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Guatemala City, Guatemala

Guatemala

Статус
Inadequate progress / suspended
Joined
1 March 2011
Latest validation
2020
Latest data from
2017
Visit the country website

Overview and role of the EITI

Guatemala primarily exports lead, gold, silver, nickel, zinc and oil. The country has a relatively small extractive sector, which contributed 0.6% of total government revenues and 1.2% of the national GDP in 2017. Mining activity has decreased over the past years due to closures and temporary suspensions of several mines, which resulted in a downturn in mineral exports. While oil production is limited, it represented a quarter of Guatemala’s exports earnings from the sector in 2017. 


Guatemala’s mining sector has been the source of several social conflicts, some resulting in judicial claims and bills submitted in the National Congress. In 2017, the Supreme Court suspended the license to operate to one of the largest mines, San Rafael. EITI reporting has listed several bills aiming to reform the extractive sector, including a moratorium in mining and hydroelectrical operations. 


Guatemala joined the EITI with the aim to improve public understanding of extractive sector management and to support capacity building for members of the EITI multi-stakeholder group. Opportunities remain for the EITI platform to be used to inform public debate and reform on matters of public interest that pertain to how the sector is managed and benefits communities. 
 

Economic contribution of the extractive industries

.6%
to government revenues
4.2%
to exports
1.2%
to GDP
.37%
to employment
  • Step 1
  • Step 2
  • Step 3

Download country data

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


Innovations and policy reforms

  • A 2017 report, published with the support of GIZ, outlines opportunities for collaboration between EITI Guatemala and EITI Perú to strengthen the impact of EITI implementation in both countries.
  • In 2016, a group of civil society organisations published a study on the contribution of Guatemala’s mining sector to development.

The EITI is a highly relevant initiative for the country, due to its nature and objectives. Its implementation allows stakeholders to learn about the strengths, opportunities, weaknesses and risks of the industry, to dialogue and reach consensus, and to generate public policy based on this information.

Cesar Guillermo Castillo Vice President of Guatemala

Extractive sector data

Production and exports

Lead

Revenue collection

Level of detail 2

Revenue distribution

2017
Standardised revenue types

Top paying companies

2017

Extractive sector management

Licenses and contracts

Hydrocarbons contracts are awarded by public bidding and direct negotiation in the form of services contracts, operation contracts and production sharing contracts (PSCs), and are approved by the President of the Republic and the Cabinet. These are published in the official diary as governmental agreements.  

Mining prospecting, exploration and exploitation licenses are awarded by the General Mining Directorate under the Ministry of Energy and Mines. Applications must include an environmental mitigation or impact assessment. Mining licenses are listed in Guatemala’s EITI Reports and on the Ministry of Energy and Mines’ website.

Beneficial ownership

Guatemala does not have a legal framework mandating the disclosure of beneficial ownership and does not disclose information in its government systems or EITI reporting.

Revenue distribution

Revenues collected from mining companies are allocated to the national treasury, while those from the oil and gas sector are allocated to the national treasury and the national development fund, FONPETROL, in accordance with Decree 71-2008.
FONPETROL, in turn, allocates a share of revenues to departments and municipalities in accordance with an applicable legal formula. 


EITI implementation

Governance

EITI-Guatemala is administered by the Guatemala Multi-Stakeholder Group (MSG), also known as the Comision Nacional. The MSG is hosted by the Ministry of Energy and Mines and chaired by the Vice President of Guatemala, Guillermo Castillo Reyes.

Timeline

Validation

Guatemala was found to have made inadequate progress in implementing the 2016 EITI Standard in January 2020, following its first Validation. The Validation identified 18 corrective actions to be addressed by the country’s next Validation, expected to commence in October 2022.

Scorecard

Latest Validation: 23 January 2020
Year

Assessment of EITI requirements

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

Overall Progress

MSG oversight

1.1Government engagement

Senior government officials’ support has decreased after Guatemala became an EITI compliant country in 2011. The Executive Coordinator of EITI Guatemala and Minister of Energy and Mines, have not taken an effective government leadership role. Government engagement in the EITI is limited to government representatives’ regular participation in the MSG and in EITI data collection upon request.

