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Bogota, Colombia

Colombia

Status
Satisfactory progress
Joined
15 October 2014
Latest validation
2018
Latest data from
2017
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Overview and role of the EITI 


Colombia produces oil, gas and coal, as well as minerals like gold, silver and platinum. The extractive sector accounted for 56% of the country’s export earnings, nearly 11% of government revenues and 32% of the country’s foreign direct investments in 2019. While mining production has increased by over 6% in 2019 due to a rise in gold outputs, coal production has reduced following legal conflicts with local indigenous communities. 
Colombia is using the EITI platform to support the government’s anti-corruption efforts, for example by contributing to the development of the Economic Growth law, which introduced regulations related to beneficial ownership disclosure in the extractive sector.

Economic contribution of the extractive industries

10.9%
to total revenues
55.7%
to exports
5%
to GDP
1%
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 report published in 2021 by Transparencia por Colombia and Foro National por Colombia, analyses the conditions for citizens to participate in the oversight of the extractive sector and examines the dynamics of interaction between stakeholders in decision-making.
  • A study, published by EITI Colombia and GIZ in 2020, examines the impact of COVID-19 on Colombia’s extractive sector and includes recommendations to address related challenges.
  • In 2019, EITI Colombia and GIZ prepared a practical guide and an explanatory video to raise awareness on the 14 different types of environmental payments that extractives companies must comply with. In 2018, companies paid a total of USD 2.9 million in environmental payments and 88,500 hectares were replanted, according to EITI reporting.

The EITI is important for us and we are keen to learn from EITI and adopt state of the art on transparency practices and good governance of the oil, gas and mining sector.

Juan Manuel Santos Former President of Colombia

Extractive sector data

Production and exports

Crude Oil

Revenue collection

Level of detail 2

Revenue distribution

2017
Standardised revenue types

Top paying companies

2017

Extractive sector management

Licenses and contracts

Colombia’s hydrocarbon sector operates under a contractual regime. Contracts are awarded by the National Hydrocarbons Agency (ANH), and take the form of either an exploration and production contract or a technical evaluation contract. All oil and gas contracts are published on the ANH website.

Mining licenses and contracts are awarded on a first come first served basis and granted by the National Mining Agency (ANM) in accordance with the Mining Code. A description of the types of mining licenses and contracts, as well as the criteria used to award them, is available on the EITI Colombia website

Many oil, gas and mining contracts are available via resourcecontracts.org.

Beneficial ownership

Colombia’s tax reform bill, enacted in September 2021, establishes the creation of a beneficial owners register operated by the National Tax and Customs Directorate (DIAN). The bill provides a defines a beneficial owner as owning 5% or more of shares, voting rights or benefits and includes an identification system for unincorporated structures.

In October 2020, the EITI developed a tool in partnership with Directorio Legislativo to identify corruption risks related to politically exposed persons (PEPs) in Colombia. The system cross-checks beneficial ownership data for extractive companies with financial disclosures to generates red flags, such as potential conflicts of interest in licensing and contracting. The project was awarded second place in the IMF Anti-Corruption Challenge.

Revenue distribution

In 2019 and 2020, the legislative authorities in Colombia modified the General Royalties System to increase the allocation of extractive revenues in regions that host extractive activities. Royalties from the extractive sector are distributed as follows:

  • 25% to municipal and departmental authorities;
  • 15% to a local investment fund and 34% to regional investment fund;
  • 23% to various funds dedicated to innovation, sustainable development, peace and reconciliation fund, etc.;
  • 3% to auditing and control.

The National Department of Planning hosts Mapa Regalías, an online tool which tracks the execution of projects benefitting from extractive revenues at the local level.


EITI implementation

Governance

EITI Colombia is administered by the Colombia Multi-Stakeholder Group (MSG), also known as the Comité Tripartito Nacional. The MSG is hosted by the Ministry of Mines and Energy and chaired by the Vice Minister of Mines, Ms Sandra Sandoval. The MSG is supported by the Technical Support Team (GAT), which supports the execution of the operational plan, and the National Technical Secretariat (STN), which supports the Vice Ministry of Mines with its National Action Plan.

Timeline

Validation

Colombia was found to have made satisfactory progress in implementing the 2016 EITI Standard in June 2018, following its first Validation. Colombia’s next Validation is expected to commence in October 2022.

Scorecard

Latest Validation: 29 June 2018
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

The government is fully and actively engaged in the EITI process. Government’s agencies have played an active role in implementing the EITI including engaging in the MSG process as observers and collaborating in different technical support groups. Other agencies collaborate with the EITI as expert resources.

