the EITI Colombia website. However, as highlighted in the government’s comments on the draft Validation report, there is public availability of comprehensive mineral production volumes and values through the ANM website, including detailed guidance on accessing this data. Indeed the information published by ANM on the production volumes on which royalty liabilities are calculated provides sufficient infomration on total mineral production volumes recorded by the government.

The Secretariat's assessment is that Colombia has mostly met Requirement 3.3, which represents backsliding from the previous Validation. The Secretariat’s view is that the objective has not yet been fully met given that reference prices are not available to allow for the calculation of estimates of mining export volumes. Industry’s comments on the draft Validation report provided a link to Ecopetrol’s audited financial statements. Civil society’s comments called for greater disaggregation of export data, by region, company and project. In the oil and gas sector, export volumes and values are systematically disclosed online, albeit not yet disaggregated by API grade or type of gas nor by region, company or project as encouraged by Requirement 3.3. Export data are disaggregated by fuel subgroup and country of destination. In the mining sector, export values are systematically disclosed for some commodities, while EITI reporting provides export values fully disaggregated by commodity. However, mineral export volumes do not appear to be publicly available. While export values are not yet disaggregated by region, company or project, such disclosures are encouraged, not strictly required by the EITI Standard. In their comments on the draft Validation report, the government and EITI Colombia Secretariat argued that all mineral export volumes and values are publicly disclosed on the DANE and ANM websites. However, export volumes and values appear to be publicly accessible for certain mineral commodities like coal, oil and ferronickel, but not for each mineral commodity exported in the period under review.

The Secretariat’s assessment is that Requirement 4.1 is mostly met, which represents backsliding from the previous Validation. The objective of this requirement is to ensure comprehensive disclosures of company payments and government revenues from oil, gas and mining as the basis for a detailed public understanding of the contribution of the extractive industries to government revenues. Available documentation and stakeholder consultations confirmed that this objective is mostly met, considering high reporting coverage, but noting limited discussions on materiality thresholds. In their comments on the draft Validation report, civil society argued that there were no assurances that the scope of EITI disclosures was comprehensive in the mining sector, given the lack of sufficient information on medium-scale, small-scale and artisanal mining from the consideration of material government revenues. Civil society called for more information on artisanal and small-scale mining and revenues accruing to the government. The EITI Colombia Secretariat’s comments highlighted the comprehensive coverage of the coal and hydrocarbons sectors and noted that the dedicated study on artisanal and small-scale mining had demonstrated that most of the gold production that was not covered in EITI reporting was informal or artisanal and did not give rise to material revenue flows to the government. The comments highlighted the materiality decisions that were documented for the 2020 EITI Report, including alternatives considered and the rationale for agreeing the thresholds selected, as well as the dedicated study on ASM. However, the Secretariat’s view is that the lack of confirmation by the tax authority that no material company payment to government had been excluded from the scope of reconciliation continues to be a concern, given that this had been the practice by EITI Colombia in past EITI Reports reviewed in the previous Validation. Indeed, the lack of this confirmation raises concerns over the potential for certain extractive companies making material payments to government may have been omitted from the scope of the latest EITI Report. According to the 2020 Colombia EITI Report, the MSG selected material revenue streams and companies on the basis of a target reconciliation coverage ratio, reaching 95.56% of the total extractive sector revenues for the 2020 fiscal year. The reconciliation coverage accounted for 98.62% of total government revenues from the oil and gas sector and 79.01% of government revenues from the mining sector. The 2020 Colombia EITI Report lists 39 material extractive companies (belonging to 24 business groups) and four government agencies that were included in the reporting scope. Stakeholder consultations indicated that the scope of EITI reporting was focused on large and medium-size companies and that the remaining extractive sector revenues were generated by a large number of small-scale producers. While