1.2Company engagement

There is an enabling environment for company participation. Industry is engaged in the EITI process and works closely with the MSG. However, five out fourteen companies invited to participate in reporting failed to submit data for the 2014-2015 EITI Report. Industry is encouraged to help re-energise the EITI process, as well as engage its members in outreach activities related to the EITI. Companies could also fund EITI-related activities and use EITI data more actively.

1.3Civil society engagement

There are no indications of legal or practical barriers for civil society to engage in EITI-related public debate, operate freely, communicate and cooperate with each other. Activists involved in the mining sector have faced threats, but this has not affected CSOs involved in EITI. However, weak government commitment and lack of momentum in EITI implementation is reducing civil society’s interest in the process.

1.4MSG governance

Stakeholders do not appear to be treated as equal partners. Agenda-setting is largely controlled by the Ministry of Energy and Mines. The MSG includes self-appointed representatives from each constituency. However, the its composition appears to be defined ad hoc. Nomination procedures are not sufficiently documented. The MSG ToR is outdated and does not include all elements required by the Standard.

1.5Work plan

The work plan includes clear objectives, linking them to national priorities. However, it does not appear to reflect constituencies’ priorities. It lacks account of costs and funding sources, and its latest version is yet to be published. The work plan does not address the scope of EITI reporting or follow-up of recommendations - reflecting deficiencies in the MSG’s work. Implementation of the work plan is lagging behind due to funding constraints.

Licenses and contracts

2.2License allocations

It is unclear which mining licenses were awarded in 2015 and whether any license transfers took place. The process for transferring mining and oil licenses is not described. The technical and financial criteria for awarding or transferring oil or mining licenses is not disclosed. There is no indication that the MSG has considered possible non-trivial deviations from the licensing framework.

2.3License register

The Mining Cadastre provides a list of mining licenses active in 2014-2015 and reveals general information such as the license-holder name, the commodities extracted in the mines and license coordinates. For oil, each Production Sharing Contract provides the same information. However, in mining, the Mining Cadastre does not appear to include dates of application or award. Moreover, the Mining Cadastre does not include the duration of the license.

2.4Policy on contract disclosure

The Government of Guatemala supports and practices contract transparency. Contractual arrangements in the mining sector do not exist. Oil and gas contracts are published in the official gazette and in the Ministry of Energy and Mines’ portal.

2.1Legal framework

The 2014-2015 EITI Report provides a comprehensive description of the legal framework and fiscal regime governing the extractive industries and addresses reform efforts. It also includes a description of the roles of the main regulatory body as well as the degree of fiscal devolution.

2.5Beneficial ownership

Not assessed

Implementing countries are not yet required to address beneficial ownership and progress with this requirement does not yet have any implications for a country’s EITI status. Nonetheless, Guatemala has made some progress in agreeing a three-year beneficial ownership roadmap published on the EITI-Guatemala website, even if beneficial ownership reporting is yet to begin.

2.6State participation

Not applicable

Given that there was no state participation in the mining and oil sector for the 2014-2015 period, this requirement is not applicable in the country.

Monitoring production

3.1Exploration data

The Report discloses an overview of the extractive industries, clarifying that there were not any significant exploration activities. The report also raises concerns over the lack of public sources of information and technical data on mineral reserves.

3.2Production data

The 2014 and 2015 Mining Statistical Yearbooks in the MEM´s website include data on production volumes and values for 2014 and 2015. For oil, the report does not disclose production volumes or values, but this data is disclosed in publicly-accessible government sources (MEM).

3.3Export data

The report discloses oil export volumes and values. Regarding mining, export values are provided. No export volumes however are provided, even though according to all stakeholders Guatemala exports significant quantities of minerals.

Revenue collection

4.3Barter agreements

Not applicable

This requirement is not applicable for Guatemala.