1.2Industry engagement

There is an enabling environment for company participation. Challenges to EITI reporting posed by taxpayer confidentiality provisions have been overcome through annual confidentiality waivers signed by all reporting companies. Mining, oil and gas companies are actively and effectively engaged in the EITI process.

1.3Civil society engagement

There are no suggestions of any legal, regulatory or practical barriers to civil society’s ability to engage in EITI-related public debate, to operate freely, to communicate and cooperate with each other, to fully, actively and effectively engage on EITI-related matters. CSOs can speak freely on transparency and natural resource governance issues, as well as to ensure that the EITI contributes to public debate.

1.4MSG governance

The MSG has been formed and includes self-appointed representatives, with no suggestion of interference or coercion. The mechanism for civil society nominations on the MSG was open. CSO members of the MSG are operationally and in policy terms independent from government and companies. MSG members participation is regular. Rotation of some members have not affected functioning of MSG. No per diems are permitted.

1.5Work plan

The 2017-2019 work plan is publicly accessible, produced in a timely manner and updated annually, with objectives aligned with national priorities. The work plan includes specific activities to follow up on recommendations from EITI reporting. The three constituencies have consulted their broader stakeholder groups in preparing annual work plans.

Licenses and contracts

2.1Legal framework

The 2016 EITI Report provides a comprehensive description of the legal framework and fiscal regime governing the extractive industries, including the degree of fiscal devolution, and addresses recent applicable reforms. It also includes a description of the roles of the main regulatory bodies.

2.2License allocations

The requisite information regarding the award and transfer of licenses are disclosed in the 2016 EITI Report both for the hydrocarbon and mining. Information on awarding hydrocarbon contracts is available in the regulator (ANH) website. Information on awarding of mining titles is publicly available in the regulator (ANM) website including the cadastre system. Cadastre is being updated to improve navigability.

2.3License register

Information regarding all active mining, oil and gas licenses is publicly available, as highlighted in the 2016 EITI Report aside from the commodity(ies) covered by mining licenses. The report provides links to both the mining cadastre and the hydrocarbon repository of contracts. Additionally, the public can access additional information, including commodity(ies) covered, upon request from the sector regulators.

2.4Policy on contract disclosure

The government’s policy on contract transparency is described, which also provides an overview of current disclosure practice. In mining, current contractual arrangements are standardised per the Mining Law and are publicly available, with proprietary technical information redacted. All oil and gas contracts are published on the hydrocarbon regulator ANH website.

2.5Beneficial ownership

Not assessed

Colombia published the roadmap for disclosing beneficial ownership information. Limited progress has been done in implementing the beneficial ownership roadmap. An initial part of the plan relied on the passing of a beneficial ownership bill that is stalled in Congress. The MSG has started to consider alternative legal ways to ensure compliance with this requirement by 2020.

2.6State participation

The 2016 EITI Report contains and links to information regarding the relationship between the government and Ecopetrol including transfers of funds between the SOE and the state, retained earnings, reinvestment, third party financing, the financial relationship with the government, the government ownership including changes in 2016 and loans and guarantees.

Monitoring production

3.1Exploration data

The 2016 EITI Report provides an overview of the extractive industries including exploration activities and procedures applicable to these activities in both the hydrocarbon and mining sectors.

3.2Production data

Total production volumes are disclosed for each mineral commodity produced in 2016, alongside reference prices allowing readers to estimate production values. Production by municipalities are included for the main commodities and producing regions. The report also links to information on how the regulatory agencies conduct inspections to check reported production figures.

3.3Export data

EITI Colombia has disclosed export volumes and values disaggregated by commodity exported, including gold. The 2016 EITI Report provides information on oil and coal exports and links to the national statistical office, which in turn publishes aggregate extractives export data since 1970. Previous reports provided information on gold exports.

Revenue collection

4.1Comprehensiveness

Materiality is documented including the options considered, constitutional tax confidentiality provisions, the reconciliation coverage targets and the rationale for the agreed definitions. Material revenue streams are clearly identified, alongside the government entities. Ex post verification of tax reconciliation coverage and stakeholder consultations confirmed comprehensiveness.

4.2In-kind revenues

The 2016 EITI Report confirms that the government receives oil royalty payments in-kind and discloses and reconciles volumes of oil collected in-kind, volumes sold and proceeds of these sales to the sole buyer Ecopetrol. Given that all of the government-s in-kind oil revenues are sold to a single buyer, Ecopetrol, they are effectively disaggregated by buyer in the 2016 EITI Report.

