The fact that there is a standard in this field, backed by the companies themselves, is a sign of their commitment to doing things right.
The use of resources from the oil industry has been a topic of discussion for decades, especially in African countries, due to the rampant corruption that has characterized more than one government in that region, even calling into question the transparency in the management of resources by companies in the oil and mining sectors.
It became necessary to devise a credible and reliable mechanism that would inform about the contributions of the extractive sector to governments, through taxes and royalties.
This was the origin of the Extractive Industries Transparency Initiative, known as EITI by its acronym in English (Extractive Industry Transparency Initiative), created within the framework of the World Summit on Sustainable Development held in Johannesburg, South Africa, in 2002.
Since then, 52 countries from Europe, Asia, Africa, and America - where the extractive sector companies are from and operate - are part of the initiative, which audits more than 2.5 trillion dollars in state revenues from the sector.
The EITI requires the disclosure of information from the companies that are part of the initiative, from the point of extraction to the revenues that the government receives from the activity; how exploration and production contracts are awarded and registered, who the real beneficiaries of these operations are, what the legal and tax regulations that govern them are, how much is produced, how much is paid, how those revenues are distributed, and what the contribution to the economy is, including employment. The entire value chain.
Perhaps the most interesting aspect of EITI is that it is a tripartite initiative, meaning that it involves governments, companies, and representatives of organized civil society, and in the case of companies, their involvement is voluntary.
It has been discussed whether it should be mandatory, but to date and rightly so, it has been understood that the voluntary nature is fundamental since it is not a monitoring initiative - which could end up being extortionate - but rather a voluntary application of the highest standards in the field.
The Colombian government decided to join EITI in 2007, and in 12 years of work, it went from being a policy of the current administration to a state commitment. A similar situation has occurred with companies: 21 companies engaged in oil and gas exploration and production, grouped into 13 business groups that represent 92.1% of the country's hydrocarbon production (Equion, Ecopetrol, Cepsa, Masarovar, Perenco, Parex, Drummond, Oxy, Chevron, Gran Tierra Energy, Canacol, Frontera Energy, Hocol). Adding the mining companies operating in Colombia, there are 34 companies that are part of this initiative, which continues to grow every day.
Well, Colombia and the 34 companies that are part of the initiative have just received the EITI Global Award, in recognition of the improvement in governance, transparency, and good management of information in the sector.
This recognition is due to the fact that it was the first country on the continent to reach the highest level in the implementation of EITI standards. The award was given in Paris, at the opening of the Global Conference, with the participation of 2,000 representatives from the extractive sector worldwide.
Another great piece of news is that Colombia was named as the new representative and spokesperson for Latin America and the Caribbean before the International Council of the initiative. The other countries in Latin America and the Caribbean that are part of EITI are: Argentina, Ecuador, Mexico, Guatemala, Guyana, Honduras, the Dominican Republic, Suriname, Trinidad and Tobago, and Peru.
In the case of our country, the initiative has the support of a coalition of government, companies, and civil society, led by the Ministry of Mines and Energy.
Some may wonder why this is such an important piece of news.
It is important because it reaffirms the commitment of companies in the oil industry to the highest standards, in this case, regarding revenues and contributions to national and departmental governments. And it is relevant because the sector represents 61% of GDP and only in 2018, oil contributed 20 trillion to the country in taxes and royalties. What better than to deal with resources from companies audited by EITI, which promotes their open and responsible management internationally.
It should not be surprising. First, because the companies operating in Colombia, while not infallible, are generally companies with high operational standards, and second, because the hydrocarbons industry is heavily regulated and monitored, in Colombia and worldwide.
The fact that there is a transparency standard regarding revenues and contributions from the extractive sector, backed by the companies themselves, is a sign of their commitment to doing things right, and always being open to doing better.
But there is still a long way to go. There is the challenge of making the information about the use of resources contributed by the sector equally rigorous and transparent. Better visualizing its contribution to the social and economic development of Colombians.
That is to say, the other side of the coin. Between 2005 and 2015, for example, the oil sector contributed 200 trillion in taxes to the national government, including resources from royalties. This should be EITI 2.0 for Colombia. A demanding and possible challenge, with the leadership of the government and support from civil society.
Colombian Association of Oil and Gas