4.6Direct subnational payments

Even though direct payments of municipal mining royalties were included in the reconciliation, several municipalities (most likely 10) failed to report. Information on payments made from Perenco to subnational collectives such as COCODES is contradictory and confusing and could not be clarified despite continuous requests by the International Secretariat.

4.7Disaggregation

The 2014-2015 EITI Report presents data by individual company, government entity and revenue stream therefore data is disaggregated to the level required by the EITI Standard.

4.9Data quality

The MSG appointed a IA to reconcile payments and revenues. Reporting companies correctly fulfilled the requests for information from the IA. Instead, government agencies were not consistent in the way they reported, and did not adhere to the agreed templates from the IA. Despite the text within the ToR, the IA and the documentation failed to demonstrate that methodologies as to ensure data quality were really applied.

4.1Comprehensiveness

The MSG has not agreed a definition of materiality, nor of reporting thresholds – there is no evidence of discussions on this. Not all revenue streams listed in 4.1.b were considered. From the 4 oil producing companies, only Perenco was selected to report for the significance of its contributions - the other 3 were invited to participate voluntarily. The MSG did not work with the IA to address materiality.

4.2In-kind revenues

Not applicable

This requirement is not applicable for Guatemala.

4.4Transportation revenues

Not applicable

This requirement is not applicable for Guatemala.

4.5SOE transactions

Not applicable

This requirement is not applicable for Guatemala.

4.8Data timeliness

The EITI Report covers fiscal years 2014 and 2015 and was published in January 2017, complying with the Standard.

Revenue allocation

5.1Distribution of revenues

The report explains the distribution of revenues to the National Budget, and provides a link to the accounting system consolidating the financial information. No reference is made either on a revenue classification system or international data standards.

5.2Subnational transfers

The 2014-2015 EITI Report is not clear about this point, and even the role and scope of FONPETROL is presented in a confusing manner. Revenue sharing formulas explaining subnational transfers amounts are included in publicly accessible laws, but not in the report, which also fails to compare the amount arising from applying the formula to the amounts transferred.

5.3Revenue management and expenditures

Not assessed

There is no additional information disclosed on country’s budget and audit processes nor links to publicly available information about expenditure. This requirement is only encouraged or recommended and should not be taken into account in assessing compliance.

Socio-economic contribution

6.1Mandatory social expenditures

According to stakeholders there are no social expenditures mandated by law, but the report does not confirm this. A list of voluntary contributions from mining companies, is disclosed, but these payments´ materiality was not discussed and therefore amounts not reconciled.

6.2Quasi-fiscal expenditures

Not applicable

Given that there are no SOEs in the country, this requirement is not applicable.

6.3Economic contribution

Information is incomplete and inconsistent. Size of extractive industry is presented in absolute terms and as a percentage but lacks information on informal sector. The report has inconsistencies regarding government revenues. Exports are reported as requested, both in absolute terms and as a percentage, as well as disaggregated by commodity. Employment data lacks an accurate governmental register.

Outcomes and impact

7.2Data accessibility

Not assessed

Guatemala has published summary data for its three EITI reports covering fiscal years 2010 to 2015, however these are not publicly available. Moreover, the MSG members did not have comments on these reports.

7.4Outcomes and impact of implementation

The MSG does not seem to be involved in producing APR – they are mostly done, by the Secretariat. The APR 2016 makes no reference to the recommendations suggested by the IA in the latest EITI Report. It mentions recommendations from Reports 2010-11 and 2012-13, but these have not been implemented. The APR 2017 was not produced, despite the International Secretariat suggestion. Little effort has been made to review impact of EITI.

7.1Public debate

The MSG should make efforts to link the EITI process to the public debate. EITI reports should achieve quality and consistency, so that citizen can read and understand them. There is no evidence of interaction between the EITI process and the topics on the public agenda regarding extractives. An open data policy should be agreed.

7.3Follow up on recommendations

Lessons learned and follow up recommendations from the latest EITI Report, were not prioritized. Meeting minutes describe a general review of recommendations was made a few times, but it is not clear if follow up steps were set.


Key documents


Contacts