stakeholder consultations indicated no significant concerns about the selection of reporting companies and material revenue streams, there is no evidence of the MSG agreeing upon a reporting threshold for selecting material companies and revenue streams, and there is limited evidence of discussion on the rationale for the agreed reporting scope. Compared to the previous Validation, the 2020 Colombia EITI Report and other documentation did not include confirmation from relevant government agencies that no extractive company accounting for a share of government extractive revenues considered to be significant by the MSG (for example, 1% of total government revenues) was excluded from the scope of reporting. This gap is a concern given the lack of public assurances that all extractive companies making material payments to government were included in the scope of reconciliation. At the same time, the 2020 EITI Report provides information on a pilot project for the gold sector that was conducted in association with the Swiss Better Gold Association. The project included collection of revenue and non-revenue data from small and mediumsize gold companies. The 2020 EITI Report provides a list of the revenue streams considered material and a description of relevant revenue streams is available in the 2020 Colombia EITI Report and through various sources available in the public domain. It does not appear that the revenue streams listed in provision 4.1.c were explicitly considered, although stakeholders consulted did not express any concerns about selected revenue streams, including related to exclusion of signature, discovery and production bonuses. Document analysis and stakeholder consultations confirmed that all companies considered material by the MSG and all government agencies receiving material payments fully reported all payments in accordance with the agreed reporting scope. The 2020 EITI Report showed that the final discrepancy between company and government reporting was 0.003% of total government extractives revenues. Such a small discrepancy bolsters assurances that reconciled financial data are comprehensive. The total extractive sector’s revenues, including any revenues below the materiality thresholds, are publicly available through Colombia EITI website (Cifras informe de cotejo, Tab 2).

The Secretariat’s assessment is that Requirement 4.4 is mostly met. The objective of this requirement is to ensure transparency in government and SOE revenues from the transit of oil, gas and minerals as a basis for promoting greater accountability in extractive commodity transportation arrangements involving the state or SOEs. The Secretariat’s assessment is that this objective is mostly met given the lack of disaggregation of public disclosures about the national oil company’s transportation revenues by individual company making such payments. Available documentation and stakeholder consultations indicate continuous efforts related to strengthening transparency of transportation data. At the same time, there is limited evidence that the progress related to compiling and systematically disclosing transportation revenue information since the previous Validation has been fully maintained, which indicates that the objective of this requirement is mostly met. The 2020 Colombia EITI Report includes a brief overview of transportation of oil, gas and coal minerals in Colombia. Available documentation and stakeholder consultations indicate that the following transportation revenues contributed to the national income in 2020: • Oil and gas: Crude oil is transported primarily by pipelines, with Cenit (100% subsidiary of Ecopetrol) leading the transportation business. Crude oil can be also transported by tank trucks, however, the share of this method of transportation has been continuously decreasing. Oil and gas pipeline transportation tax and port consideration have been identified as revenue streams contributing to government revenues. • Natural gas: Natural gas is transported by pipelines, with a number of operators involved in the transportation business. Oil and gas pipeline transportation tax and port consideration revenue streams both contribute to government revenues. However, the port consideration is not applicable for this commodity as there was no export of natural gas in the fiscal year under review. • Coal: Transportation of coal is carried out by public and private railways. The public railways are operated by a private company Fenoco through a concession granted by the state. Right of transit and port consideration are the relevant revenue streams contributing to government revenues. The applicability of Requirement 4.4 to these revenue streams requires further clarification by the MSG. Stakeholders consulted noted that no specific materiality threshold was agreed for transportation revenues for the 2020 fiscal year. However, there appeared to be a mutual agreement that oil and gas pipeline transportation tax, right of transit and port consideration were considered as material transportation revenue streams for the fiscal year under review, based on thematic reports and previous discussions held by the MSG. In their comments on the draft Validation report, the EITI Colombia Secretariat confirmed that the MSG had not established a materiality threshold for disclosing transportation revenues. The Transparency template and stakeholder consultations indicated that there had been limited changes in rules and practices since preparation of the 2017 EY study on transportation. The study provides information on the transportation arrangements, definitions of relevant transportation taxes and other relevant payments as well as methodologies used to calculate them. It also includes information on volumes of the transported commodities and revenues received by government entities and SOEs for the 2016 fiscal year. As for the oil and gas sector, the 2020 EITI Report indicates that the total volume transported by oil pipelines was 1.017m bd in 2020. Ecopetrol’s sustainable management report notes that Ecopetrol’s pipeline transportation tax amounted to approximately COP 164m, or USD 45m. This figure is only provided in aggregate and is not disaggregated by company. The 2020 Colombia EITI Report and Transparency template do not provide information on volumes of natural gas transportation, values of pipeline transportation tax for natural gas and values of port consideration. Available documentation indicates that the amounts of oil and gas pipeline transportation tax are publicly available through the government’s open data portal. However, the portal does not seem to provide data for the 2020 fiscal year. In addition, there appear to be differences in total amounts disclosed in the portal and the 2017 EY study on transportation. Stakeholders consulted flagged that collection of information is challenging considering a significant number of municipalities receiving pipeline transportation tax. When it comes to port consideration, the contractual information of the ports is available through the website of the National Infrastructure Agency (ANI), but the amounts collected by relevant agencies and municipalities do not appear to be publicly disclosed. In their comments on the draft Validation report, the EITI Colombia Secretariat explained that the Hydrocarbon Transportation Information System (SiTH) maintained by the Ministry of Mines and Energy enables calculations of transportation rates and revenues, although the system is not yet publicly accessible even if the Ministry has indicated that information is available upon request. The comments note that Resolution 72146 of 2014 set the pipeline transportation rates but that these rates are revised every four years, with new rates currently under debate for the period from 2023 to 2027. The MSG comments include a commitment to move forward on publicly disclosing this information in future. As for the coal sector, the 2020 EITI Report and the MSG’s ‘Transparency’ template for this Validation do not include information on volumes and values of transportation (right of transit and port consideration). These data also do not appear to be available elsewhere in the public domain. Available documentation does not include a clear statement on the applicability of Requirement 4.4 to transportation revenues from the coal sector. Consulted stakeholders indicated that some information on transportation revenues is available online, but noted that further work would need to be done to ensure comprehensiveness and comparability of data.

The Secretariat’s assessment is that Requirement 4.8 is fully met, as in the previous Validation. Stakeholders consulted considered that the objective of timely disclosures had been fulfilled, although some stakeholders noted relatively short timeframes for addressing the comments to the draft EITI Report. The Secretariat concurs and notes that there is still room for improvement as it pertains to sufficient turnaround time to address comments to the draft EITI Report. Colombia has published EITI Reports within the Board-approved timelines since the previous Validation. The latest 2020 EITI Report was published in December 2021, within one year of the end of the fiscal period covered by the EITI Report.

The Secretariat’s assessment is that Requirement 4.3 is not applicable. The 2020 Colombia EITI Report and the Transparency template confirm that there are no regulations, agreements or sets of agreements involving the provision of goods and services in full or partial exchange for oil, gas or mining exploration or production concessions or physical delivery of such commodities. Stakeholders consulted noted that there is a mechanism defined in Law 1819 for engaging private companies in building infrastructure in designated zones (areas affected by the armed conflict, for example). Such companies are applicable for tax reduction. However, it was noted that this mechanism does not entail full or partial exchange for oil, gas or mining exploration or production concessions or physical delivery of such commodities.