4.3Barter agreements

Not applicable

There are no agreements involving the provisions of good and services in exchange for oil, gas and mining exploration or production concessions.

4.4Transportation revenues

The report identified transport operators, including national ports, the Ministry of Mines and other government agencies. It was estimated total transport taxes and port fees paid by oil, gas and coal companies. Transport operators, the national infrastructure agency and the ports provided revenue information with appropriate level of disaggregation.

4.5SOE transactions

The 2016 EITI Report describes thoroughly the role of the SOE Ecopetrol including disclosure of all Ecopetrol payments to the state. The report explains that Ecopetrol does not collect payments from companies and comprehensively discloses and reconciled Ecopetrol’s payments to government.

4.6Direct subnational payments

Direct payments made by companies to subnational level, based on a thorough assessment, were not material. Yet, to gain a better understanding of the importance of these revenues, the MSG contracted a study on direct subnational payments based on voluntary company reporting.

4.7Disaggregation

In accordance with Requirement 4.7, the data is disaggregated by individual company, revenue stream and government entity for all revenue streams. Relevant reconciled data is not disaggregated by project.

4.8Data timeliness

In accordance with Requirement 4.8, Colombia has published EITI Reports on an annual basis and the data has not been older than the second to the last complete accounting period. There is evidence the MSG approved the reporting period of EITI Reports.

4.9Data quality

Reconciliation of payments and revenues was undertaken by a credible Independent Administrator, appointed by the MSG, and applying international auditing standards. The IA and the MSG agreed ToR consistent with the standard ToR. The final report provides a statement from the IA on the reliability of the (financial) data presented in light of agreed procedures, including an informative summary.

Revenue allocation

5.1Distribution of revenues

The 2016 EITI Report includes a description of the distribution of revenues from extractive industries and confirms that all extractives revenues are recorded in the national budget. The report includes additional information on the national royalty system and links for monitoring distribution and use of royalties.

5.2Subnational transfers

While the 2016 EITI Report include thorough information about the revenue sharing mechanism and data on the resources that are available to regions according to the mandated royalty sharing, the report did not calculate the amount to be transferred in accordance with the revenue sharing formula but reported the Planning Department DNP own calculations.

5.3Revenue management and expenditures

In the International Secretariat’s view, Colombia has gone beyond the minimum requirements by providing additional information on revenue management and expenditures as encouraged by the EITI Standard.

Socio-economic contribution

6.1Mandatory social expenditures

The 2016 EITI Report identifies mandatory social expenditures in both the mining and oil and gas sectors. The report explains the applicable social payments regime for hydrocarbon and mining companies and discloses both mandatory and voluntary social payments in 2016. Names of beneficiaries are published and the report confirms that all mandatory social expenditures are paid in cash.

6.2Quasi-fiscal expenditures

Not applicable

The 2016 EITI Report demonstrates that Ecopetrol does not undertake any quasi-fiscal expenditures.

6.3Economic contribution

The 2016 EITI Report includes, in absolute and relative terms, the size of the extractive industries, their contribution to government revenue, exports and employment. A description of the informal sector is also provided. It includes an online platform for searchable data, including location-based, on the contribution of the extractive industries to local and national economy.

Outcomes and impact

7.1Public debate

Reports have been widely disseminated including through pioneering digital means. EITI data is open and in line with international data standards for open government. Reports have been presented in comprehensive, accessible, user-friendly and innovative ways. A number of outreach efforts have facilitated dialogue and public debate. Regional outreach has been challenging.

7.2Data accessibility

Requirement 7.2 encourages the MSGs to make EITI reports accessible to public in open data formats. Such efforts are encouraged but not required and are not assessed in determining compliance with the EITI Standard. Colombia has made pioneering efforts to address these issues.

7.3Follow up on recommendations

Discrepancies from their reconciliation exercises and have largely identified and resolved them. Improvements in EITI implementation such as online data collection and capacity-building for reporting entities have facilitated the reconciliation process. Government agencies have prepared more extensively for reporting. The MSG has taken stock on strengths and weaknesses of its follow-up on recommendations.

7.4Outcomes and impact of implementation

The MSG has reviewed and discussed the outcomes and impact of the EITI implementation, including through annual progress reports in accordance with Requirement 7.4. In preparing the annual progress report (and the work plan) the MSG has extensive discussions on achievements, implementation gaps and improvements, and future challenges.


Key documents


Contacts