Guatemala

EITI Status Inadequate progress / suspended

Joined EITI in 2011

Latest Data From 2013

Latest Validation 2018

Last updated 5 August 2020

Overview

Guatemala’s extractive sector represented 1.5% and 1.2% of GDP for 2016 and 2017, according to the latest EITI Report. This decrease is a result of the temporary suspension of the Escobal mine, as well as the technical closure of the Malín 1 mine.

The main commodities are gold, silver, lead, nickel and zinc. The decrease in the mining sector can be seen in a smaller share of mining activities in Guatemala's total exports: Mining activities accounted for 6.4% of Guatemala's total exports in 2016 and 3.0% in 2017.

Oil production is limited. In 2016, oil production amounted 84.5 million USD, and increased in 2017 to 118.6 USD million.

In the last years, the mining activity in Guatemala has faced serious social conflicts, some resulting in judicial claims and bills submitted in the National Congress. In June 2017, the Supreme Court suspended the license to operate to one of the largest mines, San Rafael. As of 2016, the EITI Report listed a number of bills aiming to reform the extractive sector, including a moratorium in mining and hydroelectrical operations.

Tax and legal framework

The Guatemalan extractive industry is regulated by several norms including:

The Political Constitution of Guatemala, available here. See Articles 121 and 125.
The Hydrocarbons Law and Regulation
The Mining Law and Regulation

Learn more about mining legal framework in Guatemala here.

Learn more about hydrocarbon legal framework in Guatemala here.

Contracts and licenses

According to the Guatemala latest EITI Report, hydrocarbons contracts are awarded by public bidding and approved by the President of the Republic and the Cabinet (published in the Official Diary as Governmental Agreements). In the mining sector, the Ministry of Energy and Mines (General Mining Directorate) is responsible for awarding mining licenses (geological survey, exploration, exploitation). EITI-Guatemala Report explains the procedures for awarding mining titles.

Taxes are collected by the Superintendancy of Tax Administration (SAT, in spanish) and royalties are collected by the Ministry of Energy and Mines.

To access more information, see below:

Revenue allocation

Revenues collected from the mining companies are allocated to the national treasury while those from the oil and gas sector are allocated to the National Development Fund -FONPETROL, created according to Decree 71-2008 and to the national treasury.

FONPETROL, in turn, allocates to departments and municipalities in accordance to an applicable legal formula. This distribution is reconciled in the EITI Report reflecting relevant discrepancies in some departaments.

Innovations

The EITI encourages multi-stakeholder groups to explore innovative approaches to make the EITI more relevant and useful.

The latest Report includes an analysis of how limited licenses are affecting the financial contribution of the sector. As in previous reports it includes information on how the income from their extractive industry was distributed among some municipalities, the Petroleum Fond (FONPETROL), and the transfers made to the Protected Areas Council (PAC).

GIZ has developed interesting audios and infographic material, as well as an interactive application to develop awareness processes aimed at promoting dialogue and transparency among stakeholders to facilitate understanding.

Implementation

Guatemala joined the EITI since 2011. While implementing the EITI, Guatemala aims to improve the understanding of transparency in the extractive industries and build capacity on this topic in the members of the National Commission. It also aims to communicate the objectives, benefits and progress of the implementation of EITI-Guatemala, along with the EITI Reports to the population, particularly to the communities neighbouring extractive industries’ activities.

Its latest report coves the years 2016-2017 and was published in February 2019. The reports cover corporate tax, royalties and other taxes.

Timeline

Governance

The Guatemalan MSG is presided by Champion, Guillermo Castillo Reyes Vicepresident of the Republic of Guatemala. The MSG is composed by:

Government

EITI Champion: The Vicepresident of the Republic

Minister of Energy and Mines
Alt. Viceminister of Mining and Hydrocarbons

Minister of Public Finances
Alt. Officer at the Minister of Public Finances

Minister of Environment and Natural Resources
Alt. Officer, Ministry of Environment and Natural Resources

Civil society

Acción Ciudadana
Alt. CONGAV

CONADUR
Alt. CONADUR

Acción y Propuesta
Alt. Convergencia Tezulutlan

Other members: Acción y Propuesta, Guatecivica

Companies

Sr. Alfredo Galvez, Mining sector
Sra. Regina Rivera, Mining sector
Alt. Juan José Cabrera, Mining sector

Sr. Fredy Gudiel, Hydrocarbon sector
Alt. Vanessa Rodas, Hydrocarbon sector

Validation

On 23 January 2020, the EITI Board agreed that Guatemala has made inadequate progress overall in implementing the 2016 EITI Standard. The country was compliant under the 2011 Rules.

The Board has determined that Guatemala will have 18 months, i.e. until 23 July 2021 before a second Validation to carry out corrective actions regarding the requirements relating to government engagement (Requirement 1.1) and company engagement (1.2), civil society engagement (1.3), MSG governance (1.4), work plan (1.5), license allocations (2.2), license register(s) (2.3), the government’s policy on contract disclosure (2.4), export data (3.3), comprehensiveness of revenue disclosures (4.1), direct subnational payments (4.6), level of disaggregation (4.7), data quality (4.9), sub-national transfers (5.2), mandatory social expenditures (6.1), economic contribution (6.3), public debate (7.1), follow-up on recommendations (7.3) and outcomes and impact of implementation (7.4).

Guatemala's second Validation will commence on 23 January 2021.