The Secretariat’s assessment is that Requirement 4.7 is mostly met. Stakeholders noted that the objective of ensuring disaggregation in public disclosures of company payments and government revenues from oil, gas and mining has been mostly met, however further progress can be achieved on disclosure of information at the project level. In its comments on the draft Validation report, civil society argued for a downgrade in the assessment, noting that civil society’s requests for project-level disaggregation of financial data since 2013 had not yet been addressed to date. The comments highlighted the value of project-level data for host communities in particular. The EITI Colombia Secretariat’s comments on the draft assessment highlight that taxes are levied on both mining and hydrocarbons companies at the level of the tax identification number, i.e., by company, and not by individual project. With respect to non-tax revenues, the comments explain that the ANH website provides information on royalty revenues (and production) disaggregated by individual field. The EITI Colombia Secretariat’s comments note that there had been an attempt to consult civil society on the level of disaggregation in data disclosures, but that there had been no response from the constituency. The Secretariat’s view is that the objective is mostly met, given that some non-tax revenue data (on revenues other than royalties) has not yet been disclosed disaggregated by individual project, despite being levied on this basis. Reconciled financial data found on the Colombia EITI website is disaggregated by individual company, government entity and revenue stream, but not yet by project. While there are documented MSG discussions in meeting minutes (see here and here) of what constitutes a project, a review of these meeting minutes did not find that the MSG had ultimately agreed upon a definition. The EITI Colombia Secretariat’s comments highlighted a presentation on project-level reporting by the IA EY in 2017, at the MSG’s 32nd meeting. However, these meeting minutes also demonstrate that there are ongoing discussions around how a project should be defined. There is also limited evidence to confirm that the MSG has mapped which revenue streams were levied at a project level, nor that it has documented any extractive project that covers several contracts, licenses or agreements that share substantially interconnected infrastructure, where applicable.

The Secretariat’s assessment is that Requirement 4.9 is fully met, as in the previous Validation. Analysed documentation and stakeholder consultations suggest that the objective of ensuring the reliability of disclosures of company payments and government revenues from oil, gas and mining has been fully achieved. In their comments on the draft Validation report, civil society has called for more dialogue on the MSG for all stakeholders to understand the methodology adopted to ensure reliable data in the EITI Report. However, the EITI Colombia Secretariat’s comments noted that there was no evidence of deviations from the agreed upon procedures, referencing evidence of MSG discussions and decisions related to the methodology for quality assurances, and expressed its view that the objective had been fulfilled. These views were echoed in the MSG’s common comments on the draft Validation report. The 2020 EITI Report was prepared by the Beta Group based on the terms of reference (ToRs) for the Independent Administrator (IA) approved by the MSG and broadly consistent with the standard ToRs for IAs endorsed by the EITI Board. Stakeholders consulted didn’t express any concerns related to the selection process or final deliverables of the IA. At the same time, stakeholder consultations indicated that there were disagreements on the scope of EITI reporting, in particular with regard to civil society proposals for expanding the scope of EITI reporting beyond required aspects of the EITI Standard submitted not during the elaboration of the ToR for the EITI Report but rather during the MSG’s review of the draft EITI Report. Available documentation (see, for example, Colombia EITI website here) and stakeholder consultations confirmed that all government agencies and all companies reported the required data and complied with data quality and assurance mechanisms, including signatures from senior officials/management. The 2020 EITI Report notes that its Independent Administrator, Beta Group, published a diagnostic report on the legal framework and audit practices of government entities and extractive companies in 2021, but it remains unclear where this report can be publicly accessed. This is also confirmed by a relatively small discrepancy between government and company reporting, totaling 0.003% of government extractives revenues in 2020. The 2020 EITI Report describes applicable quality assurance mechanisms used by the Independent Administrator (IA) in detail but there is no clear statement from the IA on the comprehensiveness and reliability of reconciled financial data. Nonetheless, the International Secretariat considers that the review of underlying audit and assurance practices in government and extractive companies, combined with the full compliance of reporting entities with the agreed quality assurances for EITI reporting, imply that the reconciled data is comprehensive and reliable. The 2020 Colombia EITI Report and thematic studies include clear references and non-financial (contextual) information is clearly sourced. The report also confirms that appropriate provisions for safeguarding confidential information were agreed and implemented.

