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Guatemala: EITI building trust

Distrust has affected the development of oil and mining activities in Guatemala.

Government, civil society and extractive companies in Guatemala are using the EITI to build a constructive dialogue on how to ensure benefits for their citizens.  This follows a history of distrust which has affected the development of oil and mining industries.

The Extractive Industries Transparency Initiative (EITI) is the global standard promoting openness about revenues from natural resources.

Guatemala published their first EITI Reports disclosing taxes and other contributions that companies extracting natural resources paid to the government in the oil and mining sectors in 2010 and 2011.

For the first time Guatemalans can access information through EITI reports that allows them to better understand the management of revenues generated by their extractive sector.

Secretary of Transparency and EITI Champion, Veronica Taracena commented on the report.

“These efforts are aimed at making the revenues obtained from the extractive industries transparent.”

EITI Reports show contributions from the sectors

The EITI reports revealed that Guatemala received US $165 million in 2010 and US $225 million in 2011.  This was out of an estimated value of the production of US $0.8 billion in 2010 and US $1.4 billion in 2011.

Revenues in 2011 increased 36% in comparison to 2010. The Mining sector contributed to most of this increase as those revenues went up 58% from 2010 to 2011.

However, the oil and gas sector still dominates the extractive sectors contributing 70% of total revenues.

The EITI Reports covered 94 % and 98% of payments to the Guatemalan state in 2010 and 2011. Inconsistencies found between what the companies declared against what the government entities reported to have received from those companies were less than 1%.

With a population of almopst 15 million, the revenues collected in 2011 amounts to about US $15 per citizen.

Reports cover payments to local governments and communities

The reports included information on royalties paid to some municipalities and showed that 15% of all revenues each year were distributed between 22 municipalities through the Petroleum Fond (FONPETROL).

80% of the funds were given to Petén which is the largest region in Guatemala.

FONPETROL also transferred US $2.5 million and US $4.3 million in 2010 and 2011 to the Protected Areas Council (PAC) in accordance with the law stating 3% of oil revenues must be transferred to PAC.

Otto Haroldo Cu from Convergencia Social, a Guatemalan not-for-profit organisation, said that the EITI process allows “civil society to monitor the reconciliation of revenues and how these resources are administered”.

Technical Director for Cordaid (Catholic Organisation for Relief & Development Aid), Eelco de Groot, said publishing EITI reports was important in Guatemala as distrust had halted the development of additional mining projects.

“Through EITI, Guatemala can build trust between government, companies and people living in communities where oil and mining activities are taking place. By providing facts through EITI reports and making decisions in consensus, it will have much better support from all stakeholders.”

Perenco is the largest taxpayer in the sector contributing 67% and 64% of total payments in 2010 and 2011.  It was the only company to give detailed information of each payment type it made.

Guatemala's next EITI Report covering 2012 will disclose payments broken down by all companies operating in the country.

Similarly, the report summarised the number of active licenses by stage of development (prospecting, exploration and exploitation) for quarries, metallic and non-metallic minerals. In the oil and gas sector, the report also provides an overview of active exploration and exploitation contracts.

To learn more about the EITI in Guatemala, visit Guatemala's country page