The Secretariat’s assessment is that Requirement 5.1 is fully met, as in the previous Validation. The objective of this requirement is to ensure the traceability of extractive revenues to the national budget and ensure the same level of transparency and accountability for extractive revenues that are not recorded in the national budget. Stakeholder consultations and disclosures suggest that the objective has been met. It appears that all revenues are recorded either in national and subnational budgets or are recorded through the General Royalty System (SGR), with financial statements provided for both the national budget and the SGR. Subnational payments were reported unilaterally by companies and financial statements were not provided for subnational budgets. The 2020 EITI Report provides detailed information on the functioning of the SGR along with links to systematic disclosure of budgeted and allocated royalties through the SICODIS portal. The 2020 EITI Report describes the management of public finances though it is not clear from EITI reporting or government websites whether Colombia adheres to international revenue classification standards. EITI reporting summarizes recent changes to legislation that affect the General Royalty System. In their comments on the draft Validation report, civil society welcomed the recommendation to publish financial reports at the subnational government level and called for more capacity building and the development of tools by the MSG for subnational stakeholders to be able to use information on subnational revenue flows. This was considered highly important to address the civil society perception that information on subnational revenue flows and their management was not transparent. The EITI Colombia Secretariat’s comments noted that these recommendations would be taken into account.

The Secretariat’s assessment is that Requirement 5.3 is fully met, but not yet exceeded given that some encouraged aspects of this requirement remain to be addressed. Colombia addressed some aspects of Requirement 5.3 through EITI reporting and through information hosted systematically on government websites. Concerning expenditure decisions stemming from the national budget, the Ministry of Finance is the responsible government entity and systematically discloses information on the subject. Royalties are not recorded in the national budget but the General Royalty System (SGR) is well-summarized through EITI reporting. The Department of National Planning (DNP), the National Minerals Agency (ANM) and the National Hydrocarbons Agency (ANH) systematically disclose information on revenue management and expenditures from the SGR, including a description of extractive royalty revenues earmarked for specific programmes and geographic regions and the methods for ensuring efficiency and accountability in their use. The Auditor General’s website provides publicly accessible audit reports of the SGR as well as of the national budget and extractives sector while the DNP, ANM and ANH provide additional information on the management of royalties and financialization of mineral and hydrocarbon resources. While the MSG has provided information on revenue management and expenditures, it has not yet addressed information related to production and commodity price assumptions that would shed light on revenue sustainability, resource dependence and revenue forecasting. Therefore, it cannot yet be concluded that Colombia has exceeded all technical aspects and the overall objective of this requirement. In their comments on the draft Validation report, civil society raised concerns over the lack of EITI disclosures to date on budget assumptions, production and commodity price projections. The comments also called for more information on earmarked revenues for specific ethnic community groups in accordance with the provisions of Law 2056 of 2020. The EITI Colombia Secretariat’s comments noted that this recommendation would be taken into account.

The Secretariat's assessment is that Requirement 5.2 is fully met. Colombia EITI has demonstrated that subnational transfers of extractive revenues exist in both the mining and oil and gas sectors. Through the SICODIS portal, stakeholders at the local level are able to view the revenue-sharing formula and assess whether the transfer and management of subnational transfers of extractive revenues are in line with statutory entitlements, which fulfils the objective of this requirement. The revenue-sharing formula, as defined in Law 2056 of 2020, is the same for mining and oil and gas, with one variable of the formula used to represent each extractive commodity. These commodities are assigned different values that are used in the revenue-sharing formula to determine the amount of royalty paid. The amount to be transferred to each of the ten funds that receive subnational transfers from the SGR is based on a percentage share of the overall SGR budget. A comparison is made between notional amounts to be transferred via the budget and the actual amount transferred based on royalties received in the preceding year. These comparisons are disaggregated by local government units and can be viewed through the SICODIS portal hosted by the National Planning Department (DNP). The SICODIS portal provides detailed information on budgeted and actual transfers, appears up to date and allows the public to see the change in distribution of subnational transfers mandated by Law 2056. Data quality and assurances pertaining to subnational transfers are built into the General Royalty System and consist of dedicated processes such as the System for Monitoring, Tracking, Control and Evaluation (SMSCE) and the Index on Management of Royalty Projects (IGPR). The SGR is also subject to congressional oversight and approval. The MSG has not provided information on how extractive revenues earmarked for specific programs or investments at the subnational level are managed, or how disbursements are managed, although this is encouraged, not strictly required, under Requirement 5.2. While the MSG has not provided any recommendations on how to improve the revenue-sharing mechanism, the 2020 EITI Report notes that 2020 was the last fiscal year to operate under the SGR system as established by Law 1530 of 2012. As of 1 January 2021, the SGR will operate under the system set forth in Law 2056, which aims to improve processes, direct greater investment to the poorest municipalities and improve the autonomy of subnational entities. Government stakeholders consulted listed the redistribution of royalty payments and the increased decision-making power for Indigenous and AfroColombian communities as key aspects of Law 2056. These stakeholders also pointed out that while greater investment will flow to underserved municipalities, it will also decrease royalty investments for communities that historically received a larger share. A different government stakeholder clarified that while Law 2056 does redistribute the amount of royalty payments that departments and municipalities receive, the overall level of royalty distribution from the General Royalty System has increased, which could lead to sustainability issues in the future. An industry stakeholder also referenced financial sustainability issues on the company side as Law 2056 no longer allows companies to deduct royalties from their tax payments. Multiple civil society stakeholders pointed out that regardless of the laws in place, a lack of management and monitoring of these funds at the subnational level often leads to misuse. In one consultation with civil society, members shared links (here and here) to media reports detailing the solicitation of bribes by the government agency in charge of the approval of community projects funded through the General Royalty System.

The Secretariat’s assessment is that Requirement 4.6 is mostly met, which represents backsliding from the previous Validation. It is the Secretariat’s opinion that certain aspects of the requirement, such as an explanation for the reduction of subnational revenue streams included in the scope of EITI reporting, were not addressed and that the objective is mostly met. In their comments on the draft Validation report, civil society argued for a downgrade in the assessment given the decline in direct subnational payments disclosed and the lack of reconciliation of direct subnational payments. However, the EITI Colombia Secretariat’s and the MSG’s common comments emphasised that the MSG had continued to consider direct subnational payments as non-material and thus not part of the scope of reconciliation, based on its assessment of the materiality of these revenue flows at the MSG’s 28th meeting in 2017. Thus, while the Secretariat acknowledges the views of some MSG members that direct subnational payments are not material, the lack of review of the materiality of these payments since 2017 combined with strong concerns from civil society over the lack of reconciliation of these direct subnational payments support the Secretariat’s view that the objective is mostly fulfilled. Indeed, the MSG’s materiality decisions in preparing the 2020 and 2021 EITI Reports do not indicate that the MSG considered the value of actual direct subnational payments in deciding to exclude these payments from the scope of reconciliation. The civil society comments indicate that the constituency would want the materiality of these direct subnational payments to be reconsidered by the MSG. Extractives companies make direct subnational payments to local government units through various taxes levied at the local level. While the previous Validation identified ten revenue streams applicable at the subnational level, the 2020 EITI Report only includes five revenue streams and an assessment of materiality of direct subnational revenues is not publicly available to explain the reduction in the number of revenue streams disclosed in the scope of reporting. While nearly all material companies reported these direct payments, one material company did not report them. This information can be found on the EITI Colombia website. These payments are not reconciled as it does not appear that local government units reported information on direct subnational payments. There was a drastic reduction in subnational direct payments that is not fully explained in the 2020 EITI Report. Given the lack of discussion around materiality in EITI reporting, it is unclear whether the MSG considers subnational direct payments to be material, which would affect the Secretariat's assessment of this requirement. Some civil society and government stakeholders noted that while these subnational payments are smaller than subnational transfers through the General Royalty System, some local governments are very reliant on these funds. A government stakeholder was of the opinion that there should be a government platform to increase transparency around direct subnational payments. Data on direct subnational payments were collected through MSG-approved reporting templates, which ensures data quality and assurances of subnational payment data, as laid out in Requirement 4.9. Going forward, EITI reporting could provide discussions around the materiality of subnational payments to consider whether they should continue to be disclosed through EITI reporting.

The Secretariat’s assessment is that Requirement 6.1 is mostly met. Concerning social expenditures, the 2020 EITI Report confirms that there are both contractually mandated and voluntary social expenditures. EITI reporting discloses mandatory environmental expenditures established by law but does not indicate whether voluntary environmental expenditures were made by companies in the period under review. The objective of this requirement is to enable a public understanding of extractive companies’ social and environmental contributions and to assess how well these companies comply with their legal and contractual obligations when it comes to social and environmental expenditures. It is the Secretariat’s assessment that the objective has been mostly met. In their comments on the draft Validation report, civil society called for a downgrade in the assessment given the lack of evidence of an MSG materiality discussion related to social and environmental expenditures, gaps in companies’ disclosures of their environmental payments, the lack of disaggregation of in-kind mandatory social expenditures and the identity of all beneficiaries of extractive companies’ mandatory social expenditures. The EITI Colombia Secretariat’s and MSG’s common comments emphasise the gradual progress achieved in transparency of social and environmental expenditures and highlighted practical constraints to requiring more disaggregated information on social and environmental expenditures from companies. The comments noted that a comparison of extractive companies’ expenditures with provisions of their contracts and of the statutory legal framework could be possible in future but would require significant additional resources. The public dashboard tracking social expenditures was highlighted in the comments, although the dashboard does not specify the identify of beneficiaries of mandatory social expenditures. The Secretariat agrees that reconciliation of social and environmental expenditures is only encouraged, not strictly required, by the EITI Standard but emphasises the lack of granular information on any in-kind mandatory social expenditures and the identity of beneficiaries of all mandatory social expenditures, as well as the gaps in extractive companies’ disclosures of their environmental payments to government. Nonetheless, the Secretariat’s view is that the objective is mostly met given the gradual progress achieved in public disclosures of social and environmental expenditures, even if more comprehensive and disaggregated disclosures are needed. There is no evidence that the MSG set a specific threshold for selecting material social and environmental expenditures, implying that the general threshold for selecting material revenue streams applies (see Requirement 4.1). Several civil society stakeholders consulted noted that while some of these payments may not be material, they are important in the local context. All material companies participating in EITI reporting were asked to report environmental payments. These payments are reported by revenue stream and by company but not all companies filled out this section of their reporting templates. Of the 24 material companies, only eight companies reported forest use fees and 14 companies reported water use fees and other environmental payments. Other environmental payments to government were reported by 12 companies. The government does not yet systematically disclose the value of mandatory social expenditures by extractive companies, although the EITI Report discloses some companies’ disclosures of their mandatory social expenditures. All 13 material oil and gas companies and all but one of the eleven material mining companies reported social expenditures. Mandatory and voluntary social expenditures are disaggregated by extractive sector and by company and revenue stream. It is possible to see the value of each payment made to each department and the number of projects these payments are meant to fund. It appears that mandatory and voluntary social expenditures are usually made in cash but one mining stakeholder consulted stated that social expenditures can also be made in kind. It is unclear if material companies made in-kind social expenditures in the period under review, although EITI reporting only lists payments made in cash. There is no indication of the nature of projects funded by social expenditures and the identity of beneficiaries receiving mandatory social expenditures is not disclosed. With regards to environmental payments, the 2020 EITI Report indicates that there are mandatory environmental payments made to government. The Environmental Payments study published in 2020 by EITI Colombia indicates which government agency collects each revenue stream and describes these revenue streams in detail but does not list environmental payments made by companies in 2020. Environmental payment information is unilaterally supplied by companies. Despite the fact that some material companies did not report environmental expenditures, those mandatory environmental payments that are disclosed are disaggregated by revenue stream and by company. EITI reporting does not list environmental expenditures to third parties as is encouraged in Requirement 6.1.d. In its common comments on the draft assessment, the MSG explained that social and environmental expenditures were not reconciled because this was not practicable. Such reconciliation is only encouraged by the EITI Standard, not